Exhibit 2.1
PURCHASE AGREEMENT
by and among
ALMOST FAMILY, INC.,
CARETENDERS OF CINCINNATI, INC.,
ADULT DAY CARE OF MARYLAND, INC.,
CARETENDERS OF COLUMBUS, INC.,
CARETENDERS OF NEW JERSEY, INC.,
CARETENDERS OF SOUTHWEST FLORIDA, INC.,
CARETENDERS OF WEST PALM BEACH, INC.,
AND
ADULT DAY CARE OF LOUISVILLE, INC.,
as Seller,
and
Active Day FL, Inc.
Active Day OH, Inc.
Active Day MD, Inc.
Active Day KY, Inc.
Active Day Fleet, Inc.
as Buyer
and
Active Service Corporation
as Parent,
dated as of August 3, 2005
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................................................................1
ARTICLE II PURCHASE AND SALE OF PURCHASED ASSETS AND ASSUMPTION OF LIABILITIES...................................12
Section 2.1 Purchase and Sale of Purchased Assets.......................................................12
Section 2.2 Assignment and Assumption of Liabilities....................................................12
ARTICLE III CLOSING..............................................................................................12
Section 3.1 Closing.....................................................................................12
Section 3.2 Purchase Price; Adjustment Amount...........................................................12
Section 3.3 Deliveries by Buyer.........................................................................14
Section 3.4 Deliveries by Seller........................................................................14
Section 3.5 Consents....................................................................................15
Section 3.6 Tax Allocations.............................................................................16
Section 3.7 Transfer Taxes..............................................................................17
ARTICLE IV SELLER'S REPRESENTATIONS AND WARRANTIES...............................................................17
Section 4.1 Organization and Good Standing..............................................................17
Section 4.2 Corporate Authorization.....................................................................17
Section 4.3 Charter Documents...........................................................................17
Section 4.4 Sufficiency of Assets.......................................................................18
Section 4.5 Condition of Assets.........................................................................18
Section 4.6 Consents by Governmental Authorities........................................................18
Section 4.7 No Conflict.................................................................................18
Section 4.8 Title to and Use of Property................................................................18
Section 4.9 Permits.....................................................................................19
Section 4.10 Claims and Proceedings......................................................................19
Section 4.11 Intellectual Property.......................................................................19
Section 4.12 Material Contracts..........................................................................20
Section 4.13 Employee Benefits Plans.....................................................................22
Section 4.14 Taxes.......................................................................................22
Section 4.15 Environmental Matters.......................................................................23
Section 4.16 Compliance with Applicable Laws.............................................................23
Section 4.17 Certain Financial Information...............................................................23
Section 4.18 Undisclosed Liabilities.....................................................................23
Section 4.19 Accounts Receivable; Accounts Payable.......................................................24
Section 4.20 Business Activity Restriction...............................................................24
Section 4.21 Employees...................................................................................24
Section 4.22 No Agency Action or Enforcement.............................................................25
Section 4.23 Health Care Licenses........................................................................26
Section 4.24 Third Party Reimbursement...................................................................27
Section 4.25 HIPAA Compliance............................................................................27
Section 4.26 Billing Practices...........................................................................27
Section 4.27 Regulatory Compliance.......................................................................27
Section 4.28 Intentionally Omitted.......................................................................29
Section 4.29 Broker's Fees...............................................................................29
Section 4.30 Absence of Certain Changes or Events........................................................29
Section 4.31 Intentionally Omitted.......................................................................30
Section 4.32 Books and Records...........................................................................30
Section 4.33 Affiliate and Representative Transactions...................................................30
Section 4.34 Insurance...................................................................................31
Section 4.35 Real and Leased Properties..................................................................31
Section 4.36 Changes in Suppliers........................................................................32
Section 4.37 Rates and Reimbursement Policies............................................................32
Section 4.38 Guarantees, Warranties and Discounts........................................................32
Section 4.39 Disclosure..................................................................................32
ARTICLE V BUYER'S AND PARENT'S REPRESENTATIONS AND WARRANTIES....................................................33
Section 5.1 Organization and Good Standing..............................................................33
Section 5.2 Corporate Authorization.....................................................................33
Section 5.3 No Breach...................................................................................33
Section 5.4 Broker's Fees...............................................................................34
Section 5.5 Claims and Proceedings......................................................................34
ARTICLE VI COVENANTS.............................................................................................34
Section 6.1 Covenants of Seller.........................................................................34
Section 6.2 Covenants of Buyer and Parent...............................................................38
Section 6.3 Mutual Covenants............................................................................40
ARTICLE VII CONDITIONS...........................................................................................44
Section 7.1 Conditions to Obligation of Each Party to Effect the Transactions Contemplated by this
Agreement...................................................................................44
Section 7.2 Conditions to the Obligation of Seller......................................................44
Section 7.3 Conditions to the Obligation of Buyer and Parent............................................45
ARTICLE VIII SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION........................................................46
Section 8.1 Survival; Right to Indemnification..........................................................46
Section 8.2 Seller's Indemnity..........................................................................46
Section 8.3 Buyer's Indemnity...........................................................................47
Section 8.4 Procedure for Indemnification - Third Party Claims..........................................47
Section 8.5 Procedure for Indemnification - Other Claims................................................49
Section 8.6 Time Limitations............................................................................49
Section 8.7 Limits on Indemnification...................................................................49
Section 8.8 Purchase Price Adjustment...................................................................50
Section 8.9 No Double Recovery..........................................................................50
ARTICLE IX TAX LIABILITY.........................................................................................50
Section 9.1 Liability for Taxes.........................................................................50
ARTICLE X RECORDS/LITIGATION AND TAX MATTERS.....................................................................51
Section 10.1 Records/Litigation..........................................................................51
Section 10.2 Tax Disclosure Authorization................................................................52
ARTICLE XI TERMINATION RIGHTS....................................................................................52
Section 11.1 Termination Rights..........................................................................52
Section 11.2 No Requirement To Terminate.................................................................52
Section 11.3 Effect of Termination.......................................................................53
ARTICLE XII MISCELLANEOUS........................................................................................53
Section 12.1 Further Assurances..........................................................................53
Section 12.2 Notices.....................................................................................53
Section 12.3 Governing Law; Submission to Jurisdiction...................................................54
Section 12.4 WAIVER OF JURY TRIAL........................................................................55
Section 12.5 Entire Agreement............................................................................55
Section 12.6 Assignment..................................................................................55
Section 12.7 Amendment and Waiver........................................................................55
Section 12.8 Expenses....................................................................................55
Section 12.9 Headings....................................................................................56
Section 12.10 Counterparts................................................................................56
Section 12.11 Severability................................................................................56
Section 12.12 No Third Party Beneficiaries................................................................56
EXHIBITS
TO
PURCHASE AGREEMENT
A. Assignment and Assumption Agreement
B. Xxxx of Sale
C. Transition Services Agreement
D. Allocation Schedule (to be delivered prior to closing)
E. Non Competition/Non Solicitation Agreement
F. Trademark License Agreement
G. Copyright Assignment
H. Software License Agreement
I. Escrow Agreement
SCHEDULES TO
PURCHASE AGREEMENT
Schedule 3.2 Purchase Price; Adjustment Amount
Schedule 3.5 Consents
Schedule 4.1 Organization and Good Standing
Schedule 4.2 Corporate Authorization
Schedule 4.3 Charter Documents
Schedule 4.4 Sufficiency of Assets
Schedule 4.5 Condition of Assets
Schedule 4.6 Consents/Governmental Authorities
Schedule 4.7 No Conflict
Schedule 4.8 Title to and Use of Property
Schedule 4.9 Permits
Schedule 4.10 Claims and Proceedings
Schedule 4.11 (a), (d), (f), (g), (h) and (i) Intellectual Property
Schedule 4.12 (a), (b) and (c) Material Contracts
Schedule 4.13 (a) and (c) Employee Benefits Plans
Schedule 4.14 Taxes
Schedule 4.15 Environmental Matters
Schedule 4.16 Compliance and Applicable Laws
Schedule 4.17 (b) Certain Financial Information
Schedule 4.18 Undisclosed Liabilities
Schedule 4.19 (b) Accounts Receivable; Accounts Payable
Schedule 4.20 Business Activity Restriction
Schedule 4.21 (b) Employees
Schedule 4.22 (a) and (b) No Agency Action or Enforcement
Schedule 4.23 (b), (c) and (d) Health Care Licenses
Schedule 4.24 Third Party Reimbursement
Schedule 4.26 Billing Practices
Schedule 4.27 (b) (d), and (e) Regulatory Compliance
Schedule 4.30 Absence of Certain Changes or Events
Schedule 4.33 Affiliate and Representative Transactions
Schedule 4.34 Insurance
Schedule 4.35 (a), (b) and (f) Real and Leased Property
Schedule 4.37 Rates and Reimbursement Policies
Schedule 4.38 Guarantees, Warranties and Discounts
Schedule 5.5 Claims and Proceedings
Schedule 6.1 (c) Covenants of Seller
Schedule 6.2 Covenants of Buyer and Parent
Schedule 7.3 (c) Material Consents
Schedule 7.3 (d) Closing Employees
PURCHASE AGREEMENT
This PURCHASE AGREEMENT ("Agreement"), is made and entered into
as of August 3, 2005, by and among Almost Family, Inc., a Delaware
corporation, Caretenders of Cincinnati, Inc., a Kentucky corporation,
Adult Day Care of Maryland, Inc., a Maryland corporation, Caretenders of
Columbus, Inc., a Kentucky corporation, Caretenders of New Jersey, Inc., a
Kentucky corporation, Caretenders of Southwest Florida, Inc., a Kentucky
corporation, Caretenders of West Palm Beach, Inc., a Kentucky corporation, and
Adult Day Care of Louisville, Inc., a Kentucky corporation (individually a
"Seller Entity" and collectively "Seller Entities"; the Seller Entities are
sometimes collectively referred to herein as "Almost" or "Seller"), and
Active Day FL, Inc., Active Day OH, Inc., Active Day MD, Inc., Active Day,
KY, Inc., Active Day CT, Inc. and Active Day Fleet, Inc., each a Delaware
corporation (each a "Buyer Entity" and collectively "Buyer Entities"; the
Buyer Entities are sometimes collectively referred to herein as "Buyer"), and
wholly owned subsidiary of Active Service Corporation, a Delaware corporation
("Parent"). Buyer, Parent and Seller are referred to collectively herein as
the "Parties" and each is individually, a "Party."
WITNESSETH:
WHEREAS, Seller is in the business of providing adult day care services;
WHEREAS, Seller desires to sell, convey, transfer, assign and deliver
to Buyer, and Buyer desires to acquire certain assets and liabilities from
Seller, in each case relating exclusively to the Business (as defined herein),
which the Parties agree will be achieved pursuant to (i) the purchase and sale
of the Purchased Assets (as defined herein) and (ii) the assumption of the
Assumed Liabilities (as defined herein), all on the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, Parent desires to cause and ensure the completion of the
foregoing transactions and Seller requires Parent to be a party to this
Agreement as a condition thereof.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements made herein, and upon the terms and subject
to the conditions hereinafter set forth, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the terms defined below shall have the
indicated meanings:
"Accounts Payable" shall mean all accounts payable and accrued
Liabilities constituting the obligation to make payments in respect of goods
and/or services to the extent received or ordered or contracted for by a Seller
Entity or any of their respective Affiliates on or prior to the Closing in
connection with the Business, other than intercompany payables in respect of
amounts owed to Seller or any Affiliate of Seller.
"Accounts Receivable" shall mean (i) all accounts receivable under
agreements or Contracts for services or products provided by a Seller Entity or
any of their respective Affiliates with respect to the Business and other rights
to payment from customers of the Business and the full benefit of all security
for such accounts or right to payment (other than those accounts receivable that
are subject to or the subject of litigation), (ii) all other accounts or notes
receivable of Seller, any of its Affiliates or any of their respective
Affiliates with respect to the Business and the full benefit of all security for
such accounts or notes (other than those accounts or notes that are subject to
or the subject of litigation), and (iii) any Claim, remedy or other right
relating to any of the foregoing; provided that "Accounts Receivable" shall
exclude intercompany receivables in respect of amounts owed by Seller or an
Affiliate of Seller.
"Adjustment Ceiling" means $3,365,000.
"Adjustment Floor" means $3,165,000.
"Affiliate" shall mean, with respect to any Person, any Person which
directly or indirectly through stock ownership, other arrangements or otherwise
either controls, or is controlled by or is under common control with, such
Person.
"Agreement" shall have the meaning set forth in the preamble.
"Allocation" shall have the meaning set forth in Section 3.6.
"Almost Family Xxxx" shall have the meaning set forth in the Trademark
License Agreement.
"Ancillary Agreements" shall mean the Transition Services Agreement,
the Trademark License Agreement, Escrow Agreement, the Bills of Sale, Software
License Agreement, Copyright Assignment, the Non-Competition/Non-Solicitation
Agreement, the Assignment and Assumption Agreement, the Assignment and Estoppel
Certificate, Form 8954 and such other documents contemplated and necessary to
effectuate the transactions contemplated herein.
"Applicable Laws" shall mean all laws, statutes, rules, codes,
constitutions, principles of common law, treaties, regulations, ordinances,
manuals, policies, procedures, Orders or other requirements of rules of law as
may be in effect on or prior to the Closing Date of any Governmental Authority
having jurisdiction or regulatory authority over the Purchased Assets or the
Business.
"Assigned Contracts" shall mean all Contracts related exclusively to
the Purchased Assets or the Business, including Material Contracts set forth on
Schedule 4.12(a).
"Assignment and Assumption Agreement" shall mean the assignment and
assumption agreement to be entered into between Seller and/or its Affiliates and
Buyer substantially in the form of Exhibit A attached hereto.
"Assignment and Estoppel Certificates" shall mean a written assignment
of lease for each Leased Property and an estoppel certificate executed by the
landlord for each such Leased Property, each in a form acceptable to Buyer and
Parent.
"Assumed Liabilities" shall mean (i) all Liabilities of the Business
set forth on the Closing Net Asset Statement, (ii) all Assumed Trade Payables
not reflected in the Closing Net Asset Statement, (iii) all Liabilities incurred
in connection with, arising from or relating to Buyer's (or its Affiliates)
ownership, operation, or use of the Business (other than Liabilities related to
litigation, Claims or causes of action as a result of the Seller's operation of
the Business prior to Closing), including all of the Purchased Assets, from and
after the Closing; and (iv) without limiting the scope of any other subclause of
this definition, all Liabilities arising under or resulting from the Assigned
Contract, but only to the extent such Liabilities involve the observance,
payment, performance or discharge of (or failure to observe, pay, perform or
discharge) obligations due and owing from and after the Closing, pursuant to the
terms of such Assigned Contract.
"Assumed Trade Payables" shall mean all trade payables of the Business,
whether or not included on the Closing Net Asset Statement, which arise prior to
the Closing Date.
"Best Efforts" shall mean the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to achieve that result as
expeditiously as possible.
"Bills of Sale" shall mean one or more bills of sale and assignment
conveying, selling, transferring, and assigning the Purchased Assets to the
Buyer Entities and allocating the Purchased Assets among such Buyer Entities,
substantially in the form of Exhibit B attached hereto.
"Books and Records" shall mean all books and records of Seller or any
of its Affiliates, other than those which are a part of the Seller's
consolidated books and records, necessary for the operation of the Business as
currently operated, including cost and pricing information, financial and
accounting records, sales and credit records, supplier lists and records,
training materials, training records, maintenance and inspection reports,
equipment lists, repair notes and archives, sales and marketing materials.
"Business" shall mean the business of Seller, any Affiliates thereof,
or any of their respective Affiliates of providing adult day care services,
which is conducted through a segment known as the Adult Day Care segment as
described in Seller's Form 10-K for the period ended December 31, 2004.
"Business Day" shall mean any day on which commercial banks are open
for business in Baltimore, Maryland.
"Buyer Disclosure Schedule" shall mean that certain schedule identified
as such and delivered by Buyer to Seller pursuant to this Agreement, as set
forth in Article V, as the same may be supplemented and updated from time to
time pursuant to this Agreement, each of which is hereby incorporated and made a
part of this Agreement for all purposes as if set forth in full herein.
"Buyer Indemnitees" shall mean Buyer, its Affiliates (including Parent)
and their respective Representatives.
"Buyer New Matter" has the meaning set forth in Section 6.3(d).
"Buyer Other Matter" has the meaning set forth in Section 6.3(d).
"Buyer Permits" has the meaning set forth in Section 6.1(i).
"Charter Documents" of any Person shall mean such Person's articles of
incorporation, by-laws, certificate of formation, articles of association,
limited liability company agreement or equivalent governing or organizational
documents.
"Claim" shall mean any action, cause of action, suit, claim or
counterclaim or legal, administrative or arbitral proceeding or investigation,
whether or not the defense thereof, or any Liability in respect thereof, is
covered by insurance and whether under consumer laws, equity or statute,
including employment protection legislation.
"Closing" shall have the meaning set forth in Section 3.1.
"Closing Date" shall have the meaning set forth in Section 3.1.
"Closing Net Assets" shall have the meaning set forth in Section
3.2(c).
"Closing Net Asset Statement" shall have the meaning set forth in
Section 3.2(c).
"COBRA" shall mean the requirements of Part 6 of Subtitle B of Title I
of ERISA and Code Section 4980B and any similar state law.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Competing Transaction" shall have the meaning set forth in Section
6.1(f).
"Competition Laws" shall mean all Applicable Laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade.
"Confidentiality Agreement" shall mean that certain Non-Disclosure
Agreement, dated March 8, 2005, between the Seller and Parent.
"Contracts" shall mean all oral or written contracts, leases (including
unexpired real property leases), subleases, customer accounts, promises,
commitments, undertakings, guarantees, warranties, representations, grant of
rights, licenses (including Health Care Licenses), permits, registrations,
authorizations and agreements, and any and all Claims, rights of setoff or
recoupment, causes of action, accounts receivable, contract rights, accounts
and/or rights to reciprocal compensation arising under or in connection
therewith.
"Copyright Assignment" shall mean the copyright assignment to be
entered into between Seller and Buyer substantially in the form of Exhibit G
attached hereto.
"Credit Support Arrangements" shall have the meaning set forth in
Section 6.2(c).
"Employee Benefit Plan" shall mean any "employee benefit plan" (as
such term is defined in Section 3(3) of ERISA) and any other plan, contract,
policy, program or arrangement, whether written or unwritten, that is, or has
been, sponsored, maintained or contributed to or required to be contributed to
by Seller and any ERISA Affiliate for the benefit of or affecting current or
former employees of, consultants or former consultants of, or others performing
(or those who have performed) services for Seller or any ERISA Affiliate,
including but not limited to equity incentive, supplemental retirement,
severance, medical, disability, cafeteria benefit, fringe benefit, dependent
care benefit, life insurance, disability insurance, bonus, pension, 401(k),
profit-sharing or deferred compensation plans, programs, or arrangements, and
any employment or consulting contract.
"Employees" shall have the meaning set forth in Section 4.21.
"Encumbrances" shall mean all security interests, liens, (including
mechanics, warehousemen, laborers and landlords liens), Claims, charges,
community property interests, conditions, equitable interests, right-of-ways,
easements, encroachments, preemptive rights, rights of first refusal or similar
restrictions or rights, options, judgments, title defects, pledges, charges,
escrows, options, mortgages, hypothecations, prior assignments, title retention
agreements, indentures, security agreements, leases, title exceptions or any
other encumbrances of any kind.
"Environmental Laws" shall mean any and all Applicable Laws of any
Governmental Authority relating to pollution, hazardous substances, hazardous
wastes, medical wastes, petroleum or otherwise relating to protection of the
environment, natural resources or human health, including, by way of example and
not by way of limitation, the Clean Air Act, the Clean Water Act, the Resource
Conservation Recovery Act ("RCRA"), CERCLA, the Toxic Substances Control Act
("TSCA"), and the Emergency Planning and Community Right-to-Know Act ("EPCRA"),
all as currently amended.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean, with respect to any Person, any
corporation, trade or business which, together with such Person, is a member of
a controlled group of corporations or a group of trades or businesses under
common control within the meaning of Section 414 of the Code.
"Escrow Agreement" shall have the meaning set forth in Section 3.2(a).
"Escrow Fund" shall have the meaning set forth in Section 3.2(a).
"Escrow Period" shall have the meaning set forth in Section 8.1.
"Estimated Adjustment Amount" is the amount by which the Estimated Net
Assets are greater than the Adjustment Ceiling or lower than the Adjustment
Floor. If the Estimated Net Assets are higher than the Adjustment Floor and
lower than the Adjustment Ceiling, the Estimated Adjustment Amount shall be
zero.
"Estimated Net Assets" shall have the meaning set forth in Section
3.2(b).
"Estimated Net Asset Statement" shall have the meaning set forth in
Section 3.2(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Assets" shall mean any and all assets (tangible or
intangible) of the Seller, any of its Affiliates, and any of their respective
Affiliates or otherwise other than Purchased Assets. The assets of any Employee
Benefit Plan shall be Excluded Assets.
"Excluded Liabilities" shall mean any and all Liabilities of Seller,
any of its Affiliates, and any of their respective Affiliates or otherwise in
any way related to the Business or the Purchased Assets other than the Assumed
Liabilities.
"Form 8594" shall have the meaning given to such term in Section 3.6.
"GAAP" shall mean United States generally accepted accounting
principles applied on a consistent basis in effect on the date hereof.
"Governmental Authority" shall mean any department, commission, board,
bureau, agency, authority, legislature, court, tribunal or other instrumentality
of any nature whatsoever of any government or quasi-governmental unit of the
United States or any other country, jurisdiction, state, county, province,
municipality or other political subdivision.
"Government Program" shall have the meaning set forth in Section 4.24.
"Healthcare Laws" shall have the meaning set forth in Section 4.27(a).
"Health Care Licenses" shall mean all licenses, Permits,
accreditations, certificates of need, provider numbers, provider agreements,
approvals, qualifications, certifications, and other authorizations granted by
any health care regulatory agency or other Governmental Authority, Accreditation
Body or Third Party Payor relating to or affecting the Business or any Seller
Entity, the ownership, operation, maintenance, management, use, regulation,
development or expansion of the Business, the provision of health care services
and related transportation and food services thereby, and/or the reimbursement
of health care and other costs relating thereto.
"HIPAA" shall have the meaning set forth in Section 4.25.
"Income Tax" shall mean any Tax based on or measured by reference to
net income including any interest, penalty, or addition thereto, whether
disputed or not.
"Indemnified Party" shall have the meaning set forth in Section 8.4(a).
"Indemnifying Party" shall have the meaning set forth in Section
8.4(a).
"Independent Accounting Firm" shall have the meaning set forth in
Section 3.2(c).
"Insurance Policies" shall have the meaning set forth in Section 4.34.
"Intellectual Property" shall mean all (i) Patents, (ii) Know-how,
(iii) Trademarks, (iv) copyrights, copyright registrations and applications for
registration, (v) Software Programs and (vi) all other intellectual property
rights whether registered or not (including but not limited to "off-the-shelf"
shrink wrap computer Software programs), in each case that are licensed to or
owned by Seller and used exclusively in the Business as currently operated.
"Inventory" shall mean the consumable materials and supplies to be used
or consumed exclusively by or in the course of operating the Business.
"Know-how" shall mean any and all product specifications, processes,
methods, product designs, plans, trade secrets, ideas, concepts, inventions,
manufacturing, engineering and other manuals and drawings, physical and
analytical, safety, quality control, technical information, data, research
records, all promotional literature, customer and supplier lists and similar
data and information, and any and all other confidential or proprietary
technical and business information which are licensed to or owned by Seller and
used exclusively in the Business as currently operated.
"Leased Real Property" shall mean the real property in which a Seller
Entity, pursuant to a Real Property Lease, holds a leasehold estate in, or is
granted the right to use or occupy any land, buildings, structures,
improvements, fixtures or other interests in real property used exclusively in
the Business as currently operated. Schedule 4.35 sets forth a complete and
accurate list of all Leased Real Property.
"Liabilities" shall mean any and all direct or indirect indebtedness,
liabilities, assessments, expenses, Claims, Losses, deficiencies, obligations or
responsibilities, known or unknown, disputed or undisputed, joint or several,
vested or unvested, executory or not, fixed or unfixed, xxxxxx or inchoate,
liquidated or unliquidated, secured or unsecured, determinable or
undeterminable, accrued or unaccrued, absolute or not, actual or potential,
contingent or otherwise (including any Liability under any guarantees, letters
of credit, performance credits or with respect to insurance loss accruals),
whether due or to become due, and whether Claims with respect thereto are
asserted, if at all, before or after the Closing.
"Licensor Fees" shall have the meaning set forth in Section 6.3(b).
"Losses" shall mean any and all losses, demands, Claims, allegations,
assertions, Liabilities, costs, damages, judgments, obligations (including
corrective or remedial obligations), debts, settlements, assessments,
deficiencies, Taxes, penalties, interest, fines or expenses, whether or not
arising out of any Claims by or on behalf of a third party, including interest,
penalties, reasonable attorney's fees and expenses and all reasonable amounts
paid in investigation, defense or settlement of any of the foregoing, but
specifically excluding any consequential, special or punitive damages.
"Material Adverse Effect" shall mean any event, change, circumstance
or effect that individually or in the aggregate (taking into account all other
such events, changes, circumstances or effects), is, or is reasonably likely to
(A) be materially adverse to the operations or financial condition of the
Business, Assumed Liabilities or the Purchased Assets taken as a whole, or (B)
materially hinder, delay or prevent Seller's ability to consummate the
transactions contemplated herein, in either case, other than any event, change,
circumstance or effect relating (i) to the United States economy in general
(provided that such do not affect the operations, financial condition or
prospects of the Business, Assumed Liabilities or the Purchased Assets in a
materially disproportionate manner), (ii) financial, banking, or securities
markets (including any disruption thereof and any decline in the price of any
security or any market index), or (iii) to any outbreak or escalation of
hostilities or act of terrorism involving the United States or any declaration
of war by the U.S. Congress.
"Material Consents" shall have the meaning set forth in Section 7.3(c).
"Material Contract(s)" shall have the meaning set forth in Section
4.12(b).
"Medicare and Medicaid Programs" shall have the meaning set forth in
Section 4.24.
"Minimum Loss" shall have the meaning set forth in Section 8.7.
"Net Assets" shall be that amount equal to (i) all Purchased Assets
(excluding: intangible assets such as good will; cash; accounts receivable
subject to or the subject of litigation), less (ii) all Assumed Liabilities.
This calculation shall be determined using the same basis of accounting used to
prepare Seller's Form 10-K for the year ended December 31, 2004.
"Net Asset Certificate" shall have the meaning set forth in Section
3.2(b).
"Non-Competing Transaction" shall have the meaning set forth in Section
6.1(f).
"Non-Competition/Non-Solicitation Agreement" shall mean the
Non-Competition/Non-Solicitation Agreement between the parties in substantially
the form attached hereto as Exhibit E.
"Non-Material Consents" shall have the meaning set forth in Section
3.5(c).
"Order" shall mean any order, judgment, preliminary or permanent
injunction, temporary restraining order, award, citation, decree, consent decree
or writ of any Governmental Authority.
"Other Costs" shall have the meaning set forth in Section 9.1(b).
"Patents" shall mean all patents, patent disclosures and patent
applications (including, without limitation, all reissues, divisions,
continuations, continuations-in-part, renewals, re-examinations and extensions
of the foregoing) owned by Seller and used exclusively in the Business as
currently operated.
"Permits" shall mean all permits, licenses (including Health Care
Licenses), approvals, registrations, qualifications, rights, variances, grants,
permissive uses, easements, certificates, certifications, consents, and other
authorizations of every nature whatsoever required by, or issued to or on behalf
of Seller, any of its Affiliates, or any of their respective Affiliates by any
Governmental Authority that are necessary to the Business as currently operated.
"Permitted Encumbrances" shall mean (a) liens for Taxes not yet due and
payable, (b) liens on the Purchased Assets associated with the Assumed
Liabilities; and (c) with respect to the Leased Real Property: (i) easements,
quasi-easements, licenses, covenants, rights-of-way, and other similar
restrictions, agreements, conditions or restrictions, in each case, which are a
matter of public record, (ii) any conditions that would be shown by a physical
inspection and (iii) zoning, building and other similar restrictions imposed
pursuant to Applicable Laws.
"Person" shall mean an individual, a corporation, a limited or general
partnership, a limited liability company, an association, a trust or other
entity or organization, including a Governmental Authority.
"Personal Property" shall mean the equipment, furniture, machinery,
computer hardware, motor vehicles and other tangible personal property owned or
leased by Seller and used exclusively in the Business as currently operated.
"Prepaid Expenses" as of any date shall mean payments made by Seller,
any of its Affiliates, or any of their respective Affiliates with respect to the
Business or the Purchased Assets that constitute prepaid expenses in accordance
with GAAP.
"Private Program" shall have the meaning set forth in Section 4.24.
"Proceedings" shall have the meaning set forth in Section 6.3(h)(iii).
"Project Contract" shall have the meaning set forth in Section 6.1(j).
"Providers" shall have the meaning set forth in Section 4.27(e).
"Public Reports" means Almost Family, Inc.'s Exchange Act filings with
the SEC since January 1, 2003.
"Purchase Price" shall have the meaning set forth in Section 3.2.
"Purchase Price Objection Notice" shall have the meaning set forth in
Section 3.2(c).
"Purchase Price Resolution Period" shall have the meaning set forth in
Section 3.2(c).
