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ASSET PURCHASE AGREEMENT
Between
MEDIQ/PRN LIFE SUPPORT SERVICES, INC.
As Buyer
and
NATIONAL PATIENT CARE SYSTEMS, INC.
As Seller
and
MR. XXXXX XXXXXXX
and
XX. XXXXXXX XXXXXX
Dated as of June 26, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I SALE AND PURCHASE OF ASSETS...............................................................1
1.1 Purchased Assets to be Transferred.....................................................1
1.2 Excluded Assets........................................................................3
1.3 Delivery...............................................................................3
ARTICLE II CONSIDERATION............................................................................4
2.1 Purchase Price.........................................................................4
2.2 Obligations and Liabilities to be Assumed..............................................5
2.3 Excluded Liabilities...................................................................5
2.4 Employees..............................................................................6
ARTICLE III CLOSING.................................................................................7
3.1 Closing................................................................................7
3.2 Deliveries by Seller at the Closing....................................................7
3.3 Deliveries by Buyer at the Closing.....................................................8
3.4 Deliveries by Selling Shareholders at the Closing......................................9
ARTICLE IV TERMINATION..............................................................................9
4.1 Termination............................................................................9
4.2 Effect of Termination.................................................................10
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER AND SELLING SHAREHOLDERS........................10
5.1 Incorporation; Authority..............................................................10
5.2 Due Authorization; Binding Agreement..................................................10
5.3 No Violation or Conflict..............................................................11
5.4 Title to Assets.......................................................................11
5.5 Taxes.................................................................................11
5.6 Licenses..............................................................................12
5.7 Intellectual Property Rights..........................................................12
5.8 Litigation............................................................................13
5.9 Financial Statements..................................................................13
5.10 Labor Matters........................................................................13
5.11 Compliance with Laws.................................................................14
5.12 Employee Benefit Plans...............................................................17
5.13 Insurance............................................................................18
5.14 Consents and Approvals...............................................................19
5.15 Contracts; Compliance................................................................19
5.16 Real Property........................................................................19
5.17 Inventory and Equipment..............................................................19
5.18 Condition of Purchased Assets........................................................20
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5.19 No Undisclosed Liabilities...........................................................20
5.20 Business Locations...................................................................20
5.21 Billing; Gratuitous Payments.........................................................20
5.22 Fraud and Abuse......................................................................21
5.23 Reimbursement Matters................................................................21
5.24 Medicare/Medicaid Participation......................................................22
5.25 Ownership............................................................................22
5.26 Absence of Changes...................................................................22
5.27 Compensation Arrangements............................................................23
5.28 Disclosure...........................................................................23
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER.................................................23
6.1 Incorporation; Authority..............................................................23
6.2 Due Authorization; Binding Agreement..................................................24
ARTICLE VII COVENANTS..............................................................................24
7.1 Covenants of Seller and Selling Shareholders Pending Closing..........................24
7.2 Covenants of Buyer Pending Closing....................................................25
7.3 Full Access and Due Diligence Investigation...........................................25
7.4 Post-Closing Covenants................................................................26
7.5 Confidential Information..............................................................27
7.6 Condemnation..........................................................................28
7.7 Use of Name...........................................................................28
7.8 Release and Waiver....................................................................28
7.9 Third-Party Payments..................................................................28
7.10 Books and Records....................................................................28
7.11 May 31, 1998 Financial Statements....................................................28
7.12 Third Party Provider Agreements......................................................29
ARTICLE VIII CONDITIONS............................................................................29
8.1 Conditions Precedent to Obligations of Buyer..........................................29
8.2 Conditions Precedent to Obligations of Seller.........................................31
ARTICLE IX MISCELLANEOUS...........................................................................31
9.1 Binding Effect........................................................................31
9.2 Notices...............................................................................32
9.3 Entire Agreement, Amendments, Etc.....................................................32
9.4 Nature and Survival of Representations................................................33
9.5 Risk of Loss or Damage; Insurance.....................................................33
9.6 Waiver................................................................................33
9.7 Governing Law.........................................................................33
9.8 Expenses..............................................................................33
9.9 Headings..............................................................................34
9.10 Counterparts.........................................................................34
9.11 Severability.........................................................................34
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9.12 Time is of the Essence...............................................................34
9.13 Brokers or Finders...................................................................34
9.14 Indemnification by Seller and Selling Shareholders...................................34
9.15 Indemnification by Buyer.............................................................36
9.16 Procedure for Indemnification........................................................36
9.17 Equitable Relief.....................................................................37
9.18 Bulk Transfers.......................................................................37
9.19 Third Party Beneficiaries............................................................37
9.20 Jurisdiction and Process.............................................................38
9.21 Interpretation.......................................................................38
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SCHEDULES
Schedule 1.1.1 Rental and Sales Inventory
Schedule 1.1.2 Other Inventory
Schedule 1.1.3 Hardware and Software
Schedule 1.1.4 Vehicles
Schedule 1.1.6 Contracts of the Business
Schedule 1.1.6.1 Assumed Contracts
Schedule 1.1.7 Intellectual Property Rights
Schedule 1.1.8 Warranty Rights
Schedule 1.1.9 Licenses
Schedule 1.1.11 Consents
Schedule 1.2.2 Real Estate
Schedule 1.3 Procedures for Transfer of Purchased Assets
Schedule 2.4.1 Assumed Liabilities
Schedule 5.2 Shareholder and Board Approval
Schedule 5.3 Violations or Conflicts
Schedule 5.4 Title
Schedule 5.6 License Exceptions
Schedule 5.8 Litigation
Schedule 5.10 Labor Matters
Schedule 5.11 Environmental Matters
Schedule 5.12.1 Benefit Plans
Schedule 5.12.3 Exceptions
Schedule 5.13 Insurance
Schedule 5.14 Consents and Approvals
Schedule 5.15 Contracts; Compliance
Schedule 5.16 Real Property
Schedule 5.19 Undisclosed Liabilities
Schedule 5.20 Business Locations
Schedule 5.21 Billing Matters
Schedule 5.22 Fraud and Abuse
Schedule 5.23 Reimbursement
Schedule 5.24 Medicare/Medicaid Approvals
Schedule 5.26 Absence of Changes
Schedule 5.27 Compensation
Schedule 7.4.3 Allocation of Purchase Price
Schedule 7.9 Allocation of Third-Party Payments
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EXHIBITS
Exhibit A Escrow Agreement
Exhibit B Supply Agreement
Exhibit C Xxxx of Sale
Exhibit D Certificate of Officer of Seller
Exhibit E-1 Sublease Agreement
Exhibit E-2 License Agreement
Exhibit F Opinion of Seller's Counsel
Exhibit G Certificate of Officer of Buyer
Exhibit H Opinion of Buyer's Counsel
Exhibit I Non-Competition and Confidentiality Agreement for Xxxxx Xxxxxxx
Exhibit J Non-Competition and Confidentiality Agreement for Xxxxxxx Xxxxxx
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ASSET PURCHASE AGREEMENT
This Agreement, dated as of June 26, 1998 (the "Agreement"), is entered
into among Mediq/PRN Life Support Services, Inc., a Delaware corporation
("Buyer"), National Patient Care Systems, Inc., a Delaware corporation
("Seller"), and Xxxxx Xxxxxxx ("Xx. Xxxxxxx") and Xxxxxxx Xxxxxx ("Xx. Xxxxxx").
Xx. Xxxxxxx and Xx. Xxxxxx are sometimes individually referred to herein as a
"Selling Shareholder" and collectively referred to herein as the "Selling
Shareholders".
P R E A M B L E:
WHEREAS, Selling Shareholders own all of the issued and outstanding
capital stock of Seller;
WHEREAS, Seller is engaged, inter alia, in the business of renting,
leasing and selling therapeutic support surfaces (the "Business"), provided,
however, that the Business shall not include selling, renting and leasing
aesthetic treatment equipment, the sale of support surfaces to dealers that
service the home care market or the development or marketing of disease
management programs (the "Retained Businesses"); and
WHEREAS, Buyer desires to buy, through the payment of cash and the
assumption of certain liabilities of Seller, and Seller desires to sell certain
assets and property owned by Seller upon the terms and conditions hereinafter
set forth;
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants contained in this Agreement and intending to be legally bound hereby,
agree as follows:
ARTICLE I
SALE AND PURCHASE OF ASSETS
1.1 Purchased Assets to be Transferred. Subject to the terms and
conditions of this Agreement, Seller hereby agrees to sell, assign, convey,
transfer and deliver to Buyer at the Closing (as defined in Section 3.1), and
Buyer hereby agrees to purchase from Seller at the Closing, all of the Seller's
right, title and interest in and to all of the assets owned or used by Seller in
connection with or relating to the Business, whether tangible or intangible,
whether real or personal and wherever located (other than the Excluded Assets as
defined in Section 1.2) (the "Purchased Assets"), free and clear of all
mortgages, pledges, liens, claims, restrictions, encumbrances and security
interests of any kind or nature, except as otherwise described in Schedule 5.4
(the "Permitted Exceptions"), including without limitation, the following:
1.1.1 Rental and Sales Inventory. All of Seller's equipment held for
sale, lease or rental in connection with the Business, including, without
limitation, the equipment
described in Schedule 1.1.1 (which shall include the beds sold under the
trademark Skytron (the "Skytron Beds")).
1.1.2 Other Inventory. All of Seller's inventory, materials,
supplies, spare parts, biomedical tools and all other tools used in connection
with the equipment described in Section 1.1.1 or otherwise used in the Business,
including, without limitation, those described in Schedule 1.1.2.
1.1.3 Equipment. All of Seller's computer hardware and software,
printers and other data processing equipment used, useful or held for use in
third-party billing of the Business, including, without limitation, those
described in Schedule 1.1.3.
1.1.4 Vehicles. All vehicles as described in Schedule 1.1.4.
1.1.5 Intentionally Omitted.
1.1.6 Contracts and Leases. (i) All of the Seller's right, title and
interest in and to the contracts and leases for personal property relating to
the Business to which Seller is a party, all of which are identified (and
designated as a personal property lease or other contract) in Schedule 1.1.6 and
Schedule 5.4 (the "Contracts"), in each case solely to the extent that (a) all
rights thereto are assignable by Seller and any consents required in connection
therewith have been obtained by Seller (provided that Buyer may elect to
purchase contracts with respect to which consents have not been obtained) and
(b) Buyer in its sole discretion elects to assume such contracts or leases
(collectively, the "Assumed Contracts"). Schedule 1.1.6.1 is a list of the
Assumed Contracts.
(ii) With respect to any such contract or lease with respect
to which any required consent to assignment has not been obtained, after the
Closing the parties shall cooperate with each other upon written request, (a) in
endeavoring to obtain the requisite third party consent(s) to the assignment
thereof to Buyer, without either party being obligated, however, to make any
payment to such third party which is not otherwise due in order to obtain such
consent, unless, Buyer shall make such payment or agree to reimburse Seller for
such payment, and (b) if any such requisite consent cannot be obtained, in
endeavoring to obtain for Buyer an arrangement designed to provide for Buyer the
benefits and obligations thereof in some other manner.
1.1.7 Intellectual Property. All Seller's right, title and interest
in and to all trademarks, tradenames, service marks, copyrights, proprietary
information (including, without limitation, such information for nurses),
patents and any other forms of intellectual property (whether or not registered)
and all applications and registrations therefor which are owned or used by
Seller in the Business, including, but not limited to, those described in
Schedule 1.1.7 (with the Marks, the "Intellectual Property Rights"), and the
exclusive right to use the name "National Patient Care Systems, Inc." and any
variants or derivations thereof, including but not limited to those listed on
Schedule 1.1.7 (the "Marks"), together with all goodwill
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pertaining thereto; provided, however, that all right title and interest in and
to the xxxx "Support the Healing Process" shall be retained by Seller.
1.1.8 Warranty Rights. All rights of Seller, if any, relating to or
arising out of manufacturers' and vendors' express or implied warranties with
respect to any of the Purchased Assets, and all causes of action arising
therefrom, including, without limitation, those described in Schedule 1.1.8.
1.1.9 Licenses. All Seller's right, title and interest in and to the
Licenses, as defined in Section 5.6, including but not limited to those
specified in Schedule 1.1.9.
1.1.10 Goodwill. All of the goodwill and going concern value of
Seller relating to the Business.
1.1.11 Consents. All Seller's right, title and interest in and to
consents, licenses, permits, certifications, and approvals granted by any
non-governmental third party, including but not limited to those listed in
Schedule 1.1.11 (collectively, the "Consents").
