2.1
PURCHASE AND SALE AGREEMENT
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THIS AGREEMENT is made and entered into as of July 15 , 2004 by and among
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New York Health Care, Inc., a New York corporation (the "Seller"), NYHC Newco
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Paxxon Inc., a New York corporation ("NYHC-NJ"), and New York Health Care, LLC,
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a New York limited liability company (the "Purchaser").
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RECITALS
The Seller conducts, directly and through its wholly-owned subsidiary
NYHC-NJ, a home health care business (the "Business") and, through Bio Balance
Corp., a wholly-owned subsidiary of the Seller, a development stage
biotechnology business ("BioBalance"). In order to, among other things, raise
capital and develop the BioBalance business, the Seller desires to sell the
Business to the Purchaser and the Purchaser desires to purchase the Business,
all on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I.
PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
Section 1.01 Purchase and Sale of Assets. Upon the terms and subject
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to the conditions set forth herein, at the Closing, the Seller and NYHC-NJ shall
sell, convey, transfer, assign and deliver to the Purchaser, and the Purchaser
shall purchase, acquire and accept from the Seller and NYHC-NJ, all of the
Seller's and NYHC-NJ's right, title and interest in and to the properties,
assets, Contracts, rights and choses in action, whether tangible or intangible,
whether accrued, contingent or otherwise, and wherever located, that are used or
held for use in connection with the Business, as the same exist on the Closing
Date (collectively, the "Assets"), including the following:
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(a) all right, title and interest of the Seller and NYHC-NJ in and
to the Assets set forth on Schedule 1.01(a);
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(b) all cash and cash equivalents of the Seller and NYHC-NJ
received from or belonging to the Business including all such items in the
accounts listed on Schedule 1.01(b);
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(c) all right, title and interest of the Seller and NYHC-NJ in and
to all Contracts relating to the Business, including the Contracts set forth on
Schedule 1.01(c) (the "Assumed Contracts");
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(d) all right, title and interest of the Seller and NHYC-NJ in (i)
all trademarks and service marks used in (or at any time proposed to be used in)
the Business, and any registrations, registration certificates and applications
for registration therefor, and the goodwill
associated therewith, (ii) all trade names, assumed and fictitious names and
registered user names used in the exploitation of, or embodied in, the Business
(or at any time proposed to be so used or embodied) including the name "New York
Health Care" and other names used in the Business, all of which are set forth on
Schedule 1.01(d), and registrations and any applications for registration
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therefor, and the goodwill associated therewith and related internet domain
names;
(e) all goodwill of the Seller and NYHC-NJ associated with the
Business;
(f) all books, records, files, manuals and other similar
materials, including, advertising materials, marketing materials, brochures,
business and marketing plans and proposals, sales and promotional materials and
purchasing materials and records, accounting, financial and fiscal records,
sales order files, customer lists and customer records in all forms available,
whether of past or present customers or potential future customers, related to
or arising from the Business, advertiser lists, receipts and computer records
relating to the Business, standard operating procedures, correspondence,
customer relations information, and any other trade secrets, confidential or
proprietary information pertaining to the Business (the "Business Records");
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(g) all claims, choses in action, causes of action and judgments
relating to the Business or other Assets, including those listed on Schedule
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1.01(g);
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(h) all certifications, franchises, approvals, permits, licenses,
orders, registrations, certificates, variances and other similar permits or
rights obtained from any Governmental Entity or professional or trade
organization utilized in connection with the ownership, marketing, distributing,
licensing and exploitation of the Business, and all pending applications
therefore, including each such item listed on Schedule 1.01(h); and
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(i) all insurance policies and rights to receive insurance
proceeds relating to the damage, destruction or impairment of any of the Assets
on or prior to the Closing Date including the policies and claims listed on
Schedule 1.01(i).
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Section 1.02 Excluded Assets. Notwithstanding anything else contained
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herein, the Seller and NYHC-NJ shall not sell, transfer, convey or assign to the
Purchaser intercompany amounts due the Seller from BioBalance (the "Excluded
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Assets").
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Section 1.03 Assumed Liabilities. Subject to the terms and conditions
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contained in this Agreement, at the Closing, the Purchaser agrees to assume, pay
and perform when due all of the liabilities and obligations of the Seller and
NYHC-NJ with respect to the Business of any kind or nature, known, unknown,
accrued, absolute, contingent, recorded or unrecorded or otherwise, whether now
existing or hereafter arising as such liabilities and obligations exist on or as
of the Closing Date (the "Assumed Liabilities").
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Section 1.04 Excluded Liabilities. The Purchaser shall not assume or
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be bound by any liabilities of the Seller or its subsidiaries of any kind or
nature, known, unknown, accrued, absolute, contingent, recorded or unrecorded or
otherwise, whether now existing or hereafter arising which do not arise from or
are not related to the Business (the "Excluded Liabilities"). The Excluded
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Liabilities shall include, without limitation, the following: (i) any Liability
of any
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of the Seller or NYHC-NJ for the Taxes of any Person (other than Seller or
NYHC-NJ) under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign law), as a transferee or successor, by contract or
otherwise, (ii) any liability for Taxes of the Seller or NYHC-NJ relating to, or
arising out of, the transactions contemplated by this Agreement other than Taxes
described in Section 1.06, (iii) any liability for Taxes of the Seller or
NYHC-NJ for periods (or a portion of a period) beginning after the Closing Date,
(iv) any liability for interest, penalties or additional increases as a result
of the Seller's or NYHC-NJ's failure to timely file Tax Returns required to be
filed after the Closing Date pursuant to Section 8.02, or to timely notify the
Purchaser of any Tax required to be paid by the Purchaser pursuant to Section
8.03, and (v) any liability of the Seller relating to its general corporate
overhead or its obligations and responsibilities as a public company.
Section 1.05 Purchase Price. In addition to assuming the Assumed
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Liabilities, at the Closing, the Purchaser shall pay the Seller the Cash
Purchase Price in cash, by certified check or wire transfer to an account
designated by the Seller or a combination of the foregoing.
Section 1.06 Transfer Taxes. Each of the Seller and the Purchaser
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shall be responsible for, and shall pay on or prior to their due date, one half
(50%) of all municipal, county, state and federal sales, use and transfer Taxes
incurred and the related costs of preparing or documenting the same, if any, in
connection with the transactions contemplated by this Agreement. Seller and
NYHC-NJ shall prepare and in a timely manner sign and swear to any return,
certificate, questionnaire or affidavit as to matters required in connection
with the payment of any such Tax.
Section 1.07 Allocation of Purchase Price. The consideration provided
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for herein shall be allocated among the Assets and the assets of each Affiliate
in the manner required by Treasury Regulation Sec.1.1060-1 and as the parties
shall mutually agree (the "Allocation"). The parties hereto agree that, except
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as otherwise required by law (i) the Allocation shall be binding on the parties
hereto for all federal, state, local and foreign Tax purposes, and (ii) the
parties shall file with their respective federal income Tax Returns consistent
Internal Revenue Service Forms 8594 - Asset Acquisition Statements under Section
1060, including any required Internal Revenue Service forms, schedules or
amendments thereto which shall reflect the allocation set forth in the
Allocation.