"Purchased Assets" shall mean any and all (i) Leased Real Property,
(ii) Personal Property, (iii) Permits, (iv) Accounts Receivable, (v)
Intellectual Property, (vi) Inventory, maintenance and operating supplies used
exclusively in the Business as currently operated, (vii) Books and Records and
operating manuals, (viii) Assigned Contracts, (ix) data, records, files, manuals
(including software, clinical and operating), blueprints and other documentation
related exclusively to the Purchased Assets and the operation of the Business
including service and warranty records, sales promotion materials, creative
materials, art work, photographs, public relations and advertising material,
studies, reports, correspondence and other similar documents and records used
exclusively in the Business, whether in electronic form or otherwise, (x) all
client, customer and supplier lists, telephone numbers and electronic mail
addresses with respect to past, present or prospective clients, customers and
suppliers of the Business, (xi) all catalogs and brochures relating exclusively
to the Business, purchasing records and records relating to suppliers, (xii)
copies of all personnel records of the Transferred Employees, (xiii) all
goodwill incident to the Business, (xiv) all Prepaid Expenses and security
deposits relating exclusively to the Business (other than any collateral
provided by Seller or its Affiliates in respect of Credit Support Arrangements,
and (xv) all other intangible assets (including all Claims, contract rights and
warranty and product Liability Claims against third parties) in proportion to
their relationship to the Purchased Assets or the Business. The Purchased Assets
shall include the foregoing whether or not reflected on the Closing Net Asset
Statement, except for those assets which have been transferred or disposed of in
the ordinary course of the Business after June 30, 2005 and in accordance with
this Agreement. "Purchased Assets" does not include the Excluded Assets.
"Real Property Leases" shall mean any and all written or oral lease
agreements, sublease agreements, license agreements, occupancy agreements or
other agreements or arrangements pursuant to which Seller holds a leasehold
estate in, or is granted the right to use or occupy, any Leased Real Property.
Schedule 4.35 sets forth a complete and accurate list of all such Real Property
Leases.
"Representatives" shall mean a Person's directors, officers,
Affiliates, employees, attorneys, accountants, representatives, lenders,
consultants, independent contractors, stockholders, members and other agents.
"Restricted Material Contracts" shall have the meaning set forth in
Section 3.5(a).
"Restricted Non Material Contracts" shall have the meaning set forth in
Section 3.5(c).
"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" shall have the meaning set forth in Section 4.17(a).
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Seller Disclosure Schedule" shall mean that certain schedule
identified as such and delivered by Seller to Buyer, pursuant to this Agreement,
as set forth in Article IV, as the same may be supplemented and updated from
time to time pursuant to this Agreement, each of which is hereby incorporated
and made a part of this Agreement for all purposes as if set forth in full
herein.
"Seller Indemnitees" shall mean Seller, its Affiliates and their
respective Representatives.
"Seller's Knowledge" shall mean the actual knowledge of a particular
fact or other matter being possessed by Xxxxxxx X. Xxxxxxx, Xxxxx Xxxxxxxxx,
Xxxx Xxxxx and Xxxx Xxxxxxx and such knowledge as such person would reasonably
be expected to have in light of their duties and after reasonable investigation.
"Seller New Matter" shall have the meaning set forth in Section 6.3(c).
"Seller Other Matter" shall have the meaning set forth in Section
6.3(c).
"Software License Agreement" shall mean the Software License Agreement
to be entered into between Buyer and Seller, substantially in the form of the
agreement attached hereto as Exhibit H.
"Software Programs" shall have the meaning set forth in Section
4.11(b).
"Tax Assets" shall mean any refund, abatement or credit of, and all
other assets comprising receivables or deferred assets or prepayments for, Taxes
arising or resulting from the conduct of the Business or ownership of the
Purchased Assets by a Seller Entity or any Affiliates thereof for taxable
periods or portions thereof ending on or before the Closing Date.
"Tax Indemnity Period" shall have the meaning set forth in Section
9.1(b).
"Tax Liabilities" shall mean all Liabilities for Taxes arising or
resulting from the conduct of the Business or ownership of the Purchased Assets
by a Seller Entity or any Affiliate thereof for taxable periods or portions
thereof ending on or before the Closing Date.
"Tax Returns" shall mean all reports, returns, schedules and any other
documents required to be filed with respect to Taxes and all claims for refunds
of Taxes.
"Taxes" (and with correlative meanings, "Tax" and "Taxable") shall mean
all taxes of any kind imposed by a Governmental Authority, including those on,
or measured by or referred to as income, gross receipts, financial operation,
sales, use, ad valorem, value added, franchise, profits, license, withholding,
payroll (including all contributions or premiums pursuant to industry or
governmental social security laws or pursuant to other tax laws and
regulations), employment, excise, severance, stamp, occupation, premium,
property, recordation, transfer or windfall profits taxes, customs, duties or
similar fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by
such Governmental Authority with respect to such amounts.
"Third Party Payor Program" shall mean any third party healthcare
payment program in which any Seller Entity participates with regard to any of
its facilities or services, including, without limitation, any program, plan,
insurance or assistance program that is owned, operated or administered by a
Third Party Payor or other person, including any Government Program or Private
Program.
"Third Party Payor" means any Person or persons that maintain(s) a
Third Party Payor Program.
"Trademarks" shall mean (i) trademarks, service marks, trade names,
trade dress, labels, logos and all other names and slogans used exclusively with
any products or embodying associated goodwill of the Business related to such
products, whether or not registered, and any applications or registrations
therefor, and (ii) any associated goodwill incident thereto, in each case owned
by or licensed to Seller and used in the Business as currently operated.
"Trademark License Agreement" shall mean the trademark license
agreement to be entered into between Seller and Buyer substantially in the form
of Exhibit F.
"Transfer Taxes" shall have the meaning set forth in Section 3.7.
"Transferred Employees" shall have the meaning set forth in Section
6.2(b).
"Transition Services Agreement" shall mean the transition services
agreement to be entered into between Seller and Buyer substantially in the form
of Exhibit C attached hereto.
ARTICLE II
PURCHASE AND SALE OF PURCHASED
ASSETS AND ASSUMPTION OF LIABILITIES
Section 2.1 Purchase and Sale of Purchased Assets. Subject to the terms and
conditions of this Agreement, Seller shall sell, assign, convey, transfer and
deliver (or cause to be sold, assigned, conveyed, transferred and delivered) to
Buyer as of the Closing Date, and Buyer shall purchase and take assignment and
delivery from Seller as of the Closing Date, all of Seller's right, title and
interest in and to the Purchased Assets, free and clear of all Encumbrances
other than the Permitted Encumbrances.
Section 2.2 Assignment and Assumption of Liabilities. Subject to the terms and
conditions of this Agreement, Buyer will assume as of the Closing Date and
subsequently, in due course, pay, honor and discharge in accordance with their
respective terms and conditions all of the Assumed Liabilities without any right
of set-off against Seller other than as expressly set forth herein.
ARTICLE III
CLOSING
Section 3.1 Closing. Subject to the Parties' satisfaction or waiver of the
conditions precedent set forth in Article VII, the closing and consummation of
the transactions contemplated by this Agreement (the "Closing") shall take place
on September 1, 2005 at 10:00 a.m., Eastern Time, through exchange by facsimile
signature of execution documents followed by delivery of executed documents, or,
if the conditions set forth in Article VII have not been satisfied or waived as
of such date, on such later date that is mutually agreed between Seller and
Buyer (such date being the "Closing Date").
Section 3.2 Purchase Price; Adjustment Amount.
(a) Consideration. Subject to the terms and conditions set forth in this
Agreement, the consideration for the Purchased Assets will be $13,600,000 (the
"Purchase Price"), as may be adjusted pursuant to Section 3.2(d), plus the
assumption of the Assumed Liabilities. At the Closing, the Purchase Price shall
be paid as follows:
(i) $1,000,000 to the escrow fund (the "Escrow Fund") described in the Escrow
Agreement attached hereto as Exhibit I (the "Escrow Agreement"); and
(ii) An amount equal to (x) $12,600,000 plus (y) the Estimated Adjustment Amount
shall be delivered by Parent to the Seller Entities by wire transfer in
accordance with the instructions set forth on Schedule 3.2.
(b) Prior to the Closing Date, the Seller shall (i) prepare and deliver to
Parent a statement (the "Estimated Net Asset Statement") setting forth the
estimated Net Assets (including the components thereof) as of Closing (the
"Estimated Net Assets"), and (ii) provide Parent with a certificate of Seller's
Chief Financial Officer stating that the Estimated Net Asset Statement was
prepared by Seller in good faith and in a manner consistent with Seller's past
practices use in preparing Seller's Form 10-K for the year ended December 31,
2004, is consistent with the Books and Records and presents fairly the balance
sheet items of the Business reflected thereon as of the date thereof in
accordance with this Agreement (the "Net Asset Certificate").
(c) As soon as practicable (and in any event within ninety (90) days following
the Closing), Seller shall prepare and deliver to Parent and its counsel, a
reviewed statement setting forth the Net Assets as of the close of business on
the Closing Date (the "Closing Net Assets") together with all work papers and
back-up materials relating thereto (the "Closing Net Asset Statement"). The
costs and expenses of preparing the Closing Net Asset Statement shall be borne
50% by Seller and 50% by Parent. Each of Parent and Buyer shall assist Seller
and its Representatives in the preparation of the Closing Net Asset Statement
and shall provide Seller and its Representatives access at all reasonable times
to the personnel, properties, Books and Records of the Business, for such
purpose. No changes shall be made in any reserve or other account existing as of
the date of Closing except as (i) a result of events occurring after the date of
Closing and, in such event, only in a manner consistent with past practices and
(ii) as required by GAAP. The Closing Net Asset Statement shall be conclusive
and binding on the parties hereto unless Parent gives written notice of any
objections thereto setting forth in reasonable detail the amounts in dispute and
the basis for such disagreement (a "Purchase Price Objection Notice") to Seller
within thirty (30) days after its receipt of the Closing Net Asset Statement. If
Parent delivers a Purchase Price Objection Notice as provided above, the parties
shall attempt in good faith to resolve such dispute, and any resolution by them
as to any disputed amounts shall be final, binding and conclusive on the
parties. If the parties are unable to resolve, despite good faith negotiations,
all disputes reflected in the Purchase Price Objection Notice within thirty (30)
days after delivery thereof (the "Purchase Price Resolution Period"), then the
parties will, within thirty (30) days after the expiration of the Purchase Price
Resolution Period, submit any such unresolved dispute to an independent
accounting firm mutually acceptable to Parent and Seller (the "Independent
Accounting Firm"). Such submission shall include all work papers and back-up
materials relating to the unresolved disputes requested by the Independent
Accounting Firm to the extent available to Parent or its Representatives or
Seller or its Representatives. Parent and Seller shall be afforded the
opportunity to present to the Independent Accounting Firm any material related
to the unresolved disputes and to discuss the issues with the Independent
Accounting Firm. The determination by the Independent Accounting Firm, as set
forth in a notice to be delivered to Parent and Seller within thirty (30) days
after the submission of the unresolved disputes to the Independent Accounting
Firm, shall be final, binding and conclusive on the parties. The fees and
expenses of the Independent Accounting Firm shall be borne by Parent and Seller
in inverse proportion as they may prevail on matters resolved by the Independent
Accounting Firm, which proportionate allocations shall also be determined by the
Independent Accounting Firm at the time the determination of the Independent
Accounting Firm is rendered on the merits of the matters submitted. The Closing
Net Assets reflected in the Closing Net Asset Statement, as revised to reflect
the resolution of any and all disputes by the parties and/or the Independent
Accounting Firm, shall be deemed to be the Closing Net Assets.
(d) If Closing Net Assets is an amount equal to or falling between the
Adjustment Floor and the Adjustment Ceiling then neither party shall be
obligated to pay to the other party an amount representing an adjustment to the
Purchase Price. If Closing Net Assets exceed the Adjustment Ceiling, the Parent
shall pay to Seller via wire transfer of immediately available funds to the bank
account designated by Seller an amount equal to the difference of the difference
between the Closing Net Assets and the Adjustment Ceiling. If the Closing Net
Assets are less than the Adjustment Floor, the Seller shall pay to Parent via
wire transfer of immediately available funds to the bank account designated by
Parent an amount equal to the difference between the Closing Net Assets and the
Adjustment Floor. In each case, the amount due by Seller to Buyer or Buyer to
Seller in connection with this post-Closing reconciliation of the Closing Net
Assets shall take into account any Estimated Adjustment Amount paid at Closing.
Within five (5) Business Days after the calculation of the Closing Net Assets
becomes binding and conclusive on the parties, Seller or Parent, as the case may
be, shall make the wire transfer payment provided for in this Section 3.2(d).
Section 3.3 Deliveries by Buyer. At the Closing, Buyer and Parent shall deliver,
or cause to be delivered, to Seller the following:
(a) the Purchase Price;
(b) the certificate executed by the Secretary of Parent required to be delivered
pursuant to Section 7.2(c);
(c) the Trademark License Agreement, the Transition Services Agreement, the
Copyright Assignment, the Escrow Agreement, the Non-Competition/Non-Solicitation
Agreement, the Software License Agreement, the Copyright Assignment Agreement,
the Bills of Sale, and the Assignment and Assumption Agreement, each duly
executed by Buyer and Parent, as applicable; and
(d) such other deeds, bills of sale, endorsements, assignments, affidavits and
other instruments of sale, assignment, conveyance and transfer, in form and
substance reasonably satisfactory to Buyer and Seller, as are required to
effectively vest in Buyer all of Seller's right, title and interest in and to
all of the Purchased Assets free and clear of any and all Encumbrances, except
for the Permitted Encumbrances.
Section 3.4 Deliveries by Seller. At the Closing, Seller shall deliver, or cause
to be delivered by its Affiliates, to Buyer the following:
(a) the certificate by officers of Seller required to be delivered pursuant to
Section 7.3(e);
(b) the Trademark License Agreement, the Transition Services Agreement, the
Escrow Agreement, the Non-Competition/Non-Solicitation Agreement, the Software
License Agreement, the Copyright Assignment Agreement, the Assignment and
Assumption Agreement and Bills of Sale and any other Ancillary Agreements, each
duly executed by Seller;
(c) Assignment and Estoppel Certificates;
(d) such other deeds, bills of sale, endorsements, assignments, affidavits and
other instruments of sale, assignment, conveyance and transfer, in form and
substance reasonably satisfactory to Buyer and Seller, as are required to
effectively vest in Buyer all of Seller's right, title and interest in and to
all of the Purchased Assets free and clear of any and all Encumbrances, except
for the Permitted Encumbrances;
(e) Net Asset Certificate and the Estimated Net Asset Statement;
(f) True, correct and complete copies of all required consents of Governmental
Authorities set forth on Schedule 4.6 (other than the Buyer Permits) and all
Material Consents;
(g) Certificates of good standing from the relevant state authority, dated as of
a recent date, certifying that each Seller Entity is in good standing in its
state of incorporation and in each jurisdiction in which it is required to be
qualified to do business;
(h) Valid and effective assignment documentation, in form and substance
reasonably acceptable to Buyer, of any rights to the Intellectual Property that
are included in the Purchased Assets; and
(i) Such other documents and instruments as may be reasonably requested by Buyer
to consummate the transactions contemplated herein and to carry out the
obligations of the parties hereunder.
Section 3.5 Consents.
(a) If there are any Material Consents that have not yet been obtained (or
otherwise are not in full force and effect) as of the Closing, in the case of
each Assigned Contract as to which such Material Consents were not obtained (or
otherwise are not in full force and effect) (the "Restricted Material
Contracts"), Buyer may:
(i) waive the closing conditions as to any such Material Consent and elect to
have Seller continue its efforts to obtain the Material Consents; or
(ii) waive the closing conditions as to any such Material Consent and elect to
have Seller retain that Restricted Material Contract and all Liabilities arising
therefrom or relating thereto (whether or not such Liabilities would otherwise
be considered Assumed Liabilities), without any adjustment to the Purchase Price
or triggering of an indemnification right in favor of Buyer; or
(iii) terminate this Agreement pursuant to Article XI.
(b) If Buyer elects to have Seller continue its efforts to obtain any Material
Consents and the Closing occurs, notwithstanding Sections 2.1 and 2.2, neither
this Agreement nor any other document related hereto shall constitute a sale,
assignment, assumption, transfer, conveyance or delivery or an attempted sale,
assignment, assumption, transfer, conveyance or delivery of the Restricted
Material Contracts, and following the Closing, the parties shall use Best
Efforts, and cooperate with each other, to obtain the Material Consent relating
to each Restricted Material Contract as quickly as practicable. Until such time
as such Material Consents are obtained, the parties shall cooperate with each
other in any reasonable and lawful arrangements designed to provide to Buyer the
benefits of use of the Restricted Material Contract for its term (or any right
or benefit arising thereunder, including the enforcement for the benefit of
Buyer of any and all rights of Seller against a third party thereunder). If a
Material Consent for the sale, assignment, assumption, transfer, conveyance and
delivery of a Restricted Material Contract is obtained, Seller shall immediately
assign, transfer, convey and deliver such Restricted Material Contract to Buyer,
and Buyer shall assume the obligations under such Restricted Material Contract
assigned to Buyer from and after the date of assignment to Buyer pursuant to a
special-purpose assignment and assumption agreement substantially similar in
terms to those of the Assignment and Assumption Agreement (which special-purpose
agreement the parties shall prepare, execute and deliver in good faith at the
time of such transfer, all at no additional cost to Buyer).
(c) If there are any Consents not listed on Schedule 7.3 necessary for the
assignment and transfer of Assigned Contracts to Buyer (which Consents are
listed on Schedule 3.5) (the "Nonmaterial Consents") which have not yet been
obtained (or otherwise are not in full force and effect) as of the Closing,
Buyer shall elect at the Closing, in the case of Assigned Contracts as to which
such Nonmaterial Consents were not obtained (or otherwise are not in full force
and effect) (the "Restricted Nonmaterial Contracts"), whether to:
(i) accept the assignment of such Restricted Nonmaterial Contract, in which
case, as between Buyer and Seller, such Restricted Nonmaterial Contract shall,
to the maximum extent practicable and notwithstanding the failure to obtain the
applicable Nonmaterial Consent, be transferred at the Closing pursuant to the
Assignment and Assumption Agreement as elsewhere provided under this Agreement;
or
(ii) reject the assignment of such Restricted Nonmaterial Contract, in which
case, notwithstanding Sections 2.1 and 2.2, (A) neither this Agreement nor any
other document related to the consummation of the Contemplated Transactions
shall constitute a sale, assignment, assumption, conveyance or delivery or an
attempted sale, assignment, assumption, transfer, conveyance or delivery of such
Restricted Nonmaterial Contract, and (B) Seller shall retain such Restricted
Nonmaterial Contract and all Liabilities arising therefrom or relating thereto,
without any adjustment to the Purchase Price or triggering of an indemnification
right in favor of Buyer.
Section 3.6 Tax Allocations. The Parties agree to allocate the Purchase Price
(and all other capitalization costs) among the Purchased Assets for all purposes
(including financial, accounting and Tax purposes) in accordance with the
allocation schedule attached hereto as Exhibit D (such exhibit and the
allocations it contains, the "Allocation"). Buyer and Seller shall report and
file all Tax Returns (including amended Tax Returns and claims for refund)
consistent with the Allocation and shall not voluntarily take a position
contrary thereto or inconsistent therewith (including, without limitation, in
any audits or examinations by any Governmental Authority or any other
proceedings). Each of Parent, Buyer and Seller shall cooperate in the filing of
any forms (including "Form 8594" under Section 1060 of the Code) with respect to
such Allocation, including any amendments to such forms required with respect to
such Allocation.
Section 3.7 Transfer Taxes. All stamp, transfer, documentary, sales and use,
registration and other similar taxes and fees (including any penalties and
interest) incurred in connection with this Agreement and the transactions
contemplated hereby (collectively, the "Transfer Taxes") shall be paid by Buyer,
and except to the extent required to be filed by Seller, Buyer shall properly
file on a timely basis all necessary Tax Returns and other documentation with
respect to all Transfer Taxes. Buyer hereby agrees to indemnify Seller against,
and hold Seller harmless from, any and all Transfer Taxes. The provisions of
this Section 3.7 and no other provision, shall govern the economic burden of
Transfer Taxes.
ARTICLE IV
SELLER'S REPRESENTATIONS AND
WARRANTIES
Each Seller Entity represents and warrants to the Buyer as follows,
except as set forth on the Seller's Disclosure Schedule (which is arranged in
sections corresponding to the Sections contained in this Article IV and as to
which the disclosure in any section of the Seller Disclosure Schedule qualifies
only the corresponding Section and/or subsection, unless it is reasonably
apparent that the disclosure in any section or subsection of the Seller
Disclosure Schedule should apply to one or more other Sections):
Section 4.1 Organization and Good Standing. Each Seller Entity is duly
organized, validly existing and in good standing (to the extent such a concept
exists in the relevant jurisdiction) under the laws of its jurisdiction of
incorporation or organization and has all requisite power and authority to own,
lease and operate its properties and assets and to operate the Business as
currently operated. Except as set forth on Schedule 4.1, each Seller Entity is
duly qualified or licensed in each jurisdiction in which the ownership of
property or its assets or the conduct of its business requires such
qualification or license.
Section 4.2 Corporate Authorization. Except as set forth on Schedule 4.2, each
Seller Entity has all necessary power and authority to execute and deliver this
Agreement and the Ancillary Agreements to which it is a party, to perform its
obligations under this Agreement and the Ancillary Agreements to which it is
party, and to consummate the transactions contemplated hereby and thereby on the
terms set forth herein and therein. No other corporate proceedings on the part
of any Seller Entity not previously taken as of the date hereof are necessary to
authorize this Agreement, the Ancillary Agreements or the transactions
contemplated herein or therein. Each of this Agreement and the Ancillary
Agreements has been duly executed and delivered by each Seller Entity and,
assuming the due execution of such agreement by Buyer, is a valid and binding
obligation of such Seller Entity, enforceable against Seller, its property and
assets, as case may be, in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, receivership and similar
laws affecting the enforcement of creditors' rights generally, and general
equitable principles.
Section 4.3 Charter Documents. The copies of each Seller Entity's Charter
Documents previously provided to Buyer by Seller are true, complete and correct
copies thereof. Such Charter Documents are in full force and effect and have not
been amended since they were delivered to Buyer. Except as set forth on Schedule
4.3, no Seller Entity is in violation of any of the provisions of its Charter
Documents.
Section 4.4 Sufficiency of Assets. Except as set forth on Schedule 4.4, the
Purchased Assets, constitute all of the assets (tangible and intangible),
Contracts, Permits, property (real and personal) and other items of any nature
whatsoever used exclusively in the Business. Except as set forth on Schedule
4.4, and subject to the limitations imposed by the terms of the Trademark
License Agreement, the Purchased Assets together with the licenses granted
pursuant to the Trademark License Agreement, convey ownership or provide use or
benefit of, as applicable, all of the assets (tangible and intangible),
Contracts, Permits (other than the Buyer Permits), and property (real and
personal) used in the Business, other than the Excluded Assets.
Section 4.5 Condition of Assets. Except as set forth on Schedule 4.5, to the
Seller's Knowledge, all of the Purchased Assets whether owned or leased, are in
good operating condition and repair (with the exception of normal wear and
tear), and are free from defects other than minor defects as do not interfere
with the present use thereof in the conduct of normal operations.
Section 4.6 Consents by Governmental Authorities. Except as set forth on
Schedule 4.6, no consent, approval of or by, or filing with or notice to any
Governmental Authority is required by any Seller Entity or with respect to any
Seller Entity in connection with the execution, delivery or performance of this
Agreement and the Ancillary Agreements or the consummation of the transactions
contemplated hereby and thereby.
Section 4.7 No Conflict. Except as set forth on Schedule 4.7, the execution,
delivery and performance by each Seller Entity of this Agreement and the
Ancillary Agreements, and the consummation by Seller of the transactions
contemplated hereby and thereby, do not and will not (a) breach, contravene,
conflict with or cause a default under (with or without the giving of notice or
lapse of time) the Charter Documents of such Seller Entity, (b) breach,
contravene, conflict with or cause a default under (with or without the giving
of notice or lapse of time) any Contract to which a Seller Entity is a party or
by which any of them is bound or to which any of the Purchased Assets are
subject, except where such breach, contravention, conflict or default is not,
individually or in the aggregate, reasonably expected to have a materially
adverse effect on the Business conducted at each facility, (c) violate any
Order, Health Care Licenses, or Applicable Laws to which the Business or any of
the Purchased Assets is subject or by which a Seller Entity or its properties
may be bound, except where such violations, conflicts, breaches or defaults is
not, individually or in the aggregate, material to the Business or the Purchased
Assets or (d) result in the creation of an Encumbrance, other than Permitted
Encumbrances, on any of the Purchased Assets or the Business.
Section 4.8 Title to and Use of Property. Except as set forth on Schedule 4.8
and excluding the Excluded Assets, at the Closing, Seller will convey and Buyer
will acquire good and valid title to, or a valid leasehold interest in, the
Purchased Assets, free and clear of any and all Encumbrances (including any and
all Claims that may arise by reason of the execution, delivery or performance by
Seller of this Agreement) other than Permitted Encumbrances.
Section 4.9 Permits. Except as set forth on Schedule 4.9, (i) each Seller Entity
possesses all material Permits necessary to conduct the Business as currently
operated, (ii) no Permit has been modified, suspended or cancelled nor is any
such modification, suspension or cancellation pending or, to Seller's Knowledge,
threatened, and (iii) none of the Permits will terminate by reason of this
transaction and each Permit is transferable to Buyer pursuant to the terms
hereof. No Seller Entity is in conflict in any material respect with or in
material default or violation of any Permit.
Section 4.10 Claims and Proceedings. Except as set forth on Schedule 4.10, to
Seller's Knowledge, there is no outstanding investigation, charges, Claim or
Order of any Governmental Authority against or involving (i) the Purchased
Assets or (ii) the Business. Except as set forth on Schedule 4.10, there is no
outstanding Order of any Governmental Authority against or involving any Seller
Entity that could defeat, defer or negatively impact (i) the consummation of the
transactions contemplated by this Agreement or (ii) Ancillary Agreements after
the consummation of the transactions contemplated herein, the Business. Except
as set forth on Schedule 4.10, there is no Claim pending or, to Seller's
Knowledge, threatened against or involving any of the Purchased Assets or the
Business.
Section 4.11 Intellectual Property.
(a) Schedule 4.11(a) contains a true and complete list of all patents (and
applications therefore), as well as any registrations for (or applications for
registration), any trademarks, servicemarks, copyrights or domain names included
in the Intellectual Property and the current status of the same. Except as set
forth on Schedule 4.11(a), all of the foregoing are and remain valid and
subsisting, with all fees, payments and filings due as of the Closing Date duly
made. All of the foregoing are, to Seller's Knowledge, enforceable.
(b) Schedule 4.11(a) sets forth a true and complete list of all of
Seller's computer software programs, products and services which are material to
the operation of the Business (including the ADC System, other than so called
"off-the-shelf" shrink-wrap computer software programs (collectively, the
"Software Programs").
(c) The Intellectual Property consists solely of items and rights which are: (i)
owned by Seller; or (ii) used by Seller pursuant to a valid Permit, license,
sublicense, consent or other similar written Contract. Each such Contract, other
than Contracts for "off-the-shelf" shrink wrap computer software programs, are
set forth on Schedule 4.11(a).
(d) The Intellectual Property include all rights necessary for the operation of
the Business as presently conducted and as proposed to be conducted, and such
rights will not cease to be valid by reason of the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby. Except as set forth on Schedule 4.11(d), all of the
Intellectual Property used by the Business is owned by Seller free and clear of
any Lien and is not subject to termination or other adverse effects upon license
to Buyer of such Intellectual Property. To Seller's Knowledge, Seller is not
aware of any information which would indicate that any Intellectual Property is
invalid or unenforceable.
(e) The Software Programs are not subject to any sublicense, assignment, site,
equipment, or other operational limitations.
(f) Except as set forth on Schedule 4.11(f), no Claims: (i) challenging the
validity, enforceability, effectiveness or ownership by Seller of any of the
Intellectual Property; or (ii) to the effect that the use, distribution,
licensing, sublicensing, or sale of any product, service, work, technology or
process in the conduct of the Business as presently conducted by Seller
infringes on any intellectual property rights of any Person have been asserted
or, to Seller's Knowledge, are threatened by any Person, nor are there, to
Seller's Knowledge, any valid grounds for any bona fide claim of any such kind,
including any Claims related to the "Almost Family Xxxx" (as such term is used
in the Trademark License Agreement).
(g) Except as set forth on Schedule 4.11(g), all personnel (including
Representatives), who participate in the conception and/or development of the
Intellectual Property on behalf of Seller either: (i) are employees of Seller or
one of its Affiliates, (ii) are parties to a "work-for-hire" and/or other
arrangement or Contracts with Seller or its Affiliates providing for the
assignment of intellectual property rights relating thereto, or (iii) are
parties to appropriate instruments of assignment in favor of Seller or its
Affiliates providing for the assignment of intellectual property rights related
thereto.
(h) Except as set forth on Schedule 4.11(h), Seller owns and possesses the
Intellectual Property free and clear of any and all Encumbrances other than
Permitted Encumbrances.
(i) Except pursuant to Contracts set forth on Schedule 4.11(i), no Seller Entity
owes any royalties or other payments to third parties in respect of the
Intellectual Property, and any royalties or other payments that have accrued
prior to the Closing have been paid.
Section 4.12 Material Contracts.