1.2 Excluded Assets. The Excluded Assets shall not be conveyed
hereunder. The "Excluded Assets" means:
1.2.1 any rights of Seller under any agreement to which Seller is a
party which is not an Assumed Contract;
1.2.2 all real estate identified on Schedule 1.2.2, together with
the building, building improvements and structures erected thereon;
1.2.3 any Licenses or Consents that are not transferable;
1.2.4 any cash of Seller collected prior to Closing with respect to
revenues that have been earned by the Business through the Closing Date;
1.2.5 any accounts receivable;
1.2.6 any assets solely related to (i) the business of aesthetic
treatment equipment; (ii) the sale (but not the rent or leasing) of support
surfaces to dealers that service the home care market and (iii) disease
management programs and the inventory associated therewith; and
1.2.7 all rights of Seller under the real property leases including,
but not limited to, the real property leases set forth in Schedule 5.16.
1.3 Delivery. Simultaneously with the Closing, Seller shall deliver to
Buyer physical possession of all the Purchased Assets according to the
procedures set forth in Schedule 1.3.
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ARTICLE II
CONSIDERATION
2.1 Purchase Price. The purchase price payable to Seller in
consideration of the transfer to Buyer of the Purchased Assets and the
non-compete arrangements contemplated hereby shall be the cash portion (the
"Cash Portion") calculated as follows: (a) Buyer shall pay to Seller an amount
equal to Ten Million Seven Hundred Seventy-Eight Thousand One Hundred Fourteen
Dollars ($10,778,114) reduced by the escrow amount of One Million Dollars
($1,000,000) described in Section 2.1(b) hereof; (b) Buyer shall pay to Chase
Manhattan Trust, as Escrow Agent, One Million Dollars ($1,000,000) pursuant to
the terms of an Escrow Agreement substantially in the form of Exhibit A hereto,
to be entered into by Buyer and Seller; (c) Buyer shall pay to Seller one third
(1/3) of the amount equal to 1.44 times the annualized rental revenue for the
Confirmed Caring Healthcare Customers listed on Schedule 2.1(c) based on such
rental revenue for the six (6) month period ending April 30, 1999; provided,
however, that the amount paid to Seller pursuant to this subsection (c) shall
not exceed One Million Three Hundred Ninety-Four Thousand Nine Hundred Seventy
Dollars ($1,394,970); and (d) Buyer shall pay to Seller one third (1/3) of the
amount equal to 1.44 times the annualized rental revenue for the Confirmed
Caring Healthcare Customers listed on Schedule 2.1(d) based on such rental
revenue for the six (6) month period ending April 30, 2000; provided, however,
that the amount paid to Seller pursuant to this subsection (d) shall not exceed
One Million Three Hundred Ninety-Four Thousand Nine Hundred Seventy Dollars
($1,394,970). In addition to the Cash Portion of the purchase price set forth
above, Buyer shall assume certain liabilities of Seller in accordance with
Section 2.2 hereof (the assumption of the liabilities together with the Cash
Portion is hereinafter referred to as the "Purchase Price").
2.1.1 Delivery of Purchase Price. The Purchase Price shall be paid
by wire transfer, bank, cashier's or certified check as follows:
(a) The payments referred to in subsections (a) and (b) of
Section 2.1 shall be paid on the Closing Date to the Seller or Escrow Agent, as
applicable, and are hereinafter referred to collectively as the "Closing Cash
Payment."
(b) No later than forty-five (45) days after the first
anniversary of the Closing Date, Buyer shall deliver to Seller a statement
setting forth the calculation of the Purchase Price to be paid pursuant to
Section 2.1(c) together with such payment. If Seller provides to Buyer written
notice within fifteen (15) days of delivery of such statement of any
disagreement it has regarding Buyer's calculation, then the parties shall meet
to negotiate in good faith to resolve any disagreement to their mutual
satisfaction.
(c) No later than forty-five (45) days after the second
anniversary of the Closing Date, Buyer shall deliver to Seller a statement
setting forth the calculation of the Purchase Price to be paid pursuant to
Section 2.1(d) together with such payment. If Seller provides to Buyer written
notice within fifteen (15) days of delivery of such
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statement, then the parties shall meet to negotiate in good faith to resolve any
disagreement to their mutual satisfaction.
2.1.2 No later than fifteen (15) days from the date hereof, Seller
shall deliver to Buyer a report of revenue activity relating to the Business for
the period June 27, 1998 through June 30, 1998. Seller agrees that all payments
made by customers attributable to the revenue generated during such period shall
be remitted to Buyer within two (2) business days following the receipt by
Seller thereof.
2.2 Obligations and Liabilities to be Assumed. Buyer shall not assume or
be liable for any claim, liability or obligation of Seller, whether known or
unknown, fixed or contingent, accrued or unaccrued, except for the liabilities
specifically assumed by Buyer under this Section 2.2. At the Closing, as defined
in Section 3.1, Buyer shall assume only the obligations or liabilities arising
under each Assumed Contract set forth on Schedule 1.1.6.1, but only to the
extent such obligations or liabilities arise after the Closing Date, as defined
in Section 3.1, and only to the extent such obligations or liabilities are not
attributed to or associated with any breach of or default under such Assumed
Contract on or prior to the Closing Date or the breach of any representation or
warranty made hereunder by Seller or by a Selling Shareholder. Effective as of
the Closing, Buyer shall assume and be responsible for the payment of all
accrued vacation owed by Seller to the Transferred Employees (as defined in
Section 2.4) but only in the amount set forth in Schedule 2.4.1. Except with
respect to the Assumed Liabilities, as defined below, Buyer does not hereby and
shall not assume or in any way undertake to pay, perform, satisfy or discharge
any liabilities or obligations of Seller, and Seller agrees to pay and satisfy
when due any such liabilities and obligations not assumed by Buyer, including
the Excluded Liabilities (as defined in Section 2.3). The obligations and
liabilities to be assumed by Buyer pursuant to this Section 2.2 are hereinafter
sometimes referred to as the "Assumed Liabilities."
2.3 Excluded Liabilities. The Buyer shall assume only the Assumed
Liabilities and all other liabilities and obligations of the Seller (the
"Excluded Liabilities") shall be retained by Seller. Without limiting the
foregoing, Seller acknowledges that the following liabilities and obligations
(the "Excluded Liabilities") shall not be assumed by Buyer and shall be paid by
Seller: (i) transactions of Seller occurring after the Closing or obligations of
Seller incurred or arising after the Closing, (ii) liabilities or obligations of
Seller arising out of or in connection with the Retained Businesses or the
Excluded Assets, (iii) any obligations of Seller for expenses, taxes or fees
incident to or arising out of the negotiation, preparation, approval or
authorization of this Agreement or the consummation of the transactions
contemplated hereby, including, without limitation, all attorneys' fees and all
brokers or finders fees or commissions payable by Seller, (iv) any obligation of
Seller under or arising out of this Agreement, (v) liabilities against which
Seller is insured or otherwise indemnified or which would have been covered by
insurance (or indemnification) but for a claim by the insurer (or the
indemnitor) that the insured (or the indemnitees) had breached its obligations
under the policy of insurance (or the contract of indemnity) or had committed
fraud in the insurance application, (vi) any liability or obligation of Seller
to any past or present subsidiary or affiliate, (vii) any liabilities or
obligations, the existence of which constitute a breach of the representations,
warranties or
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covenants of Seller contained in this Agreement, (viii) any liability or
obligation arising out of or related to Seller's or the Business's failure to
comply with all applicable laws, regulations, orders, judgments, decrees (or the
failure so to comply of any affiliate of Seller) with respect to the Business,
or the policies of any third party payor on or prior to the Closing Date,
including, but not limited to, any such violation or failure (or alleged
violation or failure) under ss.ss.1320a-7, 1320a-7a, 1320a-7b or 139nn of Title
42 of the United States Code or the regulations promulgated thereunder, or
similar state or local statutes or regulations, applicable statutes, regulations
or ethical codes governing professional conduct, (ix) liabilities and
obligations (whether fixed or contingent) with respect to employment,
termination of employment, compensation or employee benefits of any nature
(including, but not limited to the benefits to be provided under the Benefit
Plans, as defined in Section 5.12) owed to any employee or former employee of
Seller (or the beneficiary of any employee or former employee) that arises out
of or relates to the employment relationship between Seller and any such
employee or former employee or the termination of such relationship, (x) any
obligations or liabilities of Seller to indemnify its officers, directors,
employees or agents, (xi) any liability, direct, indirect or contingent, for
federal, state or local taxes, or interest or penalties thereon, imposed on
Seller by reason of, or in connection with, the transactions contemplated by
this Agreement, (xii) all federal, state, local, foreign and other governmental
taxes imposed on Seller, including any tax of any other corporation which tax is
assessed against Seller by virtue of its status, prior to the Closing Date, as a
member of any consolidated group of which such other corporation was also a
member, (xiii) any liability or obligation under or related to the litigation
described in Schedule 5.8, as well as any judgment, decision, appeal, remedy or
settlement relating thereto or (xiv) any Environmental Liabilities, as defined
below.
2.4 Employees.
2.4.1 Schedule 2.4.1 identifies all active employees of Seller as of
the date of this Agreement by name, location, title or function, date of hire
and social security number. Seller shall update Schedule 2.4.1 as of the day
prior to Closing and shall include on the updated Schedule 2.4.1 each employees'
accrued but unused vacation and the amount owed to each employee in respect
thereof. Seller acknowledges and agrees that Buyer has no obligation to employ
any current or former employee of Seller following the Closing and is not
assuming any liability, cost or expense with respect thereto. In furtherance and
not in limitation of the foregoing, Seller understands and agrees that Buyer may
decide in its sole and absolute discretion to employ certain employees of Seller
following the Closing with such benefits (including vacation, pension, insurance
and severance benefits) as Buyer may adopt from time to time in its sole and
absolute discretion and no such act of Buyer shall be construed as an assumption
by Buyer of any of obligations of Seller in connection with any employee,
whether incurred before or after the Closing Date, other than as set forth in
Section 2.2. Any employee of Seller who receives and accepts an offer of
employment from Buyer shall be hereinafter referred to as a "Transferred
Employee."
2.4.2 In the event that Buyer shall desire to hire any of Seller's
employees, Seller agrees to use its best efforts to assist Buyer in hiring such
employee.
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2.4.3 For purposes of eligibility and vesting in any employee
benefit plan of the Buyer for which a Transferred Employee otherwise becomes
eligible, such Transferred Employee shall be given credit under such plan for
all service prior to the Closing with Seller. Nothing contained in this
Agreement shall confer upon any Transferred Employee any right with respect to
employment by Buyer, nor shall anything herein interfere with the right of
Buyer, following any employment of any Transferred Employee, to terminate the
employment of any such Transferred Employee at any time, with or without cause,
or restrict Buyer in the exercise of its independent business judgment in
modifying any of the terms and conditions of the employment of any such
Transferred Employee.
ARTICLE III
CLOSING
3.1 Closing. The completion of the purchase and sale of the Purchased
Assets (the "Closing") shall take place at the offices of Dechert Price &
Xxxxxx, 4000 Xxxx Atlantic Tower, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, XX at 3:00
p.m. on Friday, June 26, 1998, or on such other date, time or place as may be
mutually agreed to in writing by the parties (the "Closing Date"). The
transactions hereunder shall be effective as of 11:59 p.m., on the Closing Date
or such other time and date as the parties may mutually agree.
3.2 Deliveries by Seller at the Closing.
At the Closing, Seller shall deliver or cause to be delivered to Buyer
the following:
3.2.1 The Supply Agreement, executed by Seller, substantially in the
form of Exhibit B hereto.
3.2.2 Such documents of transfer and assignment required to transfer
title to the Purchased Assets to Buyer duly executed by Seller, including
without limitation:
(i) A Xxxx of Sale and Assignment substantially in the form of
Exhibit C hereto;
(ii) An assignment of all transferable or assignable licenses,
permits and warranties relating to the Purchased Assets and of any trademarks,
trade names, patents and the like, duly executed and in recordable form;
(iii) A non-competition agreement with Xxxx Xxxxxxx for a
period of two (2) years on the terms and conditions satisfactory to Buyer; and
(iv) Such other instruments of conveyance as shall, in the
reasonable opinion of Buyer and its counsel, be necessary to vest in Buyer good,
valid and marketable title to the Purchased Assets in accordance with Section
5.4.
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3.2.3 A copy of the Certificate of Incorporation of Seller, as
amended to the Closing Date, certified by its Secretary and the Secretary of
State of the State of Delaware and including an amendment changing the name of
Seller to a name unrelated to "National Patient Care Systems, Inc."