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ARTICLE II.
THE CLOSING
Section 2.01 Closing Date. Unless this Agreement shall have been
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terminated and the transactions shall have been abandoned pursuant to Article
VI, and subject to the satisfaction or waiver of the conditions set forth in
Sections 2.02 and 2.03, the closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxxx Berlin
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Shereff Xxxxxxxx, LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., on the third business day following the
satisfaction of the conditions set forth in Sections 2.02 and 2.03, or at such
other place, date and time as the parties shall mutually agree (such date and
time of the Closing is referred to herein as the "Closing Date").
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Section 2.02 Conditions to Obligations of the Seller. The obligation
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of the Seller and NYHC-NJ to consummate the transactions contemplated hereby
shall be subject to the fulfillment on or prior to the Closing Date of the
following conditions, any or all of which may be waived by the Seller and
NYHC-NJ, in whole or in part, to the extent permitted by applicable Requirements
of Law:
(a) Representations and Warranties. The representations and
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warranties of the Purchaser contained herein shall be true in all material
respects (except for representations and warranties that contain qualifications
as to materiality, which shall be true and correct in all respects) on and as of
the date hereof and on and as of the Closing Date with the same effect as though
made on and as of the Closing Date.
(b) Performance of Obligations. The Purchaser shall have
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performed or complied with all conditions, agreements, obligations and covenants
required to be performed or complied with by the Purchaser under this Agreement
in all material respects prior to the Closing.
(c) No Governmental Order or Other Proceeding or Litigation. No
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order of any Governmental Entity shall be in effect that restrains or prohibits
the transactions contemplated hereby and by the other Transaction Documents, and
no suit, action or other proceeding by any Governmental Entity shall have been
instituted or threatened which seeks to restrain or prohibit the transactions
contemplated hereby and thereby.
(d) Purchase Price. At the Closing, the Purchaser shall have paid
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the Cash Purchase Price as contemplated by Section 1.05.
(e) Termination of Employment Agreements. Messrs. Xxxxx and
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Xxxxxxxxx shall have agreed to the termination of their employment agreements
with the Seller (the "Employment Agreements"), with the Seller to have no
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further obligation thereunder, pursuant to duly executed agreements between the
Seller and each of Messrs. Xxxxx and Xxxxxxxxx (the "Termination Agreements").
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(f) Assumption of Loan Agreement. The Purchaser shall have
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assumed all of Sellers' obligations under the Loan and Security Agreement
between Seller and Xxxxxx
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HealthCare Finance, Inc., as amended, and (i) the lender thereunder shall have
released the Seller from all liabilities and obligations under such Loan
Agreement and the related Revolving Credit Note and (ii) such lender's security
interests in Seller's assets shall have been terminated, all in form and
substance reasonably satisfactory to Seller and its counsel.
(g) Fairness Opinion. The Seller shall have received an opinion
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of a recognized investment bank reasonably satisfactory to the Seller that the
transactions contemplated hereby are fair to the Seller from a financial point
of view.
(h) Financing. The Seller shall have raised at least $4 million
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in gross proceeds (before costs, commissions and expenses) for its remaining
operations.
(i) Deliveries. The Purchaser shall have made the deliveries
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contemplated by Section 2.04(a).
(j) Shareholder Approval. This Agreement and the transactions
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contemplated hereby and the Seller's name change shall have been duly and
validly approved by the requisite vote or consent of the Seller's shareholders
in accordance with Section 5.05.
(k) Resignations. The Purchaser shall deliver the resignations as
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of the Closing Date of Xxxxx Xxxxx and Xxxxx Xxxxxxxxx as directors and officers
of the Seller.
(l) Consents. The consents listed on Schedule 4.02(c) shall have
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been obtained.
Section 2.03 Conditions to Obligations of the Purchaser. The
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obligation of the Purchaser to consummate the transactions contemplated hereby
shall be subject to the fulfillment on or prior to the Closing Date of the
following conditions, any or all of which may be waived by the Purchaser, in
whole or in part, to the extent permitted by applicable Requirements of Law:
(a) Representations and Warranties. The representations and
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warranties of the Seller and NYHC-NJ contained herein shall be true in all
material respects (except for representations and warranties that contain
qualifications as to materiality, which shall be true and correct in all
respects) on and as of the date hereof and on and as of the Closing Date with
the same effect as though made on and as of the Closing Date.
(b) Performance of Obligations. Each of the Seller and NYHC-NJ
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shall have performed or complied with all conditions, agreements, obligations
and covenants required to be performed or complied with by the Seller and
NYHC-NJ under this Agreement prior to the Closing.
(c) Consents. The consents listed on Schedule 3.02(c) shall have
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been obtained.
(d) No Material Adverse Change. From the date hereof through and
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including the Closing Date, no event, occurrence, fact, condition, change,
development or effect shall have occurred, exist or come to exist that,
individually or in the aggregate, has constituted or resulted in, or could
reasonably be expected to constitute or result in a change materially adverse to
the
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Business, its Assets, its financial condition, operating results, customer,
employee or supplier relations, conditions or prospects (a "Material Adverse
Change"), provided that this condition shall not be applicable if such Material
Adverse Change was caused by the actions or failure to act of the current
management of the Business.
(e) No Governmental Order or Other Proceeding or Litigation. No
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order of any Governmental Entity shall be in effect that restrains or prohibits
the transactions contemplated hereby and by the other Transaction Documents, and
no suit, action or other proceeding by any Governmental Entity shall have been
instituted or threatened which seeks to restrain or prohibit the transactions
contemplated hereby or thereby.
(f) Deliveries. The Seller and NYHC-NJ shall have made the
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deliveries contemplated by Section 2.04(b).
Section 2.04 Deliveries at Closing.
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(a) At the Closing, the Purchaser shall deliver or cause to be
delivered to the Seller the following:
(i) a duly executed Assignment, Xxxx of Sale and Assumption
Agreement, in a form mutually acceptable to the parties (the "Xxxx of
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Sale");
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(ii) certificates from the appropriate governmental
official(s) as to the good standing of and the payment of state
franchise taxes by the Purchaser as of a date within ten (10) days of
the Closing;
(iii) a certificate of the Purchaser, duly executed by a
manager of the Purchaser, to the effect that each of the conditions
specified in clauses (a) and (b) of Section 2.02 has been satisfied as
of the Closing Date;
(iv) true, correct and complete copies of (1) the Articles of
Organization, as amended to date, of the Purchaser, certified as of a
recent date by the Secretary of State of the State of New York, (2)
the limited liability company operating agreement of the Purchaser,
(3) resolutions duly and validly adopted by (a) the Board of Managers
of the Purchaser and (b) the members of the Purchaser evidencing the
due authorization of the execution and delivery of this Agreement and
the other Transaction Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby,
accompanied by a certificate of a Manager of the Purchaser, dated as
of the Closing Date, stating that no amendments have been made thereto
from the date thereof through the Closing Date and certifying as to
the incumbency of the other Managers of the Purchaser that are
executing any of the Transaction Documents; and
(v) the Termination Agreements, duly executed by Messrs.