(a) Schedule 4.12(a) sets forth a complete and accurate list of
each of the Assigned Contracts that:
(i) is a lease or sublease relating to the Leased Real Property;
(ii) relates to the Personal Property and involves a remaining obligation in
excess of $100,000;
(iii) relates to a distribution, reseller or similar arrangement and involves a
remaining obligation or receipt in excess of $100,000;
(iv) relates to the purchase of goods or provision of services and involves a
remaining obligation or receipt in excess of $100,000;
(v) relates to any fixed price consulting or service agreement or similar
arrangement and involves a remaining obligation or receipt in excess of
$100,000;
(vi) is a Contract under which Seller has borrowed any money from, or issued any
note, bond, debenture or other evidence of indebtedness issued to any Person,
that has an aggregate future liability in excess of $100,000;
(vii) grants or evidences an Encumbrance on any of the Purchased Assets, other
than a Permitted Encumbrance;
(viii) provides for any joint venture, partnership, strategic alliance,
shareholders' Contract, co-marketing, co-promotion, co-packaging, joint
development or similar arrangement;
(ix) provides for the resolution or settlement of any actual or threatened
action, suit, claim, proceeding or other dispute and involves an amount in
controversy in excess of $100,000;
(x) Contract or agreement involving any Governmental Authority that is material
to the operation of the Business as a whole or at any particular facility;
(xi) any agreements with Third Party Payors or other sources of payment
pertaining to the operation of the Business;
(xii) any agreements pertaining to the transportation of program participants in
connection with the Business;
(xiii) that creates a partnership, limited liability company or joint venture;
(xiv) that are between a Seller Entity and any physician, hospital, nursing
facility, or other provider or supplier of health care services or products to
patients; with any suppliers or distributors of the products or services to a
Seller Entity;
(xv) with any consultants or vendors for services relating to billing and
reimbursement; in each case containing exclusivity, non-compete or non-solicit
provisions or which otherwise restricts the ability to freely conduct the
business or to compete with the Business or any Seller Entity;
(xvi) with any "business associates" as such term is defined in the Health
Insurance Portability and Accountability Act of 1996;
(xvii) that are inter-company agreements;
(xviii) any other Contracts not entered into in the ordinary course of business
or that are material to the business, condition (financial or otherwise),
results of operation or prospects of any Seller Entity, including without
limitation any understandings relating to any partnership, joint venture or
management services arrangement relating to any Seller Entity; or
(xix) is set forth on Schedule 4.11(a).
(b) Each Contract listed in Schedule 4.12(a) is referred to herein individually
as a "Material Contract" and, collectively, the "Material Contracts"). All
copies of Material Contracts that have been provided to the Parent are true,
complete and accurate in all material respects.
(c) Each Seller Entity has performed all of the obligations required to be
performed by it and is entitled to all benefits under, and is not alleged to be
in default in respect of any Material Contract. Each of the Material Contracts
is (i) a valid and binding obligation of Seller, enforceable against Seller, and
to Seller's Knowledge the other parties thereby, in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium,
receivership and similar laws affecting the enforcement of creditors' rights
generally, and general equitable principles, and (ii) except as disclosed on
Schedule 4.12(c), there exists no breach, default or event of default or event,
occurrence, condition or act, with respect to Seller or any of its Affiliates,
or to Seller's Knowledge, with respect to the other contracting party, which,
with the giving of notice, the lapse of the time or the happening of any other
event or conditions, would become a breach, default or event of default under
any Material Contract including as a result of the execution, delivery and
performance of this Agreement, the Ancillary Agreements and the transactions
contemplated hereby and thereby. No Seller Entity nor any of their respective
Affiliates has received written or oral notice of default, breach, cancellation,
modification or termination of any Material Contract. Except as set forth on
Schedule 4.12(c), the execution, delivery and performance of this Agreement and
the Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby, will not give rise to any right of termination, acceleration
or cancellation of any Material Contracts. To Seller's Knowledge, none of the
parties to any Material Contract intends to terminate or alter the provisions
thereof by reason of the transactions contemplated herein or otherwise. Since
June 30, 2005, except as set forth on Schedule 4.12(c), no Seller Entity, as the
case may be in each instance, has waived any right under any Material Contract,
amended or extended any Material Contract or failed to renew (or received notice
of termination or failure to renew with respect to) any Material Contract.
Section 4.13 Employee Benefits Plans.
(a) Schedule 4.13(a) lists each Employee Benefit Plan. To Seller's Knowledge,
each such Employee Benefit Plan has been maintained, funded and administered in
accordance with the terms of such Employee Benefit Plan, complies in form and in
operation in all material respects with the applicable requirements of ERISA,
the Code, and other Applicable Laws, and the Seller has paid all contributions
due in respect thereof.
(b) None of such Employee Benefit Plans is a "multiemployer plan," as defined in
Section 3(37) of ERISA or a "defined benefit plan," as defined in Section 3(35)
of ERISA.
(c) Except as set forth on Schedule 4.13(c), Buyer will not acquire any
Liabilities in connection with any Employee Benefit Plan pursuant to the
transactions contemplated by this Agreement and the Ancillary Agreements.
Section 4.14 Taxes. Each Seller Entity has filed all Tax Returns that it was
required to file in a timely manner (within any applicable extension periods),
each of which were correct and complete in all material respects. All Taxes owed
by Seller (whether or not shown on any Tax Return) have been paid or adequately
reserved for. Except as set forth on Schedule 4.14, no action, suit, proceeding
or audit is pending against or with respect to the Business regarding Taxes and
no Seller Entity has waived any statue of limitations in respect of Taxes. There
are no liens or Encumbrances for Taxes on any of the Purchased Assets, except
for liens and Encumbrances for Taxes which are not yet due and payable. Seller
is not a foreign person as defined in Section 1445(b)(2) of the Code and the
regulations thereunder.
Section 4.15 Environmental Matters. To Seller's Knowledge, the Business is in
material compliance with applicable Environmental Laws. Except as set forth on
Schedule 4.15, no Seller Entity has received any written notice, report or other
information regarding any actual or alleged violation of the Environmental Laws,
and any Liabilities or potential Liabilities, including any investigatory,
remedial or corrective obligations, relating to the Business or its facilities
arising under the Environmental Laws.
Section 4.16 Compliance with Applicable Laws. Except as set forth on Schedule
4.16, to Seller's Knowledge, (i) each Seller Entity is in material compliance
with all Applicable Laws, and (ii) since January 1, 2003, no Seller Entity has
received any oral or written notice from any Governmental Authority regarding
any actual, alleged, possible or potential violation of, or failure to comply
with, any Applicable Law or of any investigation, complaint, Claim or other
injury pertaining thereto.
Section 4.17 Certain Financial Information.
(a) Each of the consolidated financial statements (including, in each case, any
notes thereto and segment information included therein) contained in the
Seller's Annual Report on Form 10-K for the year ended December 31, 2004 and
Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (collectively,
the "SEC Reports") were prepared in accordance with GAAP (except in each case as
described in the notes thereto) applied on a consistent basis throughout the
periods indicated and each presented fairly in all material respects the
financial position of Seller and its subsidiaries on a consolidated basis, as at
the respective dates thereof and its results of operations, shareholders' equity
and cash flows for the respective periods indicated therein (subject, in the
case of unaudited statements, to normal and recurring immaterial year-end
adjustments and the absence of footnotes).
(b) Seller will prepare and set forth on Schedule 4.17(b) the Estimated Net
Asset Statement. The Estimated Net Asset Statement will be prepared by Seller in
good faith and in a manner consistent with Seller's past practices, will be
consistent with the Books and Records. The Estimated Net Asset Statement to be
delivered by Seller pursuant to Section 3.2 will be prepared by Seller in good
faith and in a manner consistent with Seller's past practices, will be
consistent with the Books and Records.
Section 4.18 Undisclosed Liabilities. Except as described on Schedule 4.18,
there are no Liabilities of Seller that constitute Assumed Liabilities other
than (a) Liabilities reflected on the Seller's Form 10-K dated June 30, 2005,
(b) Liabilities that have arisen since June 30, 2005, for trade or business
obligations incurred in connection with the purchase of goods or services in the
ordinary course of the Business and consistent with past practice, (c)
obligations of continued performance under the Assigned Contracts and the
Permits, and (d) as of Closing, Liabilities reflected on the Estimated Net Asset
Statement.
Section 4.19 Accounts Receivable; Accounts Payable.
(a) To Seller's Knowledge, (i) all Accounts Receivable represent or will
represent valid obligations arising from transactions actually made or services
actually performed in the ordinary course of the Business, and (ii) unless paid
prior to the Closing Date, the Accounts Receivable are or will be as of the
Closing Date good and collectible net of the respective reserves shown on the
Closing Net Working Capital Statement (which reserves have been established in
accordance with GAAP). No Seller Entity or any Affiliate thereof has received
written notice of, nor to Seller's Knowledge is there any contest, Claim,
defense or right of set-off related to, any Accounts Receivable. Except for the
Accounts Receivable, neither Seller nor any of its Affiliates has extended any
credit to any Person.
(b) To Sellers knowledge, all Accounts Payable represent or will represent valid
obligations arising from transactions actually made or services actually
performed in the ordinary course of the Business and, unless paid prior to the
Closing Date, will be paid in the ordinary course of the Business, except
Accounts Payable being contested in good faith and set forth on Schedule
4.19(b).
Section 4.20 Business Activity Restriction. Except as set forth on Schedule
4.20, there is no non-competition or other similar Contract, commitment or Order
(other than Permitted Encumbrances) to which the Business is subject that has or
is reasonably expected to have the effect of prohibiting or materially
restricting the conduct of the Business by Buyer, assuming the Buyer continues
to operate the Business as it is presently operated.
Section 4.21 Employees.
(a) Seller has previously delivered to Buyer a true and correct list of all
employees (listed by job classification and the Seller Entity that employs such
person), and consultants of each of the Seller Entities who work exclusively for
the Business (collectively, the "Employees") as of the date set forth herein and
a description of the rate and nature of all compensation payable by a Seller
Entity to each such person.
(b) Except as set forth on Schedule 4.21(b): (i) no Seller Entity is a party to
any Contract or collective Agreement with any labor organization, trade union or
other representative of its employees; (ii) there is no unfair labor practice
charge or complaint pending or, to Seller's Knowledge, threatened against any
Seller Entity; (iii) no Seller Entity has experienced any labor strike,
slowdown, work stoppage or similar labor controversy or any threat of such
within the past three (3) years; (iv) no representation question has been raised
respecting Seller's employees within the past three (3) years, nor are there any
campaigns being conducted to solicit authorization or trade union recognition
from Seller's employees to be represented by any labor organization; (v) no
Claim before any Governmental Authority brought by or on behalf of any employee,
prospective employee, former employee, retiree, labor organization, trade union
or other representative of Seller's employees, is pending or, to Seller's
Knowledge, threatened against the Seller and, to Seller's Knowledge, there are
no circumstances which may give rise to such Claim; (vi) no Seller Entity is a
party to, or otherwise bound by, any Order relating to its employees or
employment practices; (vii) each Seller Entity has paid in full to all of its
employees all wages, salaries, commissions, bonuses, benefits and other
compensation due and payable to such employees; (viii) none of the employees of
any Seller Entity is absent on maternity leave or long-term sickness or
disability leave; (ix) each Seller Entity has in relation to each of its
employees complied in all material respects with all obligations imposed on it
by all Applicable Laws and codes of conduct and practice relevant to the
relations between it and any employee or trade union; (x) no Seller Entity has
given or received any notice to terminate any Contract of employment of any of
its employees which expires on or after the Closing Date; and (xi) no Seller
Entity has offered a Contract of employment or for services to any Person.
Section 4.22 No Agency Action or Enforcement.
(a) Except as set forth on Schedule 4.22(a), neither the Business nor any Seller
Entity is currently, with respect to any Governmental Authority: (i) to Seller's
Knowledge the subject of any material audit, inquiry, or investigation; or (ii)
party to any consent decree, judgment, order, or settlement that (A) requires
the payment of money by a Seller Entity or any Affiliate thereof to any
Governmental Authority, or (B) requires or prohibits any activity by any Seller
Entity or Affiliate thereof; and which, in the case of either (A) or (B) of this
sentence, is either punitive in nature, or serves as a civil penalty, the
foregoing to include, without limitation, the Business being required to be
conducted under a mandatory corporate integrity agreement.
(b) Except as set forth and described in Schedule 4.22(b), (i) the right of a
Seller Entity or an Affiliate thereof or, to Seller's Knowledge, any licensed
professional or other individual who provides material services to or on behalf
of any Seller Entity or an Affiliate thereof to receive reimbursements or
provide or order services pursuant to any Government Program or Private Program
has not been terminated, excluded or otherwise materially adversely affected as
a result of any investigation or action whether by any Governmental Authority or
other third party; (ii) to Seller's Knowledge, neither a Seller Entity or any
Affiliate thereof, nor any licensed professional or other individual who is a
party to a Material Contract, has, during the past three years, been the subject
of any inspection, investigation, survey, audit, monitoring or other form of
review by any Governmental Authority, professional review organization,
accrediting organization or certifying agency based upon any alleged improper
activity, or material violation of applicable law or policy, nor has any Seller
Entity or an Affiliate thereof received any written notice of deficiency during
the past three years in connection with their respective operations; (iii) there
are not any outstanding written deficiencies or work orders of any Governmental
Authority having jurisdiction over the Business or any Seller Entity or
Affiliate thereof, or requiring conformity to any applicable agreement, statute,
regulation, ordinance or bylaw, including but not limited to, the Government
Programs and Private Programs; and (iv) no Seller Entity or any Affiliate
thereof has received any written notice of any claim, requirement or demand of
any licensing or certifying agency or other third party supervising or having
authority over the Business, any Seller Entity or any Affiliate thereof to
provide additional personnel, training or supervision so as to conform to or
comply with any existing law, code, rule, regulation or standard. Seller has
provided, prior to the date of the signing of this Agreement, Buyer with copies
of all written reports, correspondence, notices and other documents relating to
any matter described or referenced on the Compliance Schedule.
Section 4.23 Health Care Licenses.
(a) All Health Care Licenses applicable to the Business, to the extent material
to the conduct of the Business as currently conducted: (i) have been obtained;
(ii) are valid and in good standing in each jurisdiction in which such Health
Care Licenses were issued or are operable; and (iii) are not subject to any
material limitation, restriction, revocation or forfeiture by any Governmental
Authority (or in the case of any accreditation by a private accrediting body, by
such body).
(b) Set forth on Schedule 4.23(b) is a correct and complete list of such Health
Care Licenses and Permits (including the name of the issuing agency, the
expiration date, and, where applicable, the service area covered by such Health
Care License or Permit) and provider numbers and provider agreements under all
Government Programs and Private Programs, complete and correct copies of which
have been provided to Buyer. True, complete and correct copies of all surveys,
reviews and/or audits of Seller or of the Business or its predecessors in
interest relating to the Business conducted in connection with any Government
Program, Private Program or licensing or accrediting body during the past three
(3) years have been provided to Buyer.
(c) Except as disclosed in Schedule 4.23(c), no violation, default, order or
legal or administrative proceeding exists with respect to any of the Health Care
Licenses or Permits listed on Schedule 4.23(c), which violation, default, order,
legal or administrative proceeding could reasonably be expected to result in a
Material Adverse Effect. No Seller Entity or any Affiliate thereof has received
any written notice of any action pending or recommended by any Governmental
Authority (or in the case of accreditation, by the accrediting body) having
jurisdiction over the Health Care Licenses and Permits set forth on Schedule
4.23(b), either to revoke, withdraw or suspend any such Health Care Licenses and
Permits, or to terminate the participation of such Seller Entity or Affiliate in
any Government Program or Private Program. To Seller's Knowledge, no event has
occurred which, with the giving of notice, the passage of time, or both, would
constitute grounds for a material violation, order or deficiency with respect to
any of the Health Care Licenses and Permits set forth on Schedule 4.23(b) or to
revoke, withdraw or suspend any such Health Care Licenses and Permits, or to
terminate or adversely modify in a material way the participation of any Seller
Entity or Affiliate thereof in any Government Program or Private Program. Seller
has received no written notice of any decision not to renew any provider number
or provider agreement or third party payor agreement of the Business. Except as
set forth on Schedule 4.23(c), no consent or approval of, prior filing with or
notice to, or any action by, any Governmental Authority or any other third party
is required in connection with any such Health Care License or Permit, or
Government Program or Private Program, by reason of the transactions
contemplated hereby, and the continued operation of the Business thereafter on a
basis consistent with current practices.
(d) Except as set forth in Schedule 4.23(d), all of the certificates of need
held by a Seller Entity or any Affiliate thereof and material to the operation
of the Business are valid and for existing health care services and are
transferable under applicable law as part of the transactions contemplated by
this Agreement; and Seller possesses all certificates of need material to the
conduct of the Business as presently conducted.
Section 4.24 Third Party Reimbursement. Each Seller Entity, and each facility in
which the Business is conducted, is certified for participation and
reimbursement under Title XIX of The Social Security Act (the "Medicaid
Program"), and, except as set forth in Schedule 4.24, the CHAMPUS program, the
Veterans Administration program and the TriCare program (the Medicaid Program,
CHAMPUS, Veteran Administration and TriCare programs and such other similar
federal, state or local reimbursement or governmental programs for which the
Business is eligible are hereinafter referred to collectively as the "Government
Programs") and have current provider numbers and provider agreements for such
Government Programs and with such private non-governmental programs, including
without limitation any private insurance program, health maintenance
organization, preferred provider organization or employee assistance program
under which it is presently receiving payments (such non-governmental programs
herein referred to as "Private Programs").
Section 4.25 HIPAA Compliance. Seller has established and implemented such
policies, programs, procedures, contracts and systems, as are material to bring
the Seller Entities and the operation of the Business into compliance with the
Health Insurance Portability and Accountability Act of 1996 ("HIPAA"); Title II,
Subtitle F, Sections 261-264, Public Law 104-191; and the Standards for Privacy
of Individually Identifiable Health Information, 45 C.F.R. Parts 160-164 as of
the effective dates of such Laws.
Section 4.26 Billing Practices. All bills for professional and related services
submitted by or on behalf of the Business to any Third Party Payor, Government
Program or Private Program have been submitted in compliance with all material
applicable statutes, rules, regulations and Applicable Laws. True and complete
copies of such reports and xxxxxxxx for the most recent year have previously
been made available to Buyer. The Seller has paid or caused to be paid all known
and undisputed refunds, overpayments, discounts or adjustments which have become
due pursuant to such reports and xxxxxxxx and, to Seller's Knowledge, has no
outstanding liability under any Government Program or Private Program for any
refund, overpayment, discount or adjustment. Except as set forth in Schedule
4.26, to Seller's Knowledge (i) there are no pending appeals, adjustments,
challenges, audits, inquiries, litigation or notices of intent to audit with
respect to such prior reports or xxxxxxxx, and (ii) during the last five years
no Seller Entity or Affiliate thereof has been audited, surveyed, or otherwise
examined by any Government Program or Private Program in connection with the
Business.
Section 4.27 Regulatory Compliance.
(a) Each Seller Entity and each Affiliate thereof, as such relates to the
Business, has complied in all material respects with, and has made all filings
required pursuant to applicable laws prohibiting fraud and abuse including
without limitation, the Social Security Act, as amended, Sections 1128, 1128A
and 1128B, 42 U.S.C. Sections 1320a-7, 7a and 7b including, without limitation,
Criminal Penalties Involving Medicare or State Health Care Programs, commonly
referred to as the "Federal Anti-Kickback Statute" and The Social Security Act,
as amended, Section 1877, 42 U.S.C. Section 1395nn (Prohibition Against Certain
Referrals), commonly referred to as the "Xxxxx Statute," the statute commonly
referred to as the "Federal False Claims Act," and any comparable state law of
similar import or effect (collectively with HIPAA, the "Healthcare Laws"). The
Business, each Seller Entity and each Affiliate thereof is in substantial
compliance with the records maintenance requirements under applicable Healthcare
Laws with respect to the Business.
(b) Schedule 4.27(b) lists all financial relationships currently in effect
(whether or not memorialized in writing) that any Seller Entity has with any
person who is, or was at the time entered into, to Seller's Knowledge, a
physician or an immediate family member of a physician in connection with the
Business. For purposes of this Section 4.27(b), the term "financial
relationship" has the meaning set forth in 42 U.S.C. xx.xx. 1395nn.
(c) All activities of the Seller, it Affiliates or any of their respective
officers, directors, agents and employees undertaken on behalf of the Business
are currently being conducted in compliance in all material respects with all
Applicable Laws, (including without limitation all Healthcare Laws), Permits,
licenses (including without limitation Health Care Licenses), certificates,
governmental requirements, Government Program manuals and written guidance,
orders and other similar written items of any Governmental Authority including,
without limitation, all Laws pertaining to confidentiality of patient
information, occupational safety and health, workers' compensation,
unemployment, building and zoning codes. No Seller Entity or any Affiliate
thereof has, with respect to the Business, violated in any material respect or
become liable for, or received a written notice or charge asserting any such
violation or liability with respect to, any of the Laws, nor, to the Seller's
Knowledge, is there any fact or circumstance that would reasonably be expected
to form the basis for any such violation or liability. Neither Seller nor the
Business as operated by Seller is relying on any exemption from or deferral of
any of the Laws that, to Seller's Knowledge, would not be available to Buyer
after the Closing.
(d) Those Seller Entities set forth on Schedule 4.27(d) (the "Providers") are
qualified as participating providers under the programs set forth in such
schedule, including the Government Programs. There are no other Seller Entities
who act as providers with respect to the Business. With respect to the
Providers, to Seller's Knowledge there are no pending appeals, overpayment
determinations, adjustments, challenges, audits, litigation or written notices
of intent to open Medicare or Government Program claim determinations or other
reports required to be filed by any Seller Entity, except for appeals of
individual claim denials in the ordinary course of business and which would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect. To the Seller Entities' Knowledge, Providers claim for services
to any individual or third-party payer have been complete, timely and accurate,
in material compliance with Applicable Laws. None of the Providers has received
any written notice indicating that such qualification may be or has been
terminated or withdrawn. The Providers have timely filed all claims or other
reports required to be filed with respect to the purchase of products or
services by third-party payors (including, without limitation, Government
Programs), in the ordinary course of business, except where the failure to file
such claims and reports would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect, and all such claims or
reports are complete and accurate in all material respects. No Provider has any
material liability to any payor with respect to reports or claims filed on
behalf of the Business, except for liabilities incurred in the ordinary course
of business and as otherwise set forth in this Agreement including the Schedules
thereto.
(e) Except as set forth on Schedule 4.27(e), to Seller's Knowledge no employees
or members of the boards of directors of any Seller Entity or any party (or
parties) with whom the Seller contracts in connection with the Business have
been convicted of, plead guilty to or charged with a Medicare, Medicaid, other
Federal Health Care Program (as defined in 42 U.S.C. ss. 1320a-7b(f)), or other
Government Program related offense, or, to Seller's Knowledge, convicted of or
charged with a violation of federal or state law related to fraud, theft,
embezzlement, breach of fiduciary responsibility, or financial misconduct. To
Seller's Knowledge, no employees, members of the board of directors of any
Seller Entity or any party (or parties) with whom Seller or its Affiliates
contracts on behalf of the Business have been excluded, terminated or suspended
from participation in Medicare, Medicaid or any other Federal Health Care
Program, or other Government Program, or have been debarred, suspended or are
otherwise ineligible to participate in federal programs. To the Seller's
Knowledge, no employees or members of the board of directors of any Seller
Entity or Affiliate thereof related to the Business and party (or parties) with
whom any such entity contracts have committed any offense which may reasonably
serve as the basis for any such exclusion, suspension, debarment or other
ineligibility. To Seller's Knowledge, no Seller Entity has arranged with or
contracted with any individual or entity that is suspended, excluded or debarred
from participation in a Federal Health Care Program or other Government Program.
(f) To Seller's Knowledge, no Seller Entity, or any Affiliate thereof, or their
respective directors, officers, or employees has made any contribution, gift,
bribe, rebate, payoff, influence payment, kickback or other payment to any
Person, regardless of form, whether in money, property or service (A) to obtain
favorable treatment in securing business, (B) to pay for favorable treatment for
business secured, or (C) to obtain special concessions or for special
concessions already obtained, for or in respect of Seller or any Affiliate
thereof with respect to the Business.
Section 4.28 Intentionally Omitted.
Section 4.29 Broker's Fees. No agent, broker, firm or other Person acting on
behalf of Seller is, or will be, entitled to any investment banking, commission,
broker's or finder's fees from any of the parties hereto, or from any Affiliate
of any of the parties hereto, in connection with any of the transactions
contemplated by this Agreement.
Section 4.30 Absence of Certain Changes or Events. Except as set forth on
Schedule 4.30, since June 30, 2005, the Business has been conducted in the
ordinary course consistent with past practice and there has not been:
(a) Any change in the Business, or any event, occurrence or circumstance that
could reasonably be expected to cause a Material Adverse Effect;
(b) Any change by Seller in its accounting methods, principles or practices
other than as required by GAAP;
(c) Except for changes set forth in Schedule 4.30 and changes in the ordinary
course of the Business consistent with past practice, any increase in the
compensation or benefits, establishment of any bonus, stock option (including,
without limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase plan, any
increase in benefits under such Employee Benefit Plan, or any other increase in
the compensation payable or to become payable to any employees that work
exclusively in the Business;
(d) Any damage, destruction or other casualty loss (whether or not covered by
insurance), condemnation or other taking affecting the Purchased Assets;
(e) Any transaction with respect to the purchase, acquisition, lease, sale,
disposition or transfer of any Purchased Assets or to any capital expenditure
(in each case, other than in the ordinary course of the Business in accordance
with past practice) or creation of any Encumbrance on any of the Purchased
Assets other than Permitted Encumbrances;
(f) Any write-downs or write-ups (or failures to write down or write up in
accordance with GAAP) of the value of any Inventory other than in the ordinary
course of the Business consistent with past practice and in accordance with
GAAP;
(g) Any failure to maintain the Purchased Assets in accordance with good
business practice and in good operating condition and repair;
(h) Any modification, termination, waiver, amendment or other alteration or
change in the terms or provisions of any Material Contract or a Permit;
(i) Any transfer or grant to any Person of any of any Seller Entity's rights to
any Intellectual Property, in each case other than in the ordinary course of
Business;
(j) Any significant changes or turnover of the Employees;
(k) Any adverse change in Seller's relations with any Governmental Authority or
third parties who are parties to any Contracts;
(l) Any discharge or satisfaction of any Encumbrance, or payment of any material
Liabilities in relation to the Business, other than in the ordinary course of
the Business consistent with past practice; or failure to in relation to the
Business pay or discharge when due any material Liabilities in relation to the
Business; or
(m) Any Contract by Seller to do any of the foregoing.
Section 4.31 Intentionally Omitted.
Section 4.32 Books and Records. All Books and Records are true, correct and
complete and have been made available to Buyer. All of the Books and Records
have been prepared and maintained in accordance with good business practices
and, where applicable, in conformity with GAAP and in compliance with all
Applicable Laws, except where such the failure to comply with such standards
would not have a Material Adverse Effect.
Section 4.33 Affiliate and Representative Transactions. Except as disclosed on
Schedule 4.33, no Affiliate or Representative of Seller or any Affiliates or
Representatives thereof is at the date hereof a party to any transaction with
Seller, including any Contract or arrangement providing for the furnishing of
services to or by, providing for rental of any property (including Intellectual
Property) to or from, or otherwise requiring payments to or from any Seller
Entity, or any of their respective Affiliates that in any such case relates to
the Business, Purchased Assets, and Assumed Liabilities.
Section 4.34 Insurance. Schedule 4.34 sets forth a list of all insurance
policies, fidelity and surety bonds and fiduciary liability policies covering
the Purchased Assets, the Business or the Employees (the "Insurance Policies"),
and true and complete copies of all such Insurance Policies have been delivered
by Seller to Buyer. Schedule 4.34 sets forth a true and complete list of Claims
made in respect of Insurance Policies during the three (3) years prior to the
date hereof that related to Business. Since June 30, 2005, except as provided on
Schedule 4.34, there is no Claim pending under any of such Insurance Policies as
to which coverage has been questioned or denied. All premiums due under all
Insurance Policies have been paid and Seller is in compliance with the terms and
conditions of all such Insurance Policies, in all material respects. To Seller's
Knowledge, all Insurance Policies are in full force and effect. To Seller's
Knowledge, except as disclosed on Schedule 4.34, (i) there are no threatened
termination of, premium increase with respect to, or uncompleted requirements
under, any Insurance Policy, and (ii) the Purchased Assets and the Business are
insured under such Insurance Policies in amounts and against risks usually
insured against by Persons operating businesses similar to the Business.
Section 4.35 Real and Leased Properties.
(a) Except as set forth on Schedule 4.35(a), Seller has not or has never had any
owned real property or interests in real property in the Business. Schedule
4.35(a) sets forth a complete and correct list of all Leased Real Property and
accompanying agreements under which Seller leases or otherwise uses real
property in the Business. The Leased Real Property constitutes all interests in
real property (i) currently used or currently held for use in connection with
the business of Seller and (ii) which are necessary for the continued operation
of the business of Seller as such business is currently conducted. All of the
Leased Real Property, buildings, fixtures and improvements thereon leased by the
Seller are in good operating condition and repair (subject to normal wear and
tear), with sufficient access to roads and utilities to operate the business of
Seller as presently conducted. Except as set forth on Schedule 7.3, all of the
Leased Real Property is available for immediate use in the operation of the
Business by Seller or Buyer and for the purpose for which such Leased Real
Property currently is being utilized. To Seller's Knowledge, all improvements on
the Leased Real Property conform in all material respects to laws relating to
zoning health and safety and access, and the Leased Property is zoned for the
purposes for which such Leased Real Property is currently being used by Seller.
Seller has delivered to Buyer and Parent true, correct and complete copies of
the Real Property Leases together with all amendments, modifications or
supplements, if any, thereto.
(b) Each Real Property Lease is the legal, valid, binding and enforceable
obligation of Seller and, to Seller's Knowledge, any other party and is in full
force and effect in accordance with its terms, except to the extent
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law). Neither Seller nor, to Seller's Knowledge, any other party has received
any notice of any or is in material default, violation or breach in any respect
under any Real Property Lease, and no event has occurred and is continuing that
constitutes or, with notice or the passage of time or both, would constitute a
material default, violation or breach in any respect under any Real Property
Lease by Seller or, to Seller's Knowledge, any other party. Except as set forth
in Section 4.35(b), no Consent of any third party under any such Real Property
Lease is required in connection with the contemplated transactions.