3.2.4 Long form tax and corporate good standing certificate from the
Secretary of State of the State of Delaware, dated no earlier than five (5) days
prior to the Closing Date.
3.2.5 An officer's certificate, substantially in the form as set
forth in Exhibit D, certifying as to the satisfaction of the conditions set
forth in Sections 8.1.1 and 8.1.2.
3.2.6 A Sublease Agreement and a License Agreement executed by
Seller and Buyer in respect of the real property leased by Seller at the South
Hackensack, New Jersey facility, each attached substantially in the form of
Exhibits E-1 and E-2 hereto and evidence satisfactory to Buyer and Buyer's
counsel of the landlord's consent to such Agreements.
3.2.7 The opinion of Xxxxx Berenbroick, L.L.C., dated the Closing
Date in form and substance satisfactory to Buyer, to the effects set forth in
Exhibit F and with respect to such other matters as Buyer may reasonably
request.
3.2.8 State tax clearance certificates from the City of New York and
each state in which Seller does business, sufficient to establish that Buyer
shall have no obligation to withhold any consideration payable to Seller
hereunder. If Seller has not obtained the state tax clearance certificates
required pursuant to this Section 3.2.8 prior to the Closing Date, Buyer at its
sole election may waive the obtaining of such certificates as a condition to
Closing; provided, however, that in the event Buyer waives such condition to
Closing, Buyer and Seller agree to hold in escrow such amount as the parties may
agree to prior to the Closing Date and pursuant to the terms of an Escrow
Agreement, substantially in the form of Exhibit A hereto to be entered into by
Buyer and Seller.
3.3 Deliveries by Buyer at the Closing.
At the Closing, Buyer shall deliver or cause to be delivered to Seller
the following:
3.3.1 the Closing Cash Payment pursuant to Section 2.1.
3.3.2 the Supply Agreement executed by Buyer, substantially in the
form of Exhibit B hereto.
3.3.3 Certified resolutions of the Board of Directors of Buyer
authorizing the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein.
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3.3.4 Such documents required for the assumption of obligations in
accordance with Section 2.2, duly executed by Buyer.
3.3.5 A list of the Contracts that Buyer elects to include within
the Assumed Contracts.
3.3.6 A Sublease Agreement and a License Agreement executed by Buyer
and Seller in respect of the real property leased by Seller at the South
Hackensack, New Jersey facility, each attached substantially in the form of
Exhibits E-1 and E-2 hereto.
3.3.7 An officer's certificate, substantially in the form as set
forth in Exhibit G, certifying as to the satisfaction of the conditions set
forth in Sections 8.2.1 and 8.2.2.
3.3.8 The opinion of Dechert Price & Xxxxxx, dated the Closing Date
in form and substance satisfactory to Seller to the effect set forth in Exhibit
H and with respect to such other matters as Seller may reasonably request.
3.4 Deliveries by Selling Shareholders at the Closing. At the Closing
the Selling Shareholders shall deliver or cause to be delivered to the Buyer
following:
3.4.1 Xxxxx Xxxxxxx shall deliver a Non-Competition and
Confidentiality Agreement, executed by him, substantially in the form of
Exhibit I.
3.4.2 Xxxxxxx Xxxxxx shall deliver a Non-Competition and
Confidentiality Agreement, executed by her, substantially in the form of
Exhibit J.
ARTICLE IV
TERMINATION
4.1 Termination. This Agreement may be terminated only as follows and in
each case only by written notice:
4.1.1 at any time by mutual written consent of Seller and Buyer;
4.1.2 by either party, if the Closing shall not have occurred by
September 1, 1998;
4.1.3 by Seller on the one hand or Buyer on the other, if the other
party shall be in breach of any covenant, undertaking or restriction contained
herein in any material respect and such breach has not been cured within 10 days
after the giving of written notice to the breaching party of such breach; or
4.1.4 by Buyer at any time, if Buyer notifies Seller that its due
diligence investigation is unsatisfactory pursuant to and in accordance with the
terms of Section 7.3.2.
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4.2 Effect of Termination. In the event of termination of this Agreement
by either Buyer or Seller, in accordance with the applicable provisions above,
this Agreement shall forthwith terminate upon notice thereof duly given in
accordance with the provisions hereof, and there shall be no liability of any
nature on the part of either Buyer or Seller (or their respective officers or
directors) to the other, except for liabilities arising from a breach of this
Agreement prior to such termination; provided, however, that Buyer shall have no
liability of any nature if it terminates this Agreement pursuant to Section
4.1.3; provided, further that this Section 4.2 in no way limits the obligations
of the parties set forth in Sections 9.14, 9.15, 9.16 and 9.17 hereof, which
obligations shall survive the termination. If this Agreement is terminated as
provided herein, Buyer shall, and shall cause its representatives to, either
destroy or redeliver all documents, work papers and other materials of Seller
relating to the transactions contemplated hereby intended by Seller to be
confidential and marked as confidential (other than information which is in or
becomes part of the public domain by publication or otherwise or which has
heretofore been or is hereafter filed or available as public information with
any governmental authority), whether so obtained before or after the execution
hereof, to Seller, and such confidential information received by Buyer shall be
kept confidential, except as required by law.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER AND SELLING SHAREHOLDERS
Seller and each Selling Shareholder hereby, jointly and severally,
represent and warrant to Buyer as follows:
5.1 Incorporation; Authority. Seller (i) is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, (ii) is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the nature of its
business requires such qualification and (iii) has the requisite power and
authority to execute, deliver and perform this Agreement and all other
agreements and instruments required to be executed by Seller in connection with
or pursuant hereto.
5.2 Due Authorization; Binding Agreement. (i) The execution and delivery
by Seller of this Agreement and all other agreements and instruments required to
be executed by Seller in connection with or pursuant hereto and the performance
by Seller of its obligations hereunder and thereunder have been duly authorized
by all necessary corporate action on the part of Seller (including shareholder
approval). Attached hereto as Schedule 5.2 are a copy of the resolutions duly
adopted by the shareholders and board of directors of Seller authorizing the
execution, delivery and performance of this Agreement and all other agreements
and instruments required to be executed by Seller in connection with or pursuant
hereto. This Agreement and all other agreements and instruments required to be
executed by Seller in connection with or pursuant hereto constitute the legal,
valid and binding obligations and acts of Seller enforceable in accordance with
the respective terms thereof, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights
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and remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or equity).
(ii) This Agreement has been duly executed and delivered by
the Selling Shareholders, and, this Agreement and all other agreements and
instruments required to be executed by any Selling Shareholder in connection
herewith or pursuant hereto constitutes the legal, valid and binding obligations
of each such Selling Shareholder, enforceable in accordance with their terms.
5.3 No Violation or Conflict. The execution, delivery and performance of
this Agreement by Seller and by each Selling Shareholder does not, and the
consummation of the transactions contemplated by this Agreement will not, (a)
contravene any provision of the charter or bylaws of Seller, or (b) except as
disclosed on Schedule 5.3, violate, conflict with or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the
cancellation or unilateral modification or amendment of, or accelerate the
performance required by, or result in a right of termination or acceleration
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement, or other instrument or
obligation to which Seller or any Selling Shareholder is a party or to which
Seller or any Selling Shareholder or the properties or assets of any one of them
may be subject, or any judgment, ruling, order, writ, injunction, decree,
determination of any court, governmental agency, commission, board, statute,
rule or regulation applicable to Seller or any Selling Shareholder or the
properties or assets of any one of them, (c) result in the creation of any lien,
security interest, charge, claim, restriction or encumbrance upon any of the
properties, assets, or capital stock of Seller or the properties or assets of
either Selling Shareholder, or (d) result in the maturation or acceleration of
any liability or obligation of Seller (or give others the right to cause such
maturation or acceleration) or (e) result in the termination of or loss of any
right (or give others the right to cause such a termination or loss) under any
contract to which Seller is a party or by which it or any of its assets may be
bound.
5.4 Title to Assets. Except as described in Schedule 5.4 (the "Permitted
Exceptions"), Seller has and, upon the sale contemplated hereby, Buyer will be
vested with, good and marketable title to the Purchased Assets, free and clear
of any and all mortgages, pledges, liens, claims, restrictions, encumbrances or
security interests of any kind or nature.
5.5 Taxes. Seller has (i) filed all federal, state and local income,
payroll, withholding, excise, sales, use, personal property, use and occupancy,
business and other tax returns or reports (all the foregoing taxes, including
interest and penalties thereon and including estimated taxes, hereinafter
collectively called "Taxes") which are due on or before the Closing Date; (ii)
paid all Taxes which are shown to have become due pursuant to such returns and
(iii) paid all other Taxes for which a notice of assessment or demand for
payment has been received and payment is due on or before the Closing Date
except for such Taxes that are being disputed in good faith and for which
adequate reserves are being maintained. All Tax returns have been prepared in
accordance with applicable laws and requirements and are true and correct. All
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Taxes for periods beginning after November 30, 1997 are adequately provided for
on the books of Seller. Seller has filed all information returns or reports,
that are required to be filed and has reported all information required to be
included in such returns or reports with reasonable accuracy. All deficiencies
resulting from tax audits of Seller have been paid or are adequately provided
for in the Financial Statements. No income tax return of Seller is currently
under examination by any taxing authority. Seller has not (i) executed a waiver
or consent extending any statute of limitation for federal income or other Tax
liability which remains outstanding, or (ii) entered into a closing agreement
with any taxing authority or applied for a Tax ruling that will have continuing
effect with respect to the Purchased Assets following the Closing. Seller has
not received notice from a taxing authority in a jurisdiction in which Seller
does not file Tax returns asserting that Seller is or may be subject to Tax in
that jurisdiction.
5.6 Licenses. Seller currently holds all licenses, permits,
certifications, approvals, and other governmental and regulatory authorizations
required under all laws, rules and regulations applicable to or affecting the
Business or the Purchased Assets (collectively, the "Licenses") and is in
compliance with all terms and conditions thereof. All Licenses of Seller are
listed in Schedule 1.1.9 and, except as described on Schedule 5.6, are
transferable to Buyer and are in full force and effect and are not currently
subject to any show cause order or adverse governmental or regulatory action.
Seller has made timely applications for renewal of all Licenses which must be
filed on or before Closing to maintain such Licenses in full force and effect.
Seller has no reason to believe that such renewals will not be issued in the
ordinary course or will require payment. Before and after Closing, Seller shall
use its best efforts to assist Buyer in obtaining any required license,
including furnishing Buyer such necessary information and reasonable assistance
as Buyer may request in connection with its preparation of necessary filings,
submissions or applications to any governmental agency in connection with the
transactions contemplated hereby.
5.7 Intellectual Property Rights.
(i) Schedule 1.1.7 is a complete and accurate list of (i) all
Intellectual Property Rights registered in the name of Seller or used or
proposed to be used by Seller, and all applications therefor, (ii) all licenses
and other agreements relating thereto, and (iii) all written agreements relating
to technology, know-how and processes which Seller is licensed or authorized to
use by others or which Seller has licensed or authorized for use by others.
Seller owns, and has the right to transfer and assign to Buyer at the Closing,
all right, title and interest to the Intellectual Property Rights and all
licenses thereto described on Schedule 1.1.7, free and clear of all liens.
Seller does not infringe upon or otherwise act adversely to, and has not
infringed or acted adversely to, any patent, trademark, trade name, brand name,
service xxxx, service name, copyright or trade secret owned by any other person
or persons, and there is no claim or action by any person pending or threatened
with respect thereto; no other person infringes or has infringed upon or acts or
has acted adversely to any rights of Seller in and to the Intellectual Property
Rights; and there is no claim or demand of any person pertaining to, or any
proceeding pending or threatened with respect to, the exclusive rights of Seller
in the Intellectual Property Rights or the validity of the registrations
described on Schedule 1.1.7. The
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consummation of the transactions contemplated hereby will not cause any
revocation, forfeiture, reduction or other change in the rights of Buyer, as
assignee and transferee of Seller, to the Intellectual Property Rights or any
license thereto.
(ii) Seller owns or licenses all computer software programs or
other electronic data transmission, storage or computation programs listed on
Schedule 5.7 (collectively, the "Software"). No other such programs are used by
Seller to operate the Business. There are no material malfunctions or design
failures with respect to the Software and related items of systems hardware. The
Software is capable of accurately processing, managing and manipulating
date/time data from, into, and between the twentieth and twenty-first centuries,
and the years 1999, 2000 and leap year calculations, including, without
limitation, date/time data recognition, calculations which involve same century
and multi-century formulas and date values, and date/time-related user interface
functionalities and data fields which reflect the century. The billing and other
information generated by the Software is accurate and the related hardware is
accurate and the Software and such hardware are adequate for the Seller's
conduct of the Business as of the Closing Date.