Xxxxx and Xxxxxxxxx.
(b) At the Closing, the Seller and NYHC-NJ shall deliver or cause
to be delivered to the Purchaser the following:
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(i) a duly executed Xxxx of Sale, executed by the Seller and
NYHC-NJ;
(ii) possession of the Assets;
(iii) certificates from the appropriate governmental
official(s) as to the good standing of and the payment of state
franchise taxes by each of the Seller and NYHC-NJ as of a date within
ten (10) days of the Closing;
(iv) certificates of each of the Seller and NYHC-NJ, duly
executed by an appropriate officer of the Seller and NYHC-NJ,
respectively, to the effect that each of the conditions specified in
clauses (a) and (b) of Section 2.03 has been satisfied as of the
Closing Date;
(v) true, correct and complete copies of (1) the certificate
of incorporation, as amended to date, of the Seller certified as of a
recent date by the Secretary of State of the State of New York, (2)
the by-laws of the Seller, as amended to date, (3) resolutions duly
and validly adopted by (a) the Board of Directors and (b) shareholders
of the Seller evidencing the due authorization of the execution and
delivery of this Agreement and the other Transaction Documents to
which it is a party and the consummation of the transactions
contemplated hereby and thereby accompanied by a certificate of the
Secretary or Assistant Secretary of the Seller, dated as of the
Closing Date, stating that no amendments have been made thereto from
the date thereof through the Closing Date and certifying as to the
incumbency of the other officers of the Seller that are executing any
of the Transaction Documents;
(vi) true, correct and complete copies of (1) the certificate
of incorporation, as amended to date, of NYHC-NJ certified as of a
recent date by the Secretary of State of the State of New York, (2)
the by-laws of NYHC-NJ, as amended to date, (3) resolutions duly and
validly adopted by (a) the Board of Directors of NYHC-NJ and (b) the
shareholder of NHYC-NJ evidencing the due authorization of the
execution and delivery of this Agreement and the other Transaction
Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby accompanied by a
certificate of the Secretary or Assistant Secretary of the NYHC-NJ,
dated as of the Closing Date, stating that no amendments have been
made thereto from the date thereof through the Closing Date and
certifying as to the incumbency of the other officers of NYHC-NJ that
are executing any of the Transaction Documents;
(vii) true, correct and complete copies of (i) the filed
Certificate of Amendment to the certificate of incorporation of the
Seller evidencing the change in name of the Seller from New York
Healthcare, Inc. to BioBalance Holdings, Inc., (ii) resolutions duly
and validly adopted by the (a) Board of Directors and (b) Shareholders
of the Seller evidencing the authorization of the change in the name
of the Seller and the execution of the certificate of incorporation of
the Seller;
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(viii) executed letters to each customer of the Business, on
behalf of the Seller or NYHC-NJ, as the case may be, directing such
customer to directly pay Purchaser any amounts due with respect to the
Business on or after the Closing Date at such address as Purchaser
shall specify in writing;
(ix) clearance certificates or similar documents from any
applicable state, local or foreign Tax authority (including New York
and New Jersey) required by law to relieve the Purchaser of any
liability for unpaid sales or similar Taxes of the Seller or NYHC-NJ
attributable to periods prior to or including the Closing Date; and
(x) such other agreements, instruments, documents, forms or
filings as may be necessary in order to vest in the Purchaser good and
valid title to the Assets and the Business.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF
THE SELLER AND NYHC-NJ
The Seller and NYHC-NJ represent and warrant to the Purchaser as follows:
Section 3.01 Organization and Qualification. Each of the Seller and
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NYHC-NJ and their subsidiaries is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Each of the Seller
and NYHC-NJ and their subsidiaries has all corporate or other power and
authority, and is duly authorized by all necessary regulatory approvals and
orders, to own, lease and operate its assets and properties and to carry on its
business as it is now being conducted, and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of its business
or the ownership or leasing of its assets and properties makes such
qualification necessary. A true, correct and complete list of such jurisdictions
(as well as the jurisdiction of organization of each of the Seller, NYHC-NJ and
their subsidiaries included in the Business) is set forth on Schedule 3.01.
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Section 3.02 Authority, etc.
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(a) Authority.
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(i) Each of the Seller and NYHC-NJ has all requisite
corporate power and authority to enter into and fully perform this
Agreement and each other agreement contemplated hereby (this Agreement
and the other agreements, exhibits, documents, certificates and
schedules contemplated hereby are referred to as, the "Transaction
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Documents") to which it is a party and to consummate the transactions
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contemplated hereby and thereby.
(ii) The execution, delivery and performance by each of the
Seller and NYHC-NJ of this Agreement and each other Transaction
Document to which it is a party and the consummation by the Seller and
NYHC-NJ of the transactions contemplated hereby and thereby, subject,
in the case of the Seller, to obtaining
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requisite shareholder approval, have been duly authorized by all
corporate action on the part of the Seller and NYHC-NJ, and no other
corporate proceedings on the part of the Seller and NYHC-NJ are
necessary to authorize this Agreement or any of the other Transaction
Documents or the consummation of any of the transactions contemplated
hereby and thereby.
(iii) Each Transaction Document to which either or both of
Seller and NYHC-NJ is a party has been and will be, as the case may
be, duly and validly executed and delivered by the Seller and/or
NYHC-NJ and constitutes the valid and binding obligation of the Seller
and/or NYHC-NJ, enforceable against it in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or other similar laws affecting
the enforcement of creditors' rights generally and except that the
availability of equitable remedies, including but not limited to
specific performance, may be subject to the discretion of any court
before which any proceeding therefor may be brought.
(b) Non-Contravention. Neither the execution and delivery by
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either of the Seller and NYHC-NJ of this Agreement or any Transaction Document
to which it is a party, nor the consummation or performance by either of the
Seller or NYHC-NJ of the transactions contemplated hereby or thereby, will (with
or without notice or lapse of time or both) contravene, conflict with or result
in any violation by the Seller or NYHC-NJ or any of their subsidiaries included
in the Business under any provisions of or result in any right of acceleration,
termination, cancellation, penalty or modification of, or constitute a default
under (a) the certificate of incorporation, bylaws or similar governing
documents of the Seller, NHYC-NJ or any subsidiary included in the Business and
(b) assuming that the Consents set forth on Schedules 3.02(c) and 4.02(c) are
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obtained:
(i) any Requirements of Law;
(ii) any order of any Governmental Entity; or
(iii) any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, Contract, lease or other
instrument, obligation or agreement of any kind to which the Seller,
NYHC-NJ or any subsidiary included in the Business is a party or by
which any of their respective assets may be bound or affected.
