Exhibit 2.1
PURCHASE AGREEMENT
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This PURCHASE AGREEMENT (this "Agreement") is made and effective as of May
30, 2000 ("Effective Date") by and among Cypress Financial Services, Inc., a
Nevada corporation (the "Purchaser"), on the one hand; and Orange County
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Professional Services, Inc., a California corporation ("OCPS"), Impact Seminars
and Consulting, Inc., a Hawaii corporation and wholly-owned subsidiary of OCPS
("Impact"), RBA Rem-Care, Inc., a California corporation ("RBA"), and Insource
Medical Solutions, LLC, a California limited liability company ("Insource")
(OCPS, Impact, RBA and Insource are individually referred to herein as a "CPS
Group Company" and collectively as the "CPS Group Companies"); Xxxxxxx Xxxxxxxx,
an individual, Xxxxxxx X. Xxxxxxxx, an individual (collectively, the
"Mohrmanns"); Xxxxxx Xxxxx, an individual, and Xxxxxxx X. Xxxxx, an individual
(collectively, the Xxxxx'); and Xxxxxxx Xxxxxx, an individual ("Xxxxxx") (the
Mohrmanns, Xxxxx' and Xxxxxx are collectively referred to herein as the
"Shareholders"), on the other hand, and is made with reference to the following:
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A. The issued and outstanding shares of OCPS consist of One Hundred (100)
shares of common stock, Fifty (50) shares of which are owned of record (directly
and indirectly) and beneficially by the Mohrmanns and Fifty (50) shares of which
are owned of record (directly and indirectly) and beneficially by the Xxxxx'.
B. The issued and outstanding shares of Impact consist of forty (40)
shares of common stock, all of which are owned of record (directly and
indirectly) and beneficially by OCPS.
C. The issued and outstanding shares of RBA consist of Twelve Thousand
Five Hundred (12,500) shares of common stock, all of which are owned of record
(directly and indirectly) and beneficially by the Mohrmanns.
D. Fifty-one percent (51%) of the membership interests of Insource are
owned of record (directly and indirectly) and beneficially by the Mohrmanns and
forty-nine percent (49%) of the membership interests are owned of record
(directly and indirectly) and beneficially by the Xxxxxx'.
E. Each of the CPS Group Companies owns and operates an accounts
receivable management services business in conjunction with the others
(collectively, the "Business"). The real property and all improvements thereon
used in the Business are referred to herein as the "Premises" and are identified
on Schedule 1 attached hereto. The CPS Group Company identified next to the
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applicable location holds a leasehold estate in such Premises pursuant to a
lease agreement (the "Premises Leases") by and between such CPS Group Company
and the third party owner identified on Schedule 1.
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F. All in accordance with the terms and conditions set forth herein: (i)
each of the Shareholders desires RBA and Insource to sell substantially all of
their respective assets to OCPS, (ii) each of the Mohrmanns and Xxxxx' desires
to sell all of the shares (the "Shares") held by them in OCPS to the Purchaser
and (iii) the Purchaser desires to purchase the Shares.
G. As an essential inducement for the Purchaser to enter into this
Agreement, the Shareholders, RBA and Insource have agreed to (i) make certain
representations, warranties and
covenants regarding certain stock, membership interests, assets and property to
be transferred to the Purchaser, as well as other related matters, and (ii)
provide the Purchaser with certain indemnification rights with respect to such
representations, warranties and covenants .
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
of the parties contained herein, and for other good and valuable consideration,
the sufficiency and receipt of which is hereby acknowledged, the parties agree
as follows:
ARTICLE 1
TRANSACTIONS
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1.1 Purchase and Sale of Assets. Subject to the terms of this Agreement,
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on the Closing Date (as defined below), RBA and Insource shall, and the
Shareholders of RBA and Insource shall cause RBA and Insource to sell, transfer,
convey and assign to OCPS all of RBA's and Insource's right, title and interest
in and to all of the assets and properties used in connection with their
respective Businesses in consideration of the payment by OCPS of the amounts set
forth in Section 1.4.1(b), delivery of the Promissory Notes described in Section
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1.4.1(d) and OCPS's assumption of liabilities as set forth in Section 1.5. Such
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assets and properties are further defined on Schedule 1.1 attached hereto (as
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they apply to RBA and Insource) and are collectively referred to herein as the
"Purchased Assets" and, together with the assets and properties used by the
other CPS Group Companies in connection with their respective Businesses, are
referred to herein as the "Assets."
1.2 Purchase and Sale of Shares. Subject to the terms of this Agreement,
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on the Closing Date, the Purchaser shall buy and the Mohrmanns and Xxxxx' shall
sell, transfer, convey and assign to the Purchaser the Shares held by them,
constituting all of the outstanding shares of capital stock of OCPS.
1.3 Non-Competition Agreement. On the Closing Date, the Purchaser, the CPS
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Group Companies and the Shareholders shall enter into a non-competition
agreement in substantially the form attached hereto as Exhibit "A" and by this
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reference incorporated herein (the "Non-Competition Agreement").
1.4 Purchase Price; Capital Contribution.
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1.4.1 Base Purchase Price. The purchase price for the Purchased
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Assets and the Shares is SEVEN MILLION FOUR HUNDRED TWENTY-FIVE THOUSAND DOLLARS
($7,425,000) (the "Purchase Price"), payable on the Closing Date as follows:
a. The Purchaser's delivery to OCPS of cashier's checks or
wire transfers from the Purchaser payable to OCPS in the aggregate amount of ONE
MILLION FIFTY THOUSAND DOLLARS ($1,050,000), as a capital contribution to OCPS;
b. OCPS's delivery to RBA and Insource of cashier's checks or
wire transfers from OCPS payable to RBA and Insource in the aggregate amount of
ONE MILLION FIFTY THOUSAND DOLLARS ($1,050,000); which amount shall be
distributed amongst the Mohrmanns and the Xxxxxx' at the Closing as set forth in
Schedule 1.4.1;
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c. The Purchaser's delivery to the Shareholders of cashier's
checks or wire transfers from the Purchaser payable to the Mohrmanns and the
Xxxxx' in the aggregate amount of THREE MILLION TWO HUNDRED TWENTY-FIVE THOUSAND
DOLLARS ($3,225,000), to be distributed amongst the Mohrmanns and the Xxxxx' in
the amounts set forth in Schedule 1.4.1. The amounts payable to the Mohrmanns
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and the Xxxxx' will be increased or decreased, on a dollar for dollar basis, to
the extent the Former Shareholder Debt at the closing decreases or increases
from the amount set forth in Section 1.4.2;
d. Purchaser's delivery of convertible promissory notes (the
"Promissory Notes") in favor of RBA, Insource, the Mohrmanns and the Xxxxx'x in
the principal amounts set forth in Schedule 1.4.1, for an aggregate principal
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balance of THREE MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS ($3,150,000), each
in the form attached hereto as Exhibit "B". The Promissory Notes shall bear
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interest at eight percent (8%) per annum, shall be payable in monthly
installments of interest only for a period of twenty-four (24) months ("Term"),
subject to extension upon the terms set forth in the Promissory Notes, if any,
and shall be secured pursuant to the terms and conditions of a security
agreement, substantially in the form attached hereto as Exhibit "C". The
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principal balance of each Promissory Note shall be convertible into Purchaser's
Common Stock, par value $.001 per share ("Purchaser's Common Stock"), at any
time during the Term in accordance with the terms and conditions of the
Promissory Notes. The Promissory Notes may be prepaid, at the option of the
Purchaser, upon 60 days prior notice. If, at the end of the Term, any Promissory
Notes have not been converted, the remaining principal balance of such
Promissory Notes and all accrued but unpaid interest thereon shall be paid in
full.
1.4.2 Capital Contribution. On the Closing Date, Purchaser shall
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deliver to OCPS a cashier's check or wire transfer from the Purchaser payable to
OCPS in the aggregate amount of Four Hundred Fifty Thousand Dollars ($450,000),
as a capital contribution to OCPS, and such amount shall be paid by OCPS on the
Closing Date to the parties entitled thereto as payment in full of OCPS's
liability with respect to the purchase of ownership interests of current and/or
former owners (the "Former Shareholder Debt").
1.4.3 Closing Adjustment.
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a. The cash portion of the Purchase Price shall be reduced on
the Closing Date, on a dollar-for-dollar basis, to the extent that the Assets
(which, with respect to accounts receivable, includes only those that are less
than ninety (90) days from invoice date for the purposes of this calculation)
less the Assumed Liabilities (as defined below) are less than Ten Thousand
Dollars ($10,000) as of May 31, 2000, as reflected on the Financial Statements
(as defined below) dated as of May 31, 2000 (the "Closing Adjustment");
provided, however, that in no event shall the Closing Adjustment result in a
total Purchase Price of less than Ten Million Dollars ($10,000,000), including
the Purchase Price and Capital Contribution under the CPS Purchase Agreement
(defined below), and in the event the Closing Adjustment exceeds $500,000, the
Purchaser shall have the right to terminate this Agreement.
b. For purposes of the Closing Adjustment and the Permitted
Distributions (defined below), the Assets and the Assumed Liabilities shall
include the "Assets" and "Assumed Liabilities" of Hospital Employee Labor Pool,
a California corporation
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("HELP"), as such terms are defined in that certain Asset Purchase Agreement of
even date herewith between the Purchaser and HELP (the "HELP Purchase
Agreement"). The parties shall cooperate with each other and provide each other
with access to the books and records necessary to calculate the Closing
Adjustment.
c. In the event of a dispute or disagreement relating to the
Closing Adjustment which the Purchaser and the Shareholders are unable to
resolve, any such party may elect to have such dispute or disagreement resolved
by an accounting firm, not otherwise employed or retained by any party to this
Agreement, to be mutually selected by the parties or, if no agreement is
reached, by Deloitte & Touche LLP (the "Third Accounting Firm"). The Third
Accounting Firm shall resolve the dispute and the calculation of any payment
required upon such resolution shall be final and binding for purposes of this
Section. The Third Accounting Firm shall be instructed to use every reasonable
effort to perform its services within fifteen (15) days of submission of the
dispute to it and, in any case, as soon as practicable after such submission.