5.8 Litigation. Except as described on Schedule 5.8, there is no action,
order, writ, injunction or decree outstanding or claim, suit, litigation,
proceeding, arbitral action or investigation (collectively "Proceedings")
pending or, to the knowledge of Seller, threatened against, relating to or
affecting (i) Seller or either Selling Shareholder, (ii) the Purchased Assets or
the Business or (iii) the transactions contemplated by this Agreement, at law or
in equity, by or before any court or governmental department, agency or
instrumentality and there is no basis for any such Proceedings. Seller is not in
default with respect to any judgment, order, writ, injunction or decree of any
court or governmental agency, and there are no unsatisfied judgments against
Seller, the Business or any of its assets.
5.9 Financial Statements. The books of account and related records of
Seller present in reasonable detail its assets, liabilities and transactions.
Seller has heretofore delivered to Buyer the following financial statements
(collectively, the "Financial Statements") of Seller: statements of income for
the fiscal years ending November 30, 1996 and 1997, the related balance sheets
as at November 30, 1996 and 1997, statements of cash flows for the periods then
ended, a statement of income for the three-month period ending February 28,
1998, and a balance sheet as at February 28, 1998 (the aforementioned balance
sheet as at February 28, 1998 is referred to herein as the "February 28, 1998
Balance Sheet," and the balance sheet as at November 30, 1997 is referred to as
the "Balance Sheet"). The Financial Statements are correct and complete and were
prepared in accordance with the books and records of Seller in conformity with
generally accepted accounting principles, consistently applied, and present
fairly the financial position and the results of operations and cash flow of
Seller for the periods covered thereby. The Financial Statements for the fiscal
years ended November 30, 1996 and 1997 have been certified by Xxxxxx, Lupin &
Co., P.A., independent certified public accountants for Seller.
5.10 Labor Matters. The relations of Seller with its employees are good.
Schedule 5.10 lists the names of all employees of Seller who during the
twelve-month period
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prior to the date hereof either ceased being employed by Seller or notified
Seller of their intent to cease employment with Seller. Except as disclosed on
Schedule 5.10, (i) no employee of Seller is represented by any union or other
labor organization; (ii) there is no unfair labor practice complaint against
Seller pending or threatened before the National Labor Relations Board; (iii)
there is no labor strike, dispute, slow down or stoppage actually pending or, to
the best knowledge of Seller, threatened against or involving Seller; (iv) no
grievance which might have an adverse affect on the Business is pending; (v) no
private agreement restricts Seller from relocating, closing or terminating any
of its operations or facilities; (vi) Seller has not in the past three years
experienced any work stoppage or other labor difficulty or committed any unfair
labor practice; and (vii) there are no union organizational drives in progress
and there has been no formal or informal request to Seller for collective
bargaining or for any employee election from any labor organization or the
National Labor Relations Board or any other governmental agency, state or
federal, with jurisdiction over labor-management relations with respect to an
employee of Seller. Seller is in material compliance with all applicable laws
respecting employment practices, terms and conditions of employment and wages
and hours.
5.11 Compliance with Laws. Seller has complied with, and is not in
violation of, all statutes, rules, regulations and orders, federal state and
municipal (including without limitation, Environmental Laws, as defined below)
in connection with its business, the Purchased Assets or properties owned,
operated or leased by Seller, including the requirements of any third party
payor or any governmental agency or authority ("Laws"). Without limiting the
generality of the foregoing:
5.11.1 No notice, citation, summons or order has been issued, no
complaint has been filed, no penalty has been assessed and no investigation or
review is pending or threatened by any governmental or other entity with respect
to any alleged violation by Seller of any Law (including, without limitation,
any Environmental Law), or with respect to any generation, treatment, storage,
recycling, transportation or disposal, Release, as defined below, or Management,
as defined below, of any Hazardous Substances, as defined below, except as
described on Schedule 5.11 . Seller has not treated, stored for more than 90
days, recycled or disposed of any hazardous, toxic or polluting substances on
any property now or previously owned or leased by Seller, nor has anyone else
treated, stored for more than 90 days, recycled or disposed of any hazardous,
toxic or polluting substances on any property now or previously owned or leased
by Seller. Seller has complied with each and is not in violation of any federal,
state or local law, regulation, permit, provision or ordinance relating to the
generation, storage, transportation, treatment or disposal of hazardous, toxic
or polluting substances, has obtained and adhered to all necessary permits and
other approvals necessary to store, dispose, and otherwise handle hazardous,
toxic and polluting substances, and has reported, to the extent required by
federal, state and local law, all past and present sites where hazardous, toxic
or polluting substances, if any, have been treated, stored or disposed. Seller
has not transported any hazardous, toxic or polluting substances or arranged for
the transportation of such substances to any location which is the subject of
federal, state or local enforcement actions or other investigations which may
lead to claims against Seller or Buyer for clean-up costs, remedial work,
damages to natural resources or for personal injury claims.
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5.11.2 Seller has not received from any governmental authority or
other person or entity any request for information, notice of claim, complaint,
order, assessment, demand or other notification that it is, may be or will be
potentially responsible with respect to any investigation, clean-up or other
response to or damages arising from or related to the presence, Release or
threat of Release of Hazardous Substances at any property (whether now or
formerly owned, operated or leased by the Seller or off-site) or any other
claim, complaint, order, assessment, demand or notice relating to the violation
of any Environmental Law; and neither Seller nor the Selling Shareholders know
of any basis for any such requests, claims, complaints, orders, assessments,
demands or notices.
5.11.3 No Hazardous Substances (except for routine office and
janitorial supplies and chemicals customarily used in the Business) have been
Managed or Released by Seller, or for which Seller is or may be responsible in
connection with the Business, the Purchased Assets or at any property now or
formerly owned, operated or leased by Seller in connection with the Business
and, after reasonable investigation, Seller knows of no other facts or
circumstances related to environmental matters concerning the Business, any
property now or formerly owned, operated or leased by the Seller in connection
with the operation of the Business or the Purchased Assets, that could lead to
any future environmental responsibilities, liabilities or expenses of or claims
against the Seller, the Business or the Buyer that could have a material adverse
effect on the business, assets, financial condition or results of operations (a
"Material Adverse Effect") of the Buyer or of the Business.
5.11.4 Except as set forth in Schedule 5.11, to the Seller's
knowledge, no properties or facilities owned, operated or leased by the Seller
in connection with the Business or the Purchased Assets contain (i) underground
tanks, active or abandoned, or (ii) asbestos-containing materials or structural
asbestos, which is damaged, friable, or could become friable or which, in its
present condition, could pose a risk of harm to employees or the general public,
or (iii) polychlorinated biphenyls ("PCBs") or PCB-contaminated electrical
equipment, or (iv) equipment which contains ozone depleting substances. Except
as set forth on Schedule 5.11, none of the foregoing is required to be upgraded,
retrofitted or replaced by the Business with the next 5 years pursuant to
Environmental Laws.
5.11.5 The Seller has provided Buyer copies of all inspections,
studies, audits, tests, reviews, or other analysis in its or the Selling
Shareholder's possession or control conducted in relation to the Business, the
Purchased Assets or any property owned, leased or operated by the Seller in
connection with the conduct of the Business or the Purchased Assets.
5.11.6 The transaction contemplated pursuant to this Agreement does
not require compliance with the New Jersey Industrial Site Recovery Act ("ISRA")
and the Seller's standard industrial code ("SIC Code") is 5047.
5.11.7 Definitions.
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(i) "Environmental Laws" means all applicable federal, state
and local laws, regulations, rules, codes, orders, ordinances, licenses,
notices, or consent or settlement agreements relating to pollution or protection
of human health or the environment including, laws, regulations, rules, orders,
codes, ordinances, notices, and agreements as adopted or issued as of the date
of this Agreement relating to the Management or Release or threatened Release of
Hazardous Substances into the environment (including without limitation ambient
air, surface water, ground water, land surface or subsurface strata).
(ii) "Hazardous Substance" means any hazardous or toxic
substance, material or waste, pollutant or contaminant including petroleum
products, asbestos, PCBs and radioactive materials.
(iii) "Management" or "Managed" means the generation,
possession, manufacture, processing, distribution, use, treatment, storage,
disposal, transport, recycling or handling of Hazardous Substances.
(iv) "Release" means any spill, leak, discharge, disposal,
pumping, pouring, emitting, emptying, injecting, leaching, dumping or allowing
to escape of any Hazardous Substance.
5.11.8 Seller has not violated in any material respect or received a
notice or charge asserting any violation in any material respect of any Law,
regulation or terms of participation with respect to Medicare or Medicaid, or
any federal, state or local Law governing, implementing, or relating to any
state or local program for governmental payment (directly or by reimbursement)
of any amounts due or to become due to Seller on account of services provided or
to be provided by Seller, directly or indirectly, to any person.
(i) Seller has not (nor has any Selling Shareholder nor any
affiliate on behalf of Seller):
(a) offered, made or agreed to make any contribution, payment,
or gift of funds or property to any governmental official, employee, or agent
where either the contribution, payment or gift or purpose thereof was illegal
under any Law.
(b) established or maintained or agreed to establish or
maintain any unrecorded fund or material asset for any purpose, or made any
false entries on any books or records for any reason; or
(c) offered, made or agreed to make any contribution, or
reimbursed any political gift or contribution made by any other person, to any
candidate for federal, state, local, or foreign public office where such
contribution or reimbursement or the purpose thereof was illegal under any
applicable Law.
(ii) Seller has filed in a timely manner all reports,
documents, and other materials that are or were required to be filed (and the
information contained therein
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was correct and complete in all respects) under all applicable Laws, including
Section 1877 of the Social Security Act, except to the extent that
non-compliance with any such Law could not, individually or in the aggregate,
have a Material Adverse Effect on the Seller.
(iii) Seller has possession of all material records and
documents with respect to its business that are or were required to be retained
under all applicable laws.
5.12 Employee Benefit Plans.
5.12.1 Set forth on Schedule 5.12.1 is a true and complete list of
each (i) "employee benefit plan," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (including any
"multiemployer plan" as defined in Section 3(37) of ERISA), (ii) all other
pension, retirement, supplemental retirement, deferred compensation, excess
benefit, profit sharing, bonus, incentive, stock purchase, stock ownership,
stock option, stock appreciation right, severance, salary continuation,
termination, change-of-control, health, life, disability, group insurance,
vacation, holiday and fringe benefit plan, program, contract, or arrangement
maintained, contributed to, or required to be contributed to, by Seller or any
ERISA Affiliate (as defined below) for the benefit of any employee, former
employee, director or officer of Seller or under which Seller or any ERISA
Affiliate has any liability with respect to any employee, former employee,
director or officer of Seller (the "Benefit Plans"). The term "ERISA Affiliate"
shall mean (i) any corporation included with Seller in a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code,
as amended (the "Code"); (ii) any trade or business (whether or not
incorporated) which is under common control with Seller within the meaning of
Section 414(c) of the Code; (iii) any member of an affiliated service group of
which Seller is a member within the meaning of Section 414(m) of the Code; or
(iv) any other person or entity treated as an affiliate of Seller under Section
414(o) of the Code.
5.12.2 As applicable with respect to each Benefit Plan, Seller has
delivered to Buyer, true and complete copies of (i) each Benefit Plan, including
all amendments thereto, and in the case of an unwritten Benefit Plan, a written
description thereof, (ii) all trust documents, investment management contracts,
custodial agreements and insurance contracts relating thereto, (iii) the current
summary plan description and each summary of material modifications thereto,
(iv) the three most recent annual reports (Form 5500 and all schedules thereto)
filed with the Internal Revenue Service ("IRS"), (v) the most recent IRS
determination letter and each currently pending application to the IRS for a
determination letter, (vi) the three most recent summary annual reports,
actuarial reports, financial statements and trustee reports, and (vii) all
records, notices and filings concerning IRS or Department of Labor audits or
investigations, "prohibited transactions" within the meaning of Section 406 of
ERISA or Section 4975 of the Code and "reportable events" within the meaning of
Section 4043 of ERISA.