(c) Permits. Seller has all certificates of occupancy and all Permits from any
Governmental Authority necessary or useful for the current use and operation of
each Leased Real Property, and Seller has complied in all material respects with
all conditions of the Permits applicable to it. To Seller's Knowledge, no
default or violation, or event that with the lapse of time of giving of notice
or both would become a material default or material violation, has occurred in
the due observance of any Permit.
(d) Condemnation. There does not exist any actual or, to Seller's Knowledge,
threatened, or contemplated condemnation or eminent domain proceedings that
affect any Leased Property or any part thereof, and Seller has not received any
written notice of the intention of any Governmental Authority or other Person to
take or use all or any part thereof.
(e) Compliance with Real Property Laws. The use of the Leased Real Property by
Seller been in material compliance with all Applicable Laws, and Seller has not
received any written notice from a Governmental Authority of a violation or
claimed violation of any Applicable Law as it relates to the Leased Real
Property.
(f) Additional Leases. Except as set forth in Schedule 4.35(f), there are no
leases, subleases, licenses, concessions or other agreements granting to any
party or parties the right to use or occupy any portion of the Leased Real
Property.
Section 4.36 Changes in Suppliers. To the Seller's Knowledge, none of the
suppliers supplying products, services, materials or drugs to the Business has
provided any notice that it intends to cease selling such products, services,
materials or drugs to the Business, or to limit or reduce such sales of the
products, services, materials or drugs to the Business, respectively, or to
increase prices in a manner that could reasonably be expected to have a Material
Adverse Effect.
Section 4.37 Rates and Reimbursement Policies. Except as set forth on Schedule
4.37, no Seller Entity or any Affiliate thereof has, with respect to the
Business, any reimbursement or payment rate appeals, disputes or contested
positions currently pending before any governmental authority or any
administrator of any Private Programs.
Section 4.38 Guarantees, Warranties and Discounts. Except as described in
Schedule 4.38, no Seller Entity, nor any Affiliate thereof with respect to the
Business has given any guarantee, warranty or discount in respect of any of the
products sold or the services provided by it; and none of them are required to
provide any letters of credit, bonds or other financial security arrangements in
connection with any transactions with their suppliers or customers.
Section 4.39 Disclosure. The representations and warranties contained in this
Agreement, the schedules, certificates and the other agreements delivered in
connection with this Agreement and the transactions contemplated hereby (a) are
true, correct and complete, and Seller has provided true and correct copies of
all documents referred to therein that are required to be provided pursuant to
the Agreement, and (b) do not contain or will not contain, at the Closing, any
untrue statement of a material fact or omit, or will at the Closing omit, to
state a material fact necessary to make the statements therein, taken as a whole
and in light of the circumstances under which they were or will be made, not
misleading in any material respect. To Seller's Knowledge, there are no facts
relating to the financial condition of the Business which have been (i)
intentionally withheld from the Buyer, and (ii) could be reasonably expected to
have a Material Adverse Effect.
ARTICLE V
BUYER'S AND PARENT'S
REPRESENTATIONS AND WARRANTIES
Each Buyer Entity and Parent represent and warrant to the Seller as
follows, except as set forth on the Buyer's Disclosure Schedule (which is
arranged in sections corresponding to the Sections contained in this Article V
and as to which the disclosure in any section of the Buyer Disclosure Schedule
qualifies only the corresponding Section, unless it is reasonably apparent that
the disclosure in any section or subsection of the Buyer Disclosure Schedule
should apply to one or more other Sections):
Section 5.1 Organization and Good Standing. Each of Buyer and Parent is duly
organized, validly existing and in good standing under the laws of the state of
its incorporation and has all requisite power and authority to own, lease and
operate its properties and to operate its business. Each of Buyer and Parent is
duly qualified in each jurisdiction in which the ownership of property or the
conduct of its business requires such qualification, except where the failure to
do so would not, individually or in the aggregate, adversely affect Buyer's or
Parent's ability to consummate the transactions contemplated by this Agreement.
Buyer and Parent currently have sufficient funds available to consummate the
transactions contemplated by this Agreement.
Section 5.2 Corporate Authorization. Each of Buyer and Parent has full power and
authority to execute and deliver this Agreement and each Ancillary Agreement to
which it is a party, to perform its obligations under this Agreement and each
Ancillary Agreement to which it is a party and to consummate the transactions
contemplated hereby and thereby on the terms set forth herein and therein. Each
of this Agreement and the Transition Services Agreement has been duly executed
and delivered by Buyer and Parent and, assuming the due execution of such
agreement by Seller, is a valid and binding obligation of Buyer and Parent,
enforceable against Buyer and Parent in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, receivership and
similar laws affecting the enforcement of creditors' rights generally, and
general equitable principles.
Section 5.3 No Breach. The execution, delivery and performance by Buyer and
Parent of this Agreement and the Ancillary Agreements to which it is a party,
and the consummation by Buyer and Parent of the transactions contemplated hereby
and thereby, do not and will not (a) contravene or conflict with the Charter
Documents of Buyer or Parent or (b) violate any order, injunction, judgment,
decree or award, federal, state, local or foreign law, ordinance, statute, rule
or regulation to which Buyer or Parent is subject or by which Buyer or Parent or
its properties may be bound, except where such violations, conflicts, breaches
or defaults would not, individually or in the aggregate, have a material adverse
effect on the business, operations or financial condition of the Buyer that
adversely affects Buyer's or Parent's ability to consummate the transactions
contemplated by this Agreement.
Section 5.4 Broker's Fees. Neither Buyer nor Parent has any Liability or
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.
Section 5.5 Claims and Proceedings. Except as set forth on Schedule 5.5, (i)
there is no outstanding order of any Governmental Authority against or involving
Buyer or Parent any subsidiary of Parent or any of their respective Affiliates
that could defeat, defer or negatively impact the consummation of the
transactions contemplated by this Agreement, and (ii) there is no Claim pending,
or, to the knowledge of Buyer or Parent, threatened against Buyer or Parent,
involving this Agreement or the transactions contemplated hereby.
ARTICLE VI
COVENANTS
Section 6.1 Covenants of Seller. Seller covenants and agrees as follows:
(a) Access and Information. Until the consummation of the transactions
contemplated hereby, upon reasonable notice, Seller shall grant, or cause to be
granted to, Buyer, Parent and their Representatives, during the period between
the date of this Agreement and the Closing Date, reasonable access during normal
business hours to the Purchased Assets and the Books and Records and other
information of Seller relating to the operations of the Business. From the date
of this Agreement through the Closing Date, Seller shall use commercially
reasonable efforts to furnish, or cause to be furnished, to Buyer all data and
information concerning the Purchased Assets and the Business which may
reasonably be requested by Buyer and shall use all commercially reasonable
efforts to make available, or cause to be made available, such personnel of
Seller as may reasonably be requested for the furnishing of such data and
information. Buyer shall have a right to designate certain of its
Representatives as a transition team which may work from Seller's premises in
order to facilitate the orderly transfer of the Business to Buyer in accordance
with the terms of this Agreement. Such transition team shall be given reasonable
access to Seller's management and other Representatives of the Business,
including through attendance by such management and Representatives at meetings
with the transition team.
(b) Financial Statements. Seller shall deliver to Buyer as soon as practicable
after the end of each month, and in any event within 15 days thereafter, a
consolidated balance sheet of the Business as of the end of each such month and
a consolidated statement of income and a consolidated statement of cash flows of
the Business for such month and for the current year to date, including a
comparison to plan figures for such period, prepared in accordance with GAAP
consistently applied, with the exception that no notes need be attached to such
statements and year-end audit adjustments may not have been made, all
accompanied by an analysis thereof certified by Seller's Chief Financial
Officer.
(c) Continued Operation of Business. Except as provided on Schedule 6.1(c), or
as expressly required or contemplated by the terms of this Agreement, or unless
Seller obtains Buyer's prior written approval, from the date hereof through the
Closing Date, Seller shall:
(i) operate the Business in a reasonable and prudent manner, to conduct Seller's
operations according to the ordinary and usual course consistent with past
practice, to preserve intact Seller's present business organization and
structure, the goodwill of the Business, to preserve Seller's rights to be
assigned to Buyer hereunder, and to use commercially reasonable efforts to
preserve Seller's relationships with customers, suppliers, and other Persons
having material business dealings with Seller that are material to the operation
of the Business;
(ii) maintain the Books and Records in the usual and ordinary manner and in a
manner that fairly and correctly reflects the income, expenses, assets and
Liabilities of the Business in accordance with GAAP;
(iii) pay all Accounts Payable related to the Business on a current basis, but
in no event later than thirty (30) days after they become due, except Accounts
Payable being contested in good faith;
(iv) exercise commercially reasonable efforts to retain the Employees referred
to in Section 4.21(a);
(v) use commercially reasonable efforts to preserve and maintain the Purchased
Assets and, the assets and properties of Seller not used exclusively in the
Business but to be leased or licensed to Buyer pursuant to the Trademark License
Agreement and/or the Transition Services Agreement in reasonably good operating
condition, normal wear and tear excepted;
(vi) continue the pricing, procurement and purchasing policies of the Business,
in accordance with past practice;
(vii) consult with Buyer prior to any renewal, amendment, extension or
termination of, waiver of any right under, or any failure to renew, any Material
Contract; and
(viii) use commercially reasonable efforts to keep in full force and effect all
of the Insurance Polices under the same terms and coverage.
(d) Restrictions. Without Buyer's prior written approval, until the Closing
Date, Seller shall not (a) dispose of, Encumber, sell, convey, assign or
otherwise transfer any of the Purchased Assets that are used in the Business,
except for supplies in the ordinary course of business consistent with past
practice, (b) enter into any new, or amend any existing, severance Contract,
deferred compensation or arrangements, plans or programs for the benefit of the
Employees or future Employees of the Business or grant any such Persons an
increase in employee compensation other than in the ordinary course of business
or pursuant to a promotion consistent with past practice and except that this
clause (b) shall not be applicable to any Person who elects not to become a
Transferred Employee, (c) incur any capital expenditures for the Business, or
any obligations or Liabilities in respect thereof, except for those incurred in
the ordinary course of Business and previously disclosed to the Parent, (d) pay
Liabilities of the Business other than in the ordinary course of business
consistent with past practice, (e) delay or postpone the payment of Accounts
Payable or other Liabilities of the Business other than in the ordinary course
of business consistent with past practice, (f) incur any Liability (other than
Liabilities incurred in the ordinary course of the Business, consistent with
past practice, which in the aggregate will not be material to the Business), (g)
waive, release or cancel any Claims against third parties or debts owing to
Seller, (h) terminate, modify, amend, waive or otherwise alter or change any of
the terms or provisions of any Material Contract or create any default under the
terms of any Material Contract, and (i) enter into any Contract which if in
existence on the date hereof would have constituted a Material Contract or a
Real Property Lease.
(e) IP License to Excluded Assets. Seller shall provide Buyer with a license to
certain intellectual property in the Excluded Assets not exclusively used by
Seller in the Business prior to the Closing Date on such terms and conditions as
are set forth in the Trademark License Agreement.
(f) No Shop.
(i) From and after the date hereof unless and until this Agreement shall have
been terminated in accordance with its terms, Seller hereby agrees not to, and
shall cause its Representatives not to: (A) solicit, initiate, assist or
encourage the making by any Person (other than the parties to this Agreement) of
any proposal, offer or inquiry that constitutes, or is reasonably expected to
lead to, a proposal for any acquisition by a third party of all or a portion of
the Business or the Purchased Assets (a "Competing Transaction") or (B)
participate in any discussions or negotiations regarding, or furnish or disclose
to any Person any information with respect to, any Competing Transaction;
provided, that (x) neither Seller nor its Representatives shall be in any way
limited or restricted from discussing or negotiating, or otherwise taking any of
the actions contemplated by subclauses (A) or (B) above with respect to, any
transaction or proposal that does not involve the Business (a "Non-Competing
Transaction"), (y) this Section 6.1(f) shall not be applicable in any respect to
a transaction or proposal that is a Non-Competing Transaction (and any such
transaction or proposal shall not be deemed to be a "Competing Transaction" for
any purpose under this Agreement). Nothing herein shall limit Seller's ability
to make any disclosure required by Applicable Law.
(ii) Seller hereby agrees and shall cause its Representatives to cease
immediately all existing discussions or negotiations with any Person conducted
on or before the date of this Agreement with respect to a Competing Transaction.
Parent and Buyer acknowledge that, prior to the date of this Agreement, Seller
solicited or caused to be solicited by its financial advisors indications of
interest and proposals for a Competing Transaction.
(g) Confidentiality. Seller and its Affiliates will hold, and will use their
reasonable best efforts to cause their respective Representatives to hold, in
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of Applicable Law, all confidential documents and
information concerning Buyer or any of its Affiliates (whether or not related
specifically to the Business) that are furnished to Seller or its Affiliates,
except to the extent that such information can be shown to have been (i)
previously known on a nonconfidential basis by Seller, (ii) in the public domain
through no fault of Seller or (iii) later lawfully acquired by Seller from
sources other than Buyer or any of its subsidiaries or any other Person not
under a non-disclosure or confidentiality obligation in favor of Buyer or any of
its subsidiaries; provided that Seller may disclose such information to its
Representatives who need to know such information for purposes of participating
in the evaluation, negotiation and/or execution of the transactions contemplated
by this Agreement and the Ancillary Agreements so long as such Persons are
informed by Seller of the confidential nature of such information and are
directed by Seller to treat such information confidentially. Seller shall be
responsible for any failure to treat such information confidentially by such
Persons. If this Agreement is terminated, Seller and its Affiliates will, and
will use their reasonable best efforts to cause their respective Representatives
to, destroy or deliver to Buyer, upon request, all documents and other
materials, and all copies thereof, obtained by Seller or its Affiliates or on
their behalf from Buyer or any of its subsidiaries in connection with this
Agreement that are subject to such confidence. Notwithstanding the foregoing,
effective upon, and only upon, the Closing, Seller's obligations under this
Section 6.1(g) shall terminate with respect to the Purchased Assets, the Assumed
Liabilities and the Business.
(h) Transition. The Seller will not take any action that is designed or intended
to have the effect of discouraging any lessor, licensor, customer, supplier, or
other business associate of the Business from maintaining the same business
relationships with the Buyer after the Closing as it maintained with the Seller
or its Affiliates prior to the Closing. The Seller will refer all customer
inquiries relating to the Business to the Buyer from and after the Closing.
(i) Buyer Permits. In connection with the transition of the Business to Buyer,
Buyer will be required by various Government Authorities to obtain a number of
permits from such Government Authorities before Buyer will be legally permitted
to operate the Business (the "Buyer Permits"). "Buyer Permits" do not include
any Permit that is transferred or transferable from Seller. The Seller will use
commercially reasonable best efforts to assist Buyer in obtaining the Buyer
Permits.
(j) Right of First Refusal. If Seller shall receive the opportunity to
participate in the Medicare Home Health Adult Day Care Replacement Project,
Seller shall not enter into an agreement with any other provider of adult day
care services in connection with such participation (a "Project Contract")
unless Seller has complied with the terms of this Section 6.1(j).
(i) Prior to entering into any Project Contract (or negotiations therefore)
after the date of this Agreement, Seller shall first give the Buyer the right to
enter into a Project Contract with Seller by delivering to Buyer a written offer
that shall state the price and other terms and conditions of the proposed
Project Contract.
(ii) Buyer shall notify Seller within 10 business days of its acceptance,
rejection or proposed modification of the Project Contract. If Buyer proposes
modifications to the proposed terms of the Project Contract, Buyer and Seller
shall use Best Efforts to negotiate a final Project Contract among the parties.
(iii) If after 30 days of good faith negotiations, Buyer and Seller cannot agree
on the terms of a final Project Contract, either Party may terminate the
negotiations and Seller may enter into a Project Contract with another party on
substantially similar terms as those proposed to Buyer. If Seller proposes
substantially different terms to any other party, Seller must again offer to
Buyer the right to enter into a Project Contract with Seller in accordance with
the terms of this Section 6.1(j).
(iv) Notwithstanding anything set forth to the contrary in this Section 6.1(j),
Seller shall not be required or obligated to enter into a Project Contract in
the event Seller reasonably believes that Buyer is unable to or will be unable
to perform its duties and obligations or proposed duties and obligations
pursuant to said Project Contract as a result of geographic limitations or
Buyer's facility Capabilities. Seller shall notify Buyer of its determination
pursuant to this Section 6.1(j)(iv), in writing, setting forth in sufficient
detail its determination and its reasoning. Buyer shall have five (5) business
days in which to dispute said determination. The parties consent and agree to
resolve any such dispute, in good faith, within such five (5) business days.
Section 6.2 Covenants of Buyer and Parent. Each of Buyer and Parent
covenants and agrees as follows:
(a) Confidentiality. Buyer and Parent and their Affiliates will hold, and will
use their reasonable best efforts to cause their respective Representatives to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning Seller or any of its Affiliates (whether or not related
specifically to the Business) that are furnished to Buyer, Parent or its
Affiliates, except to the extent that such information can be shown to have been
(i) previously known on a nonconfidential basis by Buyer or Parent, (ii) in the
public domain through no fault of Buyer or (iii) later lawfully acquired by
Buyer or Parent from sources other than Seller or any of its subsidiaries or any
other Person not under a non-disclosure or confidentiality obligation in favor
of Seller or any of its subsidiaries; provided that Buyer or Parent may disclose
such information to its Representatives who need to know such information for
purposes of participating in the evaluation, negotiation and/or execution of the
transactions contemplated by this Agreement and the Ancillary Agreements so long
as such Persons are informed by Buyer or Parent of the confidential nature of
such information and are directed by Buyer or Parent to treat such information
confidentially. Buyer and Parent shall be jointly and severally responsible for
any failure to treat such information confidentially by such Persons. If this
Agreement is terminated, Buyer, Parent and their Affiliates will, and will use
their reasonable best efforts to cause their respective Representatives to,
destroy or deliver to Seller, upon request, all documents and other materials,
and all copies thereof, obtained by Buyer, Parent or their Affiliates or on
their behalf from Seller or any of its subsidiaries in connection with this
Agreement that are subject to such confidence. Notwithstanding the foregoing,
effective upon, and only upon, the Closing, Buyer's and Parent's obligations
under this Section 6.2(a) shall terminate with respect to the Purchased Assets,
the Assumed Liabilities, and the Business.
(b) Employment, Employees and Employment Benefit Plans.
(i) Effective as of the Closing Date, Buyer shall have offered employment to all
Persons who are employees of the Business on the day immediately prior to the
Closing Date who are listed on a schedule previously provided to Seller
(including employees who are on an approved leave of absence, short-term
disability leave or military leave, but not including any individual on
long-term disability leave), with titles and job descriptions similar to those
applicable to such employees immediately prior to the Closing Date. Employees
who accept such offer of employment are referred to herein as "Transferred
Employees." Nothing in this Section 6.2(b) shall be construed to prevent Buyer
from terminating the employment of any Transferred Employee. Except as otherwise
provided herein or in the Transition Services Agreement, effective as of the
Closing Date the Transferred Employees will cease to participate in, or accrue
any benefits under, Seller's Employee Benefit Plans. Buyer agrees to provide
each Transferred Employee immediate eligibility in any 401(k) plan it maintains
if Transferred Employees meet the service requirements thereof and immediate
coverage under Buyer's health plan and other employee welfare benefit plans (as
defined in Section 3(1) of ERISA), each with full credit for prior service with
Seller for purposes of eligibility and vesting, as applicable, provided that no
such service credit will be required to the extent it would result in a
duplication of benefits. In addition, any employee welfare benefit plan (as
defined in section 3(1) of ERISA) maintained by Buyer shall provide coverage for
any pre-existing health condition of any Transferred Employee (and any eligible
dependents or beneficiaries thereof), but only to the extent the Transferred
Employee or dependent/beneficiary was covered under a similar Employee Benefit
Plan of Seller as of the Closing Date, or as otherwise required by law.
(ii) Seller shall be responsible for the payment of all wages and other
remuneration due to Transferred Employees with respect to their services as
employees of Seller through the close of business on the Closing Date, including
any severance or termination pay promised in employment agreements, plans or
programs of the Seller at that date, and Seller shall be responsible for the
obligations and associated Liabilities that arise pursuant to the continuation
coverage requirements of COBRA as a result of "qualifying events," as defined in
COBRA, that occur on or prior to the Closing Date. Seller shall be liable for
any claims made or incurred by Transferred Employees and their beneficiaries
through the Closing Date under the Employee Benefit Plans. For purposes of the
immediately preceding sentence, a charge will be deemed incurred, in the case of
hospital, medical or dental benefits, when the services that are the subject of
the charge are performed and, in the case of other benefits (such as disability
or life insurance), when an event has occurred or when a condition has been
diagnosed that entitles the employee to the benefit. Effective as of the Closing
Date, Buyer will be responsible for the obligations and associated Liabilities
that arise pursuant to the continuation coverage requirements of COBRA as a
result of "qualifying events," as defined in COBRA, that occur with respect to
Transferred Employees after the Closing Date.
(iii) Seller shall treat all Transferred Employees as terminated for purposes of
its 401(k) plan and Buyer agrees to allow rollover of distributions from such
plan to its similar plan, at any Transferred Employee's election.
(c) Credit Support.
(i) Buyer shall (x) replace all credit support arrangements provided by Seller
or any of its Affiliates, including any indemnity, guarantee, surety bond,
letter of credit, cash or other collateral or escrow account in respect of the
Business, the Purchased Assets or the Assumed Liabilities as set forth on
Schedule 6.2 (the "Credit Support Arrangements"); (y) release, or cause to be
released, Seller and its Affiliates from any Liability or obligation to provide
credit support in respect of the Business following the Closing; and (z) return,
or cause to be returned, to Seller or its Affiliates, as appropriate, all
collateral that was provided by Seller or its Affiliates pursuant to a Credit
Support Arrangement, in each case on or before the Closing.
(ii) After the Closing, neither Seller nor any of its Affiliates shall have any
obligation to provide any credit support in respect of the Business, the
Purchased Assets or the Assumed Liabilities.
(d) WARN Act Compliance. For a period of sixty (60) days after the Closing Date,
Buyer shall not effect any termination or layoff that results in an employment
loss at any single site of employment during any 30-day period of more than 33%
or fifty (50) of the Active Employees working full-time and Buyer shall not
effect a plant closing that results in an employment loss during any 30-day
period of fifty (50) or more of the Active Employees working full-time. For
purposes of this Section 6.2(d), the number of employees shall be based on the
number of Active Employees at the Closing Date. For sixty (60) days after
Closing, Buyer shall not take any action which would trigger an obligation to
provide advance notice of termination pursuant to the Worker Adjustment and
Retraining Notification Act or any other applicable advance notice or
notification Law.
(e) Buyer Permits. Buyer will use commercially reasonable best efforts to obtain
the Buyer Permits.
Section 6.3 Mutual Covenants. Buyer, Parent and Seller covenant and agree
as follows:
(a) Regulatory Approvals, Notices and Filings. Buyer, Parent and Seller shall
cooperate with one another in (i) determining whether any other action by or in
respect of, or filing with, any Governmental Authority is required in connection
with the consummation of the transactions contemplated hereby and (ii) seeking
any such other actions, making any such filings or furnishing information
required to be filed pursuant to Applicable Law. Each Party shall permit the
other Party to review any communication given by it to, and consult with each
other in advance of any meeting or conference with, any Governmental Authority
or, in connection with any proceeding by a private party, with any other Person,
and to the extent permitted by the applicable Governmental Authority or other
Person, give the other Party the opportunity to attend and participate in such
meetings and conferences, in each case in connection with the transactions
contemplated hereby. Except as otherwise provided herein, Buyer and Seller shall
bear the costs and expenses of their respective filings; provided that the costs
and expenses associated with filings made on behalf of both Buyer and Seller
shall be shared equally.
(b) Consents. Seller shall, take such actions as are necessary, and Buyer and
Parent shall reasonably cooperate with Seller in all material respects, to
obtain the Material Consents; provided, however, that such actions by Seller
shall not include any requirement of Seller to commence any litigation. Seller
shall pay all amounts owed to any licensor ("Licensor Fees") incurred in
connection with obtaining any consent, novation, approval or waiver for any
Assigned Contract. Notwithstanding the foregoing, in the event Seller is unable,
prior to the Closing Date, to obtain the consent, novation, approval or waiver
of the other party to any Assigned Contract, Seller shall reimburse Parent or
Buyer, as the case may be, for any charges, penalties or other fees, as well as
reasonable, directly related costs and expenses actually paid by Parent or
Buyer, as the case may be, to such other party that result directly from such
failure. It is understood and agreed that the amount of any such charges,
penalties or other fees, as well as costs or expenses, shall not be included in
the calculation of, and shall not be subject to, the Minimum Loss under Section
8.7.
(c) Amendment of Seller Disclosure Schedule. Seller, Parent and Buyer agree
that, with respect to the representations and warranties of the Seller contained
in Article IV hereof, the Seller shall have the continuing obligation until the
Closing Date to supplement, modify or amend promptly the Seller Disclosure
Schedule with respect to: (i) any matter occurring after the date hereof that,
if existing or occurring on or before the date of this Agreement, would have
been required to be set forth or described in the Seller Disclosure Schedule
(the "Seller New Matters"), and (ii) other matters which are not Seller New
Matters but should have been set forth or described in the Seller Disclosure
Schedule as of the date hereof (the "Seller Other Matters"). Any such
supplement, modification or amendment (i) that reflects a Seller New Matter
shall qualify the Seller's representations and warranties for all purposes of
this Agreement, except for purposes of determining whether the conditions set
forth in Article VII hereof have been fulfilled and (ii) that reflects one or
more Seller Other Matters shall not qualify any of the Seller's representations
or warranties for any purpose under this Agreement, and shall be provided solely
for informational purposes. On or before the Closing Date, the Seller will
prepare and deliver to Buyer a copy of the Seller Disclosure Schedule revised to
reflect any supplement, modification or amendment required pursuant to this
Section 6.3(c). Seller shall use commercially reasonable efforts to deliver any
such supplemented, modified or amended Seller Disclosure Schedule to Buyer at
least five (5) Business Days before the Closing Date. If no supplemented,
modified or amended Seller Disclosure Schedule satisfying the foregoing
requirements is provided by Seller, the Seller Disclosure Schedule as delivered
upon the execution of this Agreement shall continue to apply.
(d) Amendment of Buyer Disclosure Schedule. Seller and Buyer agree that, with
respect to the representations and warranties of the Buyer contained in Article
V hereof, the Buyer shall have the continuing obligation until the Closing Date
to supplement, modify or amend promptly the Buyer Disclosure Schedule with
respect to: (i) any matter occurring after the date hereof that, if existing or
occurring on or before the date of this Agreement, would have been required to
be set forth or described in the Buyer Disclosure Schedules (the "Buyer New
Matters"), and (ii) other matters which are not Buyer New Matters but should
have been set forth or described in the Buyer Disclosure Schedule as of the date
hereof (the "Buyer Other Matters"). Any such supplement, modification or
amendment (i) that reflects a Buyer New Matter shall qualify the Buyer's and
Parent's representations and warranties for all purposes of this Agreement,
except for purposes of determining whether the conditions set forth in Article
VII hereof have been fulfilled and (ii) that reflects one or more Buyer Other
Matters shall not qualify any of the Buyer's representations or warranties for
any purpose under this Agreement, and shall be provided solely for informational
purposes. On or before the Closing Date, the Buyer will prepare and deliver to
Seller a copy of the Buyer Disclosure Schedule revised to reflect any
supplement, modification or amendment required pursuant to this Section 6.3(d).
The Buyer and Parent shall use commercially reasonable efforts to deliver any
such supplemented, modified or amended Buyer Disclosure Schedule to Buyer at
least five (5) Business Days before the Closing Date. If no supplemented,
modified or amended Buyer Disclosure Schedule satisfying the foregoing
requirements is provided by Buyer, the Buyer Disclosure Schedule as delivered
upon the execution of this Agreement shall continue to apply.
(e) Notices of Certain Events. Prior to the Closing Date, Seller, on the one
hand, and the Buyer Entities, on the other hand, shall promptly notify the other
of:
(i) any notice or other communication from any Person alleging that the consent
of such Person is or may be required in connection with the transactions
contemplated herein;
(ii) any notice or other oral or written communication from any Governmental
Authority in connection with the transactions contemplated herein or relating to
Business;
(iii) any event, condition or circumstance occurring from the date hereof
through the Closing Date that would constitute a violation or breach of any
representation or warranty, whether made as of the date hereof or as of the
Closing Date, or that would constitute a violation or breach of any covenant of
any Party;
(iv) any failure of Seller, Buyer or Parent as the case may be, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder;
(v) any change that has had or is reasonably expected to have a Material Adverse
Effect, or could delay or impede the ability of any of Seller or Buyer to
perform its obligations pursuant to this Agreement and to consummate the
transactions contemplated herein.
(f) Public Announcements. Neither Buyer, Parent or Seller nor any of their
respective Affiliates or Representatives shall issue or cause the publication of
any press release or other announcement with respect to the transactions
contemplated by this Agreement, without the prior approval of the other Party,
which approval shall not be unreasonably withheld, except as may be required by
Applicable Laws or by any listing agreement with a national securities exchange
or NASDAQ. In the case of an announcement required by Applicable Laws or by a
listing agreement, the Party required to make such announcement shall use
reasonable efforts to provide the other Party with a copy of the proposed
announcement prior to its release and will give due consideration to such
comments as such other Party may have.
(g) Delivery of Property Received After Closing. After the Closing, (a) Seller
shall promptly transfer to Buyer, from time to time, any cash or other property
received or held by Seller or any of its Affiliates that is associated with or
relates to the Purchased Assets or the Business and (b) Buyer promptly shall
transfer to Seller, from time to time, any cash or other property received or
held by Buyer or Parent that is associated with or related to the Excluded
Assets.