The fees and expenses for the services of the Third Accounting Firm shall be
shared equally by the Purchaser, on the one hand, and the Shareholders, on the
other hand.
d. The Closing Adjustment determined in accordance with this
Section upon shall be promptly paid and; such amount, if any, owed to the
Purchaser which is not promptly paid, may, in the Purchaser's sole discretion,
be offset against the amounts due under the Promissory Notes.
1.4.4 Permitted Distributions. The parties acknowledge and agree that
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the Shareholders will be entitled to receive profits distributions, calculated
in accordance with GAAP, that were earned prior to the Closing in accordance
with the provisions of this Section (collectively, "Permitted Distributions");
provided, however, that Permitted Distributions shall only be payable if Assets
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less Assumed Liabilities as of May 31, 2000 are at least equal to Ten Thousand
Dollars ($10,000). Permitted Distributions shall be equal to the excess of
current assets over current liabilities as of May 31, 2000, as determined from
the Financial Statements dated as of May 31, 2000. Assets and current assets
shall include cash, accounts receivable that are less than ninety (90) days from
invoice date and prepaid expenses. Current liabilities shall include all
accounts payable, accrued payroll and benefits, accrued vacation and all other
accrued but not contingent liabilities whose payments are due in less than one
(1) year from the Closing Date, but shall exclude bank borrowings from Bank of
Southern California in the approximate amount of $250,000 that were borrowed to
fund the purchase of Impact by OCPS. Any Permitted Distributions shall be paid
monthly out of surplus cash, which shall be equal to cash received from
operations during the month less cash used to pay all liabilities due during the
respective month, calculated on a per entity basis and paid to the Shareholders
based on their pro rata ownership interest in such entity as of immediately
prior to the Closing Date. The first Permitted Distributions shall occur
promptly after the first month end following agreement upon or other resolution
of the Closing Adjustment in accordance with Section 1.4.3. Any remaining
Permitted Distributions owing at the time the Promissory Notes mature or are
accelerated shall be paid in full. In addition, (a) in the event accounts
receivable in excess of ninety (90) days of the invoice date at the time of
Closing which were excluded from current assets are subsequently collected, such
amounts shall be promptly paid to the Shareholders and (b) the Purchaser agrees
not to unreasonably withhold its consent to allow the Shareholders, following
the Closing, to
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attempt to collect accounts receivable in excess of ninety (90) days of the
invoice date at the time of Closing.
1.5 Assumption of Liabilities. On the Closing Date, the OCPS shall assume
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and/or remain liable for the liabilities of the CPS Group Companies set forth on
Schedule 1.5 (collectively, the "Assumed Liabilities"). Except for the
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liabilities specifically to be assumed or retained by OCPS as forth on Schedule
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1.5, OCPS shall not assume and shall under no circumstances be responsible for
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any liabilities or obligations of the CPS Group Companies or the Shareholders
(whether personal or corporate) with respect to and/or arising out of the
Assets, the Shares and/or the Business, regardless of amount, character or
description, or whether accrued, contingent or otherwise, including, without
limitation, (a) any liability for federal, state or local income, franchise,
excise, sales, use, occupation or other taxes or assessments arising out of or
in connection with conduct or operative facts occurring prior to the Closing
Date and (b) any liability with respect to the Former Shareholder Debt, except
for the payments of the Purchase Price and capital contributions in accordance
with Section 1.4 of this Agreement.
1.6 Investors' Rights Agreement. On the Closing Date, the Purchaser and
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those Shareholders and CPS Group Companies receiving Promissory Notes shall
enter into an investors' rights agreement, substantially in the form attached
hereto as Exhibit "D" and by this reference incorporated herein (the "Investors'
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Rights Agreement").
1.7 Employment Agreements. On the Closing Date, (i) OCPS and Xxxx Xxxxxxxx
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shall enter into an employment agreement, substantially in the form attached
hereto as Exhibit "E-1" and by this reference incorporated herein and (ii) the
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Purchaser and Xxxxxx Xxxxx shall enter into an employment agreement,
substantially in the form attached hereto as Exhibit "E-2" and by this reference
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incorporated herein (collectively, the "Employment Agreements").
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
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2.1 Shareholders, RBA and Insource. The representations and warranties
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made to the Purchaser in this Article 2 are made (i) by each Shareholder only as
to the Shares, Business, Premises and Assets owned by or in respect of the CPS
Group Company or CPS Group Companies in which such Shareholder has an ownership
interest, as set forth in the recitals to this Agreement, (ii) by RBA and
Insource only as to the Business, Premises and Assets owned by or in respect of
RBA or Insource, as the case may be, and shall continue to be true and correct
on and as of the Closing Date and (iii) subject to the exceptions set forth in
Schedule 2.1. All Shareholders of a particular CPS Group Company make the
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representations and warranties set forth in this Article 2 jointly and severally
with all other Shareholders of such CPS Group Company.
2.1.1 Title.
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a. Shares.
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(i) The entire authorized capital stock of OCPS consists
solely of Twenty Five Thousand (25,000) shares, of which One Hundred (100)
Shares are issued and
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outstanding, Fifty (50) of which are owned of record and beneficially by the
Mohrmanns and Fifty (50) of which are owned of record and beneficially by the
Xxxxx'.
(ii) The entire authorized capital stock of Impact
consists solely of One Thousand (1,000) shares, of which Forty (40) Shares are
issued and outstanding, all of which are owned of record and beneficially by
OCPS.
(iii) The entire authorized capital stock of RBA consists
solely of One Hundred Thousand (100,000) shares, of which Twelve Thousand Five
Hundred (12,5000) Shares are issued and outstanding, all of which are owned of
record and beneficially by the Mohrmanns.
(iv) Fifty-one percent (51%) of the membership interests
in Insource are owned of record and beneficially by the Mohrmanns and forty-nine
percent (49%) of the membership interests are or owned of record and
beneficially by the Xxxxxx'.
(v) All of the issued and outstanding shares of the CPS
Group Companies, including the Shares, are duly and validly authorized and
issued, fully paid and nonassessable, and were issued in compliance with all
applicable federal and state securities laws. The transfer of the Shares to be
transferred to the Purchaser pursuant to this Agreement, when transferred in
accordance herewith, will be in compliance with all applicable federal and state
securities laws. Except as set forth in Schedule 2.1.1(a), there are no
outstanding or authorized options, warrants, rights, contracts, commitments,
(including conversion or preemptive rights) or agreements for the issuance by,
or purchase or acquisition from, any of the CPS Group Companies, the
Shareholders, or any other individual or entity of any shares of the capital
stock of or membership interest in any of the CPS Group Companies, and there is
no agreement or understanding between any individuals and/or entities which
affects or relates to the voting or giving of written consents with respect to
any security or by a director, shareholder, manager or member of any of the CPS
Group Companies. There are no voting trusts, proxies or other agreements or
understandings with respect to the voting capital stock or membership interests
in any of the CPS Group Companies.
(vi) The Shareholders have and will have as of the
Closing Date good and marketable title, as sole owners, to all of the Shares to
be transferred by the Shareholders to the Purchaser pursuant to this Agreement.
(vii) OCPS will have as of the Closing Date good and
marketable title, as sole owner, to all of the Purchased Assets to be
transferred to OCPS by RBA and Insource.
b. Assets. Each of the CPS Group Companies has good and
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marketable title to (or, as of the Closing Date will have), as sole owner, or a
valid leasehold interest in all of the Assets used in connection with its
Business.
c. No Liens. All of (i) the Shares to be transferred to the
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Purchaser pursuant to this Agreement and (ii) the Assets are (or will be, as of
the Closing Date) free and clear of any and all liens, mortgages, pledges,
security interests, conditional sales or title retention agreements,
assessments, covenants, commitments or any other encumbrances of any
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nature, except as otherwise noted on Schedule 2.1.1C attached hereto, all of
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which liens and encumbrances shall be extinguished and released as of the
Closing Date, except those with respect to the CPS Group Companies' obligations
under the bank loans and lines of credit described in Schedule 2.1.1C in the
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approximate aggregate principal amount of Three Hundred Fifty Thousand Dollars
($350,000) (the "Loan Obligations"). When the Shares are delivered and paid for
pursuant to the terms of this Agreement, the Purchaser will have good and
marketable title to the Shares, free and clear of any and all adverse claims.
2.1.2 No Contravention of Laws. The execution, delivery and
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performance by the Shareholders and the CPS Group Companies of this Agreement
and the consummation of the transactions contemplated hereby will not cause the
Shareholders or any of the CPS Group Companies to violate or contravene (i) to
the best of the Shareholders' and the CPS Group Companies' knowledge, any
provision of any law or any rule or regulation of any agency or government or
(ii) any order, writ, judgment, injunction, decree, determination or award to
which any of the Shareholders, the CPS Group Companies, the Shares or the Assets
are subject.