Neither the execution and delivery by the Seller of any Transaction
Document to which it is a party, nor the consummation or performance by the
Seller of any of the transactions contemplated hereby or thereby, will result in
the creation or imposition of any lien, claim or other encumbrance of any nature
whatsoever upon the Business or the Assets.
(c) Approvals. Except as set forth on Schedule 3.02(c), no
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declaration, filing or registration with, or notice to or Consent of, any
Governmental Entity or any other Person is necessary for the execution and
delivery by the Seller or NYHC-NJ of this Agreement or any
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other Transaction Document to which it is a party or the consummation by the
Seller or NYHC-NJ of the transactions contemplated hereby and thereby.
Section 3.03 Brokers and Finders. The Seller has not employed any
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broker or finder or incurred any liability for any investment banking fees,
brokerage fees, commissions, finder's fees or similar fees in connection with
the transactions contemplated by this Agreement, except for the fee of the
investment banker giving the fairness opinion which is and shall remain the
obligation of the Seller and which shall be paid prior to the Closing.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller and NYHC-NJ as follows:
Section 4.01 Organization and Qualification. The Purchaser is a
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limited liability company duly organized, validly existing and in good standing
under the laws of the State of New York. The Purchaser has all limited
liability company power and authority, and is duly authorized by all necessary
regulatory approvals and orders, to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted, and is
duly qualified and in good standing to do business in each jurisdiction in which
the nature of its business or the ownership or leasing of its assets and
properties makes such qualification necessary. The copies of the articles of
organization of the Purchaser, as heretofore made available to the Seller, are
correct and complete in all respects.
Section 4.02 Authority, etc.
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(a) Authority.
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(i) The Managers of the Purchaser have taken all action
necessary to authorize and approve this Agreement and the other
Transaction Documents and the transactions contemplated hereby and
thereby. The Purchaser has all requisite power and authority to enter
into and fully perform this Agreement and the other Transaction
Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby.
(ii) The execution, delivery and performance by the Purchaser
of this Agreement each other Transaction Document to which it is a
party and the consummation by the Purchaser of the transactions
contemplated hereby and thereby have been duly authorized by all
limited liability company action on the part of the Purchaser and no
other proceedings on the part of the Purchaser are necessary to
authorize this Agreement or each other Transaction Document or the
consummation of any of the transactions contemplated hereby and
thereby.
(iii) Each Transaction Document to which Purchaser is a party
has been or will be, as the case may be, duly and validly executed and
delivered by Purchaser and constitutes the valid and binding
obligation of Purchaser, enforceable against it in accordance with its
terms, except as would be limited by
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applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or other similar laws affecting the enforcement of
creditors' rights generally and except that the availability of
equitable remedies, including but not limited to specific performance,
may be subject to the discretion of any court before which any
proceeding therefor may be brought.
(b) Non-Contravention. Neither the execution and delivery by
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Purchaser of this Agreement or any Transaction Document to which it is a party,
nor the consummation or performance by Purchaser of any of the transactions
contemplated hereby or thereby, will (with or without notice or lapse of time or
both) contravene, conflict with or result in any violation by the Purchaser
under any provisions of or result in any right of acceleration, termination,
cancellation, penalty or modification of, or constitute a default under (a) the
articles of organization, limited liability company agreement or similar
governing documents of Purchaser or (b) assuming that the Consents set forth on
Schedules 3.02(c) and 4.02(c) are obtained:
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(i) any Requirements of Law;
(ii) any order of any Governmental Entity; or
(iii) any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, Contract, lease or other
instrument, obligation or agreement of any kind to which the Purchaser
is a party or by which its assets may be bound or affected.
(c) Approvals. Except as set forth on Schedule 4.02(c), no
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declaration, filing or registration with, or notice to or Consent of, any
Governmental Entity or any other Person is necessary for the execution and
delivery by Purchaser of this Agreement or any other Transaction Document to
which it is a party or the consummation by Purchaser of the transactions
contemplated hereby and thereby.
Section 4.03 Brokers and Finders. Neither the Purchaser nor any of its
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officers, directors or employees has employed any broker or finder or incurred
any liability for any investment banking fees, brokerage fees, commissions or
finder's fees in connection with the transactions contemplated by this
Agreement.
ARTICLE V.
COVENANTS
Section 5.01 Conduct of the Business Until Closing. Seller and NYHC-NJ
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hereby covenant and agree that, from the date of this Agreement until the
Closing, unless otherwise contemplated by this Agreement or consented to in
writing by Purchaser, they will, and will cause each of their subsidiaries to,
carry on the Business only in the ordinary course.
Section 5.02 Conduct of Purchaser and its Managers With Respect to
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Seller. Each of Purchaser and Messrs. Xxxxx and Xxxxxxxxx hereby covenants and
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agrees that from the date hereof until the Closing Date, they will operate the
Business in the ordinary course consistent
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with past practices and not cause the Seller to do anything inconsistent with or
in violation of the Seller's covenants under this Agreement.
Section 5.03 Commercially Reasonable Efforts to Satisfy Conditions.
-----------------------------------------------------
Prior to the Closing, upon the terms and subject to the conditions of this
Agreement, Seller, NYHC-NJ and Purchaser agree to use their respective
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable (subject
to any applicable laws) to consummate the transactions contemplated hereby as
promptly as practicable including, but not limited to, obtaining the consents
set forth on Schedule 3.02(c). Prior to the Closing, each party shall promptly
consult with the other parties hereto with respect to, provide any necessary
information with respect to, and provide the other party (or their respective
counsel) with copies of, all filings made by such party with any Governmental
Entity or another information supplied by such party to a Governmental Entity in
connection with this Agreement and the transactions contemplated hereby. Each
party hereto shall promptly inform the other of any communication from any
Governmental Entity regarding any of the transactions contemplated hereby. If
any party hereto or Affiliate thereof receives a request for additional
information or documentary material from any such Governmental Entity with
respect to any of the transactions contemplated hereby, then such party shall
endeavor in good faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other parties, an appropriate
response in compliance with such request.
Section 5.04 No Solicitation by Seller and NYHC-NJ of Competing
--------------------------------------------------
Transactions. From the date hereof until the Closing or the earlier termination
------------
of this Agreement in accordance with its terms, each of the Seller and NYHC-NJ
agrees that it will deal exclusively with the Purchaser with respect to a sale
of the Business. To that end, during such period neither the Seller or NYHC-NJ
shall, nor shall it authorize or permit any of its officers, directors,
employees, direct or indirect subsidiaries, affiliates, investment bankers,
attorneys, accountants, agents or advisors or representatives, directly or
indirectly, to:
(a) solicit, initiate or knowingly facilitate or encourage the
submission of any Investment Proposal;
(b) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or take any other action
to facilitate any inquiries or the making of any proposal that constitutes an
Investment Proposal; or
(c) enter into any agreement with respect to any Investment
Proposal other than with the Purchaser.