5.12.3 Except as otherwise disclosed with particularity on Schedule
5.12.3:
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(i) The Seller and each ERISA Affiliate are in compliance in
all respects with the provisions of ERISA and the Code applicable to the Benefit
Plans. Each Benefit Plan has been maintained, operated and administered in
compliance in all respects with its terms and any related documents or
agreements and the applicable provisions of ERISA and the Code.
(ii) The Benefit Plans which are "employee pension benefit
plans" within the meaning of Section 3(2) of ERISA and which are intended to
meet the qualification requirements of Section 401(a) of the Code now meet, and
at all times since their inception have met the requirements for such
qualification, and the related trusts are now, and at all times since their
inception have been, exempt from taxation under Section 501(a) of the Code.
(iii) No Benefit Plan is now or at any time has been subject
to Part 3, Subtitle B of Title I of ERISA or Title IV of ERISA. No Benefit Plan
is now or at any time has been a multiemployer plan as defined in Section 3(37)
of ERISA.
(iv) There are no pending audits or investigations by any
governmental agency involving the Benefit Plans, and no threatened or pending
claims (except for individual claims for benefits payable in the normal
operation of the Benefit Plans), suits or proceedings involving any Benefit
Plan, any fiduciary thereof or service provider thereto, nor is there any
reasonable basis for any such claim, suit or proceeding.
(v) Neither Seller, any ERISA Affiliate, nor to the best
knowledge of Seller, any fiduciary, trustee or administrator of any Benefit
Plan, has engaged in or, in connection with the transactions contemplated by
this Agreement, will engage in any transaction with respect to any Benefit Plan
which would subject any such Benefit Plan, Seller, any ERISA Affiliate or Buyer
to a tax, penalty or liability for a "prohibited transaction" under Section 406
of ERISA or Section 4975 of the Code. None of the assets of any Benefit Plan is
invested in any property constituting "employer real property" or an "employer
security" within the meaning of Section 407 of ERISA.
(vi) With respect to each Benefit Plan that is a "group health
plan" within the meaning of Section 607 of ERISA and that is subject to Section
4980B of the Code, the Seller and each ERISA Affiliate comply in all respects
with the continuation coverage requirements of the Code and ERISA.
5.13 Insurance. Schedule 5.13 contains a complete and accurate list of
all policies or binders of fire, liability, title, worker's compensation,
environmental and other forms of insurance (showing as to each policy or binder
the carrier, policy number, coverage limit, expiration date, annual premium and
a general description of the type of coverage provided) maintained by Seller on
its business, properties or employees. All such policies are outstanding and in
full force and effect. The coverages provided by such policies are reasonable,
in both scope and amount, in light of the risks attendant to Seller's business,
properties or employees and are comparable to coverages customarily maintained
by companies in similar lines of businesses
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and such insurance is sufficient in the aggregate to cover all reasonably
foreseeable damage to and liabilities or contingencies relating to the conduct
by such business and affairs. There is no default with respect to any provision
contained in any such policy, nor has there been any failure to give any notice
or present any claim under any such policy in a timely fashion or in the manner
or detail required by the policy.
5.14 Consents and Approvals. No consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority, or any third person or entity, is required to be made or obtained by
Seller or the Selling Shareholders in connection with the execution, delivery or
performance of this Agreement and the consummation of the transactions
contemplated hereby, other than those set forth in Schedule 5.14.
5.15 Contracts; Compliance. Except as set forth on Schedule 5.15, Seller
is not a party to any material lease, contract or commitment of any kind with
respect to the Business, oral or written, formal or informal. All leases,
contracts and other commitments to which Seller is a party or by which Seller is
bound are in full force and effect; all parties to such leases, contracts and
other commitments have complied with the provisions thereof; no such party is in
default under any of the terms thereof; and no event has occurred that with the
passage of time or the giving of notice or both would constitute a default by
any party under any provision thereof.
5.16 Real Property. Schedule 5.16 sets forth a correct list and summary
descriptions of all real properties owned or leased by Seller; all structures
and other improvements on such properties are within the lot lines and do not
encroach on the properties of any other person and the use and operation of all
such properties conform to all applicable building, zoning, safety,
environmental and other laws, ordinances, regulations, codes, permits, licenses
and certificates and all restrictions and conditions affecting title. Seller has
not received any written or oral notice or order by any governmental or other
public authority, any insurance company which has issued a policy with respect
to any of such properties or any board of fire underwriters or other body
exercising similar functions which (i) relates to violations of building,
safety, fire or other ordinances or regulations, (ii) claims any defect or
deficiency with respect to any of such properties or (iii) requests the
performance of any repairs, alterations or other work to or in any of such
properties or in the streets bounding the same. There is no pending
condemnation, expropriation, eminent domain or similar proceeding affecting all
or any portion of any of such properties and, to the best knowledge of Seller,
no such proceeding is contemplated.
5.17 Inventory and Equipment. The inventory of materials and supplies
set forth in Schedule 1.1.2 is in good condition, suitable for its intended use
and is valued at the lower of cost or market, the cost thereof being determined
on a first-in, first-out basis. All of the equipment (including rental
equipment) of Seller set forth in Schedules 1.1.1 and 1.1.3 is valued at its
acquisition cost less accumulated depreciation calculated under the three to
seven year straight-line method, except as disclosed in the Financial
Statements. Except as set forth in Schedule 1.1.1, Schedule 1.1.2 or Schedule
1.1.3, as the case may be, all such inventories and
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equipment consist of items of a quality and quantity usable, saleable, leasable
or rentable in the ordinary course of Seller's business within a reasonable
period of time and at normal profit margins, and all such inventories and
equipment can be expected to be consumed, sold, leased or rented in the ordinary
course of business within a reasonable period of time. Except as set forth in
Schedule 1.1.1, Schedule 1.1.2 or Schedule 1.1.3, as the case may be, none of
the inventory or equipment of Seller is obsolete or slow moving, and any
obsolete or slow moving inventory has been written off or reserved against in
the Financial Statements.
5.18 Condition of Purchased Assets. The Purchased Assets are in good
operating condition and repair, free from any defect and are suitable for the
purposes for which they are used in the Business. The Purchased Assets
constitute all rights, properties and assets of Seller that are necessary to
operate the Business as currently operated.
5.19 No Undisclosed Liabilities. Seller has no liability or obligation
of any nature, whether due or to become due, absolute, contingent or otherwise,
including liabilities for or in respect of federal, state and local taxes and
any interest or penalties relating thereto, except (i) liabilities fully
reflected in or reserved against on the Balance Sheet or notes thereto, (ii)
liabilities that have arisen after the Balance Sheet in the ordinary course and
fully reflected as liabilities on Seller's books of account, none of which,
individually or in the aggregate, has been materially adverse and (iii)
liabilities set forth in Schedule 5.19.
5.20 Business Locations. Set forth on Schedule 5.20 is a list of each
location (specifying state and country) (i) where Seller has a place of business
and (ii) where Seller owns, leases or stores real and personal property. Also
set forth on Schedule 5.20 is a list of each name under which Seller has ever
conducted its business.
5.21 Billing; Gratuitous Payments.
5.21.1 Billing. Except as set forth in Schedule 5.21, all billing by
the Seller to third party payors, including, but not limited to, the federal
Medicare program, state Medicaid programs and private insurance companies has
been true and correct in all material respects and in compliance in all material
respects with all applicable Legal Requirements and the policies of such third
party payors.
5.21.2 Absence of Certain Business Practices. Neither Seller, nor
any officer, employee or agent of Seller, nor any Selling Shareholder, nor any
other person acting on behalf of any of them, has, within the past five years
given any remuneration, gift, keepsake, or similar benefit to any patient,
referral source, provider, customer, supplier or governmental employee which
could reasonably be expected to subject Seller to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, were any such
litigation or proceeding to be commenced; and either
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(i) if not given in the past, would have adversely affected,
in any material respect, the earnings or business of Seller taken as a whole, as
reflected in the Financial Statements; or
(ii) if not continued in the future, could reasonably be
expected to adversely affect, in any material respect, the assets, operations or
prospects of Seller.
5.22 Fraud and Abuse. Except as set forth in Schedule 5.22, neither
Seller or the Selling Shareholders nor any person or entity providing
professional or other services for Seller is currently, or in the past five (5)
years has, engaged in any activities which are prohibited, or are cause for
criminal or civil penalties or mandatory or permissive exclusion from Medicare
or Medicaid, under Sections 1320a-7, 1320a-7a, 1320a-7B or 395nn of Title 42 of
the United States Code or the regulations promulgated thereunder, or similar
state or local statutes or regulations, or which are prohibited by applicable
statutes, regulations, or ethical codes governing professional conduct,
including, but not limited to, the following:
(i) knowingly and willfully making or causing to be made a
false statement or representation of a material fact in any application for any
benefit or payment;
(ii) knowingly or willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment;
(iii) any failure by a claimant to disclose knowledge of the
occurrence of any event affecting the initial or continued right to any benefit
or payment on its own behalf or of another, with the intent to fraudulently
secure such benefit or payment;
(iv) knowingly and willfully soliciting or receiving any
remuneration (including any kickback, bribe or rebate) directly or indirectly,
overtly or covertly, in cash or in kind, or offering to pay or receive such
remuneration: (1) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare or Medicaid; or (2) in
return for purchasing, leasing or ordering or arranging for, or recommending,
purchasing, leasing or ordering any good, facility, service or item for which
payment may be made in whole or in part by Medicare or Medicaid; or
(v) referring any patients to a person or entity with which
either Seller or either of the Selling Shareholders has a financial relationship
that is prohibited by applicable law.
5.23 Reimbursement Matters. Except as disclosed on Schedule 5.23, in the
past three years (a) Seller has not and, to the Seller's knowledge, no nursing
home, hospital or other health care provider with respect to which Seller
provides services has received any written notice of denial or recoupment from
the Medicare or Medicaid programs, or any other third party reimbursement source
(inclusive of managed care organizations) with respect to products or services
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provided by Seller; (b) to the Seller's knowledge, there is no basis for the
assertion after the Closing of any such denial or recoupment claim and (c)
neither Seller nor, to Seller's knowledge, any nursing home, hospital or other
health care provider with respect to which Seller provides services has received
written notice of any denial of claims for payment from any Medicare or Medicaid
program or any other third party reimbursement source (inclusive of managed care
organizations) of any pending or threatened investigations or surveys
specifically with respect to, or arising out of, products or services provided
by Seller, and to Seller's knowledge, no such investigation or survey is
pending, threatened or imminent. Seller has fully and accurately disclosed to
the appropriate intermediaries and carriers all material billing and business
practices with respect to Medicare and Medicaid reimbursement with respect to
the Business to the extent necessary for Seller to comply with applicable law.
Seller has complied with all material requirements imposed by any such
intermediary or carrier with respect to such billing. Seller has billed the
applicable intermediaries and/or carriers for the services rendered by Seller in
material compliance with all applicable Medicare and Medicaid laws, and Seller
is not aware of any non-compliance by it with any state licensing or corporate
practice of medicine law that would cause such billing or business practices to
not be in material compliance with any of such Medicare or Medicaid laws. Seller
has not received any notice from any regulatory authority or intermediary that
indicates that Buyer could not continue to xxxx intermediaries in substantially
the same manner and structure as Seller is billing on the date hereof.
5.24 Medicare/Medicaid Participation. All services provided by Seller
for which Seller directly or indirectly receives payment under the Medicare or
Medicaid programs are, to the extent required by law, certified for
participation or enrollment in all Medicare and Medicaid programs, have a
current and valid provider contract with the Medicare and Medicaid programs or
other third party reimbursement source (inclusive of managed care
organizations), are in compliance with the conditions of participation of such
programs, and, to the extent required by law, have received all approvals or
qualifications necessary for reimbursement, except for such certifications,
contracts, compliances, approvals and qualifications which are set forth on
Schedule 5.24 and which, individually or in the aggregate, would not have a
material adverse effect on Seller's earnings or business. Seller has delivered
to Buyer true and complete copies of all Medicare and Medicaid survey and
inspection reports by the applicable licensing authority or payor for any period
after November 30, 1992 for each location of Seller for which there is a
Medicare or Medicaid provider number.
5.25 Ownership. The Selling Shareholders are the legal and beneficial
owners of all of the issued and outstanding capital stock of Seller.