(h) Tax Matters.
(i) Seller will be responsible for the preparation and filing of all Tax Returns
for all periods ending on or prior to the Closing Date as to which Tax Returns
are due after the Closing Date (including the consolidated, unitary, and
combined Tax Returns for Seller which include the operations of the Business for
any period ending on or before the Closing Date). Seller will make all payments
required with respect to any such Tax Return; provided, however, that Buyer will
indemnify Seller pursuant to Article IX for any such Taxes that are Assumed
Liabilities.
(ii) Buyer will be responsible for the preparation and filing of all Tax Returns
for the Business for all periods ending after the Closing Date as to which Tax
Returns are due after the Closing Date. Buyer will make all payments required
with respect to any such Tax Return; provided, however, that Seller will
indemnify the Buyer to the extent any payment the Buyer is making is a Tax
attributable to a taxable period ending on or before the Closing Date based on
the principles in Section 9.1(c), except to the extent that such Taxes are
Assumed Liabilities.
(iii) Each Party shall, at its own expense, control any tax audit or examination
by any Governmental Authority, and have the right to initiate any claim for
refund or amended return, and contest, resolve and defend against any
assessment, notice of deficiency or other adjustment or proposed adjustment of
Taxes ("Proceedings") for any taxable period for which that Party is charged
with payment or indemnification responsibility under Article IX. Each Party
shall promptly forward to the other Party all written notifications and other
written communications, including (if available) the original envelope showing
any postmark, from any Governmental Authority received by such Party relating to
any Liability for Taxes for any taxable period for which such other Party is
charged with payment or indemnification responsibility under Article IX. Each
Indemnifying Party shall promptly notify, and consult with, each Indemnified
Party as to any action it proposes to take with respect to any Liability for
Taxes for which it is required to indemnify the Indemnified Party. The
Indemnified Party shall not enter into any closing agreement or final settlement
with any Governmental Authority with respect to any such Tax Liability without
the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld. Each Party shall, at the expense of the requesting Party,
execute or cause to be executed any powers of attorney or other documents
reasonably requested by such requesting Party to enable it to take any and all
actions such Party reasonably requests with respect to any proceedings which the
requesting Party controls. The failure by a Party to provide timely notice under
this subsection shall relieve the other Party from its indemnification
obligations with respect to the subject matter of any notification not timely
forwarded, to the extent the other Party has suffered a loss or other economic
detriment because of such failure to provide notification in a timely fashion.
(i) Lessor Consent. Each of Parent, Buyer and Seller shall take all commercially
reasonable efforts, and shall reasonably cooperate in such effort, to obtain a
consent from the lessor of each Leased Real Property with respect to the
assignment of the Lease to Buyer.
(j) Right to Use Certain Software. Seller shall pay all costs, expenses and fees
(except any internal costs or expenses of Parent or Buyer, as the case may be)
charged by the owner or licensor to obtain the right for Buyer to use any
software or other Intellectual Property which is a Purchased Asset, including
but not limited to "off-the-shelf" shrink wrap computer software programs, in
connection with the Business so that the Buyer may use it legally and without
interruption, with a proper and valid license therefore, and so that it operates
post closing, substantially in the form as currently used and configured by
Seller.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Obligation of Each Party to Effect the Transactions
Contemplated by this Agreement. The obligation of each Party to effect the
transactions contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing Date of the following conditions:
(a) Seller and Buyer have received all authorizations, consents and approvals of
any Governmental Authority referred to in Section 4.6 hereof.
(b) no preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a Governmental Authority nor
any Applicable Laws shall be in effect that would restrain or otherwise prevent
the consummation of the transactions contemplated by this Agreement.
(c) no Claim instituted by any Person shall have been commenced or pending
against Seller or Buyer or any of their respective Affiliates or
Representatives, which Claim seeks to restrain, prevent, change or delay in any
material respect the transactions contemplated herein or seeks to challenge any
of the material terms or provisions of this Agreement or seeks material damages
in connection with any of the transactions contemplated herein; and
(d) All consents, approvals and authorizations of Governmental Authorities
legally required to be obtained to consummate the transactions contemplated
herein shall have been obtained from such Governmental Authorities, except where
the failure to obtain any such consent, approval or authorization could not
reasonably be expected to result in a Material Adverse Effect.
Section 7.2 Conditions to the Obligation of Seller. Unless waived in writing by
Seller, the obligation of Seller to effect the transactions contemplated by this
Agreement is subject to the fulfillment at or prior to the Closing Date of the
following conditions, any one or more of which may be waived in whole or in part
by Seller:
(a) Each of Parent and Buyer shall have performed in all material respects each
obligation and agreement and complied in all material respects with each
covenant to be performed and complied with by it hereunder at or prior to the
Closing Date;
(b) The representations and warranties of each of Parent and Buyer in this
Agreement that are qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all material respects as of
the date hereof and as of the Closing Date (except to the extent such
representations and warranties expressly relate to any earlier date, in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, in each case on and as of such earlier date), except for
changes contemplated by this Agreement;
(c) Parent shall have furnished to Seller a certificate, dated as of the Closing
Date, signed by a duly authorized officer of Parent to the effect that all
conditions set forth in Sections 7.2(a) and (b) have been satisfied;
(d) Seller shall have received, or be satisfied that it will receive, evidence
satisfactory to Seller, that all Credit Support Arrangements shall terminate
prior to or contemporaneously with the Closing and Seller and its Affiliates
shall cease to have any Liability or obligations thereunder or any obligation to
provide additional credit support in respect of the Business following the
Closing and that all collateral for such Credit Support Arrangements shall have
been returned;
(e) Buyer shall have replaced Seller's vehicle financing credit facility and
shall have caused Seller to be released from all obligations with said vehicle
financing credit facility; and
(f) On the Closing Date, Buyer shall have delivered to Seller all of the
documents required to be delivered pursuant to Section 3.4.
Section 7.3 Conditions to the Obligation of Buyer and Parent. Unless waived in
writing by Buyer and Parent, the obligations of both Buyer and Parent to effect
the transactions contemplated by this Agreement is subject to the fulfillment at
or prior to the Closing Date of the following conditions, any one or more of
which may be waived in whole or in part by the Buyer and Parent:
(a) Seller shall have performed in all material respects each obligation and
agreement and complied in all material respects with each covenant to be
performed and complied with by it hereunder at or prior to the Closing Date;
(b) The representations and warranties of Seller in this Agreement that are
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects as of the date
hereof and as of the Closing Date (except to the extent such representations and
warranties expressly relate to any earlier date, in which case such
representations and warranties qualified as to materiality shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, in each case on and as of such earlier date), except for changes
contemplated by this Agreement;
(c) Subject to Buyer's rights under Section 3.5, each of the Consents listed on
Schedule 7.3(c) ("Material Consents") shall have been obtained and shall be in
full force and effect.
(d) Those employees of Seller listed on Schedule 7.3(d) shall have accepted
employment with the Buyer on terms that are acceptable to Buyer and Parent.
(e) Seller shall have furnished to Buyer a certificate, dated as of the Closing
Date, signed by a duly authorized officer of Seller to the effect that all
conditions set forth in Sections 7.3(a), (b), (c) and (g) have been satisfied.
(f) On the Closing Date, Seller shall have delivered to Buyer all of the
documents required to be delivered pursuant to Section 3.4; and
(g) During the period from the date hereof to the Closing Date, there shall not
have occurred any of the actions described in Section 4.30(a), (d), (e), (h),
and (k).
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS;
INDEMNIFICATION
Section 8.1 Survival; Right to Indemnification. All of the representations,
warranties, covenants, agreements and Closing certifications made by each of
Seller, Parent and Buyer in this Agreement, the Xxxx of Sale and the Assignment
and Assumption Agreement shall survive the execution and delivery of this
Agreement and the Closing hereunder for a period of twelve (12) months following
the Closing Date (the "Escrow Period"), except that (a) the COBRA obligations in
Section 6.2(b)(ii) shall survive for the period COBRA coverage is required to be
provided by Code Section 4980B, (b) the representations and warranties contained
in Section 4.1, Section 4.2, Section 4.3, and Section 4.8, Section 5.1, Section
5.2, and Section 5.4, shall survive the Closing without time limit, (c) the
representations and warranties contained in Section 4.22, Section 4.23, Section
4.24, Section 4.25, Section 4.26, Section 4.27 Section 4.13, Section 4.14, and
Section 4.15, and Claims arising under Article IX shall expire on the first day
immediately after the last day of the shortest applicable federal or state
statute of limitations relating to the regulatory matters addressed in such
representations and warranties (i.e., without regard to the statute of
limitations for the bringing of contract claims by Buyer) or if there is no
applicable statue of limitations, then three (3) years following the Closing
Date, (d) Claims related to Seller's fraud in connection with this transaction
shall survive without time limit, (e) Claims related to Section 8.2(c) or (d) or
Section 8.3(c) or (d) shall survive without time limit, and (f) Claims with
respect to covenants to be performed post-Closing shall survive for a period of
twelve (12) months following the last date the applicable covenant required
performance. There shall be no termination of any representations, warranties,
covenants, agreements or Closing certifications, as applicable, as it relates to
a Claim asserted prior to the termination of such survival period.
Section 8.2 Seller's Indemnity. Seller Entities shall jointly and severally
indemnify, defend and hold Buyer Indemnitees harmless from and against any
Losses, subject to the limitations and provisions of this Article VIII, and the
Escrow Agreement, as applicable, directly or indirectly, in connection with,
arising out of, or which would not have occurred but for:
(a) the breach of any representation or warranty made by Seller in Article IV
(other than Section 4.14, breaches of which shall be handled pursuant to Article
IX), the Xxxx of Sale, the Assignment and Assumption Agreement, or in any
certificate, document or agreement furnished pursuant hereto or thereto by
Seller;
(b) any breach or nonfulfillment of any covenant or agreement of Seller under
this Agreement (other than Section 6.3(h) breaches of which shall be handled
pursuant to Article IX), the Xxxx of Sale, the Assignment and Assumption
Agreement or under any certificate, document or agreement furnished pursuant
hereto by Seller;
(c) (i) the Excluded Liabilities, which relate to or arise out of any Claims
which have been covered or would have been covered by any insurance policies in
effect and held by Seller had such Claim been made on or before the Closing
Date, including Seller's failure to satisfy any of its obligations relating
thereto; (ii) the Excluded Liabilities which relate to or arise out of any
Claims which have been covered or would have been covered by any self-insurance
programs of Seller had such Claim been made on or before the Closing Date,
including Seller's failure to satisfy any of its obligations relating thereto;
or (iii) the Excluded Liabilities which relate to or arise out of any Claim
related to any business conducted by the Seller, except for the Business, on or
before the Closing Date or thereafter, including Seller's failure to satisfy any
of its obligations relating thereto; or
(d) Seller's failure to comply with any bulk sales, bulk transfer or fraudulent
transfer laws that may be applicable to this Agreement or the transactions
contemplated hereby.
(e) Assumed Trade Payables not included in the Closing Net Asset Statement and
paid by Buyer.
Section 8.3 Buyer's Indemnity. Each Buyer Entity, jointly and severally, shall
indemnify, defend and hold Seller Indemnitees harmless from and against any
Losses, subject to the limitations and provisions of this Article VIII asserted
against, imposed upon, resulting to, required to be paid by, or incurred by any
Seller Indemnitees, directly or indirectly, in connection with, arising out of,
or which would not have occurred but for:
(a) the breach of any representation or warranty made by any Buyer Entity in
this Agreement, the Xxxx of Sale, the Assignment and Assumption Agreement, or in
any certificate, document or agreement furnished pursuant hereto or thereto by
such Buyer Entity;
(b) any breach or nonfulfillment by any Buyer Entity of any covenant or
agreement of such Buyer Entity under this Agreement (other than Section 6.3(h),
which shall be covered by Article IX), the Xxxx of Sale, the Assignment and
Assumption Agreement, or under any certificate, document or agreement furnished
pursuant hereto by any Buyer Entity;
(c) the Assumed Liabilities, including any Buyer Entity's failure to satisfy any
of its obligations relating thereto, except to the extent such Losses relate to
or result from, directly or indirectly, a breach of any representation or
warranty of Seller in this Agreement; and
(d) the ownership, operation or use of the Purchased Assets and the Business
after the Closing (which do not include the Excluded Liabilities) by any Buyer
Entity.
Section 8.4 Procedure for Indemnification - Third Party Claims.
(a) Promptly after receipt by any Party entitled to indemnity hereunder of the
commencement of any Claim against such Party (the "Indemnified Party"), such
Indemnified Party will, if a Claim is to be made against an indemnifying party
under this Article VIII, give notice to the party obligated to provide
indemnification pursuant to this Article VIII (the "Indemnifying Party") of the
commencement of such Claim, specifying the factual basis of the Claim and the
amount thereof in reasonable detail to the extent then known by such Indemnified
Party, but the failure to notify the Indemnifying Party will not relieve the
Indemnifying Party of any Liability that it may have to any Indemnified Party,
except to the extent that the Indemnifying Party is actually prejudiced by the
Indemnified Party's failure to give such notice.
(b) If any third party Claim referred to in Section 8.4(a) is brought against an
Indemnified Party, the Indemnified Party shall give notice to the Indemnifying
Party of the commencement of such third party Claim within ten (10) Business
Days after receipt by such Indemnified party of notice of the third party Claim.
Thereafter, the Indemnified Party shall deliver to the Indemnifying Party,
within five (5) Business Days' after receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
the Third Party Claim. The Indemnifying Party will be entitled to participate in
the defense of such third party Claim and, if it so chooses to assume the
defense thereof with counsel selected by the Indemnifying Party, and reasonably
acceptable to the Indemnified Party, if the Indemnifying Party gives written
notice to the Indemnified Party of its election to assume the defense of such
third party Claim within ten (10) Business Days after receiving notice thereof
but only if: (i) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Liabilities
asserted in or ultimately resulting from the third party Claim and fulfill its
indemnification obligations hereunder; (ii) the Liabilities asserted in the
third party Claim involves only money damages and do not seek an injunction or
other equitable relief; and (iii) settlement of, or an adverse judgment with
respect to, the Liabilities asserted in or ultimately resulting from the third
party Claim shall not, in the reasonable good faith judgment of the Indemnified
Party, be likely to establish a precedential custom or practice materially
adverse to the continuing business interests of the Indemnified Party. If the
Indemnified Party assumes the defense against any third party Claim described in
clauses (ii) or (iii), the Indemnifying Party will not be bound by any
determinations with respect to such third party Claims without its prior written
consent, which consent shall not be unreasonably withheld. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such third party Claim (at its own expense and with its own counsel
reasonably satisfactory to the Indemnified Party), the Indemnifying Party will
not, as long as the Indemnifying Party diligently conducts such defense, be
liable to the Indemnified Party under this Article VIII for any fees of other
counsel or any other expenses with respect to the defense of such third party
Claim, in each case subsequently incurred by the Indemnified Party in connection
with the defense of such third party Claim unless the Indemnifying Party is also
a party to such third party Claim, and counsel to the Indemnified Party
determines in good faith and advises the Indemnifying Party that joint
representation would give rise to a conflict of interest under (x) applicable
standards of professional responsibility, or (y) because the Indemnified Party
has or may have one or more defenses or counterclaims that are inconsistent with
one or more of those that may be available to the Indemnifying Party in respect
of such third party Claim. If the Indemnifying Party assumes the defense of a
third party Claim, (i) no compromise or settlement of such third party Claim may
be effected by the Indemnifying Party without the Indemnified Party's consent
unless (A) there is no finding or admission of any violation by any Indemnified
Party of any Applicable Law or any violation by any Indemnified Person of the
rights of any Person, and (B) the sole relief provided is monetary damages that
are paid in full by the Indemnifying Party; (ii) the Indemnifying Party will
have no Liability with respect to any compromise or settlement of such third
party Claim effected without the Indemnifying Party's consent (which shall not
be unreasonably withheld or delayed); and (iii) the Indemnified Party will
cooperate, at the expense of he Indemnifying Party, as the Indemnifying Party
may reasonably request in investigating, defending and (subject to clause (i))
settling such third party Claim. If the Indemnifying Party elects not to defend
a third party Claim, is not permitted to defend such third party Claim by reason
of the subparagraphs (a) or (b) above of this Section 8.4(b) or fails to notify
the Indemnified Party of its election as herein provided, the Indemnified Party
may pay, compromise, settle or defend such third party Claim at the sole cost
and expense of the Indemnifying Party if the Indemnifying Party is determined to
be liable to the Indemnified Party hereunder. In any event, the Indemnified
Party and the Indemnifying Party may participate, at their own expense, in the
defense of any third party Claim.
Section 8.5 Procedure for Indemnification - Other Claims. A Claim for
indemnification for any matter not involving a third party Claim may be asserted
by notice from the Indemnified Party to the Indemnifying Party. Such notice
shall specify the factual basis of such Claim and the amount thereof in
reasonable detail to the extent then known by the Indemnified Party.
Section 8.6 Time Limitations. If the Closing occurs, the Indemnifying Party
shall have no Liability pursuant to Section 8.2 or Section 8.3 or of this
Agreement unless an Indemnified Party gives notice to the Indemnifying Party of
an actual Claim under Section 8.2 or Section 8.3 within the applicable
timeframe, if any, specified in Section 8.1, which notice shall specify the
factual basis of that Claim in reasonable detail to the extent then known by
such Indemnified Party.
Section 8.7 Limits on Indemnification.
(a) Seller shall not be required to indemnify Buyer Indemnitees, and shall not
have any Liability under Section 8.2, until the aggregate amount of all Losses
under Section 8.2 exceeds $100,000 (the "Minimum Loss"). Seller shall indemnify
Buyer Indemnitees for the Minimum Loss and all Losses thereafter, subject to
this Article VIII.
(b) Buyer shall not be required to indemnify Seller Indemnities and shall not
have any Liability under Section 8.3 until the aggregate amount of all Losses
under Section 8.3 exceeds the Minimum Loss. Buyer shall indemnify Seller
Indemnitees for the Minimum Loss and all Losses thereafter, subject to this
Article VIII.
(c) Seller's maximum liability under this Article VIII for indemnification
claims under Section 8.2 (a), (b) and (d) shall be $1,000,000, excluding claims
where fraud is proven in connection with the transactions contemplated herein.
Where Seller's fraud, in connection with the transactions contemplated herein,
is proven, Seller's maximum liability under this Article VIII for
indemnification claims under this Article VIII shall be capped at the Purchase
Price, as adjusted herein. Seller's maximum liability under this Article VIII
for indemnification claims arising out of the payment by Buyer of Assumed Trade
Payables not included in the Closing Net Asset Statement shall be $1,000,000.
Seller's maximum liability under this Article VIII for indemnification claims
under Section 8.2(c), and Section 6.1(f) and (j) shall be unlimited.
(d) Buyer's maximum liability under this Article VIII for indemnification claims
under Sections 8.3(a) and (b) shall be $1,000,000. Buyer's maximum liability
under this Article VIII for indemnification claims under Sections 8.3(c) and (d)
shall not exceed an amount equal to the Purchase Price, as adjusted herein.
Where Buyer's fraud, in connection with the transactions contemplated herein, is
proven, Buyer's maximum liability under this Article VIII for indemnification
claims under this Article VIII shall not exceed amount equal to the Purchase
Price, as adjusted herein.
(e) The rights of the parties to indemnification under this Article VIII shall
be the sole and exclusive remedy of a party to this Agreement, the Xxxx of Sale
or the Assignment and Assumption Agreement, with respect to Losses arising out
of the transactions contemplated by this Agreement, the Xxxx of Sale or the
Assignment and Assumption Agreement, or otherwise in connection with this
Agreement, the Xxxx of Sale or the Assignment and Assumption Agreement, except,
as applicable, for any right of a party to this Agreement, the Xxxx of Sale or
the Assignment and Assumption Agreement, to seek and obtain equitable relief.
(f) Each Indemnifying Party's indemnification liability shall be limited to the
Indemnified Party's actual damages and no Indemnifying Party shall be liable for
any special damages, consequential damages, or damages for lost profits;
provided however, that the Seller Entities' indemnification liability for a
breach of Sections 6.1(f) and (j) shall not be limited by the foregoing.
Section 8.8 Purchase Price Adjustment. All indemnification payments under this
Article VIII shall be deemed adjustments to the Purchase Price for federal Tax
purposes unless otherwise required by a determination made by a Governmental
Authority.
Section 8.9 No Double Recovery. Notwithstanding the fact that any Party may have
the right to assert Claims for indemnification under or in respect of more than
one provision of this Agreement or another agreement entered into in connection
herewith in respect of any fact, event, condition or circumstance, no Party
shall be entitled to recover the amount of any Losses suffered by such Party
more than once under all such agreements in respect of such fact, event,
condition or circumstance, and an Indemnifying Party shall not be liable for
indemnification to the extent the Indemnified Party has otherwise been fully
compensated on a dollar for dollar basis for such Losses pursuant to the
Purchase Price adjustment under Section 3.2(d).
ARTICLE IX
TAX LIABILITY
Section 9.1 Liability for Taxes.
(a) Buyer shall be liable for, and shall indemnify Seller Indemnitees against,
all Taxes arising or resulting from (i) the conduct of the Business or the
ownership of the Purchased Assets for taxable periods or portions thereof
beginning after the Closing Date or (ii) any transaction relating to the
Business or the Purchased Assets that Buyer or any of its Affiliates causes to
occur on or after the Closing Date (excluding, subject to Section 3.7, the sale
of the Business and the Purchased Assets to Buyer and the assumption of the
Assumed Liabilities by Buyer pursuant to this Agreement).
(b) Seller shall be liable for and agrees to indemnify, defend and hold Buyer
Indemnitees harmless from (i) any Tax that constitutes a lien or Encumbrance on
the Purchased Assets if and to the extent that such Tax arises in respect of a
taxable period ended on or before Closing (a "Tax Indemnity Period"), (ii) any
Tax or other Losses resulting from the inaccuracy or breach of any
representation or warranty set forth in Section 4.14 or the breach of any
covenants set forth in Section 6.3(h), and (iii) any costs and expenses
(including, without limitation, reasonable expenses of investigation and
attorneys' fees and expenses) arising out of the imposition or assessment of any
Tax, Losses or other costs described in clause (i), (ii) or (iii) ("Other
Costs"), and the filing of any Returns for a taxable period ending on or before
the Closing Date, including those incurred in the contest of good faith of any
such imposition, assessment or assertion. Any Tax imposed as a result of the
sale of the Business and the Purchased Assets to Buyer and the assumption of the
Assumed Liabilities by Buyer pursuant to this Agreement shall be deemed to arise
in respect of a Tax Indemnity Period.
(c) Buyer shall pay to Seller the amounts received by Buyer or any of its
Affiliates of any refund, abatement or credit of (i) Taxes which are
attributable to the conduct of the Business or the ownership of the Purchased
Assets on or prior to the Closing Date and (ii) any other Tax Assets.
(d) Any assessment or other Claim by a Governmental Authority seeking to enforce
or collect a Tax, Losses or Other Costs described in Section 9.1 shall be
subject to the provisions of Section 8.4, 8.5, 8.6, 8.7, 8.8 and 8.9 of this
Agreement to the extent that Section 6.3(h) does not apply to such assessment or
Claim.
(e) For the avoidance of doubt, notwithstanding any other contrary provisions of
this Agreement, Seller shall not be liable for any Taxes or related Losses to
the extent such Taxes or related Losses have been included as a liability in
calculating the Closing Net Assets, or such Taxes or Losses are included in
Assumed Liabilities.
ARTICLE X
RECORDS/LITIGATION AND TAX MATTERS
Section 10.1 Records/Litigation.
(a) For a period of five (5) years after the Closing Date, in the event and for
so long as any Party or any of their respective Affiliates is contesting or
defending against any Claim in connection with (i) any transaction contemplated
under this Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date involving any
Party or any of their respective Affiliates, the other Party will cooperate with
the contesting or defending party and its counsel in the contest or defense,
make available its personnel, and provide such testimony and access to its Books
and Records as shall be reasonably necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending party
(unless the contesting or defending party claims to be entitled to
indemnification therefor under Article VIII or Article IX).
(b) For a period of five (5) years after the Closing Date, each Party shall
provide such assistance as the other Party may from time to time reasonably
request in connection with the preparation of Tax Returns required to be filed,
any audit or other examination by any taxing authority, any judicial or
administrative proceeding relating to Liability for Taxes, or any claim for
refund in respect of such Taxes or in connection with any litigation and
proceedings related to the Business, including making available documents,
witnesses, employees for interviews, litigation preparation and testimony. The
requesting party shall reimburse the assisting party for the out-of-pocket costs
incurred by the assisting party.
Section 10.2 Tax Disclosure Authorization. Notwithstanding the Confidentiality
Agreement or anything herein to the contrary, the Parties (and each Affiliate
and Person acting on behalf of any Party) agree that each Party (and each
Representative of such Party) may disclose to any and all Persons, without
limitation of any kind, the transaction's tax treatment and tax structure (as
such terms are used in Code ss.ss.6011 and 6112 and regulations thereunder)
contemplated by this Agreement and all materials of any kind (including opinions
or other tax analyses) provided to such Party or such Person relating to such
tax treatment and tax structure, except to the extent necessary to comply with
any Applicable Laws; provided, however, that such disclosure may not be made
until the earlier of date of (a) public announcement of discussions relating to
the transaction, (b) public announcement of the transaction, or (c) execution of
an agreement to enter into the transaction. This authorization is not intended
to permit disclosure of any other information including (without limitation) (v)
any portion of any materials to the extent not related to the transaction's tax
treatment or tax structure, (w) the identities of participants or potential
participants, (x) the existence or status of any negotiations, (y) any pricing
or financial information (except to the extent such pricing or financial
information is related to the transaction's tax treatment or tax structure), or
(z) any other term or detail not relevant to the transaction's tax treatment or
the tax structure.
ARTICLE XI
TERMINATION RIGHTS
Section 11.1 Termination Rights. This Agreement may be terminated at
any time prior to the Closing as follows and in no other manner:
(a) by mutual written consent of Parent and Seller;
(b) after October 1, 2005 by either Seller or Parent, if the Closing has not
occurred by that date and if failure to close is not the result of a breach of
this Agreement;
(c) By Seller, if: (i) there has been a material misrepresentation or breach by
Buyer or Parent of a representation or warranty contained herein and such
material misrepresentation or breach, if curable, is not cured within ten (10)
Business Days after written notice thereof from Seller; (ii) Parent or Buyer has
committed a material breach of any covenant imposed upon it hereunder and, if
curable, fails to cure such breach within ten (10) Business Days after written
notice thereof from Seller; or (iii) any condition to Seller's obligations
hereunder becomes incapable of fulfillment through no fault of Seller and is not
waived by Seller; and
(d) By Parent, if: (i) there has been a material misrepresentation or breach by
Seller of a representation or warranty contained herein and such material
misrepresentation or breach, if curable, is not cured within ten (10) Business
Days after written notice thereof from Parent; (ii) Seller has committed a
material breach of any covenant imposed upon it hereunder and, if curable, fails
to cure such breach within ten (10) Business Days after written notice thereof
from Parent; or (iii) any condition to Parent's or Buyer's obligations hereunder
becomes incapable of fulfillment through no fault of Parent or Buyer and is not
waived by Parent or Buyer.
Section 11.2 No Requirement To Terminate. In the event that a condition
precedent to a Party's obligation is not met, nothing contained herein shall be
deemed to require any Party to terminate this Agreement, rather than to waive
such condition precedent and proceed with the Closing.
Section 11.3 Effect of Termination. In the event of termination by Parent or
Seller pursuant to this Article XI, written notice thereof shall forthwith be
given to the other party and the transactions contemplated by this Agreement
shall be terminated, without further action by any Party, except as otherwise
required by Section 11.3. If the transactions contemplated by this Agreement are
terminated as provided herein:
(a) Parent and Buyer shall return to Seller all documents and copies and other
materials received from or on behalf of Seller relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof;
(b) all confidential information received by Parent and Buyer with respect to
the Purchased Assets, the Assumed Liabilities and the Business shall be treated
in accordance with the terms and conditions of Section 6.2(a); and
(c) no Party hereto shall have any Liability or further obligation under this
Agreement resulting from such termination except (i) that the provisions of
Section 6.1(g), Section 6.2(a), Section 12.5, Section 12.10 and this Article XI
shall remain in full force and effect; and no Party waives any Claim against a
breaching Party to the extent such termination results from the breach by a
Party of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Further Assurances. From time to time, at Parent's, Buyer's or
Seller's request, whether before or after the Closing Date, Parent, Buyer or
Seller, as the case may be, shall, and shall cause their respective Affiliates
and Representatives to, execute and deliver such further instruments of
conveyance, transfer and assignment, cooperate and assist in providing
information for making and completing regulatory filings prior to or after the
Closing, and take such other actions as Parent, Buyer or Seller, as the case may
be, may reasonably require of the other Party to more effectively assign, convey
and transfer to such Party the Purchased Assets and to assume the Assumed
Liabilities, as contemplated by this Agreement.
Section 12.2 Notices. All notices or other communications required or permitted
to be delivered hereunder shall be in writing and shall be delivered by hand or
sent by prepaid telex or telecopy, or sent, postage prepaid, by registered,
certified or express mail, or reputable overnight courier service and shall be
deemed delivered when so delivered by hand, telexed or telecopied with
acknowledged receipt, or if mailed, five (5) calendar days after mailing (one
(1) Business Day in the case of express mail or overnight courier service), as
follows:
If to Parent and/or Buyer:
Active Service Corporation
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxx Xxxxxxx
Chief Executive Officer and Chairman
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to any Seller:
c/o Almost Family, Inc.
0000 Xxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx,
Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and:
Xxxxx Xxxxx Xxxx LLC
000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address or facsimile number as such Party may hereafter specify in
writing for the purpose by notice to the other Parties hereto.