For the purposes hereof, the term "Investment Proposal" means any offer or
proposal for, or indication of interest in, (i) any purchase of the equity of
the Business or any company included within the Business by any person other
than the Purchaser, (ii) any merger, consolidation, share exchange, business
combination, reorganization, recapitalization, liquidation, dissolution, tender
offer or exchange offer or other similar transaction with the Seller or any
company included within the Business or (iii) any purchase by anyone other than
Purchaser of any assets of the Business or any company included within the
Business other than
12
in the ordinary course of business consistent with past practice of the Business
or any company included within the Business, as appropriate.
Section 5.05 Proxy Statement.
---------------
(a) The Seller agrees that as promptly as practicable following
the date of this Agreement it shall prepare and file a proxy statement (the
"Proxy Statement") with the SEC. The Seller shall use commercially reasonable
---------------
efforts to cause the Proxy Statement to be mailed to its shareholders at the
earliest practicable date following such filing. In connection with the
foregoing, the Purchaser shall furnish to the Seller (and be responsible for)
all information related to it as is required to be included in the Proxy
Statement. If at any time prior to the Closing any event with respect to the
Purchaser or with respect to other information supplied by the Purchaser for
inclusion in the Proxy Statement shall occur which is required to be described
in an amendment of, or a supplement to, the Proxy Statement, the Purchaser shall
provide written notice thereof to the Seller and such event shall be so
described, and such amendment or supplement shall be promptly filed with the SEC
and, as required by law, disseminated. If, at any time prior to the Closing any
event with respect to the Seller or with respect to other information supplied
by the Seller for inclusion in the Proxy Statement shall occur, which is
required to be described in an amendment of or supplement to, the Proxy
Statement, the Seller shall provide written notice thereof to the Purchaser, and
such event shall be so described, and such amendment or supplement shall be
promptly filed with the SEC and, as required by law, disseminated. No filing
of, or amendment or supplement to, the Proxy Statement, to the extent such
amendment or supplement affects the Purchaser, will be made by the Seller
without the Purchaser's prior consent, which shall not be unreasonably withheld,
delayed or conditioned. The Seller shall advise the Purchaser, promptly after
it receives notice thereof, of any request by the SEC for amendment of the Proxy
Statement or comments thereon and responses thereto or requests by the SEC for
additional information.
(b) The Purchaser hereby covenants and agrees that all information
it provides to the Seller in connection with the Proxy Statement shall be true,
correct and complete as of the date such information is provided to the Seller.
Section 5.06 Shareholder Meeting.
-------------------
(a) As soon as practicable after review of the Proxy Statement by
the SEC is complete, the Seller, acting through the Seller's Board of Directors,
shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold an annual or
special meeting of the Seller's shareholders (the "Shareholders'
-------------
Meeting") for the purpose of considering and taking action upon the
-------
approval of (x) this Agreement and the transactions contemplated
hereby, and (y) the amendment of the Seller's Certificate of
Incorporation to change its name to "BioBalance Holdings, Inc."; and
(ii) use its reasonable efforts to solicit from the Seller's
shareholders proxies in favor of the matters described in clause (i)
of this sentence and take all
13
other action necessary to secure any vote or consent of the Seller's
shareholders required by the certificate of incorporation of the
Seller and applicable law.
Section 5.07 Access and Information. For so long as this Agreement is
----------------------
in effect, and subject to applicable laws, the Seller and NYHC-NJ shall, and
shall cause each of their subsidiaries to, (a) afford to the Purchaser and its
officers, employees, accountants, consultants, legal counsel and other
representatives reasonable access during normal business hours, subject to
reasonable advance notice, to the Business, its Assets and properties,
Contracts, books, records and personnel and (b) furnish promptly to the
Purchaser all other information concerning the Business, its operations, Assets,
liabilities and personnel as the Purchaser may reasonably request.
Section 5.08 Publicity. The Seller and the Purchaser shall consult
---------
with each other before issuing any press release or making any public statement
with respect to this Agreement or the transaction contemplated hereby and shall
not issue any such press release or make any such public statement without the
prior consent of the other party, which shall not be unreasonably withheld,
conditioned or delayed; provided, however, that a party may, without the prior
consent of the other party, may issue such press release or make such public
statement as may upon the advice of counsel be required by law if it has used
all reasonable efforts to consult with the other party prior thereto.
Section 5.09 Directors' and Officers' Indemnification and Insurance.
------------------------------------------------------
(a) For six years after the Closing, the Seller shall indemnify,
defend and hold harmless each current officer or director of the Seller, in each
such officer's or directors capacity as such, against all losses, claims,
damages, liabilities, costs, fees and expenses, including reasonable fees and
disbursements of counsel and judgments, fines, losses, claims, liabilities and
amounts paid in settlement arising out of actions or omissions occurring at or
prior to the Closing to the full extent required under applicable Requirements
of Law and the terms of the certificate of incorporation or by-laws of the
Seller, as in effect at the date hereof; provided, that, in the event any claim
or claims are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims shall continue until
disposition of any and all such claims.
(b) The Seller shall maintain its existing officers' and directors
liability insurance for a period of not less than six years after the Closing;
provided that the Seller may substitute therefor policies of substantially
equivalent coverage and amounts containing terms no less favorable to the
current directors or officers of the Seller to which such insurance applies.
Section 5.10 Employee Benefit Matters. Each "employee benefit plan,"
------------------------
within the meaning of Section 3(3) of ERISA, which is sponsored by the Seller
and covers the employees of the Business is named in Schedule 5.10 (each such
-------------
plan a "Seller Plan"). As of the Closing Date, each Seller Plan specified in
-----------
Schedule 5.10 shall have its sponsorship transferred to the Purchaser who shall
-------------
thereafter have all responsibility for the such Plan's administration, and all
liability for making the contributions to each such Plan.
14
ARTICLE VI.
TERMINATION
Section 6.01 Termination Events. This Agreement may be terminated and
------------------
the transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual written consent of the Seller and NYHC-NJ, on the
one hand, and the Purchaser, on the other;
(b) by the Seller or the Purchaser, if
(i) the Closing shall not have occurred on or before December
31, 2005; provided however, that the right to terminate this Agreement
under this Section 6.01(b)(i) shall not be available to the Seller or
the Purchaser, as the case may be, if such party's failure to fulfill
any obligation under this Agreement has been a cause of or resulted in
the failure of the transactions to occur on or before such date; or
(ii) the Seller's shareholders shall have voted against the
approval of this Agreement and the transactions contemplated hereby;
(c) by the Seller, if the Purchaser shall have breached any
representation, warranty, covenant or other agreement contained in this
Agreement which would give rise to the failure of a condition set forth in
Section 2.02, which breach cannot be or has not been cured within 45 days after
the giving of written notice by the Seller to the Purchaser; or
(d) by the Purchaser, if the Seller or NYHC-NJ shall have breached
any representation, warranty, covenant or other agreement contained in this
Agreement which would give rise to the failure of a condition set forth in
Section 2.03, which breach cannot be or has not been cured within 45 days after
the giving of written notice by the Purchaser to the Seller and NYHC-NJ.