5.26 Absence of Changes. Except as described on Schedule 5.26, Seller
has operated its business only in the ordinary and regular course in all
material respects and consistent with historical practice since November 30,
1997. Since November 30, 1997, there has not been: (i) any material and adverse
damage, destruction or loss, whether or not covered by insurance, to the
Purchased Assets; (ii) any organized labor negotiations, strike or work stoppage
affecting Seller or any threat of the foregoing; (iii) any termination or waiver
of any rights of material value to Seller's business; (iv) any change in the
accounting methods or practices
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followed by Seller; (v) any sale, transfer or other disposition of any assets of
the Seller, other than in the ordinary course of business, (vi) any adverse
change or any threat of any adverse change in the Seller's relations with any of
Seller's suppliers, clients or customers; (vii) any transaction, agreement or
event outside the ordinary course of business of the Seller; or (viii) any
commitment, obligation or understanding to do any of the foregoing.
5.27 Compensation Arrangements. Schedule 5.27 sets forth the following
information: (a) the names and current annual salary, including any bonus, if
applicable, and the benefits of all present officers and employees of Seller
whose current annual salary, including any promised, expected or customary
bonus, equals or exceeds $10,000, together with a statement of the full amount
of all remuneration (including benefits) paid by Seller to each such person and
to any director of Seller, during the year ended November 30, 1997; (b) all
consulting or employment agreements or other agreements with respect to
individual consultants or employees, oral or written, and still in effect to
which Seller is a party, none of which agreements will be assigned to, or
assumed by, Buyer at Closing; and (c) a true and correct list of all outstanding
note payables to shareholders of Seller, employees of Seller or other
individuals. Except as disclosed on Schedule 5.27, since November 30, 1997,
there has been no change in the policies of Seller regarding compensation to
Seller's employees or independent contractors or in such compensation.
5.28 Disclosure. No representation or warranty by Seller in this
Agreement or pursuant hereto, and no exhibit, document, statement, certificate
or schedule furnished or to be furnished to Buyer pursuant hereto, or in
connection with the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading or necessary to provide Buyer with proper information as
to Seller and the Purchased Assets. There is no fact or condition known to
Seller or any Selling Shareholder, which has not been disclosed to Buyer in the
Schedules to this Agreement or otherwise in writing, that had or has, or so far
as Seller or any Selling Shareholder can reasonably foresee will have a material
adverse effect on Seller, the business, financial condition, results of
operations or prospects of Seller, the Purchased Assets or the ability of Seller
or any Selling Shareholder of Seller to perform its or his obligations under
this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
6.1 Incorporation; Authority. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to execute, deliver and
perform this Agreement and all other agreements and instruments required to be
executed by Buyer in connection with or pursuant hereto.
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6.2 Due Authorization; Binding Agreement. The execution and delivery by
Buyer of this Agreement and all other agreements and instruments required to be
executed by Buyer in connection with or pursuant hereto and the performance by
Buyer of its obligations hereunder and thereunder have been duly authorized by
all necessary corporate action on the part of Buyer. This Agreement and all
other agreements or instruments required to be executed by Buyer in connection
with or pursuant hereto constitute the legal, valid and binding obligation and
act of Buyer enforceable in accordance with the respective terms thereof,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or equity).
ARTICLE VII
COVENANTS
7.1 Covenants of Seller and Selling Shareholders Pending Closing. Seller
and each Selling Shareholder jointly and severally covenants and agrees with
Buyer that:
7.1.1 From and after the date hereof and until the earlier of the
Closing or the termination of this Agreement pursuant to Section 4.1 hereof,
Seller and each Selling Shareholder with respect to the Business (i) shall use
its or his best efforts to fulfill or satisfy, or cause to be fulfilled or
satisfied, all of the conditions precedent to Buyer's obligation to consummate
and complete the purchase provided for herein, and to take all other steps and
to do all other things reasonably required to consummate this Agreement in
accordance with its terms, (ii) shall not interfere with the performance by
Buyer of its obligations under this Agreement, (iii) shall not mortgage, pledge,
assign, sell or otherwise transfer any of the Purchased Assets, (iv) and will
comply with all laws, rules and regulations applicable to Seller's business or
assets, (v) shall conduct the business, operations, activities and practices of
Seller in the usual and ordinary course, consistent with its past practices and
in accordance with the transactions contemplated hereby, (vi) shall preserve the
business organization of Seller intact, keep available to itself and to Buyer
the present services of Seller's employees, and preserve for itself and Buyer
the goodwill of Seller's suppliers, students and others with whom Seller has
business relationships, (vii) shall maintain Seller's tangible property in the
same condition as it now exists, ordinary wear and tear excepted, (viii) shall
maintain Seller's insurance policies listed on Schedule 5.13 in full force and
effect (or renew any such policies which expire), (ix) shall maintain in full
force and effect all agreements, authorizations, licenses, and other approvals
necessary for its operations, (x) shall not without the prior written consent of
Buyer enter into any contract or commitment the performance of which may extend
beyond the Closing, (xi) shall not sell, transfer, lease or otherwise dispose of
any of its assets other than sales of inventory in the ordinary course of
business and consistent with past practice, (xii) shall not fail to pay when due
all taxes, assessments, governmental charges or levies imposed upon it or its
income, profits or assets or otherwise required to be paid by it, or fail to pay
when due any liability or charge which, if unpaid, might become a lien or charge
upon any of its assets, (xiii) shall not make or authorize the making of any
capital expenditure in excess of $25,000, (xiv) shall not incur any debt or
other obligation for money borrowed, (xv) shall not incur any
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obligation or liability, absolute or contingent except in the ordinary course of
business and consistent with past practice, and in any event not in excess of
$25,000, (xv) shall not increase the compensation paid to or enter into any
contract with any employees of Seller, (xvi) shall promptly notify Buyer of any
notice from any governmental or regulatory agency or authority in connection
with the transactions contemplated by this Agreement, any fact or circumstance
of which Seller has knowledge that would make any representation or warranty set
forth herein untrue or inaccurate as of the Closing Date or as of the date of
this Agreement, or any planned or threatened labor dispute, organization
efforts, strike or collective work stoppage affecting the employees of Seller,
(xvii) shall not waive or permit the loss of any substantial right, (xviii)
shall use its or his best efforts to obtain any necessary third-party consents
to the purchase by Buyer of the Assumed Contracts and (xix) shall promptly
inform Buyer if Seller or the Selling Shareholders are in breach of any covenant
hereunder, or if any material adverse event shall have occurred with respect to
the Business or the Purchased Assets.
7.1.2 Xxxx Xxxxxxx shall enter into a non-competition agreement with
the Buyer for a period of two (2) years on the terms and conditions satisfactory
to the Buyer.
7.2 Covenants of Buyer Pending Closing. Buyer covenants and agrees with
Seller that from and after the date hereof and until the earlier of the Closing
or the termination of this Agreement pursuant to Section 4.1 hereof, Buyer (i)
shall use its best efforts to fulfill or satisfy, or cause to be fulfilled or
satisfied, all of the conditions precedent to Seller's obligations to consummate
and complete the sale provided herein and to take all other steps and do all
other things reasonably required to consummate this Agreement in accordance with
its terms, and (ii) shall not interfere with the performance by Seller or the
Selling Shareholders of its or their obligations under this Agreement.
7.3 Full Access and Due Diligence Investigation.
7.3.1 From and after the date hereof until the Closing Date, Seller
shall afford to all representatives of Buyer, free and full access during normal
business hours to the employees, accountants, assets, properties, books,
financial statements, work papers and records of Seller in order that Buyer may
have full opportunity to make investigations of Seller, the Business, the
Purchased Assets, and affairs of Seller, and Seller shall furnish or cause to be
furnished to Buyer and its representatives all such information about Seller,
the Business and the Purchased Assets as Buyer shall reasonably request;
provided, that such investigation shall not unreasonably interfere with the
operations of the Business or Seller.
7.3.2 Buyer and its counsel, accountants and other representatives
shall have the right to conduct and complete a due diligence investigation of
Seller, the Business, the Purchased Assets and the business prospects thereof,
the type and quantity of the Assumed Liabilities hereunder, Seller's financial
condition and ability to convey title to the Purchased Assets and the accuracy
and completeness of the information and materials furnished to Buyer by Seller
or its representatives. Buyer shall have the right to make surveys, draft plans
and conduct such environmental studies, audits and tests on the real property
owned or leased by Seller as are,
- 25 -
in the sole discretion of Buyer, necessary or desirable ("Tests"). Buyer shall
have no liability with respect to any remediation, correction or clean-up of any
condition of such real property disclosed by such Tests. In the event that the
results of such due diligence investigation are not satisfactory to Buyer, in
its sole and absolute discretion, Buyer shall have the right to terminate this
Agreement before the Closing Date by written notice to Seller stating that the
results of such due diligence investigation are unsatisfactory to Buyer in
Buyer's sole and absolute discretion. Buyer shall be required to disclose the
basis for any such termination.
7.4 Post-Closing Covenants.
7.4.1 Further Assurances. From time to time after the Closing, (i)
Seller (for as long as it continues its corporate existence) and each Selling
Shareholder will use reasonable efforts to execute and deliver such instruments
of conveyance, sale or assignment as Buyer may reasonably request, to more
effectively vest, confirm or evidence Buyer's title to or rights in any of the
Purchased Assets and to otherwise carry out the purpose and intent of this
Agreement and to obtain all required consents and approvals specified in 8.2.5
not obtained as of the Closing, and (ii) Buyer will execute and deliver such
instruments as Seller may reasonably request to more effectively assure the
assumption by Buyer of the obligations and liabilities of Seller to be assumed
by Buyer pursuant to this Agreement and to otherwise carry out the purpose and
intent of this Agreement.
7.4.2 Mutual Cooperation. The parties shall use reasonable efforts
to cooperate fully with each other and with their respective counsel and
accountants in connection with any steps required to be taken, including
specific assistance by Seller during the establishment of the general ledger
system for the Business, provided that nothing in this Section 7.4.2, including,
without limitation, the following sentence, shall require Seller to continue in
its employ any person no longer needed for its operations or to continue its
corporate existence beyond the Closing Date. By way of further cooperation,
Seller will use reasonable efforts for as long as it continues its corporate
existence to (i) make its remaining employees available for consultation, and
(ii) permit access to other third parties reasonably requested for verification
of any information obtained by Buyer regarding the operations of Seller.
7.4.3 Allocation of Purchase Price. Buyer, and Seller and each
Selling Shareholder agrees that the Purchase Price shall be allocated among the
Purchased Assets in accordance with the allocation set forth in Schedule 7.4.3
hereto. Buyer, Seller and each Selling Shareholder agree that each will report
the federal, state and local income and other tax consequences of the purchase
and sale contemplated hereby in a manner consistent with such allocation and
will not take any position inconsistent therewith upon examination of any tax
return, in any refund claim, in any litigation, or otherwise.
7.4.4 Other Proposals. Each Selling Shareholder, Seller and its
officers and directors, and each of their financial advisors, counsel, and other
agents will not, directly or indirectly, encourage, solicit, initiate or enter
into any agreement with respect to, or participate in any way in discussions or
negotiations with, or provide any confidential
- 26 -
information to, any person other than Buyer and its agents concerning any
merger, sale of all or substantially all of the assets of Seller, sale of any
shares of capital stock of Seller or any similar transaction involving Seller
(an "Acquisition Proposal"). As long as this Agreement remains in effect, Seller
and each Selling Shareholder will promptly communicate to Buyer (i) the identity
of any person from which they receive any request for information, any inquiry,
or any proposal to initial discussions or negotiations with respect to any
Acquisition Proposal, and (ii) the terms of any such request for information,
inquiry or proposal.
7.4.5 Non-Compete. (i) Seller and the Selling Shareholders agree
with Buyer that for a period of five (5) years after the Closing neither Seller
nor any of its affiliates shall, directly or indirectly, (a) engage or become
interested in, as an employee, manager, consultant, owner, partner, through
stock ownership (other than a less-than-2% interest in a corporation having
securities which are listed for trading on a national securities exchange), or
by the investment of capital or lending of money or property to any person,
enterprise, partnership, association, corporation, limited liability company,
joint venture or other entity which is directly or indirectly engaged in the
business of selling, renting or leasing or otherwise providing therapeutic
support surfaces anywhere in the United States, provided, however that this
Section 7.4.5 shall not restrict the Sellers conduct of the Retained Businesses
(b) induce or attempt to induce any customer to cease doing business with the
Buyer or any of its affiliates, or take any action which would reasonably be
expected to reduce, damage or interfere with the relationship between any
customer and the Buyer or such affiliate, (c) use for their own benefit or
disclose the name and/or requirements of any such customer to any other person
or persons, natural or corporate, except as such disclosure is required by any
Law, or (d) solicit or hire any of the employees or consultants of Buyer
(including without limitation, employees of Seller hired by Buyer) or any of its
affiliates.