Section 12.3 Governing Law; Submission to Jurisdiction. This Agreement shall be
deemed to be made in and in all respects shall be interpreted, construed and
governed by and in accordance with the law of the State of Delaware without
regard to the conflict of law principles thereof. Courts within the State of
Delaware will have jurisdiction over all disputes between the parties hereto
arising out of or relating to this Agreement and the Ancillary Agreements and
any agreements, instruments and documents contemplated hereby or thereby and the
transactions contemplated hereby and thereby. The Parties hereby consent to and
agree to submit to the jurisdiction of such courts. Each of the Parties hereto
waives, and agrees not to assert in any such dispute, to the fullest extent
permitted by Applicable Law, any Claim that (i) such Party is not personally
subject to the jurisdiction of such courts, (ii) such Party and such Party's
property is immune from any legal process issued by such courts or (iii) any
litigation commenced in such courts is brought in an inconvenient forum.
Section 12.4 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT AND THE ANCILLARY AGREEMENTS AND ANY AGREEMENTS,
INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY OR THEREBY AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY.
Section 12.5 Entire Agreement. This Agreement, the attached Schedules, the
Ancillary Agreements and the agreements, instruments and documents referred to
herein or executed simultaneously herewith, constitutes the entire agreement and
understanding of the parties in respect to the transactions contemplated hereby
and thereby and supersede all prior agreements, arrangements and undertakings,
whether written or oral, relating to the subject matter hereof. Except as
otherwise specifically provided in this Agreement, no conditions, usage of
trade, course of dealing or performance, understanding or agreement purporting
to modify, vary, explain or supplement the terms or conditions of this Agreement
will be binding unless hereafter made in writing and signed by the Party to be
bound, and no modification will be effected by the acknowledgment or acceptance
of documents containing terms or conditions at variance with or in addition to
those set forth in this Agreement, except as otherwise specifically agreed to by
the Parties in writing.
Section 12.6 Assignment. This Agreement and any rights and obligations hereunder
shall not be assignable or transferable by Parent, Buyer or Seller (including by
operation of Applicable Laws in connection with a merger or sale of stock, or
sale of substantially all the assets, of Parent or Seller or their respective
Affiliates) without the prior written consent of the other Party, and any
purported assignment without such consent shall be void and without effect.
Notwithstanding the foregoing, Buyer may assign its rights under this Agreement
to one of its Affiliates without Seller's prior written consent.
Section 12.7 Amendment and Waiver. This Agreement may be amended, modified,
superseded or canceled, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by the Parties hereto, or, in the case of a waiver, by or on behalf of
the Party waiving compliance unless otherwise contemplated by this Agreement
(including Section 6.3(c)). The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver by any Party of any condition, or
of any breach of any term, covenant, representation or warranty contained in
this Agreement, in any one or more instances, shall be deemed to be or construed
as a further or continuing waiver of any such condition or breach or a waiver of
any other condition or of any breach of any other term, covenant, representation
or warranty.
Section 12.8 Expenses. Whether or not the transactions contemplated hereby are
consummated, and except as otherwise specifically provided in this Agreement,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, including legal, due diligence, accounting and
investment banking fees and expenses, shall be paid by the Party incurring such
costs or expenses.
Section 12.9 Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
Section 12.10 Counterparts. This Agreement may be executed in one or more
counterparts (including by means of telecopied signature pages), all of which
shall be considered one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the Parties and
delivered to the other Parties.
Section 12.11 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be valid and effective under
Applicable Laws, but if any provision of this Agreement or the application of
any such provision to any Person or circumstance shall be held invalid, illegal
or unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof.
Section 12.12 No Third Party Beneficiaries. Except as provided with respect to
indemnification as set forth in Article VIII and Article IX and except as
otherwise expressly stated in this Agreement, nothing in this Agreement shall
confer any rights upon any Person other than the Parties hereto and their
respective heirs, successors and permitted assigns.
(signatures appear on following page)
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement on the
date first written above.
SELLER ENTITIES:
ALMOST FAMILY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CEO
CARETENDERS OF CINCINNATI, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CEO
ADULT DAY CARE OF MARYLAND, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CEO
CARETENDERS OF COLUMBUS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CEO
CARETENDERS OF NEW JERSEY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CEO
CARETENDERS OF SOUTHWEST FLORIDA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CEO
CARETENDERS OF WEST PALM BEACH, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CEO
ADULT DAY CARE OF LOUISVILLE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CEO
BUYER ENTITIES:
ACTIVE SERVICE CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: CEO
ACTIVE DAY FL, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------
Name: Xxxx X. Xxxxxxx
Title: CEO
ACTIVE DAY OH, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------
Name: Xxxx X. Xxxxxxx
Title: CEO
ACTIVE DAY MD, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: CEO
ACTIVE DAY KY, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: CEO
ACTIVE DAY FLEET, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: CEO
Exhibit A
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") is entered into as
of this ____ day of ___________, 2005 by and among Almost Family, Inc., a
Delaware corporation, Caretenders of Cincinnati, Inc., a Kentucky corporation,
Adult Day Care of Maryland, Inc., a Maryland corporation, Caretenders of
Columbus, Inc., a Kentucky corporation, Caretenders of New Jersey, Inc., a
Kentucky corporation, Caretenders of Southwest Florida, Inc., a Kentucky
corporation, Caretenders of West Palm Beach, Inc., a Kentucky corporation, and
Adult Day Care of Louisville, Inc., a Kentucky corporation (individually a
"Seller Entity" and collectively "Seller Entities"; the Seller Entities are
sometimes collectively referred to herein as "Almost" or "Seller"), and Active
Day FL, Inc., a Delaware corporation, Active Day OH, Inc., a Delaware
corporation, Active Day MD, Inc., a Delaware corporation, Active Day, KY, Inc.,
a Delaware corporation, and Active Day Fleet, Inc., a Delaware corporation (each
a "Buyer Entity" and collectively "Buyer Entities"; the Buyer Entities are
sometimes collectively referred to herein as "Buyer"), and wholly owned
subsidiary of Active Service Corporation, a Delaware corporation ("Parent").
Capitalized terms used herein but not defined shall have the meanings set forth
in that certain Purchase Agreement, dated as of August __, 2005 (the "Purchase
Agreement"), by and among the Buyer, the Seller and the Parent.
WHEREAS, Assignor, Assignee and Parent entered into that certain Purchase
Agreement; and
WHEREAS, pursuant to Section 2.2 of the Purchase Agreement, Assignor agreed to
assign and transfer to Assignee, all of Assignor's right, title and interest in
and to the Assumed Liabilities.
NOW, THEREFORE, in consideration of the terms and conditions herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Assignment of Assigned Contracts. Except as provided below, Assignor hereby
irrevocably assigns, transfers and sets over to Assignee, its successors and
assigns, all of Assignor's right, title and interest in, to and under the
Assigned Contracts and Assumed Liabilities. Nothing contained in this Agreement
shall constitute an agreement or an attempt to assign or transfer any Assigned
Contracts or Assumed Liabilities which are not assignable without the consent of
a third party, unless and until such consent has been obtained.
2. Assumption of Obligations. Assignee hereby accepts the assignment of the
Assigned Contracts and Assumed Liabilities hereby assigned to it, and expressly
assumes and agrees, from and after the date hereof: (a) to be bound by and to
abide by the terms and conditions of the Assigned Contracts and Assumed
Liabilities; and (b) to pay, perform and discharge, in due course, and satisfy
faithfully as the same shall become due for payment, performance or discharge,
all of the liabilities and obligations arising from and after the date hereof
with respect to the Assigned Contracts and Assumed Liabilities.
3. Successors and Assigns. All of the terms and provisions of this Agreement
shall be binding upon, and shall inure to the benefit of, Assignor and Assignee
and their respective successors and assigns.
4. No Effect on Purchase Agreement. Nothing contained in this Agreement shall
supersede, modify, limit, eliminate or otherwise affect any of the
representations and warranties, covenants, agreements or indemnities set forth
in the Purchase Agreement. This Agreement is entered into and delivered pursuant
to Sections 2.2, 3.3(c) and 3.4(b) of the Purchase Agreement, and nothing herein
shall be construed to modify, terminate or merge any rights any party thereto
may have pursuant to the terms thereof. In the event of any inconsistency or
conflict between the terms of the Purchase Agreement and the terms of this
Agreement, the terms of the Purchase Agreement shall prevail.
5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
6. Counterparts. This Agreement may be signed in counterparts, all of which,
taken together, shall be deemed to constitute one original Agreement.
7. Further Assurances. Assignor and Assignee hereby agree to execute,
acknowledge and deliver such other documents and instruments and take such other
actions as any party, or counsel to any party, may reasonably request to
complete and perfect the assignment and assumption contemplated herein.
[Signatures appear on next page]
IN WITNESS WHEREOF, the parties hereto have executed this Assignment and
Assumption Agreement on the date first above written.
SELLER ENTITIES:
ALMOST FAMILY, INC.
By:
Name:
Title:
CARETENDERS OF CINCINNATI, INC.
By:
Name:
Title:
ADULT DAY CARE OF MARYLAND,
INC.
By:
Name:
Title:
CARETENDERS OF COLUMBUS, INC.
By:
Name:
Title:
CARETENDERS OF NEW JERSEY, INC.
By:
Name:
Title:
CARETENDERS OF SOUTHWEST
FLORIDA, INC.
By:
Name:
Title:
CARETENDERS OF WEST PALM
BEACH, INC.
By:
Name:
Title:
ADULT DAY CARE OF LOUISVILLE,
INC.
By:
Name:
Title:
ACTIVE SERVICE CORPORATION
By:
Name:
Title:
ACTIVE DAY FL, INC.
By:
Name:
Title:
ACTIVE DAY OH, INC.
By:
Name:
Title:
ACTIVE DAY MD, INC.
By:
Name:
Title:
ACTIVE DAY KY, INC.
By:
Name:
Title:
ACTIVE DAY FLEET, INC.
By:
Name:
Title:
Exhibit B
XXXX OF SALE
THIS XXXX OF SALE (this "Agreement") is entered into as of this ____ day of
____, 2005 by and among Almost Family, Inc., a Delaware corporation, Caretenders
of Cincinnati, Inc., a Kentucky corporation, Adult Day Care of Maryland, Inc., a
Maryland corporation, Caretenders of Columbus, Inc., a Kentucky corporation,
Caretenders of New Jersey, Inc., a Kentucky corporation, Caretenders of
Southwest Florida, Inc., a Kentucky corporation, Caretenders of West Palm Beach,
Inc., a Kentucky corporation, and Adult Day Care of Louisville, Inc., a Kentucky
corporation (individually a "Seller Entity" and collectively "Seller Entities";
the Seller Entities are sometimes collectively referred to herein as "Almost" or
"Seller"), and Active Day FL, Inc., Active Day OH, Inc., Active Day MD, Inc.,
Active Day, KY, Inc., and Active Day Fleet, Inc., each a Delaware corporation
(each a "Buyer Entity" and collectively "Buyer Entities"; the Buyer Entities are
sometimes collectively referred to herein as "Buyer"), and wholly owned
subsidiary of Active Service Corporation, a Delaware corporation ("Parent").
Capitalized terms used herein but not defined shall have the meanings set forth
in that certain Purchase Agreement, dated as of August __, 2005 (the "Purchase
Agreement"), by and among Purchaser, Seller and the Parent.
WHEREAS, the Seller, the Purchaser and the Parent entered into an Asset Purchase
Agreement dated August __, 2005 (the "Purchase Agreement"); and
WHEREAS, pursuant to Section 2.1 of the Purchase Agreement, the Seller agreed to
sell, assign and transfer to Purchaser, all of the Seller's right, title and
interest in and to the Purchased Assets.
NOW, THEREFORE, in consideration of the terms and conditions herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Capitalized Terms. Capitalized terms used herein but not defined herein shall
have the meanings set forth in the Purchase Agreement.
2. Transfer of Assets.The Seller hereby irrevocably sells, conveys, assigns,
transfers and delivers to the Purchaser, its successors and assigns, all of the
Seller's right, title and interest in, to and under the Purchased Assets free
and clear of any Encumbrances other than the Permitted Encumbrances. Nothing
contained in this Agreement shall constitute an agreement or an attempt to
assign or transfer any Purchased Asset which is not assignable without the
consent of a third party, unless and until such consent has been obtained.
3. Successors and Assigns. All of the terms and provisions of this Agreement
shall be binding upon, and shall inure to the benefit of, the Seller and the
Purchaser and their respective successors and assigns.
4. No Effect on Purchase Agreement. Nothing contained in this Agreement shall
supersede, modify, limit, eliminate or otherwise affect any of the
representations and warranties, covenants, agreements or indemnities set forth
in the Purchase Agreement. This Agreement is entered into and delivered pursuant
to Sections 2.1, 3.3(c) and 3.4(b) of the Purchase Agreement, and nothing herein
shall be construed to modify, terminate or merge any rights any party thereto
may have pursuant to the terms thereof. In the event of any inconsistency or
conflict between the terms of the Purchase Agreement and the terms of this
Agreement, the terms of the Purchase Agreement shall prevail.
5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
6. Counterparts. This Agreement may be signed in counterparts, all of which,
taken together, shall be deemed to constitute one original Agreement.
7. Further Assurances. The Seller hereby covenants that at any time and from
time to time after the date hereof, it shall, upon the written request of the
Purchaser promptly execute and deliver, or cause to be executed and delivered to
the Purchaser, all such other and further instruments of sale, conveyance,
assignment or transfer and all such notices, releases, deeds, consents, bills of
sale, endorsements, powers of attorney and other documents, and to do or cause
to be done all such other acts and things as may be necessary in order to more
fully sell, convey, assign and transfer to and vest the Purchaser with the
Purchased Assets, or otherwise to carry out or evidence the terms of this
Agreement.
[Signatures appear on next page]
IN WITNESS WHEREOF, the parties hereto have executed this Xxxx of Sale on the
date first above written.
SELLER ENTITIES:
ALMOST FAMILY, INC.
Exhibit C
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (the "Agreement") is made as of the Effective
Date (as defined herein), by and among Almost Family, Inc., a Delaware
corporation, Caretenders of Cincinnati, Inc., a Kentucky corporation, Adult Day
Care of Maryland, Inc., a Maryland corporation, Caretenders of Columbus, Inc.,
Caretenders of New Jersey, Inc. Caretenders of Southwest Florida, Inc.,
Caretenders of West Palm Beach, Inc., and Adult Day Care of Louisville, Inc., a
Kentucky corporation (individually a "Seller Entity" and collectively "Seller
Entities"; the Seller Entities are sometimes collectively referred to herein as
"Almost Family"), and Active Day FL, Inc., a Delaware corporation, Active Day
OH, Inc., a Delaware corporation, Active Day MD, a Delaware corporation, Inc.,
Active Day, KY, Inc., a Delaware corporation, and Active Day Fleet, Inc., a
Delaware corporation (each a "Buyer Entity" and collectively "Buyer Entities")
and wholly owned subsidiary of Active Service Corporation, a Delaware
corporation ("Parent" and together with the Buyer Entities, "Active Day").
Capitalized terms used herein but not defined shall have the meanings set forth
in that certain Purchase Agreement, dated as of August __, 2005 (the "Purchase
Agreement"), by and among Almost Family and Active Day.
WHEREAS, Almost Family and Active Day have entered into that certain Purchase
Agreement, pursuant to which Active Day is acquiring certain assets and
liabilities from Almost Family, in each case relating to Almost Family's adult
day care services business (collectively, the "Business"); and
WHEREAS, in connection therewith, Almost Family has agreed to provide Active Day
with certain transition services as set forth herein.
NOW, THEREFORE, in consideration of the above premises and the mutual covenants
contained herein, it is agreed by and between the parties as follows:
ARTICLE I
SERVICES; FEES; TERM
1.1 Effective Date. The effective date (the "Effective Date") of this Agreement
shall be the Closing Date.
1.2 Services.
(a) Almost Family agrees to provide each of those services set forth on Schedule
A attached hereto (each, a "Service" and, collectively, the "Services") to
Active Day during the Term (as defined herein) of this Agreement or for such
shorter period set forth on Schedule A. Almost Family shall provide the Services
using the same degree of care as it exercises in performing the same or similar
services for its own account and Almost Family shall use commercially reasonable
efforts to provide each of the Services with priority equal to that provided to
its own businesses or those of any of its affiliates, subsidiaries or divisions.
(b) Upon the earlier of the expiration of the Term of this Agreement or the
termination of some or all of the Services under this Agreement, Almost Family
shall reasonably assist Active Day in Active Day's efforts in undertaking
to provide for itself any such Services, including, without limitation, taking
such other steps as are reasonably necessary and without (i) any cost to Almost
Family that is not reimbursed by Active Day or (ii) any material burden to
Almost Family to assist Active Day to provide for itself such Services on a
self-sufficient basis.
1.3 Deposits; Payments.
(a) Almost Family shall wire to Active Day, at least weekly, an amount equal to
all payments from patients or their third party payors for fees for services
rendered by the Business on, before or after the Effective Date and paid to
Almost Family (less patient and third-party refunds due to overpayments) and any
other income of Active Day directly related to the Business received by Almost
Family ("Fee Payments"). Almost Family shall provide Active Day with copies of
all remittance advice documentation and any other documentation or
correspondence related to Fee Payments received by Almost Family. No later than
five business days after the close of each month in which the Services include
the Accounts Receivables services set forth on Schedule A, Almost Family shall
deliver to Active Day a certificate signed by the Chief Financial Officer of
Almost Family detailing all Fee Payments made to Active Day and certifying that
such Fee Payments were all of the payments received by Almost Family in
connection with the Business during such preceding month.
(b) At least once per week during the period of time in which the Services
include the Accounts Payable services set forth on Schedule A, Almost Family
shall deliver to Active Day a proposed list of accounts payable, certified by
the Chief Financial Officer of Almost Family as being true and correct. Upon
approval by Active Day of such payables (the "Approved Payments"), Active Day
shall transfer by wire to Almost Family an amount equal to the total of the
Approved Payments and Almost Family shall pay such Approved Payments.
(c) In consideration of Almost Family' performance of the Services, Active Day
shall pay monthly to Almost Family the services fees (the "Services Fees") set
forth on Schedule B.
1.4 Term; Survival. The term of this Agreement (the "Term") shall
commence on the Effective Date and shall expire, unless earlier terminated
pursuant to the terms hereof, on the date that is nine months after the Closing
Date. Either party may terminate this Agreement upon written notice to the other
party in the event that the other party has breached a material term of this
Agreement and such breach has not been remedied or waived within 30 days of
written notice of such breach to the breaching party by the terminating party.
Active Day may terminate this Agreement with respect to any or all of the
Services upon 30 days written notice to Almost Family. If Active Day terminates
any or all of the Services described herein in accordance with the terms hereof,
then effective on the termination date, such Services shall be effectively
removed from this Agreement and from and after the date of such notice, all
invoices will be adjusted accordingly. Without prejudice to the survival of the
other agreements of the parties, the following obligations shall survive the
termination of this Agreement for a period of one year: (a) the obligations of
each party under Sections 2.1, 2.2 and 2.3 and (b) Almost Family's right to
receive the Services Fees for Services provided hereunder prior to the effective
date of termination. The obligations under Article III of this Agreement shall
survive indefinitely.
ARTICLE II
OTHER PROVISIONS
2.1 Audit Right. For one (1) year after the termination of any Service or of
this Agreement, as well as for the time period required by applicable laws,
Almost Family shall maintain records and other evidence sufficient to accurately
and properly reflect the performance of the Services and the Fees due in
accordance with this Agreement. Active Day or its representatives shall have
access at all reasonable times to such records for the sole purpose of auditing
and verifying the accuracy of the invoices. Any audits performed by or on behalf
of Active Day shall be at Active Day's sole cost and expense.
2.2 Confidentiality. The parties covenant that they shall abide by the
confidentiality provisions contained in the Non-Competition and Non-Solicitation
Agreement of even date herewith among the parties with respect to any
Confidential Information (as defined therein) of the parties shared in
connection with the Services performed pursuant to this Agreement.
2.3 Indemnification.
(a) Each party shall indemnify, defend and hold harmless the other party and its
employees, representatives, officers, directors, parent, affiliates, successors
and assigns from and against all losses, costs, damages (other than
consequential and punitive damages), liabilities, claims, fines, charges,
actions, suits, proceedings, demands, assessments, adjustments, and expenses
incurred by any such persons to third parties as a result of or arising from any
breach of a material representation, warranty or covenant of the indemnifying
party set forth herein.
(b) If any claim shall be made or proceeding instituted (collectively, an
"Action") against any indemnified person ("Indemnitee") for which indemnity will
be sought pursuant to this Agreement, such Indemnitee shall promptly notify the
indemnifying person ("Indemnitor") in writing ("Indemnification Notice"). The
Indemnitor, within ten (10) days following receipt of the Indemnification
Notice, shall retain counsel reasonably satisfactory to the Indemnitee to
represent the Indemnitee and any other parties the Indemnitor may designate.
Indemnitee's approval of counsel shall not be unreasonably denied or delayed.
Indemnitor shall pay the reasonable fees and disbursements of such counsel
directly related to the Action. Notwithstanding the foregoing, any Indemnitee
shall have the right to retain its own counsel, but the fees and disbursements
of such counsel shall be at the expense of the Indemnitee unless: (i) the
Indemnitor shall have failed to retain counsel as required herein, or (ii)
counsel retained by the Indemnitor is inappropriate due to actual or potential
conflicting interests between the Indemnitee and any other party represented by
such counsel in the Action. The parties agree that the Indemnitor shall not be
liable for the fees and disbursements of more than one law firm qualified to act
as counsel for the Indemnitee in connection with an Action.
(c) The Indemnitor shall not be liable for payment of any settlement
of an Action without Indemnitor's prior written consent. The Indemnitee also
shall have the right to consent in writing prior to settlement of an Action, but
such consent shall not be unreasonably withheld or delayed. The Indemnitor shall
not be liable for payment of any pre-Action settlement of a matter which would
give rise to a claim for indemnification hereunder unless the potential
Indemnitee has obtained the prior written consent of the Indemnitor, which
consent shall not be unreasonably withheld or delayed.
2.4 Records; Cooperation. Almost Family and its representatives and counsel will
cooperate with Active Day and its representatives and counsel for purposes of
permitting Active Day to address and respond to any matters involving Active Day
that relate to the Services and for which Almost Family has in its possession
any information or historical records. Upon termination of this Agreement (or
earlier at the request of Active Day), Almost Family shall duplicate and/or
transfer of any information and historical records related to Active Day or the
Services that are in the possession of Almost Family.
ARTICLE III
MISCELLANEOUS
3.1 Agency; Independent Contractor. The parties acknowledge and agree that their
relationship is that of independent contractors and that any agency of one to
the other is terminated and that nothing shall be construed as constituting a
partnership, joint venture or agency between the parties.
3.2 Notices. Any notices required or permitted to be provided pursuant to this
Agreement shall be provided in writing and be deemed received upon delivery by
hand or five (5) days after mailing by certified mail, return receipt requested,
addressed to the recipient party at its address set forth above.
3.3 Entire Agreement. This Agreement embodies the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and supersedes all prior agreements and understandings relative to said subject,
matter.
3.4 Binding Effect. This Agreement shall be binding upon, and shall inure to the
benefit of, Active Day, Almost Family and their respective successors and
assigns.
3.5 Assignment; Joinder. Neither this Agreement, nor any rights or obligations
hereunder, shall be assignable by either party without the prior written consent
of the other party hereto; provided, however, that Active Day may use the
benefit of the Services to be provided to it by Almost Family for any directly
or indirectly owned subsidiary or any affiliated entity.
3.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of Delaware applicable to contracts to be
performed entirely in that State.
3.7 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute
one and the same instrument.
3.8 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
3.9 Amendment. This Agreement may not be modified except by an instrument in
writing executed by both parties hereto.
3.10 No Third-Party Beneficiary. Nothing expressed or implied in this Agreement
is intended, or shall be construed, to confer upon or give any person or entity
other than the parties hereto and their respective successors and permitted
assigns, any rights or remedies under or by reason of this Agreement.
3.11 Severability. In the event that any one or more of the provisions contained
in this Agreement shall be declared invalid, void or unenforceable, the
remainder of the provisions of this Agreement shall remain in full force and
effect, and such invalid, void or unenforceable provision shall be interpreted
as closely as possible to the manner in which it was written.
[Signatures Appear on Following Pages]
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of
the date first above written.
SELLER ENTITIES:
ALMOST FAMILY, INC.
By:
Name:
Title:
CARETENDERS OF CINCINNATI, INC.
By:
Name:
Title:
ADULT DAY CARE OF MARYLAND, INC.
By:
Name:
Title:
CARETENDERS OF COLUMBUS, INC.
By:
Name:
Title:
CARETENDERS OF NEW JERSEY, INC.
By:
Name:
Title:
CARETENDERS OF SOUTHWEST FLORIDA, INC.
By:
Name:
Title:
CARETENDERS OF WEST PALM BEACH, INC.
By:
Name:
Title:
ADULT DAY CARE OF LOUISVILLE, INC.
By:
Name:
Title:
BUYER ENTITIES:
ACTIVE SERVICE CORPORATION
By:
Name:
Title:
ACTIVE DAY FL, INC. By:
Name:
Title:
ACTIVE DAY OH, INC.
By:
Name:
Title:
ACTIVE DAY MD, INC.
By:
Name:
Title:
ACTIVE DAY KY, INC.
By:
Name:
Title:
ACTIVE DAY FLEET, INC.
By:
Name:
Title:
Exhibit E
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
THIS NON-COMPETITION AND NON-SOLICITATION AGREEMENT (this "Agreement"), is made
as of _________, 2005 by and among Almost Family, Inc., a Delaware corporation,
Caretenders of Cincinnati, Inc., a Kentucky corporation, Adult Day Care of
Maryland, Inc., a Maryland corporation, Caretenders of Columbus, Inc., a
Kentucky corporation, Caretenders of New Jersey, Inc., a Kentucky corporation,
Caretenders of Southwest Florida, Inc., a Kentucky corporation, Caretenders of
West Palm Beach, Inc., a Kentucky corporation, and Adult Day Care of Louisville,
Inc., a Kentucky corporation (individually a "Seller Entity" and collectively
"Seller Entities"; the Seller Entities are sometimes collectively referred to
herein as "Almost" or "Seller"), and Active Day FL, Inc., a Delaware
corporation, Active Day OH, Inc., a Delaware corporation, Active Day MD, Inc., a
Delaware corporation, Active Day, KY, Inc., a Delaware corporation, and Active
Day Fleet, Inc., a Delaware corporation (each a "Buyer Entity" and collectively
"Buyer Entities"; the Buyer Entities are sometimes collectively referred to
herein as "Buyer"), and wholly owned subsidiary of Active Service Corporation, a
Delaware corporation ("Parent"). Capitalized terms used herein but not defined
shall have the meanings set forth in that certain Purchase Agreement, dated as
of August __, 2005 (the "Purchase Agreement"), by and among the Buyer, the
Seller and the Parent.
RECITALS
WHEREAS, the Buyer, the Seller and Parent have entered into that certain
Purchase Agreement, pursuant to which the Buyer is acquiring certain assets and
liabilities from the Seller, in each case relating exclusively to the Business;
WHEREAS, the parties are entering into this Agreement in order to preserve and
protect the value of the Business sold by the Seller to the Buyer pursuant to
the Purchase Agreement, and as an inducement to the consummation by the Buyer of
the transactions contemplated by the Purchase Agreement;
WHEREAS, the parties are entering into this Agreement in order to preserve and
protect the value of the business retained by Seller through the avoidance of
confusion in the marketplace that might otherwise arise out of Buyer's use of
the name "Almost Family" pursuant to a Trademark License Agreement or otherwise;
WHEREAS, certain of Seller's former employees with confidential and trade secret
information about Seller will be employed by Buyer in connection with Buyer's
operation of the Business;
WHEREAS, the parties are entering into this Agreement in order to
preserve and protect the parties' confidential and trade secret information;
WHEREAS, the Seller operates both home health and adult day care businesses in
Kentucky, Ohio, Maryland and Florida (the "Territory");
NOW THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows: Section 1. Confidential Information. Each party
recognizes that it has had access to, and has acquired, and has assisted in
developing confidential and proprietary information relating to the business and
operations of the other party, including, without limitation, information with
respect to their present and prospective services, clients, customers,
subcontractors, suppliers, pricing, cost and financial information and sales and
marketing methods (the "Confidential Information"). Each party acknowledges that
the Confidential Information is and will continue to be of significant value to
the other parties and the Business and that disclosure of such information to or
its use by the receiving party or others could cause substantial loss to the
other parties. Additionally, the Seller agrees that disclosure of any
Confidential information relating to the Business when or wherever learned or
disclosed could significantly reduce the investment the Buyer is making in the
Business. The Seller agrees that all Confidential Information related to the
Business shall remain confidential and that the Seller will use commercially
reasonably efforts to maintain the confidentiality of the Confidential
Information related to the Business and to deliver to Buyer. The Seller shall
not use any Confidential Information of the Buyer or the Business for any
purpose other than the consummation of the transactions contemplated by the
Purchase Agreement. The Buyer agrees that all Confidential Information relating
to the Seller's home health business shall remain confidential and that the
Buyer will use commercially reasonable efforts to (i) maintain the
confidentiality of the Confidential Information related to the Seller's home
health business, and (ii) cause the Transferred Employees to refrain from using
or disclosing Confidential Information regarding the Seller's home health
business.
Section 2. Non-Competition.
(a) The Seller agrees that, whether as a partner, stockholder, consultant, joint
venture, investor, lender, or in any other capacity whatsoever (other than as
the holder of not more than five percent (5%) of the total outstanding stock of
a publicly held company), without the express prior written consent of the
Buyer, for a period of three years after the Closing Date, the Seller shall not,
and shall not permit its Affiliates, to conduct the business of providing adult
day care services in the Territory.