Section 6.02 Effect of Termination. In the event of termination of
---------------------
this Agreement by either the Seller or the Purchaser as provided in Section
6.01, this Agreement shall forthwith become null and void and there shall be no
liability or obligations on the part of the Purchaser, on the one hand, or the
Seller and NYHC-NJ, on the other, or any of their respective Affiliates,
officers, or shareholders except that no such termination shall relieve any
party from liability for any breach of the respective representations, covenants
and other obligations hereunder prior to the date of termination.
ARTICLE VII.
INDEMNIFICATION
Section 7.01 Representations and Warranties. The representations and
------------------------------
warranties set forth in this Agreement hereof shall survive for a period of 18
months following the Closing Date.
15
Section 7.02 Indemnification by the Seller and NYHC-NJ. The Seller and
-----------------------------------------
NYHC-NJ shall jointly and severally indemnify, defend and hold harmless
Purchaser, and its officers, directors, employees, Affiliates, representatives,
agents and the successors and assigns of all of them (each, a "Purchaser
---------
Indemnitee") in respect of any Damages arising from or in connection with (i)
----------
the breach of any representation or warranty of the Seller or NYHC-NJ under this
Agreement, the other Transaction Documents or any certificate or document
delivered pursuant hereto or thereto, (ii) the failure of the Seller to duly
perform or observe any term, provision, covenant, agreement or ongoing
obligation to be performed or observed by it pursuant to this Agreement, the
other Transaction Documents or any certificate or document delivered pursuant
hereto or thereto (so long as such failure is not caused by Purchaser's breach
of any of the terms of this Agreement or any other Transaction Document) and
(iii) all Excluded Liabilities.
Section 7.03 Indemnification by the Purchaser. The Purchaser shall
--------------------------------
indemnify and hold harmless each of the Seller and NYHC-NJ and their respective
officers, directors, employees, Affiliates, representatives, agents and the
successors and assigns of all of them (each a "Seller Indemnitee") in respect of
-----------------
any Damages arising from or in connection with (i) the breach of any
representation or warranty of the Purchaser under this Agreement, the other
Transaction Documents or any certificate or document delivered pursuant hereto
or thereto, (ii) the failure of the Purchaser to duly perform or observe any
term, provision, covenant or agreement to be performed or observed by it
pursuant to this Agreement, the other Transaction Documents or any certificate
or document delivered pursuant hereto or thereto (so long as such failure is not
caused by the Seller's or NYHC-NJ's breach of any of the terms of this Agreement
or any other Transaction Document), and (iii) all Assumed Liabilities.
Section 7.04 Knowledge of Purchaser Principals. Neither of Messrs.
---------------------------------
Xxxxx and Xxxxxxxxx (the "Purchaser Principals") has any knowledge that any of
--------------------
the Seller's or NYHC-NJ's representations or warranties in this Agreement
(including in any schedule or exhibit hereto and any other agreement or
certificate delivered by the Seller or NYHC-NJ pursuant to this Agreement) is
untrue or misleading in any respect. The Purchaser acknowledges and agrees that
the Purchaser Principals are and have been the officers responsible for the
day-to-day management and affairs of the Business. Notwithstanding anything to
the contrary contained herein, the Purchaser, NYHC-NJ and the Seller expressly
agree that neither the Seller nor NYHC-NJ shall have any liability or obligation
to the Purchaser arising out of or in connection with the breach of any
representation, warranty, covenant or agreement (including under this Article
VII) contained herein to the extent that such breach or liability was caused by
or attributable to the knowledge of the Purchaser Principals.
ARTICLE VIII.
OBLIGATIONS AFTER THE CLOSING
Section 8.01 Further Assurances.
------------------
(a) Each party will, at any time, when called upon to do so by
another party, its successors, legal representatives, or assigns, sign all
lawful papers, make all rightful oaths, execute and deliver all documents, and
do all lawful acts required for the filing of such papers as are necessary to
aid in (i) effectively vesting in the Purchaser good title to the Assets, (ii)
16
consummating the transactions contemplated hereby, and (ii) recording,
obtaining, enforcing and vesting in Purchaser rights in the Business in all
jurisdictions, all without further compensation. If any consent of a third party
that is required in order to assign an Assumed Contract has not been obtained,
or if an attempted assignment is otherwise deemed invalid, the Seller or
NYHC-NJ, as the case may be, shall cooperate with the Purchaser in any lawful
arrangement to provide that the Purchaser shall receive the Seller's or
NYHC-NJ's entire interest in the benefits under such Assumed Contract,
including, without limitation, enforcement for the breach or cancellation
thereof by such party or otherwise.
(b) On and after the Closing Date, the Purchaser shall have the
sole right and authority to collect, for its own account and sole benefit, all
monies payable to the Business or in respect of the Assets. If any party shall
receive any monies of another, it shall hold all such monies in trust for the
sole benefit of the party to whom such monies are owed. Within five business
days after receipt thereof, the Seller and NYHC-NJ shall cause the transfer and
delivery to the Purchaser of any monies or other property which the Seller or
NYHC-NJ may receive after the Closing Date in payment of monies payable in
respect of or other property due to the Business and the Purchaser shall cause
the transfer and delivery of any monies or other property which the Purchaser
may receive after the Closing Date in payment of monies payable in respect of or
other property due to the business conducted by the Seller or NYHC-NJ other than
the Business.
Section 8.02 Tax Returns. The Seller and NYHC-NJ shall prepare or
-----------
cause to be prepared and timely file or cause to be timely filed (at their
expense) all Tax Returns for the Seller and NYHC-NJ (including consolidated,
combined or unitary income Tax Returns that include items of income of Seller
and NYHC-NJ) for all periods ending on or prior to the Closing Date, or which
include the Closing Date, which are filed after the Closing Date. Such Tax
Returns shall be prepared in a manner consistent with prior practices of the
Seller and NYHC-NJ, provided that such Tax Returns shall be prepared in
compliance with applicable law. Not later than 15 days before the filing of
each such Tax Return, the Seller shall provide a copy of such Tax Returns to the
Purchaser, and the Purchaser shall be given an opportunity to review and comment
on such Tax Return prior to filing. Seller and Purchaser agree to consult each
other and resolve in good faith any issues arising under the terms of this
Section 8.02 as a result of the review of any such Tax Returns. If such
disputes have not been resolved prior to the due date for filing of such Tax
Return, the Tax Return in question, to the extent any issues thereon remain
unresolved, shall be filed in accordance with the positions taken by the Seller
or NYHC-NJ, as the case may be. If a determination is made through the dispute
resolution process after a Tax Return is filed that Seller's (or NYHC-NJ's)
position was inappropriate, the Seller or NYHC-NJ, as the case may be, shall
promptly file an amended Tax Return (to the extent permitted by applicable law)
reflecting the final decision of the Neutral Auditor.