(ii) In the event that either this Section 7.4.5 or Section
7.5 shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too great a period of time or over
too great a geographic area or range of activities, it shall be interpreted to
extend only over the maximum period of time, geographic area or range of
activities as to which it may be enforceable.
(iii) Seller recognizes and acknowledges that in the event of
its failure to comply with any of the covenants contained in this Section 7.4.5
or Section 7.5, it may be impossible to measure in money the damages to Buyer
and that in the event of such failure, Buyer may not have an adequate remedy at
law. It is therefore agreed that Buyer, in addition to any other rights or
remedies which it may have, shall be entitled to immediate injunctive relief
(without the requirement of any bond) to enforce such covenants, and that if any
action or proceeding is brought in equity to enforce the same, Seller will not
urge, as a defense, that there is an adequate remedy at law.
7.5 Confidential Information. Seller and the Selling Shareholders
acknowledge that after the Closing, Buyer could be irreparably damaged if
Seller, the Selling Shareholders or any of Seller's affiliates' confidential
knowledge of the operations of the
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Business or the Purchased Assets were disclosed to or utilized on behalf of any
person, firm, corporation or other business entity other than Buyer or its
affiliates, and Seller and the Selling Shareholders covenant and agree that they
will not, following the Closing, without the prior written consent of Buyer,
disclose (or permit to be disclosed) or use in any way any such confidential
information, unless (i) compelled to disclose such confidential information by
judicial or administrative process or, in the opinion of their counsel, by other
requirements of law, or (ii) such confidential information is generally
available to the public through no fault of Seller or the Selling Shareholders.
7.6 Condemnation. Any taking or condemnation for any public or
quasi-public purpose or use by any competent authority in appropriate
proceedings or by any right of eminent domain of all or any part of the real
property owned or leased by Seller between the date of this Agreement and the
time of the Closing shall, at Buyer's sole option, cause a termination of this
Agreement. The election to terminate provided for hereby must be exercised by
Buyer (or will be deemed to have been waived) by written notice to Seller to
that effect, which notice shall be given by Buyer on or before the fifteenth
(15th) business day following Buyer's receipt of written notice of the
condemnation from Seller.
7.7 Use of Name. Seller and Selling Shareholders, jointly and severally,
agree that they shall not from and after the Closing Date use or grant any right
to any individual, corporation, partnership or other entity or any other person
to use, or otherwise consent to the use of, any name or xxxx that is similar to
the Marks.
7.8 Release and Waiver. Seller and Selling Shareholders hereby waive and
release Buyer and the Business from any and all Damages (including without
limitation legal expenses), whether known or unknown, foreseen or unforeseen,
which exist or which may arise in the future under common or statutory law,
including CERCLA or any other statutes now or hereafter in effect.
7.9 Third-Party Payments. As funds are received by either Buyer or
Seller from third-party payors in respect of the Business, such funds shall be
allocated to the Buyer or the Seller in accordance with the procedures set forth
in Schedule 7.9 hereto.
7.10 Books and Records. Seller shall provide to Buyer, upon Buyer's
reasonable request, a copy of Seller's records related to or used in connection
with the operation of the Business or pertaining to the Purchased Assets,
including, without limitation, customer records and lists; billing records;
employment records; equipment maintenance and repair records; quality assurance
records; and all documents filed by Seller with any state, federal or local
government authority. If Seller cannot provide a copy of any documents
reasonably requested by Buyer, then Seller shall afford to Buyer and all
representatives of Buyer full and free access during normal business hours to
such books and records.
7.11 May 31, 1998 Financial Statements. No later than July 31, 1998,
Seller shall deliver to Buyer a copy of the balance sheet of Seller at May 31,
1998 and May 31, 1997
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and the related statements of income and cash flows for the six month periods
then ended (the "May Statements"). The May Statements will be correct and
complete, will be prepared in accordance with the books and records of Seller in
conformity with generally accepted accounting principles, consistently applied,
and will present fairly the financial position and the results of operations and
cash flow of Seller for the period covered thereby.
7.12 Third Party Provider Agreements. Seller shall use its best efforts
to have all third party provider agreements (including any third party provider
numbers) related to the Business that Buyer requests assigned to the Buyer
effective as of the Closing Date. If any such provider agreement is not
assignable, Seller will use its best efforts to aid Buyer in obtaining
substitute agreements and provider numbers.
ARTICLE VIII
CONDITIONS
8.1 Conditions Precedent to Obligations of Buyer. The obligation of
Buyer to complete the purchase of Purchased Assets as provided for herein is
subject to the fulfillment or satisfaction on or before the Closing Date of each
of the conditions set forth below, any of which may be waived by Buyer in
writing.
8.1.1 All representations and warranties of Seller and the Selling
Shareholders contained in this Agreement shall be true and correct in all
respects as of the Closing, with the same force and effect as if the same had
been made on and as of the Closing Date (except to the extent such
representations and warranties speak as of a particular date), and Buyer shall
have received a certificate signed by an officer of Seller and each of the
Selling Shareholders, substantially in the form as set forth in Exhibit D, to
such effect;
8.1.2 Seller and each of the Selling Shareholders shall have
performed in all material respects all of the obligations, covenants and
agreements contained in this Agreement to be performed by Seller and the Selling
Shareholders on or before the Closing Date, and Buyer shall have received a
certificate signed by an officer of Seller and each of the Selling Shareholders,
substantially in the form as set forth in Exhibit D, to such effect;
8.1.3 All instruments and documents required on Seller's and each
Selling Shareholder's part to effectuate and consummate the transactions
contemplated hereby shall be delivered to Buyer and shall be in form and
substance satisfactory to Buyer and its counsel;
8.1.4 Buyer shall have received a certificate of the President of
Seller certifying as to a summary of (i) Seller's inventory as of the last day
of the month for the month immediately preceding the month in which the Closing
occurs and (ii) the amount and an aging of each of Seller's accounts payable and
accrued expenses as of the close of business on the tenth day prior to the
Closing Date (or such later date, if available);
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8.1.5 No order of any court or administrative agency shall be in
effect which restrains or prohibits the transactions contemplated hereby or
which would limit or adversely affect Buyer's ownership or control of the
Business and there shall not have been threatened, nor shall there by pending,
any action or proceeding by or before any court or governmental agency or other
regulatory or administrative agency or commission, (i) challenging any of the
transactions contemplated by this Agreement or seeking monetary relief by reason
of the consummation of such transactions, (ii) which materially impairs Buyer's
ability to own the Purchased Assets, or (iii) which might have a material
adverse effect on the business, prospects or condition (financial or otherwise)
of Seller;
8.1.6 There shall have been no event which has had, or may result
in, a material adverse change in the conditions, operations or prospects of the
Business, or the Purchased Assets taken as a whole, since the date hereof;
8.1.7 Seller shall have delivered to Buyer the documents specified
in Section 3.2 except as otherwise provided in Section 3.2.8;
8.1.8 (i) The consents, licenses, permits, certifications, and
approvals to do business granted by, or authorizations of, registrations,
declarations or filing with, courts, administrative agencies or commissions and
other governmental authorities or instrumentalities, domestic or foreign, and of
any other accrediting agency (including, but not limited to Medicare and
Medicaid provider and/or supplier numbers) ("Regulatory Approvals") required to
properly operate the Business and permit the billing and collection of payment
for all fees and services rendered in those states shall have been obtained or
the Buyer shall be satisfied in its reasonable discretion that such Regulatory
Approvals will be obtained without material conditions within 30 days following
the Closing Date; provided, however, that for each state for which Regulatory
Approvals have not been obtained on or prior to the Closing, the Buyer shall be
satisfied in its reasonable discretion that it shall lawfully be able to
continue to operate the Business in such state and that upon receipt of such
Regulatory Approvals, it will be lawfully permitted to xxxx and collect payment
for all services rendered by Buyer on and after the Closing Date.
(ii) The Seller shall have delivered to Buyer all of the
material authorizations, consents and approvals specified in Section 5.6.
8.1.9 The investigation conducted by Buyer or its representatives
pursuant to Section 7.3 shall be satisfactory to Buyer in its sole and absolute
discretion;
8.1.10 Any necessary third party consents for the purchase by Buyer
of Contracts that individually or in the aggregate are material to the Business
shall have been obtained.
8.1.11 Any Consents that individually or in the aggregate are
material to the Business shall have been obtained.
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8.1.12 The statement of income for the fiscal year ending November
30, 1997 delivered to Buyer by Seller pursuant to Section 5.9 shall show
revenues of at least $11,788,000 for such fiscal year.
8.2 Conditions Precedent to Obligations of Seller. The obligations of
Seller to complete the sale of Purchased Assets as provided for herein are
subject to the fulfillment or satisfaction on or before the Closing Date of each
of the conditions set forth below, any of which may be waived by Seller in
writing.
8.2.1 All representations and warranties of Buyer contained in this
Agreement shall be true and correct in all respects as of the Closing, with the
same force and effect as if the same had been made on and as of the Closing Date
(except to the extent such representations and warranties speak of a particular
date), and Seller shall have received a certificate signed by an Officer of
Buyer, substantially in the form as set forth in Exhibit H, to such effect;
8.2.2 Buyer shall have performed in all material respects all of the
obligations, covenants and agreements contained in this Agreement to be
performed by Buyer on or before the Closing Date, and Seller shall have received
a certificate signed by an Officer of Buyer, substantially in the form as set
forth in Exhibit H, to such effect;
8.2.3 All instruments and documents required on Buyer's part to
effectuate and consummate the transactions contemplated hereby shall be
delivered by Buyer and shall be in form and substance reasonably satisfactory to
Seller and its counsel;
8.2.4 No order of any court or administrative agency shall be in
effect which restrains or prohibits the transactions contemplated hereby and
there shall not have been threatened, nor shall there be pending, any action or
proceeding by or before any court or governmental agency or other regulatory or
administrative agency or commission, challenging any of the transactions
contemplated by this Agreement or seeking monetary relief by reason of the
consummation of such transactions;
8.2.5 All consents and approvals of all governmental departments,
agencies or other regulatory bodies to the transactions contemplated hereby
shall have been obtained; and
ARTICLE IX
MISCELLANEOUS
9.1 Binding Effect. All terms and provisions of this Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement, nor the obligations of any party hereunder, shall be assignable or
transferable by any such party without the prior written consent of all parties
hereto.
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9.2 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be given or made by personal delivery,
by a nationally recognized courier service for overnight delivery or by
registered or certified mail, postage prepaid, return receipt requested,
addressed
if to Buyer, at:
MEDIQ Incorporated
Xxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, President
Xxxx Xxxxxxx, General Counsel
with a copy to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Nassau, Esquire
if to Seller or to any Selling Shareholder, at:
000 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxxx Berenbroick, L.L.C.
Xxx Xxxx Xxxxxx Xxxxx
Xxxx Xxxxxx XX
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esquire
or at such other place as the party to whom such notice of communication is to
be addressed may have designated to the other parties by notice conforming to
this Section 9.2. Notices shall be deemed effective and received (i) on the
actual receipt in the case of hand delivery, (ii) on the next business day after
deposit in the case of notices by nationally recognized overnight courier
services, or (iii) on the third business day after the date of mailing in the
manner set forth herein. As used herein, notice to a party shall include
concurrent notice to that party's counsel as set forth herein.
9.3 Entire Agreement, Amendments, Etc. This Agreement and the documents
referred to herein and to be delivered pursuant hereto constitute the entire
agreement between the parties pertaining to the subject matter hereof, and
supersede all prior and
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contemporaneous agreements, understandings, negotiations and discussions of the
parties, whether oral or written; and there are no warranties, representations
or other agreements between the parties in connection with the subject matter
hereof, except as specifically set forth herein or therein. No amendment,
supplement, modification, waiver or termination of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision of this Agreement, whether or not similar, nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided. Notwithstanding any agreement with or obligation to any organization,
authority, entity or person not a party to this Agreement to the contrary, Buyer
does not assume any liability, responsibility or obligation for any of Seller's
liabilities or obligations except the Assumed Liabilities, and nothing in any
such agreement or evidence of such obligation with a third party should be
construed to be such an assumption on the part of Buyer.
9.4 Nature and Survival of Representations. The representations,
warranties, covenants and agreements of Buyer, Seller and the Selling
Shareholders contained in this Agreement, and all statements contained in this
Agreement or any Exhibit or Schedule hereto or any certificate, financial
statement or report or other document delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby, shall be deemed to
constitute representations, warranties, covenants and agreements of the
respective party delivering the same. All such representations, warranties,
covenants and agreements shall survive the Closing hereunder subject to Sections
9.15, 9.16 and 9.17 hereof.