(b) The Buyer agrees that, whether as a partner, stockholder, consultant, joint
venture, investor, lender, or in any other capacity whatsoever (other than as
the holder of not more than five percent (5%) of the total outstanding stock of
a publicly held company), without the express prior written consent of the
Seller, for a period of three years after the Closing Date, the Buyer shall not,
and shall not permit its Affiliates, to conduct the business of providing home
health care services in the Territory; provided, however, the foregoing
limitation will not prevent, hinder or otherwise delay Buyer's participation in
the Medicare Home Health Adult Day Care Replacement Project with the Seller or
any other provider or home health care services in the territory.
Section 3. Non-Solicitation.
(a) The Seller acknowledges that for a period of 60 days after the date of this
Agreement, the Buyer has the right to hire any employee or former employee of
the Seller, employed by the Seller in connection with the operation of the
Business ("Transferred Employees"). The Seller agrees that that it shall not,
and shall not cause its Affiliates to, directly or indirectly, employ, solicit
or entice away any Transferred Employees; during the one year immediately
following the Closing Date, provided that Seller and its Affiliates may engage
in general solicitations not specifically directed at Transferred Employees.
(b) The Buyer agrees that it shall not, and shall not cause its Affiliates to,
directly or indirectly, employ, solicit or entice away any employees or former
employees of the Seller other than the Transferred Employees, during the one
year period immediately following the Closing Date, provided that Buyer and its
Affiliates may engage in general solicitations not specifically directed at the
Seller's employees.
Section 4. Scope. (a) The Seller acknowledges that (i) the effective scope of
the Business encompasses the entire Territory; (ii) the Business, prior to the
Closing Date, competes with other adult day-care businesses that are or could be
located in any part of the Territory; (iii) the Buyer has required that the
Seller make the covenants set forth in this Agreement as a condition to the
Buyer's purchase of the assets and the assumption of the liabilities
constituting the Business; (iv) the provisions of this Agreement are reasonable
and necessary to protect and preserve the Buyer's interests in and right to the
use such assets and operate the Business from and after the Closing Date; and
(e) the Buyer would be irreparably damaged if the Seller were to breach the
covenants set forth in this Agreement.
(b) The Buyer acknowledges that (i) the effective scope of the Seller's home
health business encompasses the entire Territory; (ii) competition by the Buyer
with the Seller in the home health business, in conjunction with the use of the
Seller's name and operation at the Seller's former locations, would create
confusion in the marketplace and could result in the use by Buyer's of the
Seller's confidential and trade secret information regarding the Seller's home
health business; (iii) the Seller has required that the Buyer make the covenants
set forth in this Agreement as a condition to the Seller's sale of the assets
constituting the Business of certain assets and liabilities, in each case
relating exclusively to the Business; (iv) the provisions of this Agreement are
reasonable and necessary to protect and preserve the Seller's interests in and
right to the use and operation of the home health business from and after the
Closing Date; and (e) the Seller would be irreparably damaged if the Buyer were
to breach the covenants set forth in this Agreement.
Section 5. Remedies. It is recognized that damages in the event of breach of any
provision of this Agreement by the Seller or the Buyer would be difficult, if
not impossible, to ascertain, and it is therefore agreed that the Buyer or the
Seller, as applicable, in addition to
and without limiting any other remedy or right it may have, shall have the right
to an injunction or other equitable relief in any court of competent
jurisdiction, enjoining any such breach. The existence of this right shall not
preclude any other rights or remedies at law or in equity which the Buyer or the
Seller may have. In the event of notice of any breach of any covenant set forth
in this Agreement by the Seller or the Buyer, the term of such covenant will be
extended by the period from delivery of notice of such breach until the later of
(a) mutual agreement of the parties hereto and (b) a substantive decision on the
merits by a court as to such breach.
Section 6. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their successors and assigns; provided,
however, that the Seller shall not be permitted to assign its obligations
hereunder. The Buyer may assign its rights under this Agreement to any entity
which is an Affiliate of the Buyer, but upon any such assignment, both the
assignor and assignee shall be bound by the restrictions on the Buyer set forth
in this Agreement.
Section 7. Entire Agreement. This Agreement and the Purchase Agreement contains
the entire understanding of the Seller and the Buyer with respect to the
respective parties' duties hereunder and supersedes any and all prior
understandings, written or oral. This Agreement may not be amended, waived,
discharged or terminated orally, but only by an instrument in writing.
Section 8. Severability. The parties hereto agree that the restrictions and
agreements contained herein are reasonable with respect to duration, geographic
area and scope, are the product of arm's-length negotiation, and are necessary
to protect the Business acquired by the Buyer pursuant to the Purchase
Agreement. Whenever possible, each provision and term of this Agreement will be
interpreted in a manner to be effective and valid, but if any provision or term
of this Agreement is held to be prohibited or invalid, then such provision or
term will be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement. If any
of the covenants set forth herein are held to be unreasonable, arbitrary or
against public policy, such covenants will be considered divisible with respect
to scope, time and geographic area, and in such lesser scope, time and
geographic area, will be effective, binding and enforceable against the Seller
to the greatest extent permissible.
Section 9. Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in accordance with Section 12.2 of the
Purchase Agreement.
Section 10. Counterparts. This Agreement may be signed in two or more
counterparts, all of which, taken together, shall be deemed to constitute one
original Agreement.
Section 11. Governing Law. This agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, without
giving effect to the principles of conflicts of law thereof.
Section 12. Attorney's Fees. All costs and expenses, including reasonable
counsel fees and expenses, incurred in any action to obtain an award or relief
with respect to
the matters contemplated by this Agreement shall be borne by the party which is
not the prevailing party in such action.
[Signatures appear on next page]
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed and delivered under seal, by its authorized officers or
individually, as the case may be, on the date first above written.
SELLER ENTITIES:
ALMOST FAMILY, INC.
By:
Name:
Title:
CARETENDERS OF CINCINNATI, INC.
By:
Name:
Title:
ADULT DAY CARE OF MARYLAND, INC.
By:
Name:
Title:
CARETENDERS OF COLUMBUS, INC.
By:
Name:
Title:
CARETENDERS OF NEW JERSEY, INC.
By:
Name:
Title:
CARETENDERS OF SOUTHWEST FLORIDA, INC.
By:
Name:
Title:
CARETENDERS OF WEST PALM BEACH, INC.
By:
Name:
Title:
ADULT DAY CARE OF LOUISVILLE, INC.
By:
Name:
Title:
BUYER ENTITIES:
ACTIVE SERVICE CORPORATION
By:
Name:
Title:
ACTIVE DAY FL, INC. By:
Name:
Title:
ACTIVE DAY OH, INC.
By:
Name:
Title:
ACTIVE DAY MD, INC.
By:
Name:
Title:
ACTIVE DAY KY, INC.
By:
Name:
Title:
ACTIVE DAY FLEET, INC.
By:
Name:
Title:
Exhibit F
TRADEMARK LICENSE AGREEMENT
This TRADEMARK LICENSE AGREEMENT ("License Agreement"), is made and
entered into as of August [__], 2005, by and among Almost Family, Inc., a
Delaware corporation ("Licensor") and Active Service Corporation, a Delaware
corporation ("Licensee").
WHEREAS, Licensor is the owner of certain service marks and trade names and
registrations therefor; and
WHEREAS, in connection with a Purchase Agreement, dated as of August [__], 2005,
by and among Licensor, Licensee and various other parties (the "Purchase
Agreement"), Licensor desires to grant to Licensee, and Licensee desires to
acquire from Licensor, a license to permit Licensee's use of certain service
marks and trade names for a period of time until Licensee can transition to new
or other service marks and trade names in connection with the Business (as
defined in Paragraph 1 below).
NOW, THEREFORE, Licensor and Licensee hereby agree to document the license as
follows:
1. Grant of License. Effective as of the date of this License Agreement
and subject to the terms and conditions set forth in this License Agreement,
Licensor grants to Licensee an exclusive (but only as to the adult day care
industry), non-transferrable (except as set forth in Paragraph 10) license (the
"License") to use, in connection with Licensee's operation of the adult day care
centers located at the addresses set forth on Annex A (the "Centers") and
purchased pursuant to the Purchase Agreement (the "Business") the following
trade names and marks (each, a "Xxxx" and collectively, the "Marks"):
(a) ALMOST FAMILY and design Reg. No. 2,663,761 (b) ALMOST FAMILY, THE NEXT BEST
Reg. No. 2,550,726 THING TO REAL FAMILY (c) ALMOST FAMILY Reg. No. 2,499,621
2. Limitations on Use. Licensee shall use the Marks only in connection with the
Business and any Business-related purposes. Licensee shall not use any of the
Marks for any other purpose or in any other manner without the express
authorization of Licensor. Licensee may not use any one or more of the Marks as,
or as a part of, Licensee's entity name. Within fifteen (15) days from the date
of this License Agreement, Licensee shall have removed all references to
Licensor's website (xxx.xxxxxx-xxxxxx.xxx) from Licensee's vehicles, signs and
other promotional materials.
3. Quality Control. Licensee agrees that the services with which the Marks may
be used shall comply with the policies and procedures set forth in the service
manuals currently in use at each Center, as well as all applicable federal,
state and local laws and regulations. Licensor and its authorized agents shall
have the right upon reasonable advance notice, during regular business hours and
in a manner that will cause minimal disruptions to Licensee's business
operations, to inspect all uses of the Marks by Licensee. Licensee is a Delaware
corporation EXECUTION COPY validly existing under Delaware law. Licensee has the
authority to enter into this License Agreement and carry out its obligations
hereunder.
4. Proprietary Notices and Registration. Licensee agrees to use in conjunction
with the Marks all notices or symbols of ownership and registration as Licensor
may reasonably specify from time to time. Licensor shall use its commercially
reasonable efforts to maintain or renew, at Licensor's expense, trademark or
service xxxx registrations for the Marks anywhere in the world. In further
consideration of Licensor's grant of the License, Licensee agrees to reasonably
cooperate with Licensor, at Licensor's expense, in obtaining or maintaining any
such registrations.
5. Ownership Rights. Licensee agrees and acknowledges that Licensor is the sole
owner of the Marks and that the License shall not create in Licensee, nor shall
the License be construed as assigning to Licensee, any ownership interest or
legal title in or to the Marks. All goodwill associated with the Marks arising
from Licensee's use of the Marks shall inure solely to the benefit of Licensor
and not to that of Licensee. Licensee shall take no action at any time that
would have the effect of contesting or challenging the validity of Licensor's
ownership of, or legal title in or to, the Marks or any registration of the
Marks. Notwithstanding anything to the contrary contained in this License
Agreement, during the term of the Non-Competition/Non- Solicitation Agreement of
even date herewith by and between the parties hereto, Licensor shall not use,
transfer, sell, assign or license the Marks, any registration of the Marks or
assign or transfer any of its rights or obligations under this License in
connection with or for use in connection with the business of providing adult
day care which would be considered competitive to Licensee pursuant to the
Non-Competition/Non-Solicitation Agreement.
6. Protection of Rights. Licensee agrees to use its commercially reasonable
efforts to inform Licensor of (a) any potential infringement, misappropriation
or other wrongful activity by any person or entity involving any of the Marks of
which Licensee becomes aware, and (b) any potential, threatened, or actual claim
or action against Licensee or Licensor involving any of the Marks of which
Licensee becomes aware. Licensee agrees to reasonably cooperate with Licensor,
at Licensor's expense, in protecting, enforcing, and defending Licensor's rights
in the Marks.
7. Fees and Royalties. Licensee shall not be required to pay a license fee or
royalties hereunder. The consideration for this License is included in the
consideration paid to Licensor under the Purchase Agreement.
8. Term and Termination.
(a) Unless otherwise terminated in accordance with the terms of this License
Agreement, the License is effective beginning on the date of this License
Agreement and shall continue for a period of 120 days (the "Initial Term").
After the Initial Term (the "Secondary Term"), the License may remain in effect,
but only upon the prepayment by Licensee of $5,000.00 for each 30-day period in
which Licensee desires the License to remain effective. The Secondary Term shall
last for a period of up to 180 days, or such longer period as determined by
Licensor, in its sole discretion.
(b) The License may be terminated at any time by the agreement of Licensor and
Licensee, or by Licensee upon notice to Licensor.
(c) Either party shall have the right to terminate this License by giving
written notice thereof if the other materially breaches a term or condition if
this License Agreement, and fails to correct such breach within thirty (30) days
after such party has been given written notice thereof. Such termination shall
take effect upon expiration of the thirty (30) day period. The notice of
termination shall specify the breach alleged to have occurred.
(d) The License shall terminate upon the occurrence of any of the following upon
fifteen (15) days written notice to Licensee and the opportunity to cure:
(i) Licensee's attempt to assign or sublicense without the prior written consent
of Licensor, any of its rights or obligations under the License or this License
Agreement;
(ii) Licensee becoming insolvent;
(iii) Licensee making a general assignment for the benefit of creditors or
suffering or permitting the appointment of a receiver for its business or
assets;
(iv) Licensee filing a voluntary petition of bankruptcy or becoming subject to
any proceedings under any bankruptcy or insolvency law;
(v) Licensee or any government authority taking any action toward suspending or
winding up the business of Licensee, dissolving Licensee, or liquidating or
distributing substantially all of the assets of Licensee.
(vi) Licensee deviating from the quality control standards set forth in
Paragraph 3;
(vii) Licensee's continued use of one or more of the Marks which is likely to
have the effect of diluting, discrediting, disparaging, or damaging the goodwill
of any of the Marks or of Licensor.
9. Rights and Duties Upon Termination. Upon termination of the License for any
reason, all of Licensee's right to use the Marks shall end and Licensee shall
take immediate action to cease and refrain from all further use of the Marks.
The provisions of this License Agreement that are clearly intended to survive
the termination or expiration of this License Agreement shall survive such
termination or expiration, including but not limited to Paragraphs 2, 5, 9, 12,
13 and 16.
10. Assignability and Sublicensing. Licensee shall not assign, sell, sublicense
or otherwise transfer any rights under this License Agreement to any other
person or entity without the prior written consent of Licensor; provided,
however, that Licensee shall have the right to assign any rights under this
License without the consent of Licensor to any subsidiary or affiliate of
Licensee, provided that such assigning party remains liable for the performance
of its obligations under this License Agreement. Subject to the
terms and conditions of this License Agreement, including by not limited to
Paragraph 5, Licensor may assign, sell or otherwise transfer any of its rights
or obligations under this License Agreement to any other person or entity
without Licensee's prior approval.
11. Relationship of the Parties. Nothing contained in this License Agreement
shall be construed to imply that the License creates a franchisor/franchisee
relationship or a joint venture or partnership between Licensor and Licensee;
and neither Licensor nor Licensee, by virtue of this License Agreement alone,
shall have any right, power or authority, express or implied, to act on behalf
of the other or to enter into any undertaking binding the other.
12. Indemnification. Licensee shall indemnify, defend and hold Licensor and its
members, shareholders, directors, officers, employees, representatives, agents,
attorneys, successors and assigns harmless from and against any and all claims,
actions, allegations, liabilities, obligations, judgments, costs and expenses
(including reasonable attorneys' fees and disbursements, as incurred) arising
out of or resulting from: (a) any breach by Licensee of the license grant
provisions and/or license restrictions set forth in Paragraphs 1, 2 and 3; (b)
any breach by Licensee of the ownership rights obligations set forth in
Paragraph 5; and/or (c) Licensee's use of the Marks in the operation of
Licensee's business during and after the term of this License. Licensee shall
maintain liability and other insurance at levels appropriate and customary for
the operation of a business comparable to the Business.
13. Notices. Any delivery, notice or other communication required or permitted
under this License Agreement shall be in writing and shall be deemed to have
been delivered or given when hand-delivered or mailed by registered or certified
mail, return receipt requested and postage prepaid, to the intended recipient at
the following address (or such other address as may be designated from time to
time by like notice):
If to Licensor: Almost Family, Inc.
0000 Xxxxxx Xxxxxxx Xxxx Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxx,
Executive Vice President and Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxx Xxxxx Xxxx LLC
000 Xxxx Xxxxxx Xxxxxx 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Licensee: Active Service Corporation
0000 Xxxxx Xxxxxx Xxxxx Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx Xxxxxxx, Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
14. Governing Law. This License Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to its laws,
rules or regulations relating to conflicts of law.
15. Headings. The headings used in this License Agreement have been included
solely for ease of reference and shall not be considered in interpreting or
construing this License Agreement.
16. Entire Agreement and Amendments. This License Agreement and the
Purchase Agreement constitute the entire agreement of the parties with respect
to the subject matter hereof and supersede any prior or contemporaneous
agreements (whether written or oral) among the parties with respect to such
subject matter. This License Agreement may be amended or modified only by
another writing signed by all parties to be charged with the amendment or
modification.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, Licensor and Licensee have executed and delivered this
License Agreement as of the date set forth in the preamble hereto.
LICENSOR LICENSEE
ALMOST FAMILY, INC. ACTIVE SERVICE CORPORATION
BY: BY:
TITLE: TITLE:
Annex A
Hikes Point ADC
0000 Xxxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
South Third ADC
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
lizabethtown ADC
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxxx, XX 00000
Bardstown ADC 000
Xxxxxxxx Xxx. Xxx. 0
Xxxxxxxxx, XX 00000
Lexington ADC
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Owensboro ADC
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Cincinnati ADC 0000
Xxxxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
Ft. Xxxxxx ADC
000 Xxxxxxxxx Xxxx,
Xxx. 000
Xx. Xxxxxx, XX 00000
Columbus ADC
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Randallstown ADC
0000 Xxxxxxx Xxxx, Xxxxxx X-X
Xxxxxxxxxxxx, XX 00000
Arbutus ADC 0000 Xxxxxx Xxx., Xxxxxx X-X
Xxxxxxxxx, XX P
Pasadena ADC
0 X. Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Harford ADC
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Elkridge ADC
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Timonium ADC
0000 Xxxx Xxxx, Xxxxx X
Xxxxxxxxxxx, XX 00000
Baltimore ADC
0000 X. Xxxxxxxx Xx., Xxx. X
Xxxxxxxxx, XX 00000-0000
Dundalk ADC
000 Xxxxxxx Xxxx.
Xxxxxxxxx ,XX 21208-4199
Boynton Beach ADC
0000 XX Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Ft. Xxxxx ADC
0000 Xxxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000 7
Exhibit G
COPYRIGHT ASSIGNMENT
THIS COPYRIGHT ASSIGNMENT (this "Agreement") is entered into as of this ____ day
of ___________, 2005 by and among Almost Family, Inc., a Delaware corporation,
Caretenders of Cincinnati, Inc., a Kentucky corporation, Adult Day Care of
Maryland, Inc., a Maryland corporation, Caretenders of Columbus, Inc., a
Kentucky corporation, Caretenders of New Jersey, Inc., a Kentucky corporation,
Caretenders of Southwest Florida, Inc., a Kentucky corporation, Caretenders of
West Palm Beach, Inc., a Kentucky corporation, and Adult Day Care of Louisville,
Inc., a Kentucky corporation (individually a "Seller Entity" and collectively
"Seller Entities"; the Seller Entities are sometimes collectively referred to
herein as "Almost" or "Seller" or "Assignor"), and Active Day FL, Inc., a
Delaware corporation, Active Day OH, Inc., a Delaware corporation, Active Day
MD, Inc., a Delaware corporation, Active Day, KY, Inc., a Delaware corporation,
and Active Day Fleet, Inc., a Delaware corporation (each a "Buyer Entity" and
collectively "Buyer Entities"; the Buyer Entities are sometimes collectively
referred to herein as "Buyer" or "Assignee"), and wholly owned subsidiary of
Active Service Corporation, a Delaware corporation ("Parent"). Capitalized terms
used herein but not defined shall have the meanings set forth in that certain
Purchase Agreement, dated as of August __, 2005 (the "Purchase Agreement"), by
and among the Buyer, the Seller and the Parent.
WHEREAS, Assignor, Assignee and Parent entered into that certain Purchase
Agreement; and
WHEREAS, pursuant to Section 3.3(c) of the Purchase Agreement, Assignor agreed
to assign and transfer to Assignee and Assignee desires to acquire the entire
right, title and interest in, to and under Assignor's unregistered and
registered copyrighted works, software programs, manuals and relevant copyright
registrations therefor which have been developed and which are used in
connection with Assignor's Business, a partial, but non-exclusive list of which
is attached as Exhibit A (collectively, the "Works").
NOW THEREFORE, in consideration of the terms and conditions herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Assignment. Assignor does hereby irrevocably sell, transfer, convey and
assign to Assignee all of its right, title and interest in and to the Works and
all elements thereof, including, without limitation, any and all applications,
registrations and renewals thereof, all common law rights therein, work made for
hire rights thereto, together with all rights and privileges granted and secured
thereby, including, without limitation, the exclusive right to do and to
authorize others to do any and all acts allowed by law, and together with all
now or hereafter existing rights of every kind and character whatsoever
throughout the world pertaining to the Works, in all media and forms now in
existence or to be developed hereafter, in perpetuity, free and clear of all
Encumbrances. The preceding assignment includes the right to xxx for and collect
for all past, present and future infringements and damages throughout the world.
Assignor agrees to execute and deliver to Assignee such other documents as may
be required by Assignee to effectuate or perfect this Assignment.
2. Successors and Assigns. All of the terms and provisions of this Agreement
shall be binding upon, and shall inure to the benefit of, Assignor and Assignee
and their respective successors and assigns.
3. No Effect on Purchase Agreement. Nothing contained in this Agreement shall
supersede, modify, limit, eliminate or otherwise affect any of the
representations and warranties, covenants, agreements or indemnities set forth
in the Purchase Agreement. This Agreement is entered into and delivered pursuant
to Sections 3.3(c) of the Purchase Agreement, and nothing herein shall be
construed to modify, terminate or merge any rights any party thereto may have
pursuant to the terms thereof. In the event of any inconsistency or conflict
between the terms of the Purchase Agreement and the terms of this Agreement, the
terms of the Purchase Agreement shall prevail.
4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
5. Counterparts. This Agreement may be signed in counterparts, all of which,
taken together, shall be deemed to constitute one original Agreement.
6. Further Assurances. Assignor and Assignee hereby agree to execute,
acknowledge and deliver such other documents and instruments and take such other
actions as any party, or counsel to any party, may reasonably request to
complete and perfect the assignment and assumption contemplated herein.
[Signatures appear on next page]
IN WITNESS WHEREOF, the parties hereto have executed this Assignment and
Assumption Agreement on the date first above written.
SELLER ENTITIES:
ALMOST FAMILY, INC.
By:
Name:
Title:
CARETENDERS OF CINCINNATI, INC.
By:
Name:
Title:
ADULT DAY CARE OF MARYLAND,
INC.,
By:
Name:
Title:
CARETENDERS OF COLUMBUS, INC.
By:
Name:
Title:
CARETENDERS OF NEW JERSEY, INC.
By:
By:
Name:
Title:
CARETENDERS OF SOUTHWEST
FLORIDA, INC.
By:
Name:
CARETENDERS OF WEST PALM
BEACH, INC.
By:
Name:
Title:
ADULT DAY CARE OF LOUISVILLE,
INC.
By:
Name:
Title:
BUYER ENTITIES:
ACTIVE SERVICE CORPORATION
By:
Name:
Title:
ACTIVE DAY FL., INC.
By:
Name:
Title:
ACTIVE DAY OH., INC.
By:
Name:
Title:
ACTIVE DAY MD., INC.
By:
Name:
Title:
ACTIVE DAY KY., INC.
By:
Name:
Title:
ACTIVE DAY FLEET, INC.
By:
Name:
Title:
Exhibit A
Exhibit H
SOFTWARE LICENSE AGREEMENT
This SOFTWARE LICENSE AGREEMENT ("Agreement") is made and entered into as of
August [__], 2005 ("Effective Date"), by and between [_________], a [________]
corporation ("Licensor") and Adult Day Care of Louisville, a Kentucky
corporation ("Licensee"), pursuant to a Purchase Agreement, dated August [__],
2005, by and among Licensor, Licensee and various other parties (the "Purchase
Agreement").
1. Entire Agreement. This Agreement, together with the Purchase
Agreement, constitutes the entire agreement between Licensor and Licensee and
supersedes all proposals, oral and written, between the parties on this subject.
2. Software License.
(a) Type I License. For the Type I License Term set forth in Section 5(a),
Licensor hereby grants Licensee for the limited purposes set forth in this
Section 2(a) a limited, nonexclusive and nontransferable (except as set forth in
Section 15(f)) license to use the software known as the "Center Management
System" (the "Software"), together with all related materials, documentation and
technical information currently in the possession of Licensee (the "Related
Materials") solely for Licensee's own internal recordkeeping purposes.
(b) Type II License. For the Type II License Term set forth in Section 5(b),
Licensor hereby grants Licensee for the limited purposes set forth in this
Section 2(b) a limited, nonexclusive and nontransferable (except as set forth in
Section 15(f)) license to use the Software together with all Related Materials
for any purpose, subject to the restrictions on transfer in Section 3(b) below.
3. License Restrictions.
(a) During the Type I License Term, Licensee shall not and shall take reasonable
steps to ensure that any third parties do not: (i) sell, rent, lease, lend,
license, sublicense, distribute or otherwise transfer the Software or Related
Materials to any third party; (ii) modify, change, decompile, disassemble or
reverse engineer the Software, in whole or in part; (iii) write or develop any
derivative software or any other software program based upon the Software or
Related Materials; (iv) use the Software to provide processing or other services
to third parties, or otherwise use the Software on a "service bureau" basis; (v)
use the Software on a concurrent user basis; or (vi) provide, disclose, divulge
or make available to, or permit use of the Software or Related Materials by any
third party without Licensor's prior written consent.
(b) For the Type II License Term, Licensee shall not sell, rent, lease, lend,
license, sublicense, distribute or otherwise transfer the Software or Related
Materials to any third party engaged in the business of providing adult day care
services.
4. Copies of Software. Licensee shall have the right to retain all
copies of the Software and Related Materials currently in its possession for use
as back-up copies or other internal use, subject to the restrictions on use and
disclosure set forth herein.
5. Term.
(a) Type I License Term. The term of the Type I License granted hereunder shall
be effective as of the Effective Date and shall continue until the expiration of
the non-compete period set forth in the Purchase Agreement, unless earlier
terminated as set forth in Section 9 hereto.
(b) Type II License Term. The term of the Type II License granted
hereunder shall be effective as of the date of expiration of the non-compete
period set forth in the Purchase Agreement and shall continue until terminated
as set forth in Section 9 hereto.
6. Delivery and Installation. Licensee acknowledges and agrees that as of the
Effective Date it has possession of the Software and Related Materials and no
delivery and/or installation shall be required.
7. Audit Right. Licensor, or its authorized representative, shall have the right
upon reasonable advance notice, during regular business hours and in a manner
that will cause minimal disruptions to Licensee's business operations, to audit
and inspect Licensee's use of the Software and/or Related Materials to verify
compliance with the terms and conditions of this Agreement. Licensor reserves
the right to terminate this Agreement and/or assess additional fees if the
results of any such audit show that Licensee's utilization of the Software is
not in compliance with the terms and conditions of this Agreement.
8. Fees and Charges. Licensee shall owe no additional fees and charges other
than the consideration paid to Licensor in connection with the Purchase
Agreement.
9. Termination. During the Type I License Term:
(a) Default. Either party has the right to terminate this Agreement if the other
party breaches or is in default of any material obligation hereunder, which
default is incapable of cure or which, being capable of cure, has not been cured
within seven (7) days after receipt of written notice of such default from the
nondefaulting party or within such additional cure period as the nondefaulting
party may authorize.
(b) Acts of Insolvency. Licensor may terminate this Agreement by written notice
to Licensee, and may regard Licensee as in default of this Agreement, if
Licensee becomes insolvent, makes a general assignment for the benefit of
creditors, suffers or permits the appointment of a receiver for its business or
assets, becomes subject to any proceeding under any bankruptcy or insolvency law
whether domestic or foreign, or has wound up or liquidated, voluntarily or
otherwise.
(c) Rights and Obligations of the Parties on Termination. In the event that this
Agreement is terminated, each party shall forthwith return to the other all
papers, materials, and other properties of the other party then in its
possession. In addition, Licensee shall return to Licensor all copies of the
Software and Related Materials.
(d) Continuing Obligations. The obligations of the parties under Sections 9(c),
11, 12 and 14 shall survive termination of any license of the Software and
Related Materials hereunder.
10. Warranty Disclaimer. THE SOFTWARE, THE RELATED MATERIALS, AND ALL RELATED
DOCUMENTS AND INFORMATION IS PROVIDED "AS IS" WITHOUT ANY COVENANTS,
REPRESENTATIONS AND/OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, OF ANY
KIND, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
OF FITNESS FOR A PARTICULAR PURPOSE AND/OR NON-INFRINGEMENT. LICENSOR DOES NOT
COVENANT, REPRESENT OR WARRANT THAT THE SOFTWARE AND/OR RELATED MATERIALS WILL
MEET LICENSEE'S REQUIREMENTS OR THAT LICENSEE WILL RECEIVE ANY BENEFITS FROM THE
USE OF THE SOFTWARE AND/OR RELATED MATERIALS. LICENSOR DOES NOT GUARANTEE THAT
LICENSEE'S USE OF THE SOFTWARE PROVIDED UNDER THIS AGREEMENT WILL BE
UNINTERRUPTED, ERROR FREE OR SECURE. LICENSOR SHALL HAVE NO OBLIGATION TO
PROVIDE OR ADVISE LICENSEE OF ANY FUTURE UPDATES, CHANGES, ENHANCEMENTS OR
MODIFICATIONS OF OR TO THE SOFTWARE OR RELATED MATERIALS.