2.1.3 Good Standing. Each of OCPS and RBA is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
California. Impact is a corporation duly organized, validly existing and in good
standing under the laws of the State of Hawaii. Insource is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of California. Each of the CPS Group Companies (i) has the power to
own its property and to carry on its business as now being conducted and (ii) is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned by it therein or in which the
transaction of its business makes such qualification necessary.
2.1.4 Equity Investments. None of the CPS Group Companies own or have
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subscribed or otherwise agreed to purchase any equity interest, directly or
indirectly, in any corporation, partnership, limited liability company, joint
venture or other entity, except for OCPS, with respect to its ownership of all
of the capital stock of Impact.
2.1.5 Binding Agreement. This Agreement constitutes the valid and
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legally binding obligation of each of the CPS Group Companies and the
Shareholders, and is enforceable in accordance with its terms. The CPS Group
Companies have full power, authority and legal right and capacity to execute and
deliver this Agreement, to transfer such Company's right, title and interest in
its respective Premises and Assets and to perform and observe the terms and
conditions hereof. The Shareholders have full power, authority and legal right
and capacity to execute and deliver this Agreement, to transfer such
Shareholder's right, title and interest in their respective Shares and to
perform and observe the terms and conditions hereof.
2.1.6 No Conflict. No provision of any mortgage, lease indenture,
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contract, agreement, commitment, obligation, understanding and promise (whether
written or oral) ("Contract") binding on any of the CPS Group Companies, the
Assets, the Premises (except the Premises being leased by the Purchaser, as
lessor, the "Cypress Premises"), the Shareholders or the Shares or affecting any
of the CPS Group Companies, the Assets, the Premises (except the Cypress
Premises), the Shareholders or the Shares in any way conflicts with, or in any
way prevents or threatens to prevent, the execution, delivery or performance of
this Agreement by
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any of the CPS Group Companies or the Shareholders (including, without
limitation, the transfer of any of the Purchased Assets to OCPS or the Shares to
the Purchaser). No event of default (or event which, with the passing of time or
the giving of notice, or both, would constitute such an event of default) exists
under any Contract, and the execution, delivery and performance of this
Agreement by the CPS Group Companies or the Shareholders (including, without
limitation, the transfer of any of the Purchased Assets to OCPS or the Shares to
the Purchaser) will not result, or threaten to result, in such an event of
default or any basis for any claim of such an event of default or a right to
terminate any Contract.
2.1.7 Compliance with Charter Documents and Laws.
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a. True and correct copies of the Articles of Incorporation
and Bylaws of each of the CPS Group Companies (except as to Insource), as
amended and intended to be in effect on the Closing Date, have been provided to
the Purchaser and are attached hereto as Schedules 2.1.7A(i) and (ii).
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b. The Articles of Organization and Operating Agreement of
Insource, as amended and intended to be in effect on the Closing Date, have been
provided to the Purchaser and are attached hereto as Schedules 2.1.7B(i) and
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(ii).
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c. Each of the CPS Group Companies has complied with and is
not in violation of the following: (a) any material term or provision of its
Articles of Incorporation or Bylaws (or, in the case of Insource, its Articles
of Organization or Operating Agreement) or any resolutions adopted by its Board
of Directors or shareholders (or, in the case of Insource, its managers or
members) and (b) applicable federal, state or local statutes, laws and
regulations (including, without limitation, (i) to the best of Shareholder's
knowledge, any applicable environmental, health, building, zoning, employment or
occupational safety law, ordinance or regulation and (ii) any laws, ordinances
or regulations affecting the business, properties, assets or operation of
businesses selling accounts receivable management services, and/or the operation
of the Business, including, without limitation, the Federal Fair Debt Collection
Practices Act.
2.1.8 Other Approvals. Any and all consents, approvals,
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authorizations and ratifications required by any of the CPS Group Companies or
the Shareholders under all applicable laws, regulations and Contracts in order
to execute, deliver and perform under this Agreement (including the consummation
of all transactions contemplated hereby) are set forth on Schedule 2.1.8. All
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consents, approvals, authorizations and ratifications set forth on Schedule
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2.1.8 have been or will be obtained prior to the Closing Date.
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2.1.9 Brokers or Finders. No individual or entity has or, as a result
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of the transactions contemplated hereby, will have, directly or indirectly, any
valid claim against or upon the Purchaser or any of the CPS Group Companies, the
Shareholders, the Shares, the Premises or the Assets for any compensation as a
finder, broker or agent, or in any similar capacity with respect to the
transactions contemplated hereby.
2.1.10 Financial Information. At the Closing, Schedule 2.1.10 to this
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Agreement shall contain the audited balance sheets of each of the CPS Group
Companies (i) as of December 31, 1998 and December 31, 1999, and related audited
statements of operations,
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changes in shareholders' equity and cash flows for the years then ended and (ii)
as of May 31, 2000, and related audited statements of operations, changes in
shareholders' equity and cash flows for the five months then ended (the
financial statements contained in Schedule 2.1.10 are referred to as the
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"Financial Statements").
a. Preparation of Financial Statements. As of the Closing
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Date, all of the Financial Statements have been prepared in accordance with
generally accepted accounting principles on a consistent basis throughout the
periods covered, are in accordance with each of the respective CPS Group
Companies' books and records, and fairly present the financial position of each
of the respective CPS Group Companies and the results of its operations as of
the dates and for the periods indicated thereon. As of the Closing Date, there
are no liabilities of any of the CPS Group Companies, contingent or otherwise,
except as set forth on the Financial Statements. As of the Closing Date, the
Financial Statements do not contain any untrue statement of material fact or
omit or fail to state any material fact necessary to make the Financial
Statements not misleading.
b. Financial Statement Schedules. True, correct and complete
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lists of any and all accounts, notes and claims receivable of each of the CPS
Group Companies in existence as of the date hereof are set forth in Schedule
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2.1.10. None of these accounts, notes and claims is in default and all are, to
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the best of the Shareholders' and the CPS Group Companies' knowledge, fully
collectible in accordance with their terms, net of applicable reserves. To the
extent that a specific and descriptive reference thereto is not made on Schedule
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2.1.10, a true, correct and complete list of any and all Contracts and other
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obligations of each of the CPS Group Companies which have not been fully
performed as of the date hereof is set forth on Schedule 2.1.19, which Schedule
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includes the identity of the parties involved, the nature of the obligations of
the respective CPS Group Company thereunder and the Assets which have been
committed to the fulfillment of such obligations.
2.1.11 Maintenance of Financial Condition. Except as set forth on
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Schedule 2.1.11, since December 31, 1999, there has not been any:
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a. Change in the condition (financial or otherwise) or title
of any of the CPS Group Companies, the Business, the Assets, the Premises or the
Shares except changes in the ordinary course of business, none of which
(individually or in the aggregate) has been material;
b. Loss of any vendor to any of the CPS Group Companies whose
services could not easily be replaced at substantially the same costs;
c. Loss of any customer or client of the CPS Group Companies
whose net fees over the past twelve (12) months exceeded $100,000 or loss of
customers or clients of the CPS Group Companies whose aggregate net fees over
the past twelve (12) months exceeded $500,000;
d. Except for customary market adjustments and Permitted
Distributions, change in the compensation or benefits of, or any bonuses paid or
promised to, any
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employees, officers or directors of any of the CPS Group Companies whose annual
compensation exceeds $50,000;
e. Issuance or authorization for issuance of any equity
security, bond (excepting Licenses and Bonds, as defined below), note or other
security of any of the CPS Group Companies;
f. Except for Permitted Distributions, declaration of any
dividend or other distribution to any shareholder or other holder of any
beneficial interest in any of the CPS Group Companies;
g. Investment in any entity;
h. Disposition of any equity or other security of any of the
CPS Group Companies;
i. Creation of a mortgage, pledge, lien or encumbrance made
on any of the properties or assets of any of the CPS Group Companies, except
those in respect of operating equipment purchases made in the ordinary course of
business under existing arrangements in respect of the Loan Obligations;
j. Capital expenditures in excess of $10,000 (individually or
in the aggregate), except for operating equipment purchases made in the ordinary
course of business which in the aggregate do not exceed $100,000;
k. Indebtedness for borrowed money incurred, assumed or
guaranteed by any of the CPS Group Companies except for routine borrowings in
the ordinary course of any of the CPS Group Companies' business;
l. Amendment to the Articles of Incorporation, Bylaws,
Articles of Organization or Operating Agreement of any of the CPS Group
Companies;
x. Xxxxx in payment of accounts payable, except delays due to
recent expansion of the Business, none of which exceed sixty (60) days;
n. Other occurrence, event or condition of any similar or
dissimilar character which has materially adversely affected, or may materially
adversely affect (individually or in the aggregate), any of the CPS Group
Companies or the Business; or
o. Agreement or commitment to take any of the actions
referred to in subparagraphs (d) through (n) above.
2.1.12 Good Condition and Sufficiency. The assets used in the Business
------------------------------
(including, without limitation, the Assets and the Premises (except the Cypress
Premises)) are in good operating condition and repair (subject to ordinary wear
and tear). The Assets and the Premises (except the Cypress Premises) have been
properly maintained and have been repaired or replaced when necessary.
