-----------------------------
AGREEMENT AND PLAN OF MERGER
DATED AS OF FEBRUARY 10, 1998
AMONG
INTEGRATED HEALTH SERVICES, INC.
AND
ROTECH OXYGEN & MEDICAL EQUIPMENT, INC.
AND
MEDICARE CONVALESCENT AIDS OF PINELLAS, INC. D/B/A MEDAIDS
AND THE SHAREHOLDERS OF THE CONSTITUENT CORPORATIONS
TABLE OF CONTENTS
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PAGE
ARTICLE I: MERGER...............................................................2
1.1 Merger...............................................................2
1.2 Merger Time..........................................................2
1.3 Payment of Merger Consideration......................................2
1.4 Surviving Corporation................................................3
ARTICLE II: CONVERSION...........................................................3
2.1 Consideration........................................................3
2.2 Conversion of Common Stock...........................................4
2.3 Manner of Exchange...................................................5
2.4 No Fractional Shares.................................................6
2.5 Assets...............................................................6
2.6 Closing Date Liabilities.............................................7
2.7 Right of Offset Against the Escrow Fund..............................8
ARTICLE III: IHS STOCK...........................................................9
3.1 IHS Stock............................................................9
ARTICLE IV: EMPLOYEES...........................................................14
ARTICLE V: CLOSING.............................................................14
5.1 Closing Date........................................................14
5.2 Deliveries..........................................................14
ARTICLE VI: ASSET CONDITION.....................................................15
ARTICLE VII: SALES AND TRANSFER TAXES; FEES.....................................15
ARTICLE VIII: RESTRICTIONS ON OPERATIONS OF THE COMPANIES.......................15
8.1 Negative Covenants..................................................15
8.2 Conduct of Business Pending Closing.................................17
ARTICLE IX: REPRESENTATIONS AND WARRANTIES BY SHAREHOLDERS......................17
9.1 Organization of Companies; Enforceability...........................17
9.2 Consents............................................................17
9.3 LITIGATION..........................................................18
9.4 Compliance with Laws and Contracts..................................18
9.5 Corporate Acts and Proceedings......................................18
9.6 TITLE TO ASSETS.....................................................18
9.7 Contracts...........................................................18
9.8 Brokers.............................................................20
(i)
9.9 Employment Contracts; Employees.....................................20
9.10 Employee Benefit Plans..............................................21
9.11 Insurance...........................................................21
9.12 Disclosure..........................................................21
9.13 Officers and Directors of Companies.................................21
9.14 Inventory and Fixed Assets..........................................22
9.15 Financial Statements................................................22
9.16 Tax Information.....................................................22
9.17 Adverse Business Developments.......................................23
9.18 Relationships.......................................................23
9.19 Assets Comprising the Business......................................23
9.20 Questionable Payments...............................................24
9.21 Reimbursement Matters...............................................24
9.22 Environmental Compliance............................................24
9.23 Capital Stock.......................................................24
9.24 Accounts Receivable.................................................25
ARTICLE X: REPRESENTATIONS AND WARRANTIES OF IHS AND NEWCO......................25
10.1 Due Organization....................................................25
10.2 Due Authority.......................................................25
10.3 Binding Authority...................................................25
10.4 Cash Payment Authority..............................................25
10.5 Brokers.............................................................25
ARTICLE XI: SURVIVAL OF REPRESENTATIONS AND WARRANTIES..........................26
ARTICLE XII: RESTRICTIVE COVENANTS..............................................26
12.1 Non-Compete.........................................................26
12.2 Confidential Information............................................26
12.3 Non-Solicitation and Non-Pirating...................................27
12.4 Necessary Restrictions..............................................27
12.5 Remedies for Breach.................................................27
ARTICLE XIII: INDEMNIFICATION; REMEDIES.........................................27
13.1 Indemnification by Guarantors and Shareholders......................27
13.2 Indemnification by IHS..............................................28
13.3 Definition of Damages...............................................28
13.4 Remedies............................................................28
13.5 Settlement of Disputes..............................................29
ARTICLE XIV: POST-CLOSING REQUIREMENTS OF SHAREHOLDERS..........................30
14.1 Final Financial and Tax Information.................................30
(ii)
ARTICLE XV: MISCELLANEOUS.......................................................31
15.1 Group's Representative..............................................31
15.2 Third Party Beneficiaries...........................................32
15.3 Expenses............................................................32
15.4 Notices.............................................................32
15.5 Choice of Law.......................................................33
15.6 Sections and Other Headings.........................................33
15.7 Counterpart Execution...............................................33
15.8 Gender..............................................................33
15.9 Parties in Interest.................................................33
15.10 Entire Agreement....................................................33
15.11 Performance.........................................................33
15.12 Waiver, Discharge, Etc..............................................33
15.13 Cooperation Further Assistance......................................34
15.14 Joint and Several...................................................34
15.15 Independent Legal Counsel...........................................34
(iii)
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AGREEMENT AND PLAN OF MERGER
--------------------------
This Agreement and Plan of Merger (this "AGREEMENT") is made as of the
day of , 1998, among INTEGRATED HEALTH SERVICES, INC., a Delaware corporation
("IHS"), ROTECH OXYGEN & MEDICAL EQUIPMENT, INC., a Florida corporation
("NEWCO"), MEDICARE CONVALESCENT AIDS OF PINELLAS, INC. D/B/A MEDAIDS
("MEDAIDS", or the "COMPANY"), XXXXXX XXXXXX ("XXXXXX"), XXXXXX XXXXXXX
("XXXXXXX"), XXXXX XXXXXXXXXX ("XXXXXXXXXX", together with Xxxxxx and, the
"GUARANTORS" and each a "GUARANTOR"), Xxxxxx Xxxxxx and Xxxxxxxxx Xxxxxx, as
Trustees F/B/O Xxxxxx Xxxxxx UTD 7/14/78 (the "XXXXXX TRUST"), Xxxxxx X. Xxxxxxx
as Trustee of the Xxxxxx X. Xxxxxxx Trust U/A/D 5/22/96 (the "X. XXXXXXX
TRUST"), Xxxxxx X. Xxxxxxx, as trustee F/B/O Xxxxxx X. Xxxxxxx Revocable Trust,
Dated 6/10/88 (the "X. XXXXXXX TRUST"), Xxxxxx X. and Xxxxx Xxxxx Xxxxxxxxxx,
JTWROS ("XXXXXXXXXX JTWROS"), and Xxxxxx Xxxxxx ("X. XXXXXX", and together with
the Xxxxxx Trust, the X. Xxxxxxx Trust, the X. Xxxxxxx Trust, and Jarczynki
JTWROS, the "SHAREHOLDERS" and each a "SHAREHOLDER").
WHEREAS, RXSTAT, Inc. (the "SUBSIDIARY") is a wholly owned subsidiary
of the Company; and
WHEREAS, the Company and the Subsidiary operate a home respiratory and
durable medical equipment business in the State of Florida (the "BUSINESS"); and
WHEREAS, the Shareholders own all of the issued and outstanding shares
of common stock of Medaids, par value $1 per share ("MEDAIDS STOCK" or "COMPANY
SHARES"); and
WHEREAS, concurrently herewith, IHS and Newco are entering into an
Agreement and Plan of Merger (the "PRIME MERGER AGREEMENT") with Prime Medical
Services, Inc. ("PRIME") and its stockholders, pursuant to which, among other
things, Prime is being merged with and into Newco upon the terms and subject to
the conditions set forth therein; and
WHEREAS, Newco is an indirectly wholly owned subsidiary of IHS;
WHEREAS, the Boards of Directors of IHS, Newco, and the Company deem it
advisable to merge the Company and Prime with and into Newco pursuant to this
Agreement and the Prime Merger Agreement (the "MERGER");
WHEREAS, pursuant to the Merger each outstanding share of capital stock
of Medaids (each a "MEDAIDS SHARE", and collectively, the "MEDAIDS SHARES")
shall be converted into the right to receive the Merger Consideration (as
hereinafter defined); and
WHEREAS, to effectuate the foregoing, the parties desire to adopt a
plan of merger and reorganization; and
WHEREAS, all of the holders of capital stock in the Company have
approved this Agreement and the plan of merger described herein and the
transactions contemplated hereby in accordance with all applicable laws, and the
Company's Certificate of Incorporation and By-laws; and
WHEREAS, the Guarantors and Shareholders have obtained all consents of
Governmental Authorities (as such term is hereinafter defined) and all third
parties necessary to the consummation of the transactions contemplated hereby;
and
WHEREAS, each of the Guarantors acknowledges that he or she will
directly or indirectly receive good and valuable consideration by reason of the
completion of the Merger;
NOW, THEREFORE, each of the Guarantors, Shareholders, Newco, IHS, and
the Company, intending to be legally bound, agree as follows:
ARTICLE I: MERGER
1.1 MERGER. Upon the terms and subject to the conditions set forth in
this Plan of Merger and in accordance with the General Corporation Law of the
State of Florida (the "FBCA"), at the Merger Time (as defined herein), the
Company and Prime shall be merged with and into Newco in accordance with the
provisions of Section 607.1101, et al of the FBCA. In furtherance thereof, on
the Closing Date the Company and Newco (together with Prime), shall execute,
deliver, and cause to be filed with the Secretary of State of the State of
Florida, the Articles and Plan of Merger in the form of Exhibit 1.1 hereto (the
"PLAN OF MERGER" or "ARTICLES OF MERGER"). Following the Merger Time, the
separate existence of the Company and Prime shall cease, and Newco shall
continue as the surviving corporation in the Merger (hereinafter sometimes
referred to as the "SURVIVING CORPORATION") as a business corporation
incorporated under the laws of the State of Florida under the name "ROTECH
OXYGEN & MEDICAL EQUIPMENT, INC. D/B/A MEDAIDS", and shall succeed to and assume
all the rights and obligations of the Company, Prime and Newco in accordance
with the FBCA.
1.2 MERGER TIME. The Merger shall become effective at such time (the
"MERGER TIME") as the duly executed Articles of Merger is filed with the
Secretary of State of the State of Florida.
1.3 PAYMENT OF MERGER CONSIDERATION. IHS agrees that following the
Closing (as defined in Section 5.1, below), it will make payment of the Merger
Consideration (as defined in Section 2.1(d)) to the extent set forth in, and in
accordance with the terms of, this Agreement.
2
1.4 SURVIVING CORPORATION.
(A) CERTIFICATE OF INCORPORATION. The Certificate of Incorporation
of Newco as in effect immediately prior to the Merger Time (as such term is
defined in Section 2.2) shall be the Certificate of Incorporation of the
Surviving Corporation until duly amended in accordance with the terms thereof
and of the FBCA.
(B) BY-LAWS. The By-laws of Newco as in effect immediately prior
to the Merger Time shall be the By-laws of the Surviving Corporation until duly
amended in accordance with their terms and as provided by the Certificate of
Incorporation of the Surviving Corporation and the FBCA.
(C) DIRECTORS. The directors of Newco at the Merger Time shall,
from and after the Merger Time, be the directors of the Surviving Corporation
until their respective successors have been duly elected or appointed and
qualified or until their earlier death, resignation, or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and By-laws.
(D) OFFICERS. The officers of Newco at the Merger Time shall, from
and after the Merger Time, be the officers of the Surviving Corporation until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation, or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-laws.
(E) FURTHER ACTION. If at any time after the Merger Time, IHS
shall consider that any further deeds, assignments, conveyances, agreements,
documents, instruments, or assurances in law or any other things are necessary
or desirable to vest, perfect, confirm, or record in the Surviving Corporation
the title to any property, rights, privileges, powers, and franchises of Newco
by reason of, or as a result of, the merger, or otherwise to carry out the
provisions of this Agreement and the Plan of Merger, the officers of Newco shall
execute and deliver, upon IHS's request, any instruments or assurances, and do
all other things necessary or proper to vest, perfect, confirm, or record title
to such property, rights, privileges, powers, and franchises in the Surviving
Corporation, and otherwise to carry out the provisions of this Agreement and the
Plan of Merger.
(F) The Plan of Merger includes the merger of Prime with and into
Newco, and the payment of merger consideration to the shareholders of Prime.
Each Shareholder and Guarantor represents, warrants and agrees that it, he or
she has reviewed the Plan of Merger, and it, he or she hereby approves such Plan
of Merger.
ARTICLE II: CONVERSION
2.1 CONSIDERATION. For purposes of this Agreement the terms:
(A) (I) "MERGER CONSIDERATION" shall mean THREE MILLION ONE
HUNDRED THOUSAND DOLLARS ($3,100,000) plus the Additional Amount (as
defined below).
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(II) "MEDAIDS CASH MERGER CONSIDERATION" shall mean $620,000
of the Merger Consideration, and shall be paid in cash.