9.5 Risk of Loss or Damage; Insurance. It is understood and agreed that
all right, title and interest in and to the Purchased Assets and all risk of
loss or damage thereto shall not pass from Seller to Buyer unless and until the
Closing occurs. In the event of a casualty or condemnation in respect of the
Purchased Assets, Buyer shall have the right, at its sole option, to elect to
either terminate this Agreement or to accept the insurance proceeds in respect
of such casualty or condemnation and proceed to close otherwise in accordance
with the terms and conditions of this Agreement. Seller agrees to maintain the
insurance currently carried with respect to the Purchased Assets until the
Closing.
9.6 Waiver. No waiver shall be deemed to have been made by any party of
any of its rights hereunder unless the same shall be in writing and shall be
signed by the waiving party. Such a waiver, if any, shall be a waiver only in
respect to the specific instance involved and shall in no way impair the rights
of the waiving party or the obligations of any other party in any other respect
at any other time.
9.7 Governing Law. This Agreement shall be construed and interpreted
according to the substantive laws of the State of New Jersey without giving
effect to the principles of conflicts of law thereof.
9.8 Expenses. Each of the parties shall pay its own expenses in
connection with the drafting and negotiation of this Agreement.
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9.9 Headings. The headings of the articles and sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.
9.10 Counterparts. This Agreement may be executed by the parties in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.11 Severability. In the event that any one or more terms or provisions
hereof shall be held void or unenforceable by any court or arbitrator, all
remaining terms and provisions hereof shall remain in full force and effect,
unless the deletion of those provisions held void or unenforceable would result
in a change which would frustrate a material intention of the parties hereto.
9.12 Time is of the Essence. Seller, each Selling Shareholder and Buyer
agree that time is of the essence in connection with the implementation and
performance by the parties of all terms, conditions and obligations of this
Agreement.
9.13 Brokers or Finders. Seller and each Selling Shareholder hereby
agrees to pay any broker's or finder's fee or any similar commission or fee in
connection with any of the transactions contemplated by this Agreement.
9.14 Indemnification by Seller and Selling Shareholders.
9.14.1 Extent of Indemnity. Seller and each Selling Shareholder
hereby jointly and severally indemnify, defend and hold harmless Buyer and its
affiliates and their respective officers and directors from and against:
(i) any loss, liability, claim, obligation, damage or
deficiency, directly or indirectly, arising out of or resulting from any
misrepresentation or, breach of warranty or nonfulfillment of any agreement on
the part of Seller or any Selling Shareholder contained in this Agreement or in
any statement or certificate furnished or to be furnished to Buyer pursuant
hereto or in connection with the transactions contemplated hereby;
(ii) except for Assumed Liabilities, any and all liabilities
of, relating to or arising in connection with Seller or the Business of any
nature, whether due or to become due, whether accrued, absolute, contingent or
otherwise, existing on the Closing Date or arising out of any transactions
entered into, or any state of facts existing, prior to such date, and any and
all liabilities of, relating to or arising in connection with the Retained
Business;
(iii) any loss, liability, claim, obligation, damage or
deficiency arising out of or resulting from the litigation or threatened
litigation described on Schedule 5.8;
(iv) any loss, liability, claim, obligation, damage or
deficiency arising out of or resulting from any claim asserted with respect to
Excluded Liabilities;
- 34 -
(v) any loss, liability, claim, obligation, damage or
deficiency arising out of or resulting from any Environmental Liabilities.
"Environmental Liabilities" means any and all Damages, as defined below, whether
known or unknown, foreseen or unforeseen, contingent or otherwise, or fixed or
absolute to the extent they arise out of or relate to any of the following
events or conditions first occurring on or before the Closing: (a)
environmental conditions, including without limitation the presence,
manufacture, packaging, labeling, processing, distribution, use, generation,
treatment, storage, disposal, transport, handling, Management, of or exposure to
Hazardous Substances, at, on, in or under any Property now or previously owned,
operated or leased by Seller or in the conduct of the Business (including but
not limited to any environmental conditions, whether on- or off-site) or in
connection with the Purchased Assets or Excluded Assets or the conduct of the
Business; or (b) violations of or compliance with any Environmental Law; or (c)
the Release or threat of Release of Hazardous Substances (i) at or from any
property now or previously owned, operated or leased by Seller or in the conduct
of the Business, whether into the air, soil, ground or surface waters on or
off-site or (ii) arising from or relating to the off-site transportation,
storage, treatment, recycling, disposal or Release of Hazardous Substances
generated, used, Managed, or handled by or on behalf of Seller or in connection
with the Purchased Assets or the Excluded Assets or the conduct of the Business;
or (d) any of the matters referred to or otherwise identified in Schedule 5.11;
and
(vi) any actions, judgments, costs and expenses (including
reasonable attorneys' fees and all other expenses incurred in investigating,
preparing or defending any litigation or proceeding, commenced or threatened)
incident to any of the foregoing or the enforcement of this Section 9.14.
For purposes of this Agreement, the aggregate amount of such
losses, liabilities, claims, fines, penalties, obligations, damages,
deficiencies, costs (including costs of reporting, investigation, remediation or
other response action), expenses, and fees shall be hereinafter referred to as
"Damage" or "Damages."
9.14.2 Time Limit on Certain Indemnification Claims. No action or
claim for Damages resulting from breaches of the representations and warranties
of Seller or Selling Shareholder shall be brought or made after the expiration
of a three-year period from the Closing Date, except that such time limitation
shall not apply to (i) claims for misrepresentations or breaches of warranty
relating to Section 5.5 (relating to Taxes), which may be asserted until 60 days
after the running of the applicable statute of limitations with respect to the
taxable period to which the particular claims relates, (ii) claims for
misrepresentations or breaches of warranty relating to Section 5.4 (relating to
title to any Purchased Asset), or to Section 5.11 (relating to compliance with
Laws), to Section 5.12 (relating to employee benefit plans), or to Section 5.22
(relating to fraud and abuse) which may be asserted until the date on which the
statute of limitations applicable to such matters expires or (iii) any claims
which have been the subject of a written notice from Buyer to Seller prior to
the expiration of such three-year period, which notice specifies in reasonable
detail the nature of the claim.
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9.14.3 Certain Matters Excluded. Notwithstanding anything to the
contrary in this Section 9.14, no limitation or condition of liability provided
in this Section 9.14 shall apply to the breach of any of the representations and
warranties contained herein if such representation or warranty was made with
actual knowledge that it contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements or facts
contained therein not misleading.
9.14.4 Setoff. Promptly after incurring any loss pursuant to this
Section 9.14, Buyer may, at its sole discretion, set off the amount of any such
loss described herein against moneys otherwise due Seller or the Selling
Shareholders under this or any other agreement between or among such parties.
9.15 Indemnification by Buyer. Buyer hereby indemnifies, defends and
holds harmless Seller and its affiliates and their respective officers and
directors and the Selling Shareholders from and against:
9.15.1 any loss, liability, claim, obligation, damage or deficiency
arising out of or resulting from any misrepresentation, breach of warranty or
nonfulfillment of any agreement on the part of Buyer contained in this Agreement
or in any statement or certificate furnished or to be furnished to Seller in
connection with the transactions contemplated hereby;
9.15.2 any loss, liability, claim, obligation, damage or deficiency
resulting from or arising out of the failure by Buyer to pay or discharge, or
cause to be paid or discharged, any of the Assumed Liabilities; and
9.15.3 any actions, judgments, costs and expenses (including
reasonable attorneys' fees and all other expenses incurred in investigating,
preparing or defending any litigation or proceeding, commenced or threatened)
incident to any of the foregoing or the enforcement of this Section 9.15.
9.16 Procedure for Indemnification.
9.16.1 The provisions of this Section 9.16 shall govern any claim
for indemnification by Buyer, pursuant to Section 9.14, or by Seller, pursuant
to Section 9.15 (each such party an "Indemnitee") against the party or parties
agreeing to provide indemnification hereunder (the "Indemnitor").
9.16.2 The Indemnitee shall promptly give notice hereunder to the
Indemnitor, after obtaining notice of any claim as to which recovery may be
sought against the Indemnitor because of the indemnity in Sections 9.14 or 9.15,
and, if such indemnity shall arise from the claim of a third party, the
Indemnitee shall consent to the Indemnitor assuming the defense of any such
claim; provided that the Indemnitee shall not be required to permit the
Indemnitor to assume the defense of any third party claim (x) which, if not
first paid, discharged or otherwise complied with, would result in a material
interruption or cessation of the conduct of the business of the Indemnitee, or
(y) if the Indemnitee, reasonably concludes that there may be a
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conflict of interest between the Indemnitor, on the one hand, and the
Indemnitee, on the other hand, in the conduct of the defense of such action.
Failure by the Indemnitor to notify the Indemnitee of its election to defend any
such claim or action within 14 days of the date of notice from the Indemnitee
shall be deemed to constitute its consent to the Indemnitee's assumption of such
defense, which defense shall be reimbursed in accordance with Section 9.16.3. If
the Indemnitor assumes the defense of such claim or litigation resulting
therefrom, the obligations of the Indemnitor hereunder as to such claim shall
include taking all steps necessary in the defense or settlement of such claim or
litigation resulting therefrom including the retention of counsel, which counsel
must be to the Indemnitee's reasonable satisfaction, and holding the Indemnitee
harmless from and against any and all Damage resulting from, arising out of, or
incurred with respect to any settlement approved by the Indemnitor or any
judgment in connection with such claim or litigation resulting therefrom. The
Indemnitor shall not, in the defense of such claim or litigation, (i) consent to
the entry of any judgment (other than a judgment of dismissal on the merits
without costs) except with the written consent of the Indemnitee, which consent
shall not be unreasonably withheld or (ii) enter into any settlement (except
with the written consent of the Indemnitee, which consent shall not be
unreasonably withheld), unless the Indemnitee is released and held harmless from
and against any and all Damages resulting from, arising out of or incurred with
respect to such judgment or settlement.
9.16.3 If the Indemnitor shall not assume the defense of any such
claim by a third party or litigation resulting therefrom, the Indemnitee may
defend against such claim or litigation in such manner as it deems appropriate,
and the Indemnitee may settle such claim or litigation on such terms as it may
deem appropriate and the Indemnitor shall promptly reimburse the Indemnitee for
the amount of such settlement and for all Damages incurred by the Indemnitee in
connection with the defense against or settlement of such claim or litigation.
9.17 Equitable Relief. The parties hereto agree that, in the event of
any breach of the terms and conditions of this Agreement, Buyer's remedies at
law will be inadequate and, in such event, Buyer shall be entitled to commence
an action for preliminary and permanent injunctive relief and other equitable
relief in any court of competent jurisdiction, without the necessity of proving
actual damages or posting a bond or other security, in addition to all other
remedies available at law or equity.
9.18 Bulk Transfers. If Buyer requests, Seller will comply with any
applicable bulk transfer laws. If Buyer does not so request, Buyer and Seller
each hereby waives compliance with any applicable bulk transfer laws in
connection with the sale of the Purchased Assets hereunder and Seller hereby
agrees to indemnify Buyer against and hold Buyer harmless from any and all
damages and liabilities (including reasonable attorneys' fees) relating to or
resulting from such non-compliance.
9.19 Third Party Beneficiaries. This Agreement is for the sole benefit
of the parties hereto and their permitted assigns and nothing herein expressed
or implied shall give or be construed to give to any person or entity, other
than the parties hereto and such assigns, any legal or equitable rights
hereunder.
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9.20 Jurisdiction and Process. Buyer, Seller and the Selling
Shareholders each irrevocably submits to the exclusive jurisdiction of the
Superior Court of New Jersey, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
9.21 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The parties acknowledge and agree that: (i)
each party and its counsel have reviewed the terms and provisions of this
Agreement and have contributed to its revision, (ii) the normal rule of
construction, to the effect that any ambiguities are resolved against the
drafting party, shall not be employed in the interpretation of it, and (iii) the
terms and provisions of this Agreement shall be constructed fairly as to all
parties hereto and not in favor of or against any party, regardless of which
party was generally responsible for the preparation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.
MEDIQ/PRN LIFE SUPPORT SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------------
Xxxx X. Xxxxxxx
Vice President and General Counsel
NATIONAL PATIENT CARE SYSTEMS, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Xxxxxxx Xxxxxx
President
/s/ Xxxxx Xxxxxxx
------------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxx
-------------------------------------------
Xxxxxxx Xxxxxx
- 38 -