-10-
2.1.13 Insurance. The CPS Group Companies, the Business, the Premises
---------
and the Assets are each covered by insurance policies in commercially reasonable
amount and with commercially reasonable terms and provisions. A summary of the
name, address and telephone number of the agent, the name of the insurer, policy
holders and insureds, the policy number and the period and type of coverage for
each such policy is set forth on Schedule 2.1.13. Each such policy shall remain
---------------
binding and in full force and effect through the Closing Date and otherwise in
accordance with their respective provisions. Schedule 2.1.13 also includes a
---------------
list of all liability insurance coverage maintained with respect to each of the
CPS Group Companies, the Business, the Premises and the Assets during any part
of the last five (5) years, including the name of the insuring entity and policy
number as well as the amount of insurance coverage.
2.1.14 Litigation. Except as provided on Schedule 2.1.14, there is no
---------- ---------------
legal, administrative or arbitration proceeding ("Proceeding") pending or, to
the best of the Shareholders' and the CPS Group Companies' knowledge, threatened
against or affecting any of the CPS Group Companies, the Business, the Assets,
the Premises, the Shares or the Shareholders in any court or before any
governmental entity or authority. Except as provided on Schedule 2.1.14, there
---------------
is no outstanding judgment, order, writ, injunction or decree of any court,
governmental agency, authority or arbitration tribunal against or affecting any
of the CPS Group Companies, the Business, the Assets, the Premises, the Shares
or the Shareholders. Except as set forth on Schedule 2.1.14, to the best of the
---------------
Shareholders' and the CPS Group Companies' knowledge, there exists no basis for
any Proceeding against or affecting any of the CPS Group Companies, the
Business, the Assets, the Premises, the Shares or the Shareholders including,
without limitation, any condition which, if revealed to all interested parties,
would give rise to a Proceeding.
2.1.15 Licenses and Bonds. Each of the CPS Group Companies possesses
------------------
from the appropriate governmental body all licenses, permits, authorizations,
approvals and rights and has posted all bonds ("Licenses and Bonds") as are
necessary for such entity to engage in the Business as such business is
currently conducted or as are required under applicable laws, regulations or
Contracts. Lists of all Licenses and Bonds currently held or posted by each of
the CPS Group Companies and required in the operation of the Business, including
their respective expiration dates and any conditions to their validity, are set
forth on Schedule 2.1.15, attached hereto. All such Licenses and Bonds have been
---------------
lawfully and validly issued and are in full force and effect. No violation of
such Licenses and Bonds has been recorded and there is no pending or, to the
best of the Shareholders' and the CPS Group Companies' knowledge, threatened
proceeding which may revoke or limit any or all of them. Licenses and Bonds with
respect to the Business shall continue in full force and effect through the
Closing Date; moreover, Licenses and Bonds with respect to the Business
constitute Assets and shall be transferred to the Purchaser through the purchase
of the Shares by or as of the Closing Date without interruption.
2.1.16 Intellectual Property Rights. All of the patents, copyrights,
----------------------------
trademarks, service marks, logos, trade names, domain names, URLs and websites
which are currently being used in the operation of the Business, which are
listed on Schedule 2.1.16 attached hereto, are valid, in good standing and free
---------------
and clear of all liens and encumbrances of any nature whatsoever, and have not
been (a) challenged in any way or (b) involved in any interference claim or
proceeding. To the best of the Shareholders' and the CPS Group Companies'
-11-
knowledge, operation of the Business in the ordinary course will not involve
infringement or claimed infringement of any issued or applied-for United States
patent or trademark.
2.1.17 Third Parties. The Business operating in the ordinary
-------------
course, to the best of the Shareholders' and the CPS Group Companies' knowledge,
(a) does not, and will not as of the Closing Date, infringe upon or violate any
rights of any third party, and (b) does not, and will not as of the Closing
Date, violate any right of privacy or any personal or proprietary right.
2.1.18 Taxes. Each of the CPS Group Companies and the Shareholders
-----
have filed, on a timely basis, all tax returns (or extensions for the filing
thereof), reports and declarations required to be filed for all periods prior
to, and those periods including, the Closing Date. State and federal income and
franchise tax returns for the prior three fiscal years for each of the CPS Group
Companies are attached hereto as Schedules 2.1.18A, 2.1.18B and 2.1.18C,
--------- ------- ------- -------
respectively. No time in which to file any such unfiled returns, reports or
declarations has been extended, except for the fiscal year ended December 31,
1999. Each of the CPS Group Companies and the Shareholders have paid, at the
time and in the manner required, and where payment is not due have accrued on
their respective balance sheets, all taxes for all periods prior to and those
periods including the Closing Date. All taxes shown to be due on any returns,
reports and declarations have been paid, and none of the CPS Group Companies or
the Shareholders are delinquent in the payment of any tax, estimated tax,
assessment or governmental charge payable by or on behalf of such party. There
is no tax audit of any kind pending or, to the best of the Shareholders' and the
CPS Group Companies' knowledge, threatened against any of the CPS Group
Companies or the Shareholders nor has a claim for assessment, proposed
assessment, or collection of any tax been received or, to the best of the
Shareholders' and the CPS Group Companies' knowledge, threatened. None of the
CPS Group Companies or the Shareholders have any outstanding agreement or waiver
extending or waiving any statute of limitations with respect to the collection
or assessment of any tax, nor will such an agreement be entered into prior to
the Closing Date. No payments contemplated by this Agreement are subject to the
provisions of Section 280G of the Internal Revenue Code. There are no tax liens
on any portion of the Shares, the Business, the Premises or the Assets. For
purposes of this Agreement, the term "tax" shall include all federal, state,
local, foreign or other governmental income, franchise, gross-receipts,
property, sales, use, transfer, excise, employment, and other taxes of any
nature whatsoever including, without limitation, all interest, penalties, fines,
assessments and deficiencies relating thereto.
2.1.19 Contracts. A complete list of each Contract in the following
---------
categories and to which any of the CPS Group Companies is a party, under or by
which it has any obligation or by which the Business or Assets are bound in any
respect, is attached hereto as Schedule 2.1.19 (copies of which have been
---------------
provided to the Purchaser):
a. Contracts for the purchase, sale, lease or other
disposition of equipment, goods, materials, supplies, or capital assets, or the
performance of services, in any case involving more than Ten Thousand Dollars
($10,000), except for operating equipment purchases made in the ordinary course
of business which in the aggregate do not exceed $100,000;
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b. Notes, mortgages, deeds of trust, loan agreements, security
agreements, guarantees, debentures, credit agreements and other evidences of
indebtedness; c. Stock option, stock purchase, warrant, repurchase or other
Contracts relating to any capital stock or membership interest of any of the CPS
Group Companies;
d. Contracts relating to the employment of, or the performance
of services by, any employee, consultant or independent contractor;
e. Contracts with individuals or entities to whom any of the
CPS Group Companies has agreed to provide services, in any case involving
average monthly net fees in excess of $5,000 over the past twelve (12) months;
f. Contracts with shareholders or optionees of any of the CPS
Group Companies;
g. Licenses and Bonds, sublicenses, royalty agreements and
other Contracts to which any of the CPS Group Companies is a party, or to which
the Business or Assets are otherwise subject;
h. Any Contract that is not terminable by the applicable CPS
Group Company unilaterally for convenience (without ongoing liability) upon
thirty (30) days' notice;
i. Contracts limiting the right of any of the CPS Group
Companies to compete in any business or with any individual or entity; and
j. All other Contracts material to the Business as presently
conducted.
Each of the Contracts constitutes the valid and legally binding obligation
of the applicable CPS Group Company and other individuals or entities that are a
party thereto, will be binding after the sale of the Purchased Assets to OCPS
and the Shares to the Purchaser and is enforceable in accordance with its terms.
2.1.20 Employees. Schedules of all current employees for each of the
---------
CPS Group Companies, their current rates of compensation (and any other
remuneration of any kind) and benefits and date of last compensation increase,
any accrued vacation and all compensation, benefits and bonuses paid since
January 1, 2000 are attached hereto as Schedule 2.1.20. Except as set forth on
---------------
Schedule 2.1.20, there has been no hiring of new employees or termination of
---------------
existing employees since December 31, 1999. All Contracts and relationships
between each of the CPS Group Companies and its current or former officers,
directors, managers, principals, employees or consultants who are or were
employed or otherwise compensated in connection with activities of such CPS
Group Company ("Employees") are and have been in full compliance with law and
are terminable at-will. None of the Employees belongs to a union, and none of
the CPS Group Companies is bound, in any way, by any collective bargaining
agreements or consent decrees involving the Employees. On and as of the Closing
Date, there shall be no outstanding liabilities, obligations, expenses or
commitments in respect of any Employees, except liabilities
-13-
or obligations relating to any employee benefit plans, pension plans, welfare
benefit plans, retirement, disability, medical, dental or other health insurance
plans, life insurance or other death benefit plans, profit-sharing, deferred
compensation, severance, bonus, stock purchase, stock ownership or other
compensation plans or arrangements, accrued but unpaid vacation, sick-leave or
personal time which (x) arose out of the ordinary course of business, (y) and
are set forth on the books and records of the CPS Group Companies as of the
Closing Date and (z) will be taken into account with respect to any purchase
price adjustment pursuant to Paragraph 1.4.2. Copies of any of the foregoing
plans are attached, as appropriate, to Schedule 2.1.20. None of the CPS Group
---------------
Companies or any Related Party ("Related Party" means any company, trade or
business, whether or not incorporated, which is considered a single employer
with any of the CPS Group Companies under Section 4001 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) has sponsored,
been obligated to contribute to, terminated or withdrawn from any employee
pension benefit plan (within the meaning of Section 3(2) of ERISA) which is a
multi-employer plan (as defined in Section 3(37) of ERISA), and none of the CPS
Group Companies or any Related Party has incurred any withdrawal liability (as
defined in Section 4201 of ERISA) with respect to any multi-employer plan, and
no such withdrawal liability will result from this Agreement or the consummation
of any of the transactions contemplated hereby. No liability under Title IV of
ERISA which has not been satisfied has been incurred by any of the CPS Group
Companies or by any Related Party with respect to an employee pension benefit
plan (within the meaning of Section 3(2) of ERISA), and no proceedings by the
Pension Benefit Guaranty Corporation to terminate any such plan pursuant to
Title IV of ERISA have been instituted or threatened under which any of the CPS
Group Companies or any Related Party could have any present or future liability.