(III) "MEDAIDS IHS STOCK MERGER CONSIDERATION" shall mean the
balance of the Merger Consideration ($2,480,000 plus the "Additional
Amount" remaining from cash and equivalents after payment of Closing Date
Liabilities), and shall be paid by the delivery of shares of common stock,
par value $.001, of IHS ("IHS SHARES") having a value as determined in
accordance with Section 3.1(a) below for the shares to be issued at Closing
and as of the "Subsequent Delivery Date" as set forth in Section 2.3(d) for
shares to be issued with respect to the "Additional Amount".
(IV) "ADDITIONAL AMOUNT" shall mean the amount of cash plus
cash equivalents included in the Assets less the amount of the Closing Date
Liabilities (as herein after defined in Section 2.6(b)). The Shareholders
and Guarantors represent, warrant and covenant that the amount of cash and
cash equivalents included in the Assets is $425,532.77 (the "CLOSING CASH
AMOUNT"). The Additional Amount shall not include any tax refunds for
Federal, State or local income taxes paid by the Company prior to the
Closing in respect of income prior to the Closing ("TAX REFUNDS");
provided, however, that the Surviving Corporation shall pay to the Group's
Representative (for distribution to the Shareholders in accordance with
their respective Proportionate Amounts) an amount equal to any Tax Refunds
actually collected by the Surviving Corporation after the Closing.
2.2 CONVERSION OF COMMON STOCK. At the Merger Time:
(A) each Medaids Share which is issued and outstanding at the
Merger Time shall by reason of the Merger, without any action by the holder
thereof, be converted into the right to receive, in accordance with the
procedures hereinafter described, a Proportionate Amount (as hereinafter
defined) of the Medaids Cash Merger Consideration and of the Medaids IHS Stock
Merger Consideration;
(B) each share of capital stock of Prime which is issued and
outstanding at the Merger Time shall by reason of the Merger, without any action
by the holder thereof, be converted into the right to receive cash and shares of
IHS Stock in the amounts, and in accordance with the procedures described in the
Plan of Merger, payable in cash plus shares of IHS Stock; and
(C) each share of Newco common stock outstanding immediately prior
to the Merger Time shall be unaffected by the Merger and shall continue to be
held by a direct or indirect wholly owned subsidiary of IHS.
For purposes of this Agreement: the "PROPORTIONATE AMOUNT" to which any
Medaids Share shall be entitled shall be a fraction, the numerator of which
shall be one, and the denominator of which shall be the total number of Medaid
Shares issued and outstanding at the Merger Time, other than shares, if any,
held in treasury.
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2.3 MANNER OF EXCHANGE. The Merger Consideration shall be paid as
follows:
(A) At Closing, IHS Shares (the "ESCROWED SHARES" or the "ESCROW
FUND") having an aggregate value (determined in accordance with Section 3.1(a)
hereof) equal to Three Hundred Ten Thousand Dollars ($310,000) shall be
delivered to CoreStates Bank, N.A., as escrow agent ("ESCROW AGENT"), to be held
by Escrow Agent during the Escrow Period (as defined in Section 2.7(d), below),
pursuant to the terms of an Escrow Agreement, in the form attached hereto as
Exhibit 2.3(a) (the "ESCROW AGREEMENT"). The Escrowed Shares shall be subject to
the provisions of Section 2.7 hereof. A Proportionate Amount of the Escrowed
Shares shall be delivered by each Shareholder.
(B) The balance of the Medaids Cash Merger Consideration and
$2,170,000 of the Medaids IHS Stock Merger Consideration shall be payable to the
Shareholders and shall be paid in accordance with the procedure set forth below
in Section 2.3(e). Attached hereto as Schedule 2.3(c) are the wire instructions
for delivery of such cash and shares of IHS Stock to the Shareholders. Each
Shareholder shall be entitled to a Proportionate Amount of such cash and shares
of IHS Stock.
(C) Two Hundred and Seventy (270) days after the Closing Date (the
"SUBSEQUENT DELIVERY DATE"), IHS shall cause the balance of the Medaids IHS
Stock Merger Consideration to be delivered to the Shareholders in accordance
with their Proportionate Amounts. Such shares of IHS Stock shall be valued as of
the Subsequent Delivery Date using a price per share of such stock equal to the
average closing New York Stock Exchange ("NYSE") price of such stock for the
twenty (20) trading day period immediately preceding the date which is two (2)
trading days before the Subsequent Delivery Date. The parties understand that
the amount of such balance of the Medaids IHS Stock Merger Consideration shall
be determined by IHS in good faith by subtracting the amount of the Closing Date
Liabilities (as determined by IHS in good faith) from the Closing Cash Amount.
(D) The Shareholders represent and warrant that in accordance with
the provisions of subsection (a) above, the Merger Consideration is required to
be distributed as set forth on Schedule 2.3(e). Upon delivery to IHS of stock
certificates representing any Company Shares, together with a fully completed
and executed letter of transmittal in the form of Exhibit 2.3(e) (a "LETTER OF
TRANSMITTAL"), IHS shall promptly pay to, or on behalf of, each person entitled
thereto the amount of cash and shall deliver certificates representing the
number of shares to which such person is entitled, as provided on Schedule
2.3(e). No interest will be paid or accrued on any Merger Consideration payable
upon the surrender of any certificate or certificates or other instruments. If
payment is to be made to a person other than the one in whose name the
certificate or other instrument surrendered is registered, it shall be a
condition of payment to such other person that the certificate or instrument so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such payment shall pay any transfer, stamp or
other taxes required by reason of the payment to a person other than the
registered holder of the certificate or other instrument surrendered or
establish to the satisfaction of IHS that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this Section
2.3(e), the certificate or certificates or instruments which immediately prior
to the Merger Time represented issued and outstanding Company Shares shall
represent for all purposes the right only to receive the Merger Consideration
set forth in this Agreement. After the Merger Time, there shall be no further
registration of transfers on the records of the Company of any Company Shares.
5
(E) Subject to the terms and conditions of this Agreement, each
party hereto approves and agrees to the Plan of Merger and shall execute,
deliver and file, or shall cause to be executed, delivered and filed, all such
consents, instruments, covenants, agreements, certificates and documents as
shall be necessary to effectuate the Merger on the Closing Date, including
without limitation, one or more Articles of Merger.
2.4 NO FRACTIONAL SHARES. No certificates or scrip representing
fractional shares of IHS Stock shall be issued upon the surrender for exchange
of certificates representing any Company Shares, and such fractional share
interests will not entitle the owner thereof to vote or to any rights of a
stockholder of IHS. Notwithstanding any other provision of this Agreement, each
holder of Company Shares exchanged pursuant to the Merger, (after taking into
account all certificates representing Company Shares delivered by such holder)
shall receive, in lieu thereof, cash (without interest) in an amount equal to
such fractional part of a share of IHS Stock multiplied by the value of such
share determined in accordance with Section 3.1(a) below.
2.5 ASSETS. As of January 30, 1998 (the "ECONOMIC CHANGE DATE"), the
assets (collectively, the "ASSETS") of each of the Company and the Subsidiary
will include the following:
(A) INVENTORY; FIXED ASSETS. All inventory and fixed assets of its
Business, including, without limitation, all of the same set forth on the
Schedule of Inventory and Fixed Assets attached hereto as Schedule 2.5(a); and
(B) ACCOUNTS RECEIVABLE. All of the accounts receivable of its
Business including, without limitation those described on Schedule 2.5(b); and
(C) MOTOR VEHICLES. All motor vehicles of its Business, including
without limitation, all of the same set forth on the Schedule of Motor Vehicles
attached hereto as Schedule 2.5(c); and
(D) PROPERTY RIGHTS. All Leases (as hereinafter defined in
paragraph 9.7(g)), easements and rights of way permitting access to its
Business; and
(E) CASH AND CASH EQUIVALENTS. The amount of cash and the cash
equivalents identified on Schedule 2.5(e) hereto, together with the bank
accounts related thereto.
(F) OTHER ASSETS. All other assets of any kind, tangible or
intangible, real, personal or mixed, owned and used or held for use by the
Company or the Subsidiary in connection with its Business, including, without
limitation, all of the following: (i) the Patients' List of the Business, as
described in Schedule 2.5(f)(i); (ii) the telephone numbers listed on the
Schedule of Telephone Numbers and Licenses attached hereto as Schedule
2.5(f)(ii); (iii) all personal property, machinery and equipment; (iv) all of
the Company's or the Subsidiary's prepaid assets; (v) all of the Company's or
the Subsidiary's rights under contracts, agreements, and instruments; (vi) any
assets of the Company or the Subsidiary used in the operation of the Business,
but not owned by the Company or the Subsidiary; (viii) all intangible rights of
the Company or the Subsidiary of every kind and description used in, or held for
use in connection with, the operation of its Business, including, without
limitation, all intangible assets, and to the extent permitted by applicable
law, all licenses, permits and authorizations; (ix) the security deposits listed
on Schedule 2.5(f)(ix), and (x)
6
each of the Company's and the Subsidiary's Certificate of Incorporation,
qualification to do business in any jurisdiction, taxpayer identification
number, minute books, stock transfer records and other documents related
specifically to the Company or the Subsidiary corporate organization and
maintenance.
2.6 CLOSING DATE LIABILITIES.
(A) The Shareholders and Guarantors jointly and severally
represent and warrant that, to the best of their knowledge and belief after
diligent inquiry, all liabilities of the Company or the Subsidiary as of the
Economic Change Date are listed on the Schedule of Liabilities attached hereto
as Schedule 2.6 (a). For purposes of this Agreement "LIABILITIES" shall mean and
include all claims, lawsuits, liabilities, obligations or debts of any kind or
nature whatsoever, whether absolute, accrued, due, direct or indirect,
contingent or liquidated, matured or unmatured, joint or several, whether or not
for a sum certain, whether for the payment of money or for the performance or
observance of any obligation or condition, and whether or not of a type which
would be reflected as a liability on a balance sheet (including, without
limitation, federal, state and local taxes of any nature) in accordance with
generally accepted accounting principles, consistently applied ("GAAP"),
including without limitation, malpractice or other tort claims asserted against
the Company or the Subsidiary, claims for breach of contract, any claims of any
kind asserted by patients, former patients, employees or former employees of the
Company or the Subsidiary or any other party that are based on acts or omissions
occurring on or before the Closing Date, amounts due or that may become due in
connection with the participation of the Company or the Subsidiary in the
Medicare or Medicaid programs or due to any other health care reimbursement or
payment intermediary, or that may be due by the Company or the Subsidiary to any
other third party payor, accounts payable, notes payable, trade payables, lease
obligations, indebtedness for borrowed money, accrued interest, and contractual
obligations. The Shareholders and Guarantors acknowledge that the amount of the
Merger Consideration for the Company Shares is based on the accuracy of the
representations and warranties of the Shareholders and the Guarantors contained
in this Agreement, including, but not limited to, the representations and
warranties contained in this Section 2.6(a).
(B) At the Closing, pursuant to an assumption agreement in the
form of Schedule 2.6(b) hereto (the "ASSUMPTION AGREEMENT"), the Shareholders
and the Guarantors will assume, jointly and severally, each liability of the
Company and the Subsidiaries arising out of facts or circumstances existing as
of the Economic Change Date, whether or not disclosed or known on the Closing
Date (the "CLOSING DATE LIABILITIES"), and will agree to satisfy all of the
Closing Date Liabilities that are not satisfied pursuant to Section 14.1, below,
as the same become due. Notwithstanding the foregoing, Buyer shall pay all
Closing Date Liabilities that are payable in cash, to the extent, but only to
the extent, the aggregate amount thereof does not exceed the Closing Cash
Amount.
(C) Without limiting the generality of the provisions of
subsection (b) above, the Closing Date Liabilities shall include all liabilities
under any Contracts (as hereinafter defined) to the extent such liabilities
arise out of facts or circumstances or obligations to be satisfied on or prior
to the Economic Change Date, all Taxes (as such term is defined in Section 9.16)
that arise out of the transactions contemplated hereby or out of any income
earned by the Company or the Subsidiary on or prior to the Merger Time, and the
Broker's Fee.
7
(D) Newco and IHS agree that the obligations (the "CONTINUING
OBLIGATIONS") arising out of services or products or other benefits to be
provided to the Surviving Corporation or the Subsidiary after Closing under
Contracts that are not terminated on or prior to Closing shall be the
responsibility of the Surviving Corporation or the Subsidiary, as the case may
be, after the Closing, and shall not constitute Closing Date Liabilities, and
Newco and IHS shall indemnify and hold each Guarantor and Shareholder harmless
from and against any Damages (as hereinafter defined in Section 13.3) arising
out of any of such Continuing Obligations.