11. Proprietary Rights. All materials, including without limitation, the
Software, the Related Materials, any other computer software, data or
information developed or provided by Licensor under this and any ideas,
know-how, methodologies, equipment or processes conceived, developed or used by
Licensor to provide the Software or other deliverables or services under this
Agreement, including, without limitation, all copyrights, trademarks, patents,
trade secrets and any other proprietary rights related to such materials
(collectively, "Licensor Materials") shall be and remain the sole and exclusive
property of Licensor. To the extent, if any, that ownership of Licensor
Materials does not automatically vest in Licensor by virtue of this Agreement,
Licensee hereby transfers and assigns to Licensor all rights, title and interest
Licensee may have in and to Licensor Materials and agrees to execute any and all
documents that Licensor may reasonably request in connection therewith. Licensee
acknowledges and agrees that Licensor shall have the right to provide to third
parties software, deliverables and services that are the same or similar to the
Software and/or Related Materials provided hereunder, and to use or otherwise
exploit any Licensor Materials in providing such Software and/or Related
Materials. Any addition, modification or improvement to the Software and/or
Related Materials made by Licensee after the Type I License Term shall be the
sole and exclusive property of Licensee and Licensee shall have no obligation to
disclose any such addition, modification or improvement to Licensor. Any
addition, modification or improvement to the Software and/or Related Materials
made by Licensor after the date of this Agreement shall be the sole and
exclusive property of Licensor and Licensor shall have no obligation to disclose
any such addition, modification or improvement to Licensee.
12. Confidentiality. Licensee acknowledges that the Software and Related
Materials are the "Confidential and Proprietary Information" of Licensor.
Therefore, Licensee agrees that it will not permit the use or disclosure of any
such Confidential and Proprietary Information to any party, other than its own
employees who must have such information to implement use of the Software as
contemplated by this Agreement. Licensee shall cause its employees who have
EXECUTION COPY 4 access to the Software and Related Materials to acknowledge in
writing the confidential nature of the Software and Related Materials and such
employees' obligations hereunder to maintain the confidentiality of the
Confidential and Proprietary Information. Licensee may maintain all copies of
the Software and Related Materials currently in its possession for its own
internal use as described in Section 4 of this Agreement but may not otherwise
use or copy the Software or Related Materials. Except as provided in a certain
Trademark License Agreement, of even date herewith, by and between Licensee and
Licensor, neither party shall use the names(s), trademarks(s) or trade names(s),
whether registered or not, of the other party in publicity releases or
advertising or in any other manner, including customer lists, without securing
the prior written approval of the other party.
13. Indemnification. Licensee shall indemnify, defend and hold Licensor and its
members, shareholders, directors, officers, employees, representatives, agents,
attorneys, successors and assigns harmless from and against any and all claims,
actions, allegations, liabilities, obligations, judgments, costs and expenses
(including reasonable attorneys' fees and disbursements, as incurred) arising
out of or resulting from: (a) any breach by Licensee of the license grant
provisions and/or license restrictions set forth in Sections 3 and 4
respectively; (b) any breach by Licensee of the proprietary rights obligations
set forth in Section 11 of this Agreement; (c) any breach by Licensee of the
confidentiality obligations set forth in Section 12 of this Agreement; and/or
(d) Licensee's use of the Software and/or the Related Materials in the operation
of Licensee's business. Licensee shall maintain liability and other insurance at
levels appropriate and customary for the operation of a business comparable to
Licensee's business.
14. Limitation of Liability. Except with regard to Licensee's indemnification
obligations set forth above in Section 13 which are not subject to this Section
14, in no event shall either of the parties hereto be liable to the other for
the payment of any exemplary, punitive, consequential, indirect, special or
incidental damages as a result of the breach by a party of any term or condition
of this Agreement or otherwise.
15. Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by the laws of the State of
Delaware, excluding any reference to any conflicts of law rules or principles.
(b) Severability. If any part, terms or provision of this Agreement is held by
any court to be unenforceable or prohibited by any law applicable to this
Agreement, the rights and obligations to the parties shall be construed and
enforced with that part, term or provision limited so as to make it enforceable
to the greatest extent allowed by law, or, if it is totally unenforceable as if
this Agreement did not contain that particular part, term of provision.
(c) Waiver. Any waiver or modification of this Agreement will not be effective
unless executed in writing and signed by Licensor and Licensee. The failure of
either party to enforce, or the delay by either party in enforcing, any of its
rights under this Agreement will not be deemed to be a waiver or modification by
such party of any of its rights under this Agreement.
(d) Headings; Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and such counterparts together shall
constitute one and the same agreement. The headings used herein are for
reference and convenience only and shall not enter into the interpretation
hereof.
(e) Notices. Any delivery, notice or other communication required or permitted
under this Agreement shall be in writing and shall be deemed to have been
delivered or given when hand-delivered or mailed by registered or certified
mail, return receipt requested and postage prepaid, to the intended recipient at
the following address (or such other address as may be designated from time to
time by like notice):
If to Licensee: Almost Family, Inc.
0000 Xxxxxx Xxxxxxx Xxxx Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxx, Executive Vice
President and Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxx Xxxxx Xxxx LLC
000 Xxxx Xxxxxx Xxxxxx 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx Telephone:
(000) 000-0000 Facsimile:
(000) 000-0000 If to Licensor:Active Service Corporation
0000 Xxxxx Xxxxxx Xxxxx Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(f) Assignment. During the Type I License Term, Licensee shall not assign, sell,
sublicense or otherwise transfer any rights under this Agreement to any other
person or entity without the prior written consent of Licensor;
provided, however, that Licensee shall have the right to
assign any rights under this License without the consent of
Licensor to any subsidiary or affiliate of Licensee, provided that such
assigning party remains liable for the performance of its obligations under this
License Agreement. During the Type II License Term, Licensee shall not assign,
sell, sublicense or otherwise transfer any rights under this Agreement to any
third party in or intending to be in the business of providing adult day care
services. Subject to the terms and conditions of this Agreement, Licensor may
assign, sell or otherwise transfer any of its rights or obligations under this
Agreement to any other person or entity without Licensee's prior approval.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first written above.
LICENSOR LICENSEE
[____________] Adult Day Care By:
By: By:
Title: Title:
Exhibit I
Escrow Agreement
This Escrow Agreement is dated as of _________, 2005 (the "Agreement") and is
among (i) Active Services Corporation, a Delaware corporation, Active Day FL,
Inc., a Delaware corporation, Active Day OH, Inc., a Delaware corporation,
Active Day MD, Inc., a Delaware corporation, Active Day KY, Inc., a Delaware
corporation, and Active Day Fleet, Inc., a Delaware corporation (collectively
"Buyers"), (ii) Almost Family, Inc., a Delaware corporation, Caretenders of
Cincinnati, Inc., a Kentucky corporation, Adult Day Care of Maryland, Inc., a
Maryland corporation, Caretenders of Columbus, Inc., a Kentucky corporation,
Caretenders of New Jersey, Inc., a Kentucky corporation, Caretenders of
Southwest Florida, Inc., a Kentucky corporation, Caretenders of West Palm Beach,
Inc., a Kentucky corporation, and Adult Day Care of Louisville, Inc., a Kentucky
corporation (collectively, the "Sellers"), and X.X. Xxxxxx Trust Company,
National Association, a national banking association, as escrow agent (the
"Escrow Agent").
WHEREAS, Buyers and Sellers are parties to that certain Purchase Agreement,
dated August ___, 2005 (as the same may be amended from time to time, the
"Purchase Agreement"), pursuant to which Buyers, among other things, are
acquiring certain Purchased Assets;
WHEREAS, pursuant to Article VIII of the Purchase Agreement, Sellers have agreed
to jointly and severally indemnify, defend and hold harmless the Buyer
Indemnitees from and against certain Losses; and
WHEREAS, the parties to the Purchase Agreement have agreed that Buyer will
deposit with Escrow Agent on behalf of the Sellers a portion of the purchase
consideration under Asset Purchase Agreement, to be held by Escrow Agent in an
escrow account and released to the Sellers or Buyer under the terms of this
Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, and for other good, fair and valuable consideration and reasonably
equivalent value, the receipt and sufficiency of which are hereby acknowledged
by the parties hereto, the parties do agree as follows, intending to be legally
bound:
Section 1. Establishment of Escrow Account
(a) Buyers and Seller hereby deposit with the Escrow Agent immediately available
funds in the amount of $1,000,000.00 to be held in escrow by the Escrow Agent.
The Escrow Agent accepts said sum and agrees to establish and maintain a
separate account (the "Escrow Account") therefor in its capacity as Escrow Agent
pursuant to the terms of this Agreement.
(b) In the event funds transfer instructions are given (other than in writing at
the time of the execution of the Agreement), whether in writing, by telecopier
or otherwise, the Escrow Agent is authorized to seek confirmation of such
instructions by telephone call-back to the person or persons at the telephone
numbers designated on Exhibit A hereto, and the Escrow Agent may rely upon the
confirmations of anyone purporting to be the person or LOULibrary 476676v.1
persons so designated. The persons and telephone numbers for call-backs may be
changed only in writing actually received and acknowledged by the Escrow Agent.
The parties to the Agreement acknowledge that such security procedure is
commercially reasonable. It is understood that the Escrow Agent and the
beneficiary's bank in any funds transfer may rely solely upon any account
numbers or similar identifying number provided by any party hereto to identify
(i) the beneficiary, (ii) the beneficiary's bank or (iii) an intermediary bank.
The Escrow Agent may apply funds for any payment order it executes using any
such identifying number, even where its use may result in a person other than
the beneficiary being paid, or the transfer of funds to a bank other than the
beneficiary's bank, or an intermediary bank, designated.
(c) Each Buyer and Seller shall furnish the Escrow Agent with a completed Form
W-8 or Form W-9, as applicable. Section 2. Investment (a) The Escrow Agent
agrees to invest and reinvest all available funds in the Escrow Account in the
JPMorgan Chase Bank Money Market Account, unless otherwise directed by Sellers
and as shall be acceptable to the Escrow Agent. (b) The parties recognize and
agree that the Escrow Agent will not provide supervision, recommendations or
advice relating to either the investment of moneys held in the Escrow Account or
the purchase, sale, retention or other disposition of any investment described
herein.
(c) No investment shall mature later than _________, 20__. Interest and other
earnings on investments described herein shall be added to the Escrow Account.
Any loss or expense incurred as a result of an investment will be borne by the
Escrow Account. In the event that the Escrow Agent does not receive directions
to invest funds held in the Escrow Account, the Escrow Agent shall invest such
funds in the JPMorgan Chase Bank Money Market Account, or a successor or similar
investment offered by the Escrow Agent.
(d) The Escrow Agent is hereby authorized to execute purchases and sales of
investments through the facilities of its own trading or capital markets
operations or those of any affiliated entity. The Escrow Agent shall send
statements to each of the parties hereto on a monthly basis reflecting activity
in the Escrow Account for the preceding month. In doing so, the Escrow Agent may
provide a statement containing information regarding any deposits and
disbursements and a separate statement reflecting the investment detail,
including the balance, purchases, sales, and interest postings. Although the
Buyers and Sellers each recognizes that it may obtain a broker confirmation or
written statement containing comparable information at no additional cost, the
Buyers and Sellers hereby agree that confirmations of investments are not
required to be issued by the Escrow Agent for each month in which a monthly
statement is rendered. However, no statement need be rendered for the Escrow
Account if no activity occurred for such month.
(e) The Buyers and Sellers acknowledge and agree that the delivery of the
escrowed property is subject to the sale and final settlement of investments
described herein. Proceeds of a sale of investments will be delivered on the
business day on which the appropriate instructions are delivered to the Escrow
Agent if received prior to the deadline for same day sale of such investments.
If such instructions are received after the applicable deadline, proceeds will
be delivered on the next succeeding business day.
Section 3. Disbursement of Escrow Account
(a) Whenever Buyers determine in good faith that they are entitled to payment of
a claim for indemnification under Article VIII of the Purchase Agreement, Buyers
may deliver to Sellers and Escrow Agent a written request (a "Draw-Down
Request") for payment, which request shall set forth in reasonable detail the
nature of each claim for indemnification, the amount payable to Buyers with
respect to each such claim, the total amount payable to Buyers pursuant to the
request and the basis for the determination that Buyers are entitled to the
payment. In addition, the Draw Down Request shall include a statement that the
aggregate amount of Buyers' Losses exceed $100,000.00.
(b) Sellers may object to all or any part of a Draw-Down Request by delivering a
written objection (an "Indemnity Claim Objection") to Buyers and Escrow Agent.
(c) If Sellers fail to deliver an Indemnity Claim Objection to Escrow Agent by
the end of the 10th calendar day following its receipt of a Draw-Down Request,
Escrow Agent will pay to Buyers out of the Escrow Account an amount equal to the
amount requested in the Draw-Down Request. Any payment to Buyers will be made
within two (2) business days following the expiration of said 10 calendar day
period. Escrow Agent will continue to hold any amounts remaining in the Escrow
Account following the payment of any Draw-Down Request in accordance with the
terms of this Agreement. Escrow Agent shall confirm that any Draw-Down Request
delivered to it was simultaneously delivered to Sellers within two (2) Business
Days of Escrow Agent's receipt of such Draw-Down Request.
(d) If Sellers delivera timely Indemnity Claim Objection with respect to all or
any portion of a Draw-Down Request, Escrow Agent will not disburse, and will
continue to hold in the Escrow Account, the disputed portion of the Draw-Down
Request pending:
(i) payment instructions signed by the Sellers and Buyers specifying the
agreement of the parties as to the action to be taken by Escrow Agent regarding
the disputed Draw-Down Request ("Payment Instructions"); or
(ii) a certificate from Buyers or Sellers attesting that the order attached to
the certificate ("Certificate") is a final non-appealable order of a court of
competent jurisdiction, along with a legal opinion by counsel for the presenting
party satisfactory to Escrow Agent to the effect that the order is final and
non-appealable. Escrow Agent shall act on such court order and legal opinion
without further question.
(e) Upon its receipt of Payment Instructions or a Certificate, Escrow Agent will
release from the Escrow Account and pay to Buyers the amount indicated in the
Payment 3 Instructions or the Certificate. Payment will be made within two (2)
Business Days following the date on which the Payment Instructions or the
Certificate is received by Escrow Agent. If the Payment Instructions or the
Certificate indicate that Buyers are not entitled to any portion of the amount
claimed in a Draw-Down Request (a "Discharge Notice"), then Escrow Agent will
continue to hold such amount in the Escrow Account in accordance with the terms
of this Agreement.
(f) Whenever Escrow Agent receives joint written instructions executed by Buyers
and Sellers ("Joint Written Instructions"), it will, within two (2) Business
Days of its receipt of the Joint Written Instructions, act in accordance with
the Joint Written Instructions.
(g) Subject to the provisions of the following sentence, upon the second
Business Day after the date twelve (12) months after the Effective Date (or the
first Business Day following such date in the event such date is not a Business
Day), (the "Final Termination Date"), Escrow Agent will pay to Sellers the
balance of the Escrow Amount (the "Final Escrow Disbursement"). If, however, as
of the Final Termination Date, there are outstanding Draw-Down Requests as to
which Escrow Agent has not received and fully acted upon Payment Instructions, a
Certificate, or a Discharge Notice (each an "Outstanding Claim"), Escrow Agent
will retain and continue to hold in accordance with the terms of this Agreement
an amount equal to the aggregate amount requested in all of the Outstanding
Claims, and will only pay the Final Escrow Disbursement to the extent that the
value of the Escrow Amount exceeds the aggregate amount requested in all of the
Outstanding Claims. Thereafter, Escrow Agent will release funds from the Escrow
Account as and when it receives Payment Instructions, a Certificate, or
Discharge Notice, as applicable, related to the Outstanding Claims, or, to the
extent applicable, in accordance with Section 3(c) of this Agreement.
(h) On the later of (i) the Final Termination Date, or (ii) the date that all
Outstanding Claims have been resolved, Escrow Agent will deliver to the Sellers
the interest earned on the Escrow Amount. All payments made to Sellers hereunder
shall be made in accordance with written payment instructions provided to the
Escrow Agent.
Section 4. Concerning the Escrow Agent Notwithstanding any provision contained
herein to the contrary, the Escrow Agent, including its officers, directors,
employees and agents, shall:
(a) not be liable for any action taken or omitted under this Agreement so long
as it shall have acted in good faith and without gross negligence;
(b) have no responsibility to inquire into or determine the genuineness,
authenticity, or sufficiency of any securities, checks, or other documents or
instruments submitted to it in connection with its duties hereunder;
(c) be entitled to deem the signatories of any documents or instruments
submitted to it hereunder as being those purported to be authorized to sign such
documents or instruments on behalf of the parties hereto, and shall be entitled
to rely upon the genuineness of the signatures of such signatories without
inquiry and without requiring substantiating evidence of any kind;
(d) be entitled to refrain from taking any action contemplated by this Agreement
in the event that it becomes aware of any disagreement between the parties
hereto as to any facts or as to the happening of any contemplated event
precedent to such action;
(e) have no responsibility or liability for any diminution in value of any
assets held hereunder which may result from any investments or reinvestment made
in accordance with any provision which may be contained herein;
(f) be entitled to compensation for its services hereunder as per Exhibit B
attached hereto, which is made a part hereof, and for reimbursement of its
out-of-pocket expenses including, but not by way of limitation, the fees and
costs of attorneys or agents which it may find necessary to engage in
performance of its duties hereunder, all to be paid by Sellers and Buyers upon
execution of this Agreement, and the Escrow Agent shall have, and is hereby
granted, a prior lien upon any property, cash, or assets of the Escrow Account,
with respect to its unpaid fees, nonreimbursed expenses and unsatisfied
indemnification rights, superior to the interests of any other persons or
entities;
(g) be entitled and is hereby granted the right to set off and deduct any unpaid
fees, nonreimbursed expenses or unsatisfied indemnification rights from amounts
on deposit in the Escrow Account;
(h) be under no obligation to invest the deposited funds or the income generated
thereby until it has received a Form W-9 or W-8, as applicable, from Sellers and
Buyers, regardless of whether such party is exempt from reporting or withholding
requirements under the Internal Revenue Code of 1986, as amended;
(i) be, and hereby is, jointly and severally indemnified and saved harmless by
Sellers and Buyers from any and all losses, liabilities, claims, proceedings,
suits, demands, penalties, costs and expenses, including without limitation fees
and expenses of outside and internal counsel and experts and their staffs and
all expenses of document location, duplication and shipment and of preparation
to defend any of the foregoing ("Losses"), which may be incurred by it as a
result of its execution, delivery or performance of this Agreement, unless such
Losses shall have been finally adjudicated to have been primarily caused by the
bad faith or gross negligence of the Escrow Agent, and the provisions of this
section shall survive the resignation or removal of the Escrow Agent and the
termination of this Agreement;
(j) in the event that (i) any dispute shall arise between the parties with
respect to the disposition or disbursement of any of the assets held hereunder
or (ii) the Escrow Agent shall be uncertain as to how to proceed in a situation
not explicitly addressed by the terms of
this Agreement whether because of conflicting demands by the other parties
hereto or otherwise, the Escrow Agent shall be permitted to interplead all of
the assets held hereunder into a court of competent jurisdiction, and thereafter
be fully relieved from any and all liability 5 or obligation with respect to
such interpleaded assets. The parties hereto other than the Escrow Agent further
agree to pursue any redress or recourse in connection with such a dispute,
without making the Escrow Agent a party to same;
(k) have only those duties as are specifically provided herein, which shall be
deemed purely ministerial in nature, and shall under no circumstance be deemed a
fiduciary for any of the parties to this Agreement. The Escrow Agent shall
neither be responsible for, nor chargeable with, knowledge of the terms and
conditions of any other agreement, instrument or document between the other
parties hereto, in connection herewith, including without limitation the
Purchase Agreement. This Agreement sets forth all matters pertinent to the
escrow contemplated hereunder, and no additional obligations of the Escrow Agent
shall be inferred from the terms of this Agreement or any other Agreement. IN NO
EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY SPECIAL,
INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND WHATSOEVER (INCLUDING
BUT NOT LIMITED TO LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION;
(l) have the right, but not the obligation, to consult with counsel of choice
and shall not be liable for action taken or omitted to be taken by Escrow Agent
in good faith in accordance with the advice of such counsel; if the Escrow Agent
becomes involved in litigation on account of this Agreement, it shall have the
right to retain counsel and shall have a first lien on the property deposited
hereunder for any and all costs, attorneys' fees, charges, disbursements, and
expenses in connection with such litigation; and shall be entitled to reimburse
itself therefor out of the property deposited hereunder, and if it shall be
unable to reimburse itself from the property deposited hereunder, the parties
hereto jointly and severally agree to pay to the Escrow Agent on demand its
reasonable charges, counsel and attorneys' fees, disbursements, and expenses in
connection with such litigation; and
(m) have the right to perform any of its duties hereunder through agents,
attorneys, custodians or nominees.
Any banking association or corporation into which the Escrow Agent may be
merged, converted or with which the Escrow Agent may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Escrow Agent shall be a party, or any banking association or corporation to
which all or substantially all of the corporate trust business or escrow
business of the Escrow Agent shall be transferred, shall succeed to all the
Escrow Agent's rights, obligations and immunities hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 5. Attachment of Escrow Fund; Compliance with Legal Orders
In the event that any escrow property shall be attached, garnished or levied
upon by any court order, or the delivery thereof shall be stayed or enjoined by
an order of a court, or any order, judgment or decree shall be made or entered
by any court order affecting the property 6 deposited under this Agreement, the
Escrow Agent is hereby expressly authorized, in its sole discretion, to obey and
comply with all writs, orders or decrees so entered or issued, which it is
advised by legal counsel of its own choosing is binding upon it, whether with or
without jurisdiction, and in the event that the Escrow Agent obeys or complies
with any such writ, order or decree it shall not be liable to any of the parties
hereto or to any other person, firm or corporation, by reason of such compliance
notwithstanding such writ, order or decree be subsequently reversed, modified,
annulled, set aside or vacated.
Section 6. Tax Matters
(a) Reporting of Income. The Escrow Agent shall report to the Internal Revenue
Service, as of each calendar year-end, all income earned from the investment of
any sum held in the Escrow Account against Sellers, whether or not said income
has been distributed during such year, as and to the extent required by law.
(b) Preparation and Filing of Tax Returns. Any tax returns required to be
prepared and filed will be prepared and filed by Sellers with the Internal
Revenue Service in all years income is earned, whether or not income is received
or distributed in any particular tax year, and Escrow Agent shall have no
responsibility for the preparation and/or filing or any tax return with respect
to any income earned by the Escrow Account.
(c) Payment of Taxes. Any taxes payable on income earned from the investment of
any sums held in the Escrow Account shall be paid by Sellers, regardless whether
or not the income was distributed by the Escrow Agent during any particular
year.
Section 7. Resignation or Removal of Escrow Agent
The Escrow Agent may resign as such following the giving
of thirty (30) days prior written notice to the other parties hereto. Similarly,
the Escrow Agent may be removed and replaced following the giving of thirty (30)
days prior written notice to the Escrow Agent by the other parties hereto. In
either event, the duties of the Escrow Agent shall terminate thirty (30) days
after receipt of such notice (or as of such earlier date as may be mutually
agreeable); and the Escrow Agent shall then deliver the balance of the moneys or
assets then in its possession to a successor escrow agent as shall be appointed
by the other parties hereto as evidenced by a written notice filed with the
Escrow Agent.
If the other parties hereto have failed to appoint a successor prior to the
expiration of thirty (30) days following receipt of the notice of resignation or
removal, the Escrow Agent may appoint a successor or petition any court of
competent jurisdiction for the appointment of a successor escrow agent or for
other appropriate relief, and any such resulting appointment shall be binding
upon all of the parties hereto.
Section 8. Termination
The Escrow Agent shall deliver the full balance and proceeds of the Escrow
Account as provided in Section 3 above, or upon, and pursuant to, the joint
written instructions of Sellers 7 and Buyers. Upon delivery of all proceeds of
the Escrow Account by the Escrow Agent, this Escrow Agreement shall terminate.
Section 9. Notices
Any notice, consent or request to be given in connection with any of the terms
or provisions of this Agreement shall be in writing and be given in person, by
facsimile transmission, courier delivery service or by mail, and shall become
effective (a) on delivery if given in person, (b) on the date of delivery if
sent by facsimile or by courier delivery service, or (c) four business days
after being deposited in the mails, with proper postage for first-class
registered or certified mail, prepaid. Notwithstanding the above, in the case of
communications delivered to the Escrow Agent whereby the Escrow Agent must act
based on a specified number of days upon its receipt of such communication, if
applicable, such communications shall be deemed to have been given on the date
received by the Escrow Agent. Notice given by Almost Family, Inc. shall be
deemed to constitute notice given by each Seller for purposes of this Agreement.
Notice given by Active Service Corporation shall be deemed to constitute notice
given by each Buyer for purposes of this Agreement.
Notices shall be addressed as follows:
(i) If to Buyers:
Active Service Corporation
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxx Xxxxxxx
President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) If to Sellers:
c/o Almost Family, Inc.
0000 Xxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx,
Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and:
Xxxxx Xxxxx Xxxx LLC
000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iii) If to the Escrow Agent
X.X. Xxxxxx Trust Company, National Association
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxx
Institutional Trust Services
Fax Number: 312/000-0000
Section 10. Governing Law, Counterparts
This Agreement shall be construed in accordance with the laws of the State of
Delaware. It may be executed in several counterparts, each one of which shall
constitute an original and all collectively shall constitute but one instrument.
Section 11. Amendment, Modification or Waiver
This Agreement may be amended or modified and any term of this Agreement may be
waived if such amendment, modification or waiver is in writing and signed by all
parties.
Section 12.
Assignments of Interests No assignment of the interest of any of the parties
hereto shall be binding upon the Escrow Agent unless and until written notice of
such assignment shall be delivered to and acknowledged by the Escrow Agent.
Section 13. Force Majeure
Notwithstanding any other provision of this Agreement, the Escrow Agent shall
not be obligated to perform any obligation hereunder and shall not incur any
liability for the nonperformance or breach of any obligation hereunder to the
extent that the Escrow Agent is 9 delayed in performing, unable to perform or
breaches such obligation because of acts of God, war, terrorism, fire, floods,
strikes, electrical outages, equipment or transmission failures, or other causes
reasonably beyond its control.
Section 14. IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING
A NEW ACCOUNT
To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account. When an
account is opened, we will ask for information that will allow us to identify
relevant parties.
IN WITNESS WHEREOF, the parties have been duly executed this Escrow Agreement
as of the date first above written.
SELLER ENTITIES:
ALMOST FAMILY, INC.
By:
Name:
Title:
CARETENDERS OF CINCINNATI, INC.
By:
Name:
Title:
ADULT DAY CARE OF MARYLAND,
INC.,
By:
Name:
Title:
CARETENDERS OF COLUMBUS, INC.
By:
Name:
Title:
CARETENDERS OF NEW JERSEY, INC.
By:
By:
Name:
Title:
CARETENDERS OF SOUTHWEST
FLORIDA, INC.
By:
Name:
CARETENDERS OF WEST PALM
BEACH, INC.
By:
Name:
Title:
ADULT DAY CARE OF LOUISVILLE,
INC.
By:
Name:
Title:
BUYER ENTITIES:
ACTIVE SERVICE CORPORATION
By:
Name:
Title:
ACTIVE DAY FL., INC.
By:
Name:
Title:
ACTIVE DAY OH., INC.
By:
Name:
Title:
ACTIVE DAY MD., INC.
By:
Name:
Title:
ACTIVE DAY KY., INC.
By:
Name:
Title:
ACTIVE DAY FLEET, INC.
By:
Name:
Title:
X.X. Xxxxxx Trust Company,
National Association, as Escrow Agent
By _____________________________
Its
EXHIBIT A
TELEPHONE NUMBERS AND DESIGNATED PERSONS
TO CONFIRM FUNDS TRANSFER INSTRUCTIONS
If to Sellers:
Name Signature Telephone Number
1. ____________________ ______________________ _______________
2. ____________________ ______________________ _______________
If to Buyers:
Name Signature Telephone Number
1. ____________________ ______________________ _______________
2. ____________________ ______________________ _______________
EXHIBIT B
SCHEDULE OF ESCROW AGENT FEES
Schedule of Fees
Escrow Agent Services
New Account Acceptance Fee . . . . . . . . . . . . . . . . . . . . .waived
Payable upon Account Opening
Minimum Administrative Fee . . . . . . . . . . . . . . . . . . . . .$2,000
Payable Upon Account Opening and in Advance
each year in which we act as Escrow Agent
A New Account Acceptance Fee will be charged for the Bank's review of the Escrow
Agreement along with any related account documentation. The account will be
invoiced in the month in which the account is opened and annually thereafter.
Payment of the invoice is due 30 days following receipt.
The Administrative Fee will cover a maximum of ten (10) annual administrative
hours for the Bank's standard Escrow services including account setup,
safekeeping of assets, investment of funds, collection of income and other
receipts, preparation of statements comprising account activity and asset
listing, and distribution of assets in accordance with the specific terms of the
Escrow Agreement. These fees cover a full year, or any part thereof, and thus
are not prorated in the year of termination.
Extraordinary Services and Out-of Pocket Expenses:
Any additional services beyond our standard services as specified above, such as
annual administrative activities in excess of ten (10) hours and all reasonable
out-of-pocket expenses including attorney's fees will be considered
extraordinary services for which related costs, transaction charges, and
additional fees will be billed at the Bank's standard rate.
Modification of Fees:
Circumstances may arise necessitating a change in the foregoing fee schedule.
The Bank will attempt at all times, however, to maintain the fees at a level
that is fair and reasonable in relation to the responsibilities assumed and the
duties performed.
Disclosure & Assumptions:
o
The escrow deposit shall be continuously invested in the JPMorgan Chase Bank
Money Market Account, or if directed otherwise, Escrow Agent shall execute
purchases and sales of investments through the facilities of its own trading or
capital markets operations or those of any affiliated entity. o To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens an account. When an account is
opened, we will ask for information that will allow us to identify relevant
parties.