None of the CPS Group Companies or any member of a group described in Internal
Revenue Code (the "Code") Sections 414(b), (c), (m), (n) or (o) which includes
any of the CPS Group Companies has violated the requirements of Code Section
4980B or Sections 601, et seq. of ERISA.
------
2.1.21 Environmental Matters. Except as set forth on Schedule 2.1.21
--------------------- ---------------
hereto, to the best of the Shareholders' and the CPS Group Companies' knowledge,
none of the CPS Group Companies, the Business, the Premises (except the Cypress
Premises) or the Assets, nor any portion of any of the foregoing, have been
associated with any spill, disposal, storage, discharge or release of any
Hazardous Materials (as hereinafter defined) into or upon or over any real
property (including, without limitation, the Premises (except the Cypress
Premises)) or into or upon ground or surface water. To the best of the
Shareholders' and the CPS Group Companies' knowledge, neither the Assets, the
Premises (except the Cypress Premises) nor the Business includes any asbestos-
containing materials nor do they include any electrical transformer, fluorescent
light fixture with ballasts or other equipment containing polychlorinated
biphenyls or any underground storage tanks. As used herein, the term "Hazardous
Materials" shall mean any hazardous or toxic substance, material or waste which
is regulated by any local government authority, the State of California or the
government of the United States of America.
2.1.22 Real Property. None of the CPS Group Companies owns any real
-------------
property. To the best of the Shareholders' and the CPS Group Companies'
knowledge, neither the Premises (except the Cypress Premises) nor any portion
thereof is in violation of any applicable building, zoning or other law,
ordinance or regulation (including, without limitation, OSHA or ADA), nor has
any notice or citation from any public or quasi-public authority in
-14-
respect thereto been received, including notice of an exercise of the right of
eminent domain, nor do any facts exist that would warrant any such notice or
citation.
2.1.23 Land Use. To the best of the Shareholders' and the CPS
--------
Group Companies' knowledge, there are no existing or threatened condemnation,
zoning, moratoriums, conditions, restrictions, limitations, controls or other
land use regulation proceedings which would detrimentally affect the use and/or
operation of the Premises as the Purchaser intends and the normal incidents
thereto.
2.1.24 Client Relations. No (i) client with net fees in excess of
----------------
$100,000 over the past twelve (12) months nor (ii) clients with aggregate net
fees in excess of $500,000 over the past twelve (12) months has raised any
claim, dispute or controversy with respect to any of the services provided by
any of the CPS Group Companies, nor are there any facts which exist indicating
that any of such clients may totally or partially terminate or suspend the use
of such CPS Group Company's services or otherwise reduce their current monthly
placements in the foreseeable future. None of the CPS Group Companies have in
any respect misrepresented its services or employed misleading or deceptive
practices in connection with the sale of its services.
2.1.25 Minute Books. The minute books of OCPS made available to
------------
the Purchaser and its representatives for inspection contain full, complete and
accurate records of all meetings and other corporate or company actions taken by
the directors and shareholders of OCPS. The stock certificate book and stock
record books of OCPS accurately reflect all transactions in its capital stock.
2.1.26 Investment Representations. The Shareholders, RBA and
--------------------------
Insource acknowledge that the Promissory Notes (and the Purchaser Common Stock
issuable upon the conversion thereof ) to be issued pursuant to this Agreement
(i) constitute "securities" under federal and applicable state securities laws,
(ii) will be unregistered as such, and (iii) are being transferred in reliance
upon exemptions from registration based, in part, upon the Shareholders,' RBA's
and Insource's representations contained herein. The Shareholders, RBA and
Insource are acquiring such securities for their own account and not with a view
to, or for sale in connection with, any distribution thereof. The Shareholders,
RBA and Insource acknowledge that such securities may not be sold or transferred
unless such sale or transfer is registered or qualified with the appropriate
securities authorities or unless an opinion of counsel, satisfactory to the
Purchaser is rendered which states that such sale or transfer is exempt from
registration and qualification. The Shareholders, RBA and Insource have had an
opportunity to ask questions and receive answers from the Purchaser regarding
matters relevant to the Purchaser and an investment therein.
2.1.27 Disclosure. No representation, warranty or covenant by any
----------
of the CPS Group Companies or the Shareholders contained in this Agreement, or
in any schedule, exhibit, statement or certificate furnished, or to be
furnished, to the Purchaser by any of the CPS Group Companies or the
Shareholders pursuant to this Agreement or in connection with the transactions
contemplated herein, contains or will contain any untrue or misleading statement
of any material fact, or omits or will omit, or fail to state any material fact
necessary to make any such
-15-
representation, warranty or covenant not misleading to a prospective purchaser
of any of the Shares, the Assets, the Premises, the Business or any portion of
the foregoing.
2.2 Purchaser. The Purchaser hereby represents and warrants to the
---------
Shareholders as follows, which representations and warranties shall continue to
be true and correct on and as of the Closing Date:
2.2.1 Good Standing. The Purchaser (a) is a corporation duly
-------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) has the corporate power to own its
property and to carry on its business as now being conducted and (c) is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the properties owned by it therein or in which the transaction
of its business makes such qualification necessary.
2.2.2 Binding Agreement. This Agreement constitutes the valid and
-----------------
legally binding obligation of the Purchaser and is enforceable in accordance
with its terms. The Purchaser has full power, authority and legal right to
execute and deliver this Agreement and to perform and observe the terms and
conditions hereof, subject to the filing of an Information Statement with the
Securities and Exchange Commission and distributing it to the Purchaser's
stockholders, as required by Rule14c-2, with respect to increasing the
Purchaser's authorized capital to 50,000,000 shares of Purchaser's Common Stock.
2.2.3 No Conflict. No provision of any Contract binding on the
-----------
Purchaser or affecting the Purchaser in any material way conflicts with, or in
any way prevents, the execution, delivery or performance of this Agreement by
the Purchaser.
2.2.4 Compliance with Charter Documents and Laws. The Purchaser
------------------------------------------
has complied with and is not in violation of, nor will the execution of this
Agreement or the consummation of the transactions contemplated hereby fail to
comply with or cause a violation of, the following: (a) any material term or
provision of its Certificate of Incorporation or Bylaws or any resolutions
adopted by its board of directors or shareholders; and (b) applicable federal,
state or local statutes, laws and regulations.
2.2.5 Investment Representations. The Purchaser acknowledges that
--------------------------
the Shares to be transferred to the Purchaser pursuant to this Agreement (i)
constitute "securities" under federal and applicable state securities laws, (ii)
will be unregistered as such, and (iii) are being transferred in reliance upon
exemptions from registration based, in part, upon the Purchaser's
representations contained herein. The Purchaser is acquiring such securities for
its own account and not with a view to, or for sale in connection with, any
distribution thereof. The Purchaser acknowledges that such securities may not be
sold or transferred unless such sale or transfer is registered or qualified with
the appropriate securities authorities or unless an opinion of counsel,
satisfactory to the applicable CPS Group Company is rendered which states that
such sale or transfer is exempt from registration and qualification. The
Purchaser has had an opportunity to ask questions and receive answers from the
CPS Group Companies and the Shareholders regarding matters relevant to the CPS
Group Companies and an investment therein.
-16-
2.2.6 Name Change. Within ninety (90) days of the Closing Date,
-----------
the Purchaser shall have completed and filed all documents necessary to change
the Purchaser's name to "RevCare, Inc."
2.2.7 Disclosure. No representation, warranty or covenant by the
----------
Purchaser contained in this Agreement, or in any schedule, exhibit, statement or
certificate furnished, or to be furnished, to the Shareholders by the Purchaser
pursuant to this Agreement or in connection with the transactions contemplated
herein, contains or will contain any untrue or misleading statement of any
material fact, or omits or will omit, or fail to state any material fact
necessary to make any such representation, warranty or covenant contained herein
not misleading to the Shareholders.
2.3 Survival of Representations and Warranties. The representations and
------------------------------------------
warranties of each party contained herein shall continue and be true and correct
on and as of the Closing Date and shall survive the Closing Date as follows:
2.3.1 The representations and warranties contained in Sections 2.1.1
(Title), 2 .1.3 and 2.2.1 (Good Standing), 2.1.5 and 2.2.2 (Binding Agreement),
2.1.6 and 2.2.3 (No Conflict) shall survive the consummation of the transactions
contemplated herein indefinitely; and
2.3.2 All other representations and warranties shall survive for a
period of three (3) years following the Closing Date.