(E) Additional Assets and Liabilities. (i) The parties agree that
the Assets also shall include all of the assets arising out of the operation of
the Business during the period commencing on the Economic Change Date and
terminating on the Closing Date (the "INTERIM PERIOD"), including without
limitation, any accounts receivable generated (whether or not billed) during the
Interim Period (the "INTERIM PERIOD RECEIVABLES"), any cash collected in respect
of any accounts receivable, and any inventory or equipment acquired by the
Company and the Subsidiary during such Interim Period in connection with the
operation of the Business. Notwithstanding the foregoing, the Assets shall not
include any non-material tangible assets (such as inventory or supplies) used or
disposed of, or any cash expended for liabilities incurred (as set forth in
clause (ii) below) after the Economic Change Date, in each case for the benefit
of the Business in the ordinary course of business consistent with past practice
during the Interim Period. Any cash collected in respect of accounts receivable
of the Company and the Subsidiary that were in existence as of the Economic
Change Date shall be applied to reduce the Shareholders obligations under
Section 2.7(a)(ii) below.
(II) The parties further agree that the Closing Date Liabilities
shall not include any accounts payable, payroll expenses or other expenses
incurred by the Company and the Subsidiary during the Interim Period for the
benefit of the Business in the ordinary course of business consistent with past
practice.
2.7 RIGHT OF OFFSET AGAINST THE ESCROW FUND.
(A) EVENT OF DEFICIENCY. If:
(I) the Surviving Corporation, the Subsidiary or IHS pays for
any Closing Date Liabilities (a "LIABILITIES DEFICIENCY"); or
(II) the aggregate value of all of the collectible accounts
receivable of the Company and the Subsidiary as of the Economic Change Date
is determined to be less than $ , as determined by actual net cash
collections of such receivables during the twelve (12) month period
immediately following the Closing Date (an "ASSET VALUE DEFICIENCY") (it
being understood that until the earlier to occur of (x) the first
anniversary of the Closing Date; and (y) the date on which their is no
longer an Asset Value Deficiency, the Surviving Corporation will use the
accounts receivable computer system currently used by the Company and the
Subsidiary for purposes of recording, resubmitting and collecting the
accounts receivable included in the Assets, and upon reasonable request of
the Group's Representative, the Surviving Corporation shall provide him
with reasonable information regarding the status of the collection of such
accounts receivable, and will permit the Group's
8
Representative to pursue the collection of such receivables on behalf of
the Surviving Corporation or, in lieu thereof (in the discretion of the
Surviving Corporation), the Surviving Corporation shall assign, without
recourse, such receivables to the Group's Representative in consideration
for payment to the Surviving Corporation of the face amount thereof in
cash, in each case, unless the Surviving Corporation shall reasonably
determine that the Group's Representative's pursuit of such collection may
have a material adverse effect on the Surviving Corporation); or
(III) any IHS Claimant (as defined in Section 13.1) shall be
entitled to be indemnified for any Damages (as such term is defined in
Section 13.3) pursuant to this Agreement ("INDEMNIFICATION CLAIMS", and
together with any Liabilities Deficiencies, and any Asset Value
Deficiencies, collectively "CLAIMS" and each, a "CLAIM");
then, and in any of such events, the applicable IHS Claimant may provide written
notice to the Group's Representative of the Claim, in which case such IHS
Claimant shall be entitled to recover the amount of such Claim in accordance
with the following procedure.
(B) PROCEDURE IF SHAREHOLDERS OR GUARANTORS FAIL TO PAY. If any
Shareholder or Guarantor fails to pay any Claim in full to any applicable IHS
Claimant within twenty (20) days from the date of such written notice (said
twenty (20) day period hereinafter referred to as the "NOTICE PERIOD"), such IHS
Claimant shall have the right to offset against the Escrow Fund, in accordance
with the terms and conditions of the Escrow Agreement, in amounts from time to
time equal to the amount of such Claim (subject, however, in the case of a
"DISPUTE", to the provisions of Section 13.4 hereof applicable thereto), and
each Guarantor and Shareholder agrees to any such offset. The right of the IHS
Claimants to proceed against the Escrow Fund shall not be exclusive of any other
rights or remedies that they may have under this Agreement, law, equity or
otherwise.
(C) ESCROW COSTS. The fees of the Escrow Agent shall be borne by
the IHS.
(D) ESCROW PERIOD.
(I) The "ESCROW PERIOD" shall terminate on the first
anniversary of the Closing Date.
(II) The balance, if any, of the Escrow Fund remaining (the
"REMAINING ESCROW FUNDS") at the close of business on the last day of the
Escrow Period, shall be delivered to Group's Representative for further
distribution to the Shareholders within fifteen (15) days after the last
day of the Escrow Period.
(III) Notwithstanding anything to the contrary contained in
this subsection (d), if any Claim made by any IHS Claimant is in dispute at
the time that any amounts are otherwise to be delivered to the
Shareholders' Representative, then there shall
9
be withheld from such amount to be delivered and there shall be retained in
the Escrow Fund, a number of IHS Shares such that there will be remaining
in the Escrow Fund a number of IHS Shares having a value (determined in
accordance with Section 3.1(a) hereto) equal to at least twice the amount
of the Claim asserted by the IHS Claimant until the final settlement of
such Claim or Claims.
(E) VALUE OF ESCROWED SHARES. For purposes of determining the
number of IHS Shares to be delivered to any IHS Claimant in respect of any
Claim, the IHS Shares shall be valued in accordance with Section 3.1(a) hereof.
ARTICLE III: IHS STOCK
3.1 IHS STOCK. A portion of the Merger Consideration equal to Two
Million Four Hundred Eighty Thousand Dollars ($2,480,000) shall be payable by
means of the delivery of IHS Shares in accordance with the following:
(A) SHARE VALUE. The number of IHS Shares issuable at Closing (the
"CLOSING DATE SHARE COUNT") or deliverable to any IHS Claimant from the Escrow
Fund shall be calculated based upon a price per share of such stock equal to
$29.859.
(B) REGISTRATION RIGHTS. IHS will prepare and use its reasonable
commercial efforts to cause to be filed within one-hundred and twenty (120) days
following the Closing Date, and will use its reasonable commercial efforts to
have declared effective by the Securities and Exchange Commission (the
"COMMISSION"), a registration statement for the registration of the IHS Shares
issued to the Shareholders in connection with this transaction, including the
shares, if any, issuable under Section 3.1(c) in respect of any re-calculation
of the Closing Date Share Count, under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and IHS shall maintain the effectiveness of each such
registration statement for a period of one (1) year following the date it became
effective (the "REGISTRATION DATE"), except to the extent that an exemption from
registration may be available.
(C) SHARE ADJUSTMENT. Promptly following the Share Adjustment Date
(as hereinafter defined), the number of shares deliverable as part of the Merger
Consideration (and that have not previously been transferred by any Shareholder)
shall be re-calculated based upon the average closing NYSE price for IHS Shares
for the 20-trading day period immediately preceding the first anniversary of the
Closing Date (the "RECALCULATED VALUE"), provided that such adjustment shall be
made only if the result shall be an increase in the number of shares issuable to
the Shareholders. If the number of shares as re-calculated under this subsection
(c) (the "ADJUSTED SHARE COUNT") exceeds the Closing Date Share Count, IHS
promptly shall deliver over to the Group's Representative an additional number
of IHS Shares as shall have a value equal to the amount of such excess (using
the Recalculated Value for determining the number of such IHS Shares to be
delivered), and such additional shares shall be included in the aforementioned
registration
10
statement by means of a post-effective amendment thereto. In lieu of delivering
additional shares as aforesaid, IHS may, in its sole discretion, elect to
deliver cash to the Group's Representative (for distribution to the
Shareholders) in the amount of such excess. If the Closing Date Share Count
exceeds the Adjusted Share Count, no adjustment shall be made. For purposes
hereof, "SHARE ADJUSTMENT DATE" shall mean the earlier to occur of: (x) the
first anniversary of the Closing Date; or (y) the day preceding the date, if
any, on which all issued and outstanding shares of IHS Stock are to be split,
reverse split, exchanged, converted or otherwise recharacterized pursuant to any
plan of merger, consolidation, reorganization or other corporate restructuring.
(D) REGISTRATION EXPENSES. Shareholders shall not be responsible
for, and IHS shall bear, all of the reasonable expenses of IHS related to such
registration including, without limitation, the fees and expenses of its counsel
and accountants, all of its other costs, fees and expenses incident to the
preparation, printing, registration and filing under the Securities Act of the
registration statement and all amendments and supplements thereto, the cost of
furnishing copies of each preliminary prospectus, each final prospectus and each
amendment or supplement thereto to underwriters, dealers and other purchasers of
IHS Shares and the costs and expenses (including fees and disbursements of its
counsel) incurred in connection with the qualification of IHS Shares under the
Blue Sky laws of various jurisdictions. IHS, however, shall not be required to
pay underwriter's or brokerage discounts, commissions or expenses, or to pay any
costs or expenses arising out of Shareholders' or any transferee's failure to
comply with its obligations under this Article III.
(E) RESALE LIMITATIONS. The Shareholders hereby covenant with
Buyer that, until the second anniversary of the Closing Date, sales by them and
the Shareholders of Prime of IHS Shares after the Closing Date shall not, in the
aggregate, exceed 30,000 shares during any 30- day period. All sales by
Shareholders during said period shall be effected solely through Xxxxx Xxxxxx,
Inc.
(F) REGISTRATION PROCEDURES, ETC. In connection with the
registration rights granted to the Shareholders with respect to the IHS Shares
as provided in this Section 3.1, IHS covenants and agrees as follows:
(I) At IHS's expense, IHS will keep the registration and
qualification under this Section 3.1 effective (and in compliance with
the Securities Act) by such action as may be necessary or appropriate
until the first anniversary of the Closing Date except to the extent
that an exemption from registration may be available. IHS will promptly
notify the Shareholders, at any time when a prospectus relating to a
registration statement under this Section 3.1 is required to be
delivered under the Securities Act, of the happening of any event known
to IHS as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing.
(II) IHS shall furnish the Shareholders with such number of
prospectuses as shall reasonably be requested.
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(III) IHS shall take all necessary action which may be
required in qualifying or registering IHS Shares included in a
registration statement for offering and sale under the securities or
Blue Sky laws of such states as reasonably are requested by the
Shareholders, provided that IHS shall not be obligated to qualify as a
foreign corporation or dealer to do business under the laws of any such
jurisdiction.
(IV) The information included or incorporated by reference in
the registration statement filed pursuant to this Section 3.1 will not,
at the time any such registration statement becomes effective, contain
any untrue statement of a material fact, or omit to state any material
fact required to be stated therein as necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading or necessary to correct any statement in any
earlier filing of such registration statement or any amendments
thereto. The registration statement will comply in all material
respects with the provisions of the Securities Act and the rules and
regulations thereunder. IHS shall indemnify the Shareholders, their
successors and assigns, and each person, if any, who controls such
Shareholders within the meaning of ss.15 of the Securities Act or
ss.20(a) of the Securities Exchange Act of 1934, as amended ("EXCHANGE
ACT"), against all loss, claim, damage, expense or liability (including
all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may become
subject under the Securities Act, the Exchange Act or any other
statute, common law or otherwise, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in such registration statement executed by IHS or based upon
written information furnished by IHS filed in any jurisdiction in order
to qualify IHS Shares under the securities laws thereof or filed with
the Commission, any state securities commission or agency, NYSE or any
securities exchange; or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements contained therein not misleading, unless such statement or
omission was made in reliance upon and in conformity with written
information furnished to IHS by any of the Shareholders expressly for
use in such registration statement, any amendment or supplement thereto
or any application, as the case may be. If any action is brought
against the Shareholders or any controlling person of the Shareholders
in respect of which indemnity may be sought against IHS pursuant to
this subsection 3.1(f)(iv), the Shareholders or such controlling person
shall within thirty (30) days after the receipt thereby of a summons or
complaint, notify IHS in writing of the institution of such action and
IHS shall assume the defense of such actions, including the employment
and payment of reasonable fees and expenses of counsel (reasonably
satisfactory to the Shareholder's Representative or such controlling
person). The Shareholders or such controlling person shall have the
right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the
Shareholders or such controlling person unless (A) the employment of
such counsel shall have been authorized in writing by IHS in connection
with the defense of such action, or (B) IHS shall not have employed
counsel to have charge of the defense of such action, or (C) such
indemnified party or parties shall have reasonably concluded (after
notice to IHS) that there may be defenses available to it or them which
are different from or additional to those available to IHS (in which
case, IHS shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any
12
of which events the fees and expenses of not more than one additional
firm of attorneys for the Shareholders and such controlling persons
shall be borne by IHS. Except as expressly provided in the previous
sentence, in the event that IHS shall not previously have assumed the
defenses of any such action or claim, IHS shall not thereafter be
liable to the Shareholders or such controlling person in investigating,
preparing or defending any such action or claim.