Section 8.03 Payment of Taxes. The Seller and NYHC-NJ shall pay or
----------------
cause to be paid on a timely basis all Taxes which are payable with respect to
Tax Returns described in Section 8.02; provided, that the Purchaser shall pay
the Seller the amount of such Taxes as constitute Assumed Liabilities, as
defined in Section 1.03, and determined in accordance with Section 8.04,
contemporaneous with the filing of such Tax Returns (but not less than fifteen
days after the date on which notice is provided to the Purchaser of the amount
of Taxes to be paid by the Purchaser).
17
Section 8.04 Allocation of Taxes to Pre-Closing Period. For purposes
-----------------------------------------
of this Agreement, in the case of any Taxes that are imposed on a periodic basis
and are payable for a taxable period that includes (but does not end on) the
Closing Date, the portion of such Tax that relates to the portion of such
taxable period ending on the Closing Date shall (a) in the case of any Taxes
other than Taxes based upon or related to income or receipts, to the extent
feasible, be determined on a specific identification basis, according to the
event or transaction giving rise to the Tax, and otherwise be deemed to be the
amount of such Tax for the entire taxable period multiplied by a fraction the
numerator of which is the number of days in the taxable period ending on the
Closing Date and the denominator of which is the number of days in the entire
taxable period; and (b) in the case of any Tax based upon or related to income
or receipts, be deemed equal to the amount which would be payable if the
relevant taxable period ended on the Closing Date, provided, however, that any
income or gain related to (or arising out of) the transactions contemplated
hereby (including, without limitation, gain on the sale of the Assets) shall be
excluded. Any credits (including credits for prepaid or estimated taxes)
relating to a taxable period that begins before and ends after the Closing Date
shall be taken into account as though the relevant taxable period ended on the
Closing Date. In all events, the Taxes taken into account pursuant to this
Section 8.04 shall include only income and other Taxes directly related to the
Business, and shall exclude any Taxes with respect to income or gains from
transactions outside the ordinary course of business of the Seller or NYHC-NJ,
as the case may be, provided, however, that losses and deductions properly taken
into account in determining income for the period in question shall be taken
into account such that the amount treated as an Assumed Liability for such
period shall in no event exceed the aggregate consolidated or combined income
tax due by the Seller (in the case of Taxes determined on a consolidated or
combined basis), or the separate tax due by the Seller or NYHC-NJ (in the case
of Taxes computed on a separate basis). All determinations necessary to give
effect to the foregoing allocations shall be made in a manner consistent with
prior practices of the Seller and NYHC-NJ.
Section 8.05 Amendment of Pre-Closing Period Tax Returns. Neither the
-------------------------------------------
Seller nor NYHC-NJ may amend or cause to be amended any consolidated, combined
or unitary or other Tax Return including either of the Seller or NYHC-NJ which
has been filed or was required to be filed for any Pre-Closing Period without
the consent of the Purchaser, which consent shall not be unreasonably withheld
or delayed.
Section 8.06 Resolution of Tax-Related Disputes. In the event that the
----------------------------------
Seller and the Purchaser cannot agree on the calculation of any amount relating
to Taxes or the interpretation or application of any provision of this Agreement
relating to Taxes, such dispute shall be resolved by Xxxxxx LLC (the "Neutral
-------
Auditor"), whose decision shall be final and binding upon all persons involved
-------
and whose expense shall be shared equally by the Seller and the Purchaser.
ARTICLE IX.
MISCELLANEOUS
Section 9.01 Headings. Subject headings are included for convenience
--------
only and shall not affect the interpretation of any provision of this Agreement.
18
Section 9.02 Notices. Any notice, demand, request, waiver, or other
-------
communication under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if personally served or sent by
facsimile transmission, on the business day after notice is delivered to a
courier or mailed by express mail if sent by courier delivery service or express
mail for next day delivery and on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail, registered, return
receipt requested, postage prepaid and addressed as follows (or to such other
address of which any such party shall give notice pursuant to this Section
-------
9.02):
----
If to the Seller or NYHC-NJ, to:
New York Health Care, Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. X'Xxxxxxx
---------
with a courtesy copy to:
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
---------
If to the Purchaser, to:
New York Health Care, LLC
c/o New York Health Care
0000 XxXxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxx and Xxxxx Xxxxxxxxx
---------
with a courtesy copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxx, Esq.
---------
19
Section 9.03 Successors and Assigns. Except as otherwise provided in
-----------------------
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall be binding upon and inure to the benefit of the respective
successors and permitted assigns of the parties and the heirs, personal
representatives, executors and assigns of the Seller, NYHC-NJ and the Purchaser.
This Agreement may not be assigned by any party without the prior express
written consent of the other parties provided however the Purchaser may assign
this Agreement to any entity controlled by Messrs. Xxxxx and Xxxxxxxxx without
the Seller's or NHYC-NJ's consent.
Section 9.04 Bulk Sales Laws. The Purchaser hereby waives the
---------------
provisions of any and all applicable bulk sales laws.
Section 9.05 Payment of Costs and Expenses. In the event either of the
-----------------------------
Seller or NYHC-NJ, on the one hand, or the Purchasers, on the other , or such
party's officers, directors, employees, direct or indirect subsidiaries or
affiliates breach any of the provisions of this Agreement, including, but not
limited to, Section 5.04, then, in addition to all rights and remedies that the
------------
other party or parties may have at law or in equity, such party or parties shall
be obligated to pay all costs and expenses incurred by the other party or
parties with respect to the sale or purchase of the Business, including, but not
limited to, such other party or parties' reasonable attorneys' fees.
Section 9.06 [INTENTIONALLY OMITTED]
Section 9.07 Governing Law. Notwithstanding the location of the
-------------
Closing, this Agreement shall be construed in accordance with, and governed by,
the laws of the State of New York as applied to contracts made and to be
performed entirely in the State of New York, without regard to principles of
conflicts of law.
Section 9.08 Entire Agreement. This Agreement, including the Schedules
----------------
and Exhibits hereto, sets forth the entire understanding and agreement, and
supersedes any and all other understandings, negotiations or agreements, between
the Purchaser, the Seller and NYHC-NJ relating to the sale and purchase of the
Business.
Section 9.09 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute a single agreement. This Agreement may be evidenced
by facsimile signatures.
Section 9.10 Severability. In the event that any one or more of the
------------
immaterial provisions contained in this Agreement shall for any reason be held
to be invalid, illegal or unenforceable, the same shall not affect any other
provision of this Agreement, but this Agreement shall be construed in a manner
which, as nearly as possible, reflects the original intent of the parties.
Section 9.11 No Prejudice. This Agreement has been jointly prepared by
------------
the parties hereto and the terms hereof shall not be construed in favor of or
against any party on account of its participation in such preparation.
20
Section 9.12 Amendment and Modification. This Agreement may be amended
--------------------------
or modified only by written agreement executed by both parties hereto.