ARTICLE 3
ACCESS AND INFORMATION
----------------------
3.1 Access by the Purchaser. The Purchaser and its officers, directors,
-----------------------
employees, counsel and other authorized representatives, throughout the period
prior to the Closing Date, shall be provided with reasonable access (during
normal business hours and without undue interference with normal business
activities) to the Assets, the Premises and to any other property, books and
records relating to any of the CPS Group Companies, the Business, the Shares and
the Shareholders for the purpose of facilitating a due diligence review thereof
by the Purchaser. Notwithstanding the Purchaser's rights and the obligations of
any other party hereunder, the Purchaser may or may not conduct such
investigations and/or review such information and the provisions of this Article
3 shall in no way be deemed to lessen the Purchaser's entitlement to rely on the
representations and warranties of any other party contained herein; rather, the
Purchaser is, and shall continue to be, entitled to rely absolutely on such
representations and warranties.
3.2 Access by the Shareholders. The Shareholders and their counsel and
--------------------------
other authorized representatives, throughout the period prior to the Closing
Date, shall be provided with reasonable access (during normal business hours and
without undue interference with normal business activities) all material
agreements of the Purchaser, including agreements among the Purchaser and FBR
Financial Fund II, L.P. ("FBR"), including, without limitation, shareholder
agreements, employment, incentive, option or other executive based compensation
-17-
agreements, and any other documentation between or among the Purchaser, FBR, the
Shareholders and Xxxxxx Xxxxxxx. The Shareholders shall use such information for
the purpose of facilitating a due diligence review thereof by the Shareholders
and shall not otherwise disclose or use such information.
ARTICLE 4
CONDITIONS PRECEDENT TO CLOSING
-------------------------------
4.1 Conditions to Obligations of the Purchaser. The obligations of the
------------------------------------------
Purchaser under this Agreement are, at the option of the Purchaser (in its sole
and absolute discretion), subject to the following conditions precedent:
4.1.1 All consents required in order for the transfer to (i) the
Purchaser of good title to any or all of the Shares and (ii) OCPS of good title
to the Purchased Assets of RBA and Insource shall have been obtained and such
transfers shall be in accordance with all applicable laws and regulations
(including applicable regulatory approvals);
4.1.2 All of the conditions precedent to the closing of the sale of
substantially all of the assets of HELP set forth in the HELP Purchase Agreement
shall have been satisfied;
4.1.3 The results of the audit of each of the CPS Group Companies'
financial statements for the fiscal years ended December 31, 1998 and December
31, 1999 and the five-month period ended May 31, 2000, by Xxxxxx Xxxxxxxx LLP
are satisfactory to the Purchaser, in the Purchaser's reasonable satisfaction;
4.1.4 Between December 31, 1999 and the Closing Date, there shall
have been no material adverse change in the condition, prospects or title of any
of the CPS Group Companies, the Business, the Assets, taken as a whole, or the
Shares, except changes in the ordinary course of business, none of which has
been materially adverse;
4.1.5 The Purchaser's investigations and review, if any, pursuant to
Article 3 hereof shall not have revealed any information which materially and
adversely reflects upon any of the CPS Group Companies, the Business, the
Premises, the Shareholders or the Shares;
4.1.6 All parties to this Agreement, other than the Purchaser shall
have taken all requisite action for the valid performance of this Agreement,
including the transfer of the Purchased Assets to OCPS and the Shares to the
Purchaser, lien-free and in the condition otherwise required herein;
4.1.7 The Purchaser shall have received an executed form of Release
of Financing Statement on Form UCC-2, or such other form of release reasonably
acceptable to the Purchaser, for each lien or other encumbrance shown on
Schedule 2.1.1C hereto, except those in respect of the Loan Obligations, and
---------------
such form(s) of release shall, in the reasonable opinion of the Purchaser,
effect a complete release thereof (collectively, the "Executed Releases");
4.1.8 All representations and warranties of parties to this Agreement
other than the Purchaser shall be true and correct in all material respects as
of the Closing Date;
-18-
4.1.9 No covenant of a party to this Agreement other than the
Purchaser shall be in default nor shall a default be threatened with solely the
passing of time, the giving of notice, or both;
4.1.10 No impediments shall exist or be threatened with respect to
the execution, delivery and performance by the parties to each of the Investors'
Rights Agreement, the Non-Competition Agreement and the Employment Agreements
other than the Purchaser;
4.1.11 RBA and Insource shall have completed and executed all
documents necessary to change such entities' names to names which are
sufficiently dissimilar to their current names, which determination shall be in
the Purchaser's sole discretion;
4.1.12 The Purchaser shall have received the legal opinion of counsel
to the CPS Group Companies and the Shareholders dated as of the Closing Date and
substantially in the form attached hereto as Exhibit "F" ("Opinion of Counsel to
-----------
the CPS Group Companies and the Shareholders"), which opinion may be relied upon
by the Purchaser and the Purchaser's counsel in the rendering of the opinion of
the Purchaser's counsel to the parties providing financing to the Purchaser to
consummate the transactions contemplated by this Agreement; and
4.1.13 The Purchaser shall have received evidence of payment in full
of the Former Shareholder Debt.
4.2 Conditions to Obligations of Parties other than the Purchaser. The
-------------------------------------------------------------
obligations of the Shareholders and the CPS Group Companies under this Agreement
are, at the option of the Shareholders and the CPS Group Companies (in their
sole discretion), subject to the following conditions:
4.2.1 The Purchaser shall have taken all requisite corporate action
for the valid performance of this Agreement;
4.2.2 The Purchaser's representations and warranties contained
herein shall be true and correct in all material respects as of the Closing
Date; and
4.2.3 The Shareholders shall have received the legal opinion of
counsel to the Purchaser dated as of the Closing Date and substantially in the
form attached hereto as Exhibit "G" ("Opinion of Counsel to the Purchaser").
----------
4.3 Impossibility. If, except as otherwise provided in this Agreement,
-------------
any of the parties shall be prevented from closing, completing or proceeding
with any of the transactions contemplated herein for any cause beyond the
reasonable power and control of that party, the Shareholders, if the
impossibility is on the part of the Purchaser, or the Purchaser, if the
impossibility is on the part of the Shareholders, may elect to (i) accept a
partial performance as dictated by the circumstance, or (ii) terminate this
Agreement in lieu of any other remedy.
-19-
ARTICLE 5
CLOSING
-------
5.1 Time and Place. The transactions provided for herein shall be
--------------
consummated at 10:00 a.m. on June 15, 2000 or such other date and time as the
parties may agree (the "Closing Date"), at the offices of Pillsbury Madison &
Sutro LLP, located at 000 X. Xxxxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000,
or such other location as the parties may agree.
5.1.1 Actions and Deliveries. On the Closing Date, the following
----------------------
actions and deliveries shall take place:
5.1.2 Delivery by Parties other than the Purchaser. The parties
--------------------------------------------
other than the Purchaser shall deliver to the Purchaser the following:
a. A certificate executed by each Shareholder and the
President of each CPS Group Company dated as of the Closing Date to the effect
that the representations and warranties contained herein are true and correct as
of the Closing Date;
b. A certificate executed by the Secretary of each of CPS and
Impact certifying as to the terms and effectiveness the Articles of
Incorporation and the Bylaws of each company, in form acceptable to counsel for
CPS and Impact;
c. A certificate executed by the Secretary of each CPS Group
Company, certifying as to the valid adoption of resolutions of the Board of
Directors of each CPS Group Company and the Shareholders approving this
Agreement and the consummation of the transactions contemplated hereby, in form
acceptable to counsel for the CPS Group Companies;
d. Certificates of good standing of each CPS Group Company
from (i) the Secretary of State of the state under which such company is
organized (ii) the Secretary of State of the state in which its principal place
of business is located, if different that the state of organization, and (iii)
for CPS Group Companies which are organized under the laws of the State of
California or whose principal place of business is located in California, the
Franchise Tax Board of the State of California, each dated within a reasonable
period prior to the Closing;
e. The Executed Releases;
f. Certificates representing the Shares to be transferred by
the Shareholders to the Purchaser, together with duly executed and appropriate
Assignments Separate from Certificate transferring title to such Shares to the
Purchaser;
g. Bills of Sale in forms acceptable to the Purchaser
transferring the Purchased Assets from RBA and Insource to OCPS;
h. The Investors' Rights Agreement executed by the
Shareholders;
i. The Security Agreement executed by the Shareholders;
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j. The Non-Competition Agreement executed by the Shareholders;
k. The Employment Agreements executed by Xxxx Xxxxxxxx and
Xxxxxx Xxxxx;
l. Resignations of each of the officers and directors of each
of OCPS and Impact;
m. The Opinion of Counsel to the CPS Group Companies and the
Shareholders; and
n. Such other documents as are necessary to effect the intent of
this Agreement and confirm the performance by the Shareholders and the CPS Group
Companies of their obligations hereunder (including Schedules revised as of the
Closing Date) as the Purchaser may reasonably request.