(V) The Shareholders, and their successors and assigns, shall
severally, and not jointly, indemnify IHS, its officers and directors
and each person, if any, who controls IHS within the meaning of ss.15
of the Securities Act or ss.20(a) of the Exchange Act against all loss,
claim, damage, or expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which they may become subject under the
Securities Act, the Exchange Act or any other statute, common law or
otherwise, arising from information furnished by or on behalf of such
Shareholders, or their successors or assigns for specific inclusion in
such registration statement.
(G) NOTICE OF SALE. If the Shareholders desire to transfer all or
any IHS Shares, they will deliver prior written notice to IHS, describing in
reasonable detail their intention to effect the transfer and the manner of the
proposed transfer. If the transfer is to be pursuant to an effective
registration statement as provided herein, the Shareholders will sell the IHS
Shares in compliance with the disclosure therein and discontinue any offers and
sales thereunder upon notice from IHS that the registration statement relating
to the IHS Stock being transferred is not "current" until IHS gives further
notice that offers and sales may be recommenced. In the event of any such notice
from IHS, IHS agrees to file expeditiously such amendments to the registration
statement as may be necessary to bring it current during the period specified in
Section 3.1(b) and to give prompt notice to the Shareholders when the
registration statement has again become current. If the Shareholders deliver to
IHS an opinion of counsel reasonably acceptable to IHS and its counsel and to
the effect that the proposed transfer of IHS Shares may be made without
registration under the Securities Act, the Shareholders will be entitled to
transfer IHS Shares in accordance with the terms of the notice and opinion of
their counsel.
(H) FURNISH INFORMATION. It shall be a condition precedent to the
obligations of IHS to take any action pursuant to this Article III that the
Shareholders shall furnish to IHS such information regarding themselves, the IHS
Shares held by them, and the intended method of disposition of such securities
as shall be required to effect the registration of their IHS Shares. In that
connection, each transferee of any Shareholder shall be required to represent to
IHS that all such information which is given is both complete and accurate in
all material respects. Such Shareholders shall deliver to IHS a statement in
writing from the beneficial owners of such securities that they bona fide intend
to sell, transfer or otherwise dispose of such securities. Each transferee will,
severally, promptly notify IHS at any time when a prospectus relating to a
registration statement covering such transferee's shares under this Section 3.1
is required to be delivered under the Securities Act, of the happening of any
event known to such transferee as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the statements as then existing.
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(I) INVESTMENT REPRESENTATIONS. All IHS Shares to be issued
hereunder will be newly issued shares of IHS. The Shareholders represent and
warrant to IHS that the IHS Shares being issued hereunder are being acquired,
and will be acquired, by the Shareholders for investment for their own accounts
and not with a view to or for sale in connection with any distribution thereof
within the meaning of the Securities Act or the applicable state securities law;
the Shareholders acknowledge that the IHS Shares constitute restricted
securities under Rule 144 promulgated by the Commission pursuant to the
Securities Act, and may have to be held indefinitely, and the Shareholders agree
that no IHS Shares may be sold, transferred, assigned, pledged or otherwise
disposed of except pursuant to an effective registration statement or an
exemption from registration under the Securities Act, the rules and regulations
thereunder, and under all applicable state securities laws. The Shareholders
have the knowledge and experience in financial and business matters, are capable
of evaluating the merits and risks of the investment, and are able to bear the
economic risk of such investment. The Shareholders have had the opportunity to
make inquiries of and obtain from representatives and employees of IHS such
other information about IHS as they deem necessary in connection with such
investment.
(J) LEGEND. It is understood that the certificates evidencing the
IHS Shares shall bear a legend substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR
AN OPINION OF THE COMPANY'S COUNSEL THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.
(K) CERTAIN TRANSFEREES. Prior to the effective date of
registration of the IHS Shares, no Shareholder shall transfer any shares of IHS
Shares to any person or entity except as expressly permitted by this Agreement
and unless such transferee shall have agreed in writing to be bound by the
provisions applicable to the Shareholders under this Article III.
ARTICLE IV: EMPLOYEES
It is expressly understood and agreed that although the Surviving
Corporation intends to retain substantially all of the employees of the Company
and the Subsidiary after the Closing, it may notify the Group's Representative
prior to the Closing that the employment of a limited number of such employees
is to be terminated, in which case, the Company or the Subsidiary, as the case
may be, shall cause such termination, and all liabilities resulting therefrom
that may be due to such terminated employee shall constitute Closing Date
Liabilities. In any event, any benefits, costs or liabilities incurred or
accrued on or prior to Closing with respect to any employee of the Company or
the Subsidiary shall constitute Closing Date Liabilities.
14
ARTICLE V: CLOSING
5.1 CLOSING DATE. The consummation of the transactions
contemplated by this Agreement is occurring on the date hereof and is sometimes
referred to as the "CLOSING", and the date on which such consummation occurs,
including, without limitation, the execution and delivery of this Agreement by
each of the parties hereto, is sometimes referred to as the "CLOSING DATE".
5.2 DELIVERIES. At the Closing:
(A) The Company and Newco (together with Prime) shall
execute, deliver and cause to be filed with the Secretary of State of Florida
and any other appropriate Governmental Authorities (as such term is defined in
Section 9.4), the Certificate of Merger and such other instruments or documents,
if any, as shall be necessary to cause the Company (together with Prime) to be
merged with and into Newco as provided in Section 1.1 above.
(B) The Shareholders and Guarantors will deliver to IHS an
opinion, dated the Closing Date, of their counsel, in substantially the form
attached hereto as Exhibit 5.2(b).
(C) The Company will deliver a certificate of its Secretary
or other officer certifying as of the Closing Date a copy of resolutions of its
board of directors and its stockholders, authorizing the execution, delivery and
full performance of this Agreement and the Transaction Documents (as defined in
Section 9.1(a) below), and the incumbency of its officers.
(D) Newco, as the Surviving Corporation of the Merger, will
enter into an employment agreement with Xxxxxxxxxx in the form and substance of
Exhibit 5.2(d).
(E) The Shareholders and Guarantors shall execute and deliver
the Assumption Agreement and Transmittal Letters, and deliver to IHS the
certificates representing all of the Company Shares.
(F) Each officer and director of the Company or of the
Subsidiary shall resign from such position as of the Closing Date.
ARTICLE VI: ASSET CONDITION
The Shareholders and Guarantors, jointly and severally, represent,
warrant and covenant that, as of the Closing Date, all physical Assets of the
Company and the Subsidiary are free of defects except to the extent that such
failure will not likely have a material adverse effect on the assets,
liabilities, financial condition or prospects of the Company or the Subsidiary,
and in good working order, condition and repair, except for ordinary wear and
tear, and conform in all material respects with all applicable Governmental
Requirements (as defined in Section 9.4).
15
ARTICLE VII: SALES AND TRANSFER TAXES; FEES
All transfer and other taxes and fees, if any, that may be due or
payable as a result of the transactions contemplated by this Agreement, whether
levied on the Shareholders, IHS, Newco or the Company, shall be borne by the
Shareholders and Guarantors.
ARTICLE VIII: RESTRICTIONS ON OPERATIONS OF THE COMPANIES
8.1 NEGATIVE COVENANTS. The Shareholders and Guarantors represent,
warrant and covenant that, except as expressly disclosed on Schedules hereto,
since the most recent Financial Statement Date referred to in Section 9.15
below, there has been no material adverse change in the assets, liabilities,
financial condition, or prospects of the Company or the Subsidiary, and neither
the Company nor the Subsidiary has:
(A) sold, assigned or transferred any Assets, except in the
ordinary course of business, consistent with past practice;
(B) subjected any Assets to any liens, claims, security
interests, pledges, mortgages, restrictions on transfer or use and other
encumbrances of any kind or nature whatsoever ("LIENS");
(C) entered into any contract or transaction binding the
Company or the Subsidiary or Business other than immaterial contracts or
transactions entered into in the ordinary course of business, consistent with
past practice;
(D) incurred any liabilities or indebtedness other than in
the ordinary course of business, consistent with past practice;
(E) except in the ordinary course of business, consistent
with past practice, or otherwise to comply with any applicable minimum wage law,
paid any bonuses, increased the salaries or other compensation of any of its
employees, consultants, agents or representatives, or made any increase in, or
any additions to, other benefits to which any of such employees, consultants,
agents or representatives may be entitled;
(F) discharged or satisfied any Lien, or satisfied, paid or
prepaid any material liabilities, other than in the ordinary course of business
consistent with past practice, or failed to pay or discharge when due any
liabilities, the failure to pay or discharge of which has caused or may cause
any actual damage or risk of loss to the Company or the Subsidiaries or Business
or Assets;
(G) failed to collect any accounts receivable in the ordinary
course of business, consistent with past practice;
16
(H) changed any of the accounting principles followed by it
or the methods of applying such principles;
(I) canceled, modified or waived any debts or claims held by
it, other than in the ordinary course of business, consistent with past
practice, or waived any rights of substantial value, whether or not in the
ordinary course of business;
(J) instituted, settled or agreed to settle any litigation,
action or proceeding before any Governmental Authority relating to them or their
property or received any threat thereof; or
(K) entered into any material transaction other than in the
ordinary course of business, consistent with past practice.
8.2 CONDUCT OF BUSINESS PENDING CLOSING. The Shareholders and
Guarantors represent, warrant and covenant that since the most recent Financial
Statement Date referred to in Section 9.15 below, each of the Company and the
Subsidiary shall maintain its existence and conduct its business in good faith
and in the customary and ordinary course of business consistent with past
practice.
ARTICLE IX: REPRESENTATIONS AND WARRANTIES BY SHAREHOLDERS
As a material inducement to IHS and Newco to execute and perform their
obligations under this Agreement, the Shareholders and Guarantors hereby,
jointly and severally, represent and warrant to IHS and Newco as follows as of
the Closing Date:
9.1 ORGANIZATION OF COMPANIES; ENFORCEABILITY.
(A) The Company is a corporation, organized, and in good
standing in the State of Florida, and is qualified to do business and is in good
standing in each other State where the nature of its business or the assets held
by it requires such qualification, and has requisite corporate power and
authority to carry on its Business as presently being conducted, to enter into
this Agreement, and to carry out and perform the terms and provisions of this
Agreement. Each of this Agreement and each agreement, instrument, certificate
and document ("TRANSACTION DOCUMENTS") executed by the Company in connection
with this Agreement or the transactions contemplated hereby constitutes the
legal, valid and binding obligations of the Company, enforceable against it in
accordance with its respective terms.
(B) The Company has no subsidiaries other than the
Subsidiary. The Company owns, legally and beneficially and free and clear of all
Liens, all of the issued and outstanding capital stock of the Subsidiary. The
Subsidiary is a corporation, organized, and in good standing in the State of
Florida, and is qualified to do business and is in good standing in each other
17
State where the nature of its business or the assets held by it requires such
qualification, and has requisite corporate power and authority to carry on its
Business as presently being conducted.
(C) Each Shareholder that is a trust was duly created and
exists in accordance with the law of the State of Florida, and has the requisite
trust power and authority to carry on its activities as presently being
conducted, to enter into this Agreement, and to carry out and perform the terms
and provisions of this Agreement. This Agreement and each of the Transaction
Documents executed by any Shareholder (whether or not such Shareholder is a
trust) constitutes the legal, valid and binding obligations of such Shareholder,
enforceable against it, him or her in accordance with its respective terms.
9.2 CONSENTS. No authorization, consent, approval, license,
exemption by, filing or registration with any Governmental Authority or of any
party to any contract, agreement, instrument, commitment, lease, indenture or
understanding (written, oral or implied) by which the Company or the Subsidiary
or any of the Assets is bound ("CONTRACTS") or by which any Shareholder or
Guarantor or any Shareholder's or Guarantor's assets is bound
("SHAREHOLDER/GUARANTOR CONTRACTS") is necessary in connection with the
execution, delivery and performance of this Agreement or any of the Transaction
Documents by any Company or Shareholder or Guarantor. Without limiting the
generality of the foregoing, all necessary consents to the execution, delivery
and performance of this Agreement and the Transaction Documents and the
transactions contemplated hereby and thereby of any beneficiary or settlor of
any Shareholder that is a trust have been obtained.
9.3 LITIGATION. Except as set forth on Schedule 9.3, there are no
actions, suits or proceedings affecting the Company or the Subsidiary or any of
the Assets which are pending or threatened against the Company or the Subsidiary
or affecting any of the Company's or the Subsidiary's properties or rights, at
law or in equity, or before any Governmental Authority, nor is the Company or
the Subsidiary or any of their respective officers or directors or any
Shareholder aware of any facts which to their knowledge might reasonably be
expected to result in any such action, suit or proceeding.