Section 9.13 Waiver. At any time prior to the Closing, the Purchaser,
------
on the one hand, or the Seller and NYHC-NJ, on the other, may (i) extend the
time for the performance of any of the obligations or other acts of the other,
(ii) waive any inaccuracies in the representations and warranties of the other
contained herein or in any document delivered pursuant hereto, and (iii) waive
compliance with any of the agreements or conditions of the other contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party granting such waiver but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or future
failure.
ARTICLE X.
DEFINITIONS
For the purposes hereof, unless the context otherwise requires, the
term "including" shall mean "including without limitation;" all accounting terms
not otherwise defined herein shall have the respective meanings accorded to them
under GAAP; all references to a contract, agreement or instrument herein shall
mean such contract, agreement or instrument and all exhibits, schedules and
other attachments thereto, as any such contract, agreement or instrument may be
amended, supplemented or otherwise modified from time to time in a manner that
does not violate the provisions of this Agreement; the words "herein", "hereof",
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular article, section or other subdivision, unless so
noted; all references to any article, section or other subdivision refer, unless
otherwise indicated, to the corresponding article, section or other subdivision
of this Agreement. Unless the context otherwise requires, any of the following
terms may be used in the singular or the plural, depending on the reference; and
the following terms shall have the meanings indicated below:
"Affiliate" shall mean, when used with respect to any Person, (i) if
---------
such Person is a corporation, any officer or director thereof and any Person
which is, directly or indirectly, the beneficial owner of more than ten percent
(10%) of any class of any equity security (as defined in the Securities Act)
thereof, and any officer, director, partner or Affiliate of such beneficial
owner, (ii) if such Person is a partnership, any partner thereof, (iii) if such
Person is a limited liability company or other unincorporated association, any
member, manager, officer or managing agent thereof, and (iv) any other Person
(other than the Purchaser) which, directly or indirectly, controls or is
controlled by or is under common control with such Person. For purposes of this
definition, "control" (including the correlative terms "controlling,"
"controlled by" and "under common control with"), with respect to any Person,
shall mean possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, the ability to exercise voting power, or by
Contract or otherwise.
"Allocation" shall have the meaning set forth in Section 1.07.
---------- ------------
21
"Assets" shall have the meaning set forth in Section 1.01.
------ ------------
"Assumed Contracts" shall have the meaning set forth in Section
----------------- -------
1.01(c).
-------
"Assumed Liabilities" shall have the meaning set forth in Section
------------------- -------
1.03.
----
"Xxxx of Sale" shall have the meaning set forth in Section 2.04(a)(i).
------------ ------------------
"BioBalance" shall have the meaning set forth in the Recitals.
----------
"Business" shall have the meaning set forth in the Recitals.
--------
"Business Records" shall have the meaning set forth in Section
---------------- -------
1.01(f).
-------
"Cash Purchase Price" shall mean $2,700,000.
-------------------
"Closing" shall have the meaning set forth in Section 2.01.
------- ------------
"Closing Date" shall have the meaning set forth in Section 2.01.
------------ ------------
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
----
the regulations promulgated thereunder, as in effect from time to time.
"Consents" shall mean all governmental and third party consents,
--------
permits, approvals, orders, authorizations, qualifications, and waivers
necessary to be received by a Person for the consummation of the Transactions
contemplated by this Agreement.
"Contracts" shall mean all contracts, commitments, agreements,
---------
arrangements and other instruments, whether written or oral.
"Damages" shall mean any liabilities, costs or expenses (including
-------
reasonable attorneys' fees), judgments, fines, losses, claims, damages and
amounts paid in settlement.
"Employment Agreements" shall have the meaning set forth in Section
--------------------- -------
2.02(e).
-------
"Excluded Assets" shall have the meaning set forth in Section 1.02.
--------------- ------------
"Excluded Liabilities" shall have the meaning set forth in Section
-------------------- -------
1.04.
----
"GAAP" shall mean U.S. generally accepted accounting principles,
----
applied on a consistent basis.
"Governmental Entity" shall mean the government of the United States
-------------------
of America, any other nation or any political subdivision of the United States
or any other nation, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Material Adverse Change" shall have the meaning set forth in Section
----------------------- -------
2.03(d).
-------
22
"NYHC-NJ" shall have the meaning set forth in the Preamble.
-------
"Person" shall mean any individual, sole proprietorship, partnership,
------
joint venture, trust, unincorporated organization, limited liability company,
association, corporation, institution, entity, party, or Governmental Entity or
any other juridical entity of any kind or nature whatsoever.
"Pre-Closing Period" shall mean a taxable period ending on or before
------------------
the Closing Date.
"Purchaser" shall have the meaning set forth in the Preamble.
---------
"Purchaser Indemnitee" shall have the meaning set forth in Section
-------------------- -------
7.02.
----
"Purchaser Principals" shall have the meaning set forth in Section
-------------------- -------
7.04.
----
"Requirements of Law" shall mean as to any Person, provisions of the
-------------------
Articles or Certificate of Incorporation and By-laws or regulations or other
organizational or governing documents of such Person, or any law, treaty, code,
rule, regulation, right, privilege, qualification, license or franchise or
determination of any Governmental Entity, in each case applicable or binding
upon such Person or any of such Person's property or to which such Person or any
of such Person's property is subject.
"SEC" shall mean the Securities and Exchange Commission.
---
"Seller" shall have the meaning set forth in the Preamble.
------
"Seller Indemnitee" shall have the meaning set forth in Section 7.03
------------------ ------------
"Tax" or "Taxes" means all federal, state, county, local, municipal,
--- -----
foreign and other taxes, assessments, duties or similar charges of any kind
whatsoever, including all corporate franchise, income, gross receipts,
occupation, windfall profits, sales, use, ad valorem, value-added, profits,
license, withholding, payroll, employment, excise, premium, real property,
personal property, customs, net worth, capital gains, transfer, stamp,
documentary, social security, disability, environmental, alternative minimum,
recapture and other taxes, and including all interest, penalties and additions
imposed with respect thereto, whether disputed or not and including any
obligations to indemnify or otherwise assume or succeed to the Tax liability of
any Person, and any liability in respect of any Tax as a result of being a
member of any affiliated, combined, consolidated, unitary or similar group.
"Tax Return" means any report, return, statement, estimate,
----------
informational return, declaration or other written information required to be
supplied to a taxing authority in connection with Taxes, and includes any
supplement thereto and amendment thereof.
"Termination Agreements" shall have the meaning set forth in Section
---------------------- -------
2.02(e).
-------
"Transaction Documents" shall have the meaning set forth in Section
--------------------- -------
3.02(a)(i).
----------
23
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
NEW YORK HEALTH CARE, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------------
Name:
Title:
NYHC NEWCO PAXXON, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------------
Name:
Title:
NEW YORK HEALTH CARE, LLC
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------------
Name:
Title:
As to Section 5.02 and the first sentence of
Section 7.04 of this Agreement:
/s/ Xxxxx Xxxxx
---------------------------------------
Xxxxx Xxxxx
/s/ Xxxxx Xxxxxxxxx
---------------------------------------
Xxxxx Xxxxxxxxx
24