5.1.3 Delivery by the Purchaser. The Purchaser shall deliver to the
-------------------------
Shareholders, RBA and Insource the following:
a. Cashier's checks or wire transfers from the Purchaser payable
in the aggregate amount of FOUR MILLION SEVEN HUNDRED TWENTY FIVE THOUSAND
DOLLARS ($4,725,000) as described in Sections 1.4.1 and 1.4.2;
b. The Promissory Notes executed by an authorized officer of the
Purchaser;
c. A Certificate executed by an authorized officer of the
Purchaser and dated as of the Closing Date to the effect that the
representations and warranties of the Purchaser and contained herein are true
and correct as of the Closing Date;
d. The Investors' Rights Agreement executed by an authorized
officer of the Purchaser;
e. The Security Agreement and UCC-1 financing statements in
forms reasonably acceptable to the Shareholders' counsel executed by an
authorized officer of the Purchaser and the other parties thereto other than the
Shareholders;
f. The Non-Competition Agreement executed by an authorized
officer of the Purchaser;
g. The Employment Agreements executed by an authorized officer
of Purchaser;
h. The Opinion of Counsel to the Purchaser; and
i. Such other documents as are necessary to effect the intent of
this Agreement and confirm the performance by the Purchaser of its obligations
hereunder as any party other than the Purchaser may reasonably request.
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5.2 Further Acts. On the Closing Date, the Shareholders and the CPS Group
------------
Companies shall deliver to the Purchaser such bills of sale, endorsements,
assignments, and other good and sufficient instruments of conveyance and
assignment, reasonably satisfactory in form and substance to the Purchaser and
its counsel, as shall be effective to vest in (a) OCPS all right, title and
interest in and to the Purchased Assets and (b) in the Purchaser all right,
title and interest in and to each of the Shares. Simultaneously with such
delivery, the Shareholders and the CPS Group Companies shall take all additional
steps as may be reasonably necessary to put the Purchaser into full possession,
enjoyment and operating control of each of the Shares, the CPS Group Companies,
the Business, the Premises and the Assets.
5.3 Simultaneous Transactions and Duration of Closing. All transactions
-------------------------------------------------
on the Closing Date shall be deemed to have taken place simultaneously, and no
transaction shall be deemed to have been completed until all transactions are
completed and all documents delivered.
ARTICLE 6
OBLIGATIONS BEFORE CLOSING
--------------------------
6.1 Conduct of Business in Normal Course. From the date of this Agreement
------------------------------------
until the Closing Date, each of the CPS Group Companies and the Shareholders
shall carry on the Business and activities diligently and in substantially the
same manner as it previously has been carried on, and shall not make or
institute any unusual or novel methods of purchase, sale, lease, commitment,
management, accounting or operation that will vary materially from the methods
used by it as of the date of this Agreement, or take any of the actions
described in Section 2.1.11, except with the prior consent of Xxxxxx Xxxxxxx.
--------------
6.2 Full Payment of Liabilities. The Shareholders covenant that any and
---------------------------
all liabilities of the CPS Group Companies and the Business, except the Assumed
Liabilities, shall be paid in full at or prior to the Closing Date and any and
all liens, claims and encumbrances affecting the Premises or the Assets shall be
removed to the reasonable satisfaction of Purchaser, except those in respect of
the Assumed Liabilities; provided, however, that neither the CPS Group Companies
-------- -------
nor the Shareholders shall borrow any additional sums under the Loan Obligations
or fail to make any payments due thereunder without the prior written consent of
Purchaser.
6.3 Preservation of Business and Relationships. The CPS Group Companies
------------------------------------------
and the Shareholders shall use their best efforts, without making any
commitments on behalf of the Purchaser, to preserve its business organization
intact, to keep available to its business its present Employees, and to preserve
its present relationships with suppliers, lessors, licensors, customers and
others having business relationships with it.
6.4 Existing Agreements. The CPS Group Companies and the Shareholders
-------------------
shall not modify, amend, cancel or terminate any of its existing Contracts, or
agree to do any of those acts.
6.5 Governmental Filings. The CPS Group Companies and the Shareholders
--------------------
shall cooperate fully with the Purchaser in preparing and filing all information
and documents deemed necessary or desirable by the Purchaser under any statutes
or governmental rules or regulations pertaining to the transactions contemplated
by this Agreement.
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6.6 Consents. The CPS Group Companies and the Shareholders shall give all
--------
notices required to be made and given by the CPS Group Companies or the
Shareholders and use their best efforts to obtain all consents required to be
obtained by the CPS Group Companies or the Shareholders in connection with the
sale of the Shares and the other transactions contemplated by this Agreement.
6.7 Notice to the Purchaser. Each of the CPS Group Companies and the
-----------------------
Shareholders shall give prompt notice to the Purchaser of (a) any notice of, or
order or communication relating to, any default or potential default received by
such party or of which such party is aware with respect to any Contract, and (b)
any notice or other communication from any third party alleging that the consent
of such third party may be required in connection with any of the transactions
contemplated by this Agreement.
6.8 Actions by the Shareholders. Each of the CPS Group Companies and the
---------------------------
Shareholders shall take any and all actions which may be necessary to cause such
party to perform its obligations hereunder in a timely and appropriate manner.
ARTICLE 7
INDEMNIFICATION
---------------
7.1 Indemnification.
---------------
7.1.1 Shareholders, RBA and Insource. Each of the Shareholders,
------------------------------
RBA and Insource shall indemnify, defend (with counsel reasonably acceptable to
the Purchaser and/or OCPS, as the case may be) and hold the Purchaser and OCPS
harmless from and against any and all costs, actions, expenses (including
reasonable attorneys' fees), claims, demands and liabilities arising from any
material misrepresentation or material inaccuracy in, material breach or
material nonperformance of, any warranty, representation, covenant or agreement
made by such party in this Agreement or any certificate delivered in connection
with this Agreement.
7.1.2 Purchaser. The Purchaser shall indemnify, defend (with counsel
---------
reasonably acceptable to the Shareholders) and hold the Shareholders, RBA and
Insource harmless from and against any and all costs, actions, expenses
(including reasonable attorneys' fees), claims, demands and liabilities arising
from (a) any material misrepresentation or material inaccuracy in, material
breach or material nonperformance of, any warranty, representation, covenant or
agreement made by the Purchaser in this Agreement or any certificate delivered
in connection with this Agreement or (b) the Assumed Liabilities.
7.1.3 Offset Right. Except for the Closing Adjustment, which may
------------
be offset in accordance with the provisions of Section 1.4.2 subject to the
dispute resolution procedures described therein, the Purchaser and OCPS may
charge and offset the amount of any and all of the Purchaser's or OCPS's losses,
costs, actions, expenses (including reasonable attorneys' fees), claims, demands
and liabilities arising from any material misrepresentation, inaccuracy in,
breach, or nonperformance of any warranty, representation, covenant or agreement
made by the Shareholders, RBA or Insource in this Agreement or any agreements or
transactions contemplated hereby prior to or as of the Closing Date against any
amounts payable by the
-23-
Purchaser or OCPS to Shareholders (including, without limitation, amounts
payable pursuant to the Promissory Notes). The Purchaser and OCPS shall give the
Shareholders fifteen (15) days' advance written notice of its intention to seek
such an offset, including the grounds or reasons therefor, and will, during such
period, discuss the matter with the Shareholders in an attempt to resolve the
matter without effecting an offset. Failing a complete resolution of the claim
during such 15-day period, the Purchaser shall initiate arbitration of the
dispute in accordance with Section 9.6 hereof and shall, during the pendency of
such arbitration (and the 15-day period beginning with notice of a claim), make
any payments otherwise due and owing under the Promissory Notes into an account
under the control of the Judicial Arbitration and Mediation Service ("JAMS"). An
offset against such payments will be made only upon the final award of the
arbitrator in such arbitration proceeding. The existence of a claim and/or the
pendency of an arbitration proceeding in connection therewith shall not toll,
delay or excuse the Purchaser's obligation to make the payments called for under
the Promissory Notes into an arbitration account as provided herein.
7.1.4 Mutual Cooperation. Each party to this Agreement shall
------------------
cooperate with the other party(ies) in defending claims for which the other
party(ies) is/are or may be liable under this Article 7 by giving prompt notice
to the other party(ies) of the existence of any such claim and by promptly
furnishing such documents and information as may be useful in defense of such
claims.
ARTICLE 8
TAXES, FEES AND TERMINATION
---------------------------
8.1 Tax Returns. The Shareholders shall prepare and file all tax
-----------
returns, schedules and filings in respect of CPS and Impact the fiscal year
ended December 31, 1999 and the stub period from January 1, 2000 up to and
including the Closing Date, and pay all taxes due in respect of such returns,
prior to the applicable due date therefor (as such due dates may be extended)
and provide copies of all such tax returns, schedules and filings to the
Purchaser. All such returns, schedules and filings shall be accurate and shall
comply fully with applicable law and regulations and past practice in both form
and substance.
8.2 Fees and Expenses.
-----------------
8.2.1 The Shareholders and the Purchaser shall each pay their
respective costs and expenses (including attorneys' fees) incurred or to be
incurred in negotiating and preparing this Agreement and in closing and
performing the transactions contemplated herein. The Shareholders and the
Purchaser shall each pay one-half of the cost of the Purchaser's lien and
litigation searches on the CPS Group Companies, the Shareholders, the Premises
and the Assets, copies of such lien searches have been provided to the
Shareholders.
8.2.2 The Purchaser shall pay the cost of the audit to be performed
by Xxxxxx Xxxxxxxx LLP of the CPS Group Companies' financial statements for the
fiscal years ended December 31, 1998 and December 31, 1999.