9.4 COMPLIANCE WITH LAWS AND CONTRACTS. Neither the Company nor
the Subsidiary is in violation of, or in default under: any term or provision of
its Articles of Incorporation or By-Laws; or any judgment, order, writ,
injunction, decree, statute, law, rule, regulation, directive, mandate,
ordinance or guideline ("GOVERNMENTAL REQUIREMENTS") of any Federal, state,
local or other governmental or quasi-governmental agency, bureau, board,
council, administrator, court, arbitrator, commission, department,
instrumentality, body or other authority ("GOVERNMENTAL AUTHORITIES"); or of any
Contract. The execution and delivery by the Company and each Shareholder and
each Guarantor of, and the performance and compliance by each of them with this
Agreement, and the Transaction Documents and the transactions contemplated
hereby and thereby, does not and will not result in the violation of or conflict
with or constitute a default under any such term or provision or result in the
creation of any Lien on any of the properties or assets of the Company or the
Subsidiary or any Shareholder or Guarantor pursuant to any such term or
provision or any term or provision of any Governmental Requirement by which any
Shareholder or Guarantor is bound or of any Shareholder/Guarantor Contract.
18
9.5 CORPORATE ACTS AND PROCEEDINGS. The execution, delivery and
performance of this Agreement and each of the Transaction Documents, and the
transactions contemplated hereby and thereby, including the consummation of the
Merger as provided for in this Agreement, have been approved and consented to by
the Board of Directors of the Company and, all holders of outstanding capital
stock of the Company, and all action required by any applicable Governmental
Requirement by the stockholders of the Company with regard thereto have been
appropriately authorized and accomplished. Any rights of appraisal or to dissent
to the Merger have been waived.
9.6 TITLE TO ASSETS. Except for the Assets that are held subject
to Leases (as hereinafter defined) the Company and the Subsidiary have good and
indefeasible title to all of the Assets, free and clear of all Liens. The
Company and the Subsidiary have good and valid leasehold interests, subject to
no Liens, in each of the Leases.
9.7 CONTRACTS. Set forth on Schedule 9.7 hereto is a list of all
material Contracts of the Company and the Subsidiary, including, without
limitation, each:
(A) contract, agreement or commitment for the employment or
retention of, or collective bargaining, severance or termination of or with, any
director, officer, employee, consultant, sales representative, or agent or group
of employees, or any non-competition, non- solicitation, confidentiality or
similar agreement with any such person or persons;
(B) contract, agreement or arrangement for the acquisition or
disposition of any assets, property or rights outside the ordinary course of
business or requiring the consent of any party to the transfer and assignment of
any such assets, property or rights (by purchase or sale of assets, purchase or
sale of stock, merger or otherwise), that is executory or that was entered into
during the three (3) year period ending on the date hereof;
(C) contract, agreement or commitment which contains any
provisions requiring the Company or the Subsidiary or Business to indemnify or
act for any other person or entity or to guaranty or act as surety for any other
person or entity;
(D) contract, agreement or commitment restricting any Company
or Business from, or in favor of the Company or the Subsidiary or Business and
restricting any other person or entity from, conducting business anywhere in the
world for any period of time or restricting the use or disclosure of any
confidential or proprietary information or prohibiting the solicitation of
business or of employees, agents or others;
(E) partnership, joint venture or management contract or
similar arrangement, or agreement which involves a right to share profits or
future payments with respect to any Business or any portion thereof or the
business of any other person or entity;
(F) licensing, distributor, dealer, franchise, sales or
manufacturer's representative, agency or other similar contract, arrangement or
commitment;
19
(G) contract, agreement or arrangement granting a leasehold
or other interest in real property or personal property, including without
limitation, subleases, licenses and sublicenses (the "LEASES");
(H) profit sharing, thrift, bonus, incentive, deferred
compensation, stock option, stock purchase, severance pay, pension, retirement,
hospitalization, insurance or other similar plan, agreement or arrangement
applicable to any employee, consultant or agent of the Company or the Subsidiary
or Business not covered by subsection (a) above;
(I) agreement, consent order, plea bargain, settlement or
stipulation or similar arrangement with any Governmental Authority;
(J) agreement with respect to the settlement of any
litigation or other proceeding with any third person or entity;
(K) agreement relating to the ownership, transfer, voting or
exercise of other rights with respect to any equity in the Company or the
Subsidiary, or any other entity, including without limitation, registration
rights agreements, voting trust agreements and shareholder and proxy agreements;
(L) contract, agreement or commitment to provide services or
products, or
(M) agreement not made in the ordinary and normal course of
business and consistent with past practice, or involving consideration in excess
of $25,000 in each case, that is not set forth in subsections (a) through (l)
above.
To the best knowledge of the Company, the Subsidiary, and each Guarantor
and Shareholder, no party to any Contract is in default under any Contract. The
Shareholders and Guarantors have delivered to IHS true and complete copies of
each written Contract (or a description of each oral Contract) requested by IHS.
9.8 BROKERS. The Shareholders and the Company have been
represented solely by the Broker, and as a result the Broker's Fee in the amount
of $123,300 is payable by the Shareholders to the Broker at the Closing in
connection with the transactions contemplated by this Agreement, and no broker
or finder is entitled to any additional broker's or finder's fee or other
commission in respect thereof based in any way on agreements, understandings or
arrangements with any Company or Shareholder.
9.9 EMPLOYMENT CONTRACTS; EMPLOYEES. There are no Contracts of
employment between the Company or the Subsidiary and any of its employees,
except as set forth on Schedule 9.7(a) above. The name, position, current rate
of compensation and any vacation or holiday pay, sick pay, personal leave,
severance and any other compensation arrangements or fringe benefits, of each
current employee, sales representative, consultant and agent of the Company or
the
20
Subsidiary, contained on the Schedule of Personnel Payrates and Advances
attached hereto as Schedule 9.9 is accurate and complete. No employee,
consultant or agent of the Company or the Subsidiary has any vested or unvested
retirement benefits or other termination benefits, except as described on
Schedule 9.9. Since the date that is two (2) years prior to the Closing Date,
there has been no material adverse change in the relationship between the
Company or the Subsidiary and its employees, nor any strike or labor disturbance
by any of such employees affecting the Business and there is no indication that
such a change, strike or labor disturbance is likely. No employees of the
Company or the Subsidiary are represented by any labor union or similar
organization in connection with their employment by or relationship with, the
Company or the Subsidiary, and to the knowledge of the Company, the Subsidiary,
the Guarantors and Shareholders, there are no pending or threatened activities
the purpose of which is to achieve such representation of all or some of such
employees, and there are no threats of strikes, work stoppages or pending
grievances by any such employees. Neither the Company nor the Subsidiary is
party to any collective bargaining or other labor contracts.
9.10 EMPLOYEE BENEFIT PLANS. Neither the Company nor the
Subsidiary has any pension, bonus, profit-sharing, or retirement plans for
directors, officers or employees of the Business, the Company or the Subsidiary,
nor is the Company or the Subsidiary required to contribute to any such plan.
Without limiting the generality of the foregoing, neither the Company nor the
Subsidiary maintains or makes contributions to, and neither the Company nor the
Subsidiary has at any time in the past maintained or made contributions to, any
employee benefit plan which is subject to the minimum funding standards of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or to any
multi-employer plan subject to the terms of the Multi-employer Pension Plan
Amendment Act of 1980 (the "MULTI-EMPLOYER ACT"). Prior to the date hereof, the
only pension, bonus, profit-sharing, or retirement plans that have been in
effect for directors, officers or employees of the Business or the Company or
the Subsidiary are set forth on Schedule 9.10 hereto (the "TERMINATED PLANS").
Each of such Terminated Plans has been terminated in accordance with the terms
of such Terminated Plans and in accordance with all Governmental Requirements,
including without limitation, ERISA. At the time of termination, each of such
Terminated Plans was fully funded and in compliance with all applicable
Governmental Requirements. Neither the Company nor the Subsidiary has any
liability with respect to any Terminated Plan.
9.11 INSURANCE. All inventories, buildings and fixed assets owned
or leased by the Company or the Subsidiary are and will be adequately insured
against fire and other casualty through the Closing Date. The information
contained on the Schedule of Insurance Policies, attached hereto as Schedule
9.11, is accurate and complete. Schedule 9.11 also sets forth any claims made
under any of the insurance policies referred to above or increases in premiums
therefore during the past two years. True and complete copies of all policies of
fire, liability and other forms of insurance held or owned by the Company or the
Subsidiary or otherwise in force and providing coverage for any Business or any
of the Assets (including but not limited to medical malpractice insurance, and
any state sponsored plan or program for worker's compensation) have been
delivered to IHS. Such policies are owned by and payable solely to the Company
or the Subsidiary, and said policies or renewals or replacements thereof will be
outstanding and duly in force at the Closing Date, and all premiums due on or
before the Closing Date in respect thereof have been paid. The Company and the
Subsidiary have purchased title insurance as set forth on Schedule 9.11.
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9.12 DISCLOSURE. No representation or warranty by any Guarantor or
Shareholder in this Agreement or in any Transaction Document, contains any
untrue statement of material fact or omits to state any material fact, of which
the Company, the Subsidiary, any Guarantor or Shareholder or any of their
respective officers, directors, trustees or stockholders has knowledge or
notice, required to make the statements herein or therein contained not
misleading.
9.13 OFFICERS AND DIRECTORS OF COMPANIES. As of the Closing Date,
the following individuals are all of the officers and directors of the Company
and the Subsidiary:
Name Office/Position
---- ---------------
Xxxxxx Xxxxxx Director, President, Secretary
Xxxxxx Xxxxxxx Director, Vice President, Treasurer
9.14 INVENTORY AND FIXED ASSETS. The information contained on the
Schedule of Inventory and Fixed Assets, attached hereto as Schedule 2.5(a) is
accurate and complete in all material respects.
9.15 FINANCIAL STATEMENTS. The Shareholders and Guarantors have
furnished IHS with the financial statements of the Company and the Subsidiary on
a consolidated basis (the "FINANCIAL STATEMENTS") for the periods ended
[_____________________ ], [_____________________________] and December 31, 1997
(the "FINANCIAL STATEMENT DATES"), copies of which are attached hereto as
Schedule 9.15. The Financial Statements: (a) are in accordance with the books
and records of the Company and the Subsidiary; (b) fairly present the financial
condition of the Company and the Subsidiary on a consolidated basis at such date
and the results of its operations for the periods specified; (c) were prepared
in accordance with all rules, guidelines, regulations and laws applicable to
reporting financial condition for Federal income tax purposes applied on a basis
consistent with prior periods (the "TAX PRINCIPLES"); (d) with respect to all
Contracts of the Company or Subsidiary, reflect adequate reserves for all
reasonably anticipated losses and costs in excess of anticipated income; and (e)
with respect to any balance sheets, disclose all of the liabilities of the
Company and the Subsidiary at the Financial Statement Dates and include the
appropriate reserves for all taxes and other accrued liabilities, except that
certain contingent liabilities, if not disclosed on such balance sheets, shall
be considered to be disclosed pursuant to this subparagraph, if expressly
disclosed on Schedule 9.15 to this Agreement. The income statements included in
the Financial Statements do not contain any items of special or nonrecurring
income or expense or any other income not earned or expense not incurred in the
ordinary course of business, consistent with past practice, except as expressly
specified therein, and such Financial Statements include all adjustments, which
consist only of normal recurring accruals, necessary for such fair presentation.
9.16 TAX INFORMATION. Each of the Company and the Subsidiary has
furnished IHS with its (a) most recent tax registration certificates, and (b)
tax returns for the periods ________________________ ,_______________ and
__________________ required of it by each state or other locality in which it
conducts business, which tax returns in all instances where applicable include,
but shall not be limited to, income, franchise taxes, state and local tangible
personal property tax returns, and state and local sales tax returns, which
registration certificates and tax returns are set forth, collectively,
22
on the Schedule of Tax Information, attached hereto as Schedule 9.16. The
Balance Sheet included in the most recent Financial Statements for the Company
and the Subsidiary on a consolidated basis sufficiently provides for all
accrued, deferred and unpaid federal, state, local and foreign net or gross
income, profits, property, sales, use, excise, license, franchise, severance,
stamp, occupation, premium, windfall profits tax, alternative and add-on minimum
taxes, customs duty, added value, payroll, employer's income, withholding and
social security taxes, excise or other taxes ("TAXES") and any penalties,
interest, governmental charges, assessments and deficiencies related thereto,
payable by the Company or the Subsidiary. All Taxes payable by the Company or
the Subsidiary, and all interest and penalties thereon, whether disputed or not,
have been paid in full when due, all tax returns, declarations of estimated tax
and other reports required to be filed in connection therewith ("TAX RETURNS")
have been accurately prepared and completed on an appropriate basis and duly and
timely filed in accordance with all Governmental Requirements, all computations
and taxable income correctly and accurately made and reported in accordance with
all Government Requirements, and all withholdings and deposits required by
Governmental Requirements to be made by the Company or the Subsidiary with
respect to employee's withholding taxes have been duly made. None of the Company
or the Subsidiary has been delinquent in the payment of any Tax, assessment or
governmental charge or deposit and has no tax deficiency or claim outstanding,
proposed or assessed against it, and there is no basis for any such deficiency
or claim. The federal income tax returns of the Company and the Subsidiary have
been filed with the Internal Revenue Service for all of the fiscal years though
the year ended , and no objections with respect thereto have been received by
the Company, the Subsidiary, any Guarantor or Shareholder. There is not now in
force any extension of time with respect to the date on which any Tax Return was
or is due to be filed by or with respect to the Company or the Subsidiary or any
waiver or agreement by the Company or the Subsidiary for the extension of time
for assessment of any Tax. Neither the Company nor the Subsidiary is a party to
any pending action or proceeding, and, to the knowledge of the Company, the
Subsidiary, the Guarantors and the Shareholders, no action or proceeding has
been threatened by any Governmental Authority for assessment or collection of
any Taxes, nor has any claim for assessment or collection of Taxes been asserted
against the Company or the Subsidiary. Neither the Company nor the Subsidiary is
a party to any tax sharing agreement or arrangement. Neither the Company nor the
Subsidiary has elected to be taxed in accordance with Subchapter S of the
Internal Revenue Code of 1986, as amended.
9.17 ADVERSE BUSINESS DEVELOPMENTS. No notice has been received by
the Company, the Subsidiary, any Guarantor or Shareholder of any new or
substantially expanded firm or individual engaged in a business directly
competitive to the Company or the Subsidiary in its primary service area within
six (6) months before the date hereof that the Company, the Subsidiary, any
Guarantor or Subsidiary reasonably believes will have a material adverse effect
on the Business. None of the Company, the Subsidiary, the Guarantors and
Shareholders has received, either orally or in writing, any notice specific to
it of pending or threatened adverse action with respect to any Medicare,
Medicaid, private insurance or third party payor reimbursement method, practice
or allowance as to any business activity engaged in by the Company or the
Subsidiary, nor has the Company, the Subsidiary, any Guarantor or any
Shareholder received, or been threatened with, any claim for refund specific to
it in excess of $750 by a Medicare or Medicaid carrier, except as disclosed in
the Schedule of Proceedings attached hereto as Schedule 9.17.
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9.18 RELATIONSHIPS. Except as disclosed on Schedule 9.18, none of
the Company, the Subsidiary, the Shareholders and the Guarantors, and none of
their respective officers, trustees, directors, employees, immediate family
members, and no person or entity which is controlled by, under common control
with, or controlling any of them (each, an "AFFILIATE") has, or at any time
within the last two (2) years has had, a material ownership interest in any
business, corporate or otherwise, that is a party to, or in any property that is
the subject of, business relationships or arrangements of any kind relating to
the operation of the Business of the Company and the Subsidiary. Except as set
forth on Schedule 9.18, no Affiliate is guaranteeing the obligations of the
Company or the Subsidiary.
9.19 ASSETS COMPRISING THE BUSINESS. The Assets are all of the
tangible and intangible properties (real, personal and mixed), including,
without limitation, all licenses, intellectual property, permits and
authorizations, and contracts that are necessary or material to the operation of
the Businesses as now operated. The quantities of inventory and supply items
included in the Assets are reasonable in light of the present and anticipated
volume of the Businesses of the Company and the Subsidiary in the ordinary
course of the business of the Company and the Subsidiary, consistent with past
practice, as determined by the Shareholders and Guarantors in good faith and
consistent with past practice.
9.20 QUESTIONABLE PAYMENTS. Neither the Company nor the Subsidiary
has, and to the knowledge of the Company, the Subsidiary, the Guarantors and
Shareholders, none of their Affiliates or employees have, offered, made or
received any illegal or unlawful payment, bribe, kickback, political
contribution or other similar questionable payment for any referrals or
otherwise in connection with the ownership or operation of any of the Business,
including, without limitation, any of the same that would constitute a violation
of the Foreign Corrupt Practices Act of 1977, as amended.
9.21 REIMBURSEMENT MATTERS. Each of the Company and the Subsidiary
to the extent necessary to conduct its business in a manner consistent with past
practice, is qualified for participation in the Medicare and Medicaid programs.
Except as disclosed on Schedule 9.21, (i) none of the Company, the Subsidiary,
the Guarantors and the Shareholders has received any notice of denial or
recoupment from the Medicare or Medicaid programs, or any other third party
reimbursement source (inclusive of managed care organizations) with respect to
products or services provided by the Company or the Subsidiary, (ii) to the
knowledge of the Company, the Subsidiary, the Guarantors and each Shareholder,
there is no basis for the assertion after the Closing Date of any such denial or
recoupment claim, and (iii) none of the Company, the Subsidiary, the Guarantors
and the Shareholders has received notice from any Medicare or Medicaid program
or any other third party reimbursement source (inclusive of managed care
organizations) of any pending or threatened investigations or surveys with
respect to, or arising out of, products or services provided by the Company or
the Subsidiary or otherwise, and to the knowledge of the Company, the
Subsidiary, the Guarantors and the Shareholders, no such investigation or survey
is pending, threatened or imminent.
9.22 ENVIRONMENTAL COMPLIANCE. Except as disclosed on Schedule
9.22, at all times during the ownership by the Company and the Subsidiary of the
Business, such Business has not been, and the Business currently is not, in
violation of any Governmental Requirement relating
24
to environmental matters and no notice has ever been served upon any Guarantor
or Shareholder or the Subsidiary or the Company, or any of their agents or
representatives or any prior owner of any Business, claiming any violation of
any Governmental Requirement concerning the environmental state, condition or
quality of any real or personal property in any related to the Business, or
requiring or calling attention to the need for any work, repairs or demolition
on or in connection with any of the real property in order to comply with any
governmental requirement concerning the environmental or healthful state,
condition or quality of the real property.
9.23 CAPITAL STOCK. Schedule 9.23 sets forth a complete list and
description of all of the authorized capital stock of the Company and the
Subsidiary, the number of shares issued and outstanding of such capital stock
and the identity of each holder thereof, in each case indicating the number of
shares held. No shares of capital stock of the Company or the Subsidiary are
held in the treasury or such corporation. Each of the Company and the Subsidiary
has only one class of capital stock. The Shareholders are the lawful record and
beneficial owners of all of the Company Shares as indicated on Schedule 9.23,
free and clear of all Liens, and the Company is the lawful record and beneficial
owner of all of the issued and outstanding shares of capital stock of the
Subsidiary, free and clear of all Liens, and all of such stock is duly
authorized, validly issued, and fully paid and non-assessable. Each Shareholder
has the full legal power to transfer and deliver the Company Shares listed as
owned by him, her or it on Schedule 9.23. There are not now any and, on the
Closing Date there will be no, subscription, participation, preemptive or first
refusal rights to purchase or otherwise acquire shares of capital stock of the
Company or the Subsidiary from the Company, the Subsidiary or from any
Shareholder or from any other person, pursuant to any provision of law or the
Articles of Incorporation or By-Laws of the Company or the Subsidiary or by
agreement or otherwise. There are not now any and, on the Closing Date there
shall not be, outstanding any warrants, options, or other rights to subscribe
for or purchase from the Company or the Subsidiary any shares of capital stock
of the Company or the Subsidiary, nor are there and there shall not be
outstanding on the Closing Date, any securities convertible into or exchangeable
for any such shares. There are no voting agreements, arrangements, trusts or
restrictions relating to any of the Company Shares or any shares of capital
stock of the Subsidiary.
9.24 ACCOUNTS RECEIVABLE. The information contained on the
Schedule of Accounts Receivable Data, attached hereto as Schedule 9.24, is
accurate and complete. $ of the amount set forth thereon is fully collectible
(without further reserve) within twelve (12) months from the Closing Date.
ARTICLE X: REPRESENTATIONS AND WARRANTIES OF IHS AND NEWCO
IHS and Newco represent and warrant to the Shareholders that:
10.1 DUE ORGANIZATION. Each of IHS and Newco is a duly organized,
valid corporation under the laws of the State of Delaware and Florida,
respectively.
10.2 DUE AUTHORITY. Each of IHS and Newco is duly authorized by
law and corporate policy and approval to: (a) enter into this Agreement and each
Transaction Document; (b)
25
make all warranties and representations made by them herein; and (c) deliver all
consideration provided for under the terms hereof.
10.3 BINDING AUTHORITY. All signatories and agents designated as
agents/officers for IHS or Newco for signing purposes have the authority to bind
IHS or Newco, as the case may be, to the terms of this Agreement.
10.4 CASH PAYMENT AUTHORITY. IHS has the authority to cause the
Merger Consideration to be delivered in accordance with the terms of this
Agreement.
10.5 BROKERS. No broker or finder has acted for the IHS or Newco
in connection with the transactions contemplated by this Agreement, and no
broker or finder is entitled to any broker's or finder's fee or other commission
in respect thereof based in any way on agreements, understandings or
arrangements with IHS or Newco.
ARTICLE XI: SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of IHS, Newco and each Guarantor and
each Shareholder contained or made pursuant to this Agreement shall survive the
execution of this Agreement.
ARTICLE XII: RESTRICTIVE COVENANTS
12.1 NON-COMPETE. Each Shareholder and each Guarantor hereby
agrees that until the fifth (5th) anniversary of the Closing Date (the
"RESTRICTED PERIOD"), it, he or she will not, directly or indirectly, own,
manage, operate, join, control or participate, or have a proprietary interest
in, the ownership, management, operation or control, of or be connected with, in
any manner, any home health care business within fifty (50) miles of any
location set forth on the Schedule of Locations attached hereto as Schedule
12.1.
12.2 CONFIDENTIAL INFORMATION. Certain confidential and
proprietary information is included within the Assets ("TRADE SECRETS"),
including, without limitation, with respect to some or all of the following
categories of information: (a) financial information, including but not limited
to information relating to earnings, assets, debts, prices, pricing structure,
reimbursement matters, volume of purchases or sales or other financial data
whether related to the Company or the Subsidiary or generally, or to particular
products, services, geographic areas, or time periods; (b) supply and service
information, including but not limited to information relating to goods and
services, suppliers' names or addresses, terms of supply or service contracts or
of particular transactions, or related information about potential suppliers to
the extent that such information is not generally known to the public, and to
the extent that the combination of suppliers or use of a particular supplier,
though generally known or available, may yield advantages to IHS or the
Surviving Corporation, details of which are not generally known; (c) marketing
information, including but not limited to information relating to details about
ongoing or proposed marketing programs or agreements by or on behalf of the
Company or the Subsidiary, sales forecasts, advertising formats and methods or
results of marketing efforts or information about impending transactions; (d)
personnel information, including but not limited to information relating to
26
employees' personal or medical histories, compensation or other terms of
employment, actual or proposed promotions, hirings, resignations, disciplinary
actions, terminations or reasons therefor, training methods, performance, or
other employee information; (e) customer and patient information, including but
not limited to information relating to names, addresses or backgrounds of past,
existing or prospective clients, customers, payors, referral sources, and
patients, records of agreements and prices, proposals or agreements between any
of them and the Company or the Subsidiary, status of accounts or credit,
patients' medical histories or related information as well as customer lists;
and (f) inventions and technological information, including but not limited to
information related to proprietary technology, trade secrets, research and
development data, processes, formulae, data and know-how, improvements,
inventions, techniques, and information that has been created, discovered or
developed, or has otherwise become known to the applicable Guarantor or
Shareholder, and/or in which property rights have been assigned or otherwise
conveyed to the Company or the Subsidiary, which information has commercial
value in the business in which the Company or the Subsidiary is engaged. Each
Shareholder and Guarantor shall hold all Trade Secrets in confidence and will
not discuss, communicate or transmit to others, or make any unauthorized copy of
or use any of the Trade Secrets; and will take all reasonable actions that IHS
deems reasonably necessary or appropriate, to prevent unauthorized use or
disclosure of or to protect the Surviving Corporation's interest in the Trade
Secrets. The foregoing does not apply to information that by means other than
deliberate or inadvertent disclosure by any Guarantor or Shareholder or any of
their respective Affiliates, becomes well known to the public; or disclosure
compelled by judicial or administrative proceedings after the Guarantors and
Shareholders diligently try to avoid each disclosure and afford IHS the
opportunity to obtain assurance that compelled disclosures will receive
confidential treatment.