8.3 Termination. This Agreement may be terminated as follows:
-----------
-24-
8.3.1 Purchaser. By the Purchaser if there is any breach of this
---------
Agreement by a party other than the Purchaser or any condition precedent to the
obligations of the Purchaser hereunder is not satisfied and such condition is
not waived by the Purchaser on or prior to the Closing Date; or
8.3.2 Shareholders. By the Shareholders if there is a breach of
------------
this Agreement by a party other than the Shareholders or any of the CPS Group
Companies or any condition precedent to the obligations of the Shareholders
hereunder is not satisfied and such condition is not waived by the Shareholders
on or prior to the Closing Date;
in which case, the party with a right of termination may terminate this
Agreement at its option by notice to the other parties. In the event of a
termination of this Agreement by any party as above provided due to the default
of the other party(ies), such defaulting party(ies) shall be liable to the other
parties for damages proximately caused by such default.
ARTICLE 9
MISCELLANEOUS
-------------
9.1 Warranty of Title. All warranties of title contained herein with
-----------------
respect to the Purchased Assets, the Shares or any portion thereof is hereby
made a part of all instruments of transfer by which any of the Purchased Assets
are transferred to OCPS or the Shares are transferred to the Purchaser.
9.2 Notices. Any notices or other communications pursuant to this
-------
Agreement shall be given in writing and shall be deemed to have been given when
delivered personally, or three (3) business days after deposit in the United
States mail, registered or certified, with proper postage and registration or
certification fees prepaid, or one (1) business day after delivery to Federal
Express or a similar overnight carrier, addressed to the following:
IF TO PURCHASER:
Cypress Financial Services, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies of all notices to the Purchaser or any of the CPS Group
Companies to:
Pillsbury Madison & Sutro LLP
000 Xxxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-25-
IF TO THE SHAREHOLDERS:
Xxxxxxx Xxxxxxxx
0000 Xxxxxx Xxxxx Xxxxxx
Xxxxx Xxxx, XX 00000-0000
with copies of all notices to the Shareholders to:
Xxxxxx X. Xxxxxx, Esq.
Attorney at Law
000 X. Xxxxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other addresses as may be designated by any of the parties from time
to time by written notice given to the other party(ies) in the aforesaid manner.
9.3 Survival. The indemnities, agreements and covenants made in this
--------
Agreement shall survive the Closing Date.
9.4 Assignment. Neither this Agreement nor any rights pertaining hereto
----------
may be assigned by any party.
9.5 Severability. Should any one or more of the provisions of this
------------
Agreement or of any agreement entered into pursuant to this Agreement be
determined to be unlawful or unenforceable in any relevant jurisdiction, then
such illegal or unenforceable provision shall be modified by the proper court,
if possible, but only to the extent necessary to make such provision
enforceable, and such modified provision and all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement
shall be given effect separately from the provision or portion thereof
determined to be unlawful or unenforceable and shall not be affected thereby;
provided, that any such modification shall apply only with respect to the
operation of this Agreement in the particular jurisdiction in which such
determination of unlawfulness or unenforceability is made.
9.6 Arbitration. Except with respect to the Closing Adjustment, which
-----------
shall be governed by Section 1.4.3, in the event of a claim or dispute
concerning or arising out of this Agreement and the agreements and transactions
contemplated hereby, such dispute shall be submitted to binding arbitration.
Arbitration proceedings may be commenced by giving the other party(ies) written
notice thereof and shall proceed thereafter in accordance with and be governed
by the rules and procedures of JAMS then in effect. The arbitrator shall be a
neutral arbitrator (the "Arbitrator") mutually selected by Xxxxxx Xxxxxxx and
Xxxx Xxxxxxxx from among five individuals proposed by JAMS. The decision of the
Arbitrator shall be final, binding and nonappealable with respect to all
persons, including, without limitation, persons who have failed or refused to
participate in the arbitration process. The Arbitrator shall have authority to
award relief under legal or equitable principles, including interim or
preliminary relief. Unless the Arbitrator finds that exceptional circumstances
require otherwise, all costs incurred in
-26-
connection with the arbitration, including the Arbitrator's fees and expenses
of expert witnesses, legal counsel and accountants, shall be allocated to the
parties by the Arbitrator, taking into account the parties' original positions
and the ultimate determination by the Arbitrator.
9.7 Brokerage Commission. The parties acknowledge that the Shareholders
--------------------
will not pay any commission to any broker in connection herewith. Each party
shall indemnify and hold harmless the other parties against any and all losses,
costs, damages, expenses (including attorneys' fees) and liabilities whatsoever
based upon any commitment by such indemnifying party to pay any brokerage
commission or other fee by reason of the transactions contemplated herein.
9.8 Applicable Law. This Agreement and the rights and obligations of
--------------
the parties hereunder shall be construed under, and governed by, the laws of the
State of California without giving effect to conflict of laws provisions.
9.9 Binding Effect. The terms and provisions of this Agreement shall be
--------------
binding upon, and shall inure to the benefit of, the parties hereto and their
respective assigns, heirs, representatives and successors.
9.10 Further Assurances. Each party hereby agrees to execute all such
------------------
further instruments and documents and to take all such further action as the
other party(ies) may reasonably request in order to give effect to the
provisions and purposes of this Agreement.
9.11 Entire Agreement. This Agreement, the attached schedules and exhibits
----------------
referenced herein, and the instruments, agreements and certificates to be
executed and delivered pursuant hereto, constitute the entire understanding of
the parties with respect to the subject matter hereof and supersede any and all
prior letters, agreements or memorandums of understanding.
9.12 Waiver, Modification or Cancellation. Any waiver, modification or
------------------------------------
cancellation of any of the provisions of this Agreement shall not be valid
unless in writing and signed by the parties hereto.
9.13 Headings; Terminology. The various headings or titles used herein are
---------------------
for convenience only and shall not affect the interpretation of any of the
provisions hereof. All personal pronouns used in this Agreement, whether used in
the masculine, feminine or neuter gender, shall include all other genders; and
the singular number shall include the plural, and vice versa.
9.14 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.15 Publicity. All notices to third parties and all other publicity
---------
concerning the transactions contemplated herein shall be jointly planned and
coordinated by and between the Purchaser and the Shareholders. None of the
parties shall act unilaterally in this regard without the prior written consent
of the other; however, such consent shall not be unreasonably withheld.
-27-
9.16 Condemnation. If, prior to the Closing Date, condemnation proceedings
------------
are commenced or threatened against the Premises which could result in the
taking of all or a portion of the Premises, the Purchaser shall have the right
to terminate this Agreement and its obligations hereunder.
[Remainder of page left intentionally blank.]
-28-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
PURCHASER: CPS GROUP COMPANIES:
CYPRESS FINANCIAL SERVICES, INC., ORANGE COUNTY PROFESSIONAL SERVICES,
a Nevada corporation INC., a California corporation
By: ________________________________ By: _________________________________
Name:_______________________________ Name: _______________________________
Title:______________________________ Title: ______________________________
IMPACT SEMINARS AND CONSULTING, INC.,
a Hawaii corporation
By: _________________________________
Name: _______________________________
Title:_______________________________
RBA REM-CARE, INC.,
a California corporation
By: _______________________________
Name: _______________________________
Title:_______________________________
INSOURCE MEDICAL SOLUTIONS, LLC, a
California limited liability company
By: _______________________________
Name: _______________________________
Title:_______________________________
SHAREHOLDERS:
__________________________
Xxxxxxx Xxxxxxxx
__________________________
Xxxxxxx X. Xxxxxxxx
__________________________
Xxxxxx Xxxxx
__________________________
Xxxxxxx X. Xxxxx
__________________________
Xxxxxxx Xxxxxx
INDEX OF EXHIBITS
EXHIBITS
--------
A - Non-Competition Agreement
B - Promissory Notes
C - Security Agreement
D - Investors' Rights Agreement
E-1 - Employment Agreement for Xxxx Xxxxxxxx
E-2 - Employment Agreement for Xxxxxx Xxxxx
F - Opinion of Counsel to the CPS Group Companies and the Shareholders
G - Opinion of Counsel to the Purchaser
INDEX OF SCHEDULES
------------------
SCHEDULES
---------
1 Premises
1.1 Assets
Exhibit 1 - Equipment
Exhibit 2 - Contracts and Receivables
Exhibit 3 Cash and Accounts
1.4.1. Schedule of Purchase Price Payments (Cash and Promissory Notes)
1.5 Assumed Liabilities
2.1 Schedule of Exceptions to Representations and Warranties
2.1.1A Outstanding Options, Etc., and Agreements for the Purchase or
Acquisition of Shares
2.1.1C Liens; Bank Loans and Lines of Credit
2.1.7A(i) Articles of Incorporation
2.1.7A(ii) Bylaws
2.1.7B(i) Articles of Organization
2.1.7B(ii) Operating Agreement
2.1.8 Required Approvals and Consents
2.1.10 Financial Statements and Schedules
2.1.11 Exceptions to Maintenance of Financial Condition
2.1.13 Insurance Policies
2.1.14 Litigation
2.1.15 Licenses and Bonds
2.1.16 Intellectual Property Rights
2.1.18A State and Federal Tax Returns for 1999
2.1.18B State and Federal Tax Returns for 1998
2.1.18C State and Federal Tax Returns for 1997
2.1.19 Contracts
2.1.20 Employees
2.1.21 Environmental Matters