12.3 NON-SOLICITATION AND NON-PIRATING. Each Guarantor and
Shareholder hereby agrees that, during the Restricted Period it, he or she will
not, directly or indirectly, for itself, himself or herself on behalf of any
other person, firm, entity or other enterprise: (a) solicit or in any way divert
or take away any person or entity that, prior to the Closing Date, was a
patient, client, customer, payor, referral source, facility or patient of the
Company, Prime or the Subsidiary; or (b) hire, entice away or in any other
manner persuade any person who was an employee, consultant, representative or
agent of the Company, Prime or the Subsidiary prior to the Closing Date, to
alter, modify or terminate their relationship with the Surviving Corporation.
12.4 NECESSARY RESTRICTIONS. Each Guarantor and Shareholder
acknowledges that the restrictions contained in this Agreement are reasonable
and necessary to protect the legitimate business interests of IHS and the
Surviving Corporation and that any violation thereof by any of them would result
in irreparable harm to IHS and the Surviving Corporation, and that damages in
the event of any such breach of this Agreement will be difficult, if not
impossible, to ascertain. Accordingly, each of the Guarantors and Shareholders
agrees that upon the violation of any of the restrictions contained in this
Agreement, IHS or the Surviving Corporation shall be entitled to obtain from any
court of competent jurisdiction a preliminary and permanent injunction as well
as any other relief provided at law, equity, under this Agreement or otherwise.
In the event any of the foregoing restrictions are adjudged unreasonable in any
proceeding, then the parties agree that the period of time or the scope of such
restrictions (or both) shall be adjusted to such a manner or for such a time (or
both) as is adjudged to be reasonable.
27
12.5 REMEDIES FOR BREACH. Each Guarantor and Shareholder
acknowledge that the covenants contained in this Article XII of this Agreement
are independent covenants of IHS and the Surviving Corporation and that any
failure by IHS or the Surviving Corporation to perform its obligations under
this Agreement or any other agreement shall not be a defense to enforcement of
the covenants contained in this Agreement, including but not limited to a
temporary or permanent injunction.
ARTICLE XIII: INDEMNIFICATION; REMEDIES
13.1 INDEMNIFICATION BY GUARANTORS AND SHAREHOLDERS. The
Guarantors and Shareholders shall, jointly and severally, indemnify and hold
harmless at all times IHS and the Surviving Corporation and their respective
stockholders, directors, officers, employees, agents and assigns (collectively,
the "IHS CLAIMANTS" and each an "IHS CLAIMANT", from and against any Damages (as
hereinafter defined) resulting from: (a) any inaccurate representation made by
any Shareholder or Guarantor in, pursuant to or under this Agreement or any
Transaction Document; (b) any breach of any warranty made by any Shareholder or
Guarantor in, pursuant to or under this Agreement or any Transaction Document;
(c) any breach or default in the performance by any of the Company, the
Guarantors or Shareholders of any of the covenants to be performed by any of the
Shareholders, the Guarantors or the Company hereunder or in any Transaction
Document; (d) any Closing Date Liabilities; (e) any Liabilities Deficiency; and
(f) any Asset Value Deficiency.
13.2 INDEMNIFICATION BY IHS. IHS shall indemnify and hold harmless
at all times each Shareholder and Guarantors from and against any Damages
resulting from: (a) any inaccurate representation made by IHS or Newco in,
pursuant to or under this Agreement; (b) any breach of any warranty made by IHS
or Newco in, pursuant to or under this Agreement; and (c) any breach or default
in the performance by IHS or Newco of any of the covenants to be performed by
IHS or Newco hereunder.
13.3 DEFINITION OF DAMAGES. The term "DAMAGES" as used herein
shall include any demands, claims, actions, deficiencies, losses, delinquencies,
defaults, assessments, fees, costs, taxes, expenses, debts, liabilities,
obligations, settlements, penalties, and damages, including, without limitation,
reasonable counsel and arbitration fees incurred in investigating or in
attempting to avoid or oppose the imposition thereof.
13.4 REMEDIES.
(A) REMEDIES OF IHS CLAIMANTS. If any IHS Claimant makes
written request to any Guarantor or Shareholder for the payment of Damages, then
such Guarantor or Shareholder shall pay to such IHS Claimant the amount of
Damages requested within ten (10) days from the date on which such request is
received (the "NOTICE PERIOD").
(B) SHAREHOLDERS' REMEDIES. If any Guarantor or Shareholder
makes written request to IHS or the Surviving Corporation for the payment of
Damages, then IHS or the
28
Surviving Corporation shall pay to such Guarantor or Shareholder the amount of
Damages requested within the Notice Period.
(C) NOTICE OF DISPUTE. Notwithstanding the foregoing
provisions of this Section 13.4, if a party (the "DEMANDING PARTY") serves a
request for payment on the other party (the "OBLIGATED PARTY"), the Obligated
Party shall have the option to provide written notice to the Demanding Party
(the "NOTICE OF DISPUTE") within the Notice Period that the Obligated Party
disputes, in good faith, the validity or amount of the Damages set out in the
request for payment of Damages, and if the affected parties cannot agree on the
validity or amount of such Damages within ten (10) days following the Notice
Period, the dispute as to the validity or amount of such claim or liability (the
"DISPUTE") shall be settled as set forth in Section 13.5 below, with the
non-prevailing party bearing the prevailing party's costs of arbitration if such
Dispute is resolved by arbitration.
(D) ARBITRATION. If arbitration is required pursuant to this
Section 13.4, IHS and the Surviving Corporation, on the one hand and the
Shareholders' Representative on behalf of all of the Shareholders and
Guarantors, on the other hand, each shall select an arbitrator within ten (10)
business days after the Notice of Dispute is delivered; those two arbitrators
will then select a third arbitrator; and the three arbitrators so chosen will
determine the validity of the claim for Damages (unless a single arbitrator
shall be agreed to by the applicable parties; in which case such single
arbitrator shall make such determination). If either side delays in appointing
an arbitrator when required, and ten (10) days or more has elapsed, the
arbitrator appointed by the other party shall arbitrate the dispute. If any of
the Shareholders or Guarantors shall be subject to a Dispute with IHS and/or the
Surviving Corporation, they shall, unless IHS or the Surviving Corporation
elects otherwise in its sole and absolute discretion, be required to act as a
group with respect to any and all rights and obligations with respect to the
resolution of the Dispute as provided in this Section 13.4. The parties agree
that any arbitration pursuant hereto shall be held in Tampa, Florida.
13.5 SETTLEMENT OF DISPUTES.
(A) DISPUTES NOT INVOLVING THIRD PARTIES. If a Dispute
involves claims not involving any third party, IHS and the Surviving
Corporation, on the one hand, and all of the Guarantors and Shareholders, on the
other hand, shall settle the Dispute by submitting the same to binding
arbitration.
(B) DISPUTES INVOLVING CLAIMS MADE BY THIRD PARTIES. If a
Dispute involves claims made by one or more third parties (a "THIRD PARTY
CLAIM"), the party asserting its right to indemnification for such Third Party
Claim shall give written notice to the other party as soon as practical after
such asserting party receives notice of such Third Party Claim; provided,
however the failure to timely give such notice shall not affect such party's
right to indemnification except to the extent the party to receive the notice is
damaged by such delay. Upon such notice the parties shall submit the Dispute to
arbitration, and the following procedures shall apply:
(I) Solely for purposes of determining the party
responsible for defending the Third Party Claim, the arbitrators shall
deem such Third Party Claim to be valid (although such consideration
shall not be an admission by any party as to any liability to any
party). The arbitrators then shall decide which party shall be liable
for the Third Party Claim if it is successfully prosecuted by such
third party or parties, and the decision of such
29
arbitrators with respect to such liability shall be final and binding
as among the parties. (Such party determined to be liable for such
claim sometimes shall be referred to herein as the "RESPONSIBLE
PARTY".)
(II) If the Responsible Party refuses to settle (and pay
the settlement amount of) the Third Party Claim immediately, then the
Responsible Party immediately shall select one of the following two
options:
Option One: The Responsible Party, at the Responsible
Party's sole expense and risk, can assume the defense of
the Third Party Claim, provided the Responsible Party first
places in escrow, in favor of the other party, adequate
collateral (as determined by the arbitrators on
consideration of all relevant facts) to protect the other
party from all Damages with respect to such Third Party
Claim (in which case the other party immediately shall be
reimbursed by the Responsible Party for any amount the
other party is required to pay with respect to such Third
Party Claim); or
Option Two: The Responsible Party, at the Responsible
Party's expense and risk, can co-defend the Third Party
Claim with the other party, with the Responsible Party also
responsible for advancing all costs incurred by the other
Party in connection with such defense, including, without
limitation, the legal fees and expenses of the other
party's counsel for its reasonable involvement in such
defense. If the other party is found to be liable for any
portion of such Third Party Claim, the Responsible Party
immediately shall advance to the other party any amount
required to be paid by the other party with respect
thereto; provided, however, if the Responsible Party
selects this option, the Responsible Party shall attempt
diligently to have the other party removed as a party to
any legal action involving the Third Party Claim (and, upon
such removal, the involvement of the other party's counsel
shall cease unless requested by the Responsible Party or
the Responsible Party's counsel); and
(III) No party may settle any Third Party Claim without the
prior consent of the other parties hereto unless the settlement will
not have a material adverse effect on the other party hereto. The
parties will resolve any Dispute with respect to any such proposed
settlement in accordance with this Section 13.5.
(IV) Any party responsible for defending a Third Party Claim
shall proceed with diligence and in good faith with respect thereto.
ARTICLE XIV: POST-CLOSING REQUIREMENTS OF SHAREHOLDERS
30
14.1 FINAL FINANCIAL AND TAX INFORMATION.
(A) Not later than thirty (30) days following Closing, the
Shareholders and Guarantors, at their sole cost and expense, shall deliver to
IHS "FINAL AND TAX FINANCIAL INFORMATION", which shall include:
(I) a balance sheet of the Company and the Subsidiary on
a consolidated basis as of the Economic Change Date prepared in
accordance with the Tax Principles;
(II) an income statement, prepared in accordance with
the Tax Principles, of the Company and the Subsidiary on a consolidated
basis for the period commencing on the date succeeding the last day of
the most recent Financial Statement Date and ending on the Economic
Change Date;
(III) an aged schedule of accounts receivable of the
Company and the Subsidiary as of the Economic Change Date;
(IV) a Cash Settlement Summary of the Company and the
Subsidiary, in form provided by Buyer;
(V) an inventory of fixed assets of the Company and the
Subsidiary as of the Economic Change Date;
(VI) an inventory of supplies of the Company and the
Subsidiary as of the Economic Change Date; and
(VII) a Federal and State tax return for the Company and
the Subsidiary for the Company's and Subsidiary's respective fiscal
period ending on the Economic Change Date, or if such a return may not
be filed in accordance with applicable Governmental Requirements, a tax
return fiscal year end Federal and State income tax return for the
Company and the Subsidiary prepared as if the Economic Change Date was
the last day of the fiscal year of the Company and the Subsidiary.
(B) LIABILITIES DEFICIENCY. If all such Final Financial and
Tax Information is not delivered to IHS within such thirty (30) day period
following the effective date of the merger, the Guarantors and Shareholders
shall be liable to IHS in an amount equal to $500.00 for each day after such
thirty (30) day period until all such Final Financial and Tax Information is
delivered to IHS, and such liability shall constitute a Liabilities Deficiency
under the provisions of Section 2.7(a), above.
31
ARTICLE XV: MISCELLANEOUS
15.1 GROUP'S REPRESENTATIVE. Each Guarantor and Shareholder hereby
designates Xxxxxx Xxxxxx, and Xxxxxx Xxxxxx hereby accepts the designation as
the representative of the Guarantor and Shareholders ( the "GROUP'S
REPRESENTATIVE") to act for and on behalf of the Guarantors and Shareholders as
provided in this Agreement. Each Shareholder and Guarantor shall be bound by all
actions taken or omitted by Group's Representative on behalf of any Guarantor or
Shareholder as provided in this Agreement, and each Guarantor and Shareholder
shall be deemed to have received any notice deemed given or payment made to
Group's Representative in accordance with the notice provisions of this
Agreement on the date deemed given or the date paid to Group's Representative,
and IHS and the Surviving Corporation shall be entitled to rely on all notices
and consents given, and all settlements entered into on behalf of any Guarantor
or Shareholder to the extent authorized pursuant to the terms of this Agreement
notwithstanding any objections made by any Guarantor or Shareholder prior to,
concurrently with or subsequent to the giving of any such notice or consent or
the settlement of any such matter. Group's Representative may be replaced only
if and when all of the Guarantors and Shareholders shall notify IHS that a new
individual person (named in such notice) has been unanimously selected by them
to be the new Group's Representative, in which case such new person shall
thereafter be the Group's Representative.
15.2 THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
expressed or implied, is intended to confer on any person, other than the
parties hereto, and their successors, any rights or remedies under or by reason
of this Agreement other the affiliates entitled to indemnification pursuant to
Sections 13.1 and 13.2.
15.3 EXPENSES. Except as otherwise stated herein, each of the
parties shall bear all expenses incurred by them in connection with this
Agreement and in consummation of the transactions contemplated hereby in
preparation thereof.
15.4 NOTICES. All notices, consents, waivers and other
communications required or permitted hereunder shall be in writing and shall be
deemed to be properly given when personally delivered to the party or parties
entitled to receive the notice or three (3) business days after sent by
certified or registered mail, postage prepaid, or on the business day after sent
by nationally recognized overnight courier, in each case, properly addressed to
the party or parties entitled to receive such notice at the address stated
below:
to any Guarantor
or Shareholder: Xxxxxx Xxxxxx
00000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
with a copy to: Xxxxxxx X. XxXxxxxxx, Esq.
XxXxxxxxx, Xxxxxxxx and Xxxx
West Xxxxxxx Legal Center
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
32
to IHS: Integrated Health Services, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx, General Counsel, and
Xxxxxxxxx X. Xxxxx, Executive Vice
President
and
Blass & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
with a copy to: RoTech Medical Corporation
0000 X.X. XxXxxx Xxxx, Xxxxx X
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
15.5 CHOICE OF LAW. The laws of the State of Florida applicable to
contracts executed, delivered and to be fully performed in such State govern the
validity of this Agreement, the construction of its terms, and the
interpretation of the rights and duties of the parties.
15.6 SECTIONS AND OTHER HEADINGS. Section, paragraph, and other
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
15.7 COUNTERPART EXECUTION. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which, together, shall constitute but one instrument. Facsimile signatures may
be deemed binding for this Agreement, or any modification or amendment hereto,
or any Transaction Documents contemplated hereby.
15.8 GENDER. All gender employed in this Agreement shall include
all genders, and the singular shall include the plural and the plural shall
include the singular whenever and as often as may be appropriate.
15.9 PARTIES IN INTEREST. This Agreement shall be binding on and
shall inure to the benefit of, and be enforceable by, IHS, the Surviving
Corporation, the Guarantors, Shareholders and their respective successors and
assigns. IHS and the Surviving Corporation shall be entitled to assign their
rights under this Agreement and the Transaction Documents after the Closing. No
Shareholder or Guarantor may assign this Agreement or any of his or her rights
hereunder without the prior consent of IHS.
15.10 ENTIRE AGREEMENT. This Agreement including all Schedules and
Exhibits hereto, and all Transaction Documents constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and there
are no agreements, understandings, restrictions, warranties, or representations
between the parties with respect to the subject matter hereof other than as set
forth herein or as herein provided.
33
15.11 PERFORMANCE. In the event of a breach by any Shareholder or
Guarantor of any of its, his or her respective obligations hereunder, IHS shall
have the right, in addition to any other remedies which may be available, to
obtain specific performance of the terms of this Agreement, and each of the
Guarantors and Shareholders hereby waives the defense that there may be an
adequate remedy at law.
15.12 WAIVER, DISCHARGE, ETC. This Agreement and the Transaction
Documents and the obligations hereunder and thereunder shall not be released,
discharged, abandoned, changed or modified in any manner, except by an
instrument in writing executed by or on behalf of each of the parties hereto by
their duly authorized officer or representative. The failure of any party to
enforce at any time any of the provisions of this Agreement or any Transaction
Document shall in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Agreement or such Transaction
Document, as the case may be, or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement or any Transaction Document shall be held to be a waiver of any
other or subsequent breach.
15.13 COOPERATION FURTHER ASSISTANCE. From time to time, as and
when reasonably requested by any party hereto after the Closing, the other
parties will (at the expense of the requesting party) execute and deliver, or
cause to be executed or delivered, all such documents, instruments and consents
and will use reasonable efforts to take all such action as may be reasonably
requested or necessary to carry out the intent and purpose of this Agreement.
15.14 JOINT AND SEVERAL. The Shareholders and Guarantors shall be
jointly and severally liable for all representations, warranties and
obligations, including, without limitation, indemnification obligations, and
covenants made by any of them pursuant to this Agreement, including, without
limitation, any made pursuant to any Transaction Document. For all purposes of
this Agreement, any representation or warranty that is qualified to be "to the
knowledge of any Shareholder or Company or Guarantor or the Subsidiary" or by a
requirement that the Company, the Subsidiary, or any Guarantor or Shareholder
shall have received "notice" of any matter, or any similar qualification shall
be deemed to include the knowledge of the Company, the Subsidiary, or any
Guarantor or Shareholder or notices to the Company, the Subsidiary, or any
Guarantor or Shareholder, as the case may be. No Guarantor or Shareholder shall
have any right of contribution from, or indemnification by, the Surviving
Corporation (as the successor to the Company and Prime) by reason of such
Guarantor's or Shareholder's prior association with the Company or Prime as a
shareholder, employee, officer or director.
15.15 INDEPENDENT LEGAL COUNSEL. Each Guarantor and Shareholder
represents and warrants that it, he or she has had the opportunity to seek the
advice of independent legal counsel prior to signing this Agreement, and that
IHS has recommended to such Guarantor or Shareholder that such party obtain
legal counsel.
34
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first stated above.
By:/s/ Xxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: EVP, Corporate
Development
ROTECH OXYGEN & MEDICAL
EQUIPMENT, INC.
By: /s/ XXXXXXX X. XXXXXX
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
STATE OF FLORIDA
-----------------
COUNTY OF ORANGE
-----------------
The foregoing instrument was acknowledged before me by, Xxxxxxx X.
Xxxxxx,_______________________ as President of Rotech Oxygen & Medical
Equipment, Inc., a Florida corporation, on behalf of the corporation, and who is
personally known to me; or has produced ______________________________________as
identification.
/s/ XXXXXXXXX X. XXXXX
----------------------------------- -----------------------------
Date Notary Signature
[SEAL] XXXXXXXXX X. XXXXX
MY COMMISSION #CC377695 EXPIRES
JUNE 25, 1998
BONDED THRU XXXX FARM INSURANCE, INC.
-----------------------------
Notary Name Printed
My Commission Expires:
STATE OF MARYLAND
-----------------
COUNTY OF BALTIMORE
-----------------
The foregoing instrument was acknowledged before me by, Xxxxxxxxx X.
Xxxxx, Executive Vice President of Integrated Health Services, a
________corporation, on behalf of the corporation, and who is personally known
to me; or has produced a driver's license as identification.
5/10/98 /s/ XXXXX XXXXXX XXXXX
----------------------------------- -----------------------------
Date Notary Signature
[SEAL] XXXXX XXXXXX XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES DECEMBER 24, 2000
/s/ XXXXX XXXXXX XXXXX
-----------------------------
Notary Name Printed
My Commission Expires:
35
XXXXXX XXXXXX AND XXXXXXXXX XXXXXX,
AS TRUSTEES F/B/O
XXXXXX XXXXXX UTD 7/14/78
By: /s/ XXXXXX XXXXXX
--------------------------------
Its: Trustee
STATE OF FLORIDA
-----------------
COUNTY OF HILLSBOROUGH
----------------
The foregoing agreement was acknowledged before me
by,_____________________ , who is personally known to me; or has produced
__________________________________ as identification.
2/8/98 /s/ XXXXXXX X. XXXXXXXXX
------------------------- -------------------------------------
Date Notary Signature
XXXXXXX X. XXXXXXXXX
-------------------------------------
Notary Name Printed
My Commission Expires:
[SEAL] XXXXXXX X. XXXXXXXXX
NOTARY PUBLIC XXXXX XX XXXXXXX
XXXXXXXXXX XX. XX000000
MY COMMISSION EXPIRES MARCH 22, 2000
XXXXXX X. XXXXXXX, AS TRUSTEE OF THE
XXXXXX X. XXXXXXX TRUST U/A/D
5/22/96
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Its: TRUSTEE
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing agreement was acknowledged before me by,
Xxxxxx X. Xxxxxxx, Trustee, who is personally known to me; or has produced
______________________________ as identification.
2/6/98 /s/ XXXXXXX X. XXXXXXXXX
------------------------- ------------------------------
Date Notary Signature
XXXXXXX X. XXXXXXXXX
[SEAL] XXXXXXX X. XXXXXXXXX ------------------------------
NOTARY PUBLIC STATE OF FLORIDA Notary Name Printed
COMMISSION NO. CC539722 My Commission Expires:
MY COMMISSION EXPIRES MARCH 22, 2000
37
XXXXXX X. XXXXXXX, AS TRUSTEE FBO
XXXXXX X. XXXXXXX REVOCABLE TRUST
DATED 6/10/88
By: /s/ XXXXXX X. XXXXXXX
------------------------------
Its: TRUSTEE
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing agreement was acknowledged before me by Xxxxxx X.
Xxxxxxx, Trustee , who is personally known to me; or has produced
______________________________ as identification.
2/6/98 /s/ XXXXXXX X. XXXXXXXXX
------------------------- ------------------------------
Date Notary Signature
XXXXXXX X. XXXXXXXXX
------------------------------
[SEAL] XXXXXXX X. XXXXXXXXX Notary Name Printed
NOTARY PUBLIC STATE OF FLORIDA My Commission Expires:
COMMISSION NO. CC539722
MY COMMISSION EXPIRES MARCH 22, 0000 Xxxxxx Xxxxxx
XXXXX XX XXXXXXX
XXXXXX OF HILLSBOROUGH
The foregoing agreement was acknowledged before me
by, Xxxxxx Xxxxxx , who is personally known to me; or has produced
___________________________________ as identification.
2/6/98 /s/ XXXXXXX X. XXXXXXXXX
------------------------- ------------------------------
Date Notary Signature
[SEAL] XXXXXXX X. XXXXXXXXX XXXXXXX X. XXXXXXXXX
NOTARY PUBLIC STATE OF FLORIDA ------------------------------
COMMISSION NO. CC539722 Notary Name Printed
MY COMMISSION EXPIRES MARCH 22, 2000 My Commission Expires:
38
/s/ Xxxxxx Xxxxxxx
-------------------------
Xxxxxx Xxxxxxx
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing agreement was acknowledged before me by, Xxxxxx Xxxxxxx ,
who is personally known to me; or has produced ____________________________ as
identification.
2/6/98 /s/ Xxxxxxx X. Xxxxxxxxx
------------------------- ------------------------------
Date [OFFICIAL NOTARY SEAL] Notary Signature
------------------------------
Notary Name Printed
My Commission Expires:
/S/ Xxxxx Xxxxxxxxxx
------------------------------
Xxxxx Xxxxxxxxxx
STATE OF FLORIDA
----------------------
COUNTY OF HILLSBOROUGH
---------------------
The foregoing agreement was acknowledged before me
by,______________________ , who is personally known to me; or has produced
_____________________________ as identification.
2/6/98 /s/ Xxxxxxx X. Xxxxxxxxx
------------------------- ------------------------------
Date Notary Signature
[OFFICIAL NOTARY SEAL]
------------------------------
Notary Name Printed
My Commission Expires:
39
/s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx Xxxxxx
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
The foregoing agreement was acknowledged before me by, Xxxxxx Xxxxxx,
[who is personally known to me]; or has produced CA Drivers' License as
identification.
February 5, 1998 /s/ Xxxxxxx Xxxxxx
------------------------- -----------------------------
Date Notary Signature
Xxxxxxx Xxxxxx
------------------------------
Notary Name Printed
My Commission Expires:
Dec. 7, 2000
40
SCHEDULES AND EXHIBITS
Schedule 1(a)(i) - Accounts Receivable
Schedule 1(a)(ii) - Inventory; Fixed Assets
Schedule 1(a)(iii) - Automobiles
Schedule 1(a)(v)(B) - Other Assets
Schedule 1(a)(v)(C) - Telephone Numbers
Schedule 2(a) - Allocation of Purchase Price
Schedule 2(b)(iv) - Wire Instructions
Schedule 4(a) - Closing Date Liabilities
Schedule 4(b) - Unassumed Contracts
Schedule 9(c) - Seller's Opinion
Schedule 12(c) - Liabilities
Schedule 12(g) - Contracts
Schedule 12(i) - Personnel Payrates; Employee Benefits
Schedule 12(k) - Insurance
Schedule 12(o) - Tax Returns and Financial Statements
Schedule 12(p) - Supplemental Tax Information
Schedule 12(q) - Adverse Business Developments
Schedule 12(r) - Relationships
Schedule 12(u) - Reimbursement Matters
Schedule 12(v) - Environmental Compliance
Schedule 15(a) - Locations
Exhibit 2(b)(i) - Escrow Agreement
Exhibit 2(b)(ii) - Payment Escrow Agreement
41
