PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") dated as of July 1, 2001 is
made among Premier Home HealthCare Services, Inc., a New York corporation
(together with its successors and assigns, "Purchaser"), Star Multi Care
Services, Inc., a New York corporation (together with its successors and
assigns, "Parent Seller"), and Amserv Health Care of New Jersey, Inc., a
Delaware corporation (together with its successors and assigns, the "Subsidiary
Seller"; Parent Seller and Subsidiary Seller are sometimes referred to as
"Sellers" and individually as "Seller"). Capitalized terms not otherwise defined
herein have the meanings set forth in Section 13.1.
Recitals
WHEREAS, the Sellers are engaged in the business of providing professional
and paraprofessional home healthcare personnel services and healthcare facility
staffing services for hospitals and skilled nursing facilities including,
without limitation, all related computer, record-keeping, billing, payroll and
similar administrative operations, located in New Jersey (the "New Jersey
Business") and in New York (the "New York Business", and together with the New
Jersey Business, the "Business").
NOW THEREFORE, in consideration of the mutual premises and covenants and
agreements contained herein, the parties intending to be legally bound, agree as
follows:
Article I
Sale of Assets and Closings
Section 1.1 Sale of New Jersey Assets and New York Assets.
(a) On the terms and subject to the conditions set forth in this
Agreement, Sellers shall sell, transfer, convey, assign and deliver to
Purchaser, and Purchaser shall purchase and pay for, at the New Jersey Closing,
all of each Seller's right, title and interest in, to and under the following
Assets and Properties of Sellers, used or held for use in connection with the
New Jersey Business (the "New Jersey Assets"), except as otherwise provided in
Section 1.1(b), free and clear of all liens and encumbrances:
(i) The New Jersey Real Property Leases, all as set forth on
Section 1.1 of the Disclosure Schedule;
(ii) The New Jersey Tangible Personal Property, all as set forth on
Section 1.1 of the Disclosure Schedule;
(iii) The New Jersey Personal Property Leases, all as set forth on
Section 1.1 of the Disclosure Schedule;
(iv) The New Jersey Business Contracts, all of which the Sellers
represent and warrant are set forth on Section 1.1 of the
Disclosure Schedule;
(v) The New Jersey Prepaid Expenses, all as set forth on Section
1.1 of the Disclosure Schedule;
(vi) The New Jersey Intangible Personal Property, including
original patient files;
(vii) The New Jersey Tenant Security Deposits;
(viii) The New Jersey Business Books and Records, except to the
extent such books and records are items susceptible to
duplication and are required by Law to be retained by any
Seller, such Seller may deliver photostatic copies or other
reproductions to Purchaser;
(ix) The personnel records of each employee engaged by Purchaser
upon the New Jersey Closing, as further set forth in Section
9.1;
(x) Subject to Section 1.10, all of each Seller's right, title and
interest in, to and under the name "Amserv Health Care" and
any derivatives, abbreviations or similarities to the name
"Amserv Health Care" in the States of New York and New Jersey;
and
(xi) The Other Assets.
(b) Notwithstanding anything in this Agreement to the contrary, the
following Assets and Properties of the Subsidiary Seller (the "New Jersey
Excluded Assets") shall be excluded from and shall not constitute New Jersey
Assets:
(i) Cash (including checks received prior to the New Jersey
Closing, whether or not deposited or cleared prior to the
close of business on the date of the New Jersey Closing),
commercial paper, certificates of deposit and other bank
deposits, treasury bills and other cash equivalents for
services rendered by Sellers prior to the New Jersey Closing;
(ii) Accounts Receivable, including, without limitation, New Jersey
Accounts Receivable, for services rendered prior to the New
Jersey Closing and Medicaid Provider Numbers required for
collection;
(iii) The New Jersey Business Licenses, which shall be delivered to
Purchaser upon execution of this Agreement, held in escrow,
and surrendered at the New Jersey Closing;
(iv) Life insurance policies of officers and other employees of
each Seller and all other insurance policies relating to the
operation of the New Jersey Business or any other business of
the Subsidiary Seller;
(v) All assets owned or held by any Benefit Plans;
(vi) All refunds or credits, if any, of Taxes due to or from any
Seller that cannot be assigned by Law;
(vii) The real or personal property described in Section 1.1(b) of
the Disclosure Schedule;
(viii) The minute books, stock transfer books and corporate seal of
Sellers and any other Books and Records relating solely to the
New Jersey Excluded Assets or the Retained Liabilities,
including, without limitation, the Regulated Books and
Records;
(ix) Any rights (including indemnification) and claims and
recoveries under litigation of any Seller against third
parties arising out of or relating to events prior to the New
Jersey Closing;
(x) The rights of any Seller in, to and under all Contracts of any
nature, the obligations of such Seller under which are not
expressly assumed by Purchaser pursuant to Section 1.2;
(xi) Each Seller's right, title and interest in any prepaid expense
listed in Section 1.1(b) of the Disclosure Schedule ("NJ
Retained Prepaid Expenses"); and
(xii) Each Seller's rights under this Agreement and the Operative
Agreements.
(c) On the terms and subject to the conditions set forth in this
Agreement, Sellers shall sell, transfer, convey, assign and deliver to
Purchaser, and Purchaser shall purchase and pay for, at the New York Closing,
all of each Seller's right, title and interest in, to and under the following
Assets and Properties of Sellers used or held for use in connection with the New
York Business (the "New York Assets"), except as otherwise provided in Section
1.1(d), free and clear of all liens and encumbrances:
(i) The New York Business Contracts, all of which the Sellers
represent and warrant are set forth on Section 1.1 of the
Disclosure Schedule;
(ii) The New York Intangible Personal Property, including original
patient files;
(iii) The New York Business Books and Records, except to the extent
such books and records are items susceptible to duplication
and are required by Law to be retained by any Seller, such
Seller may deliver photostatic copies or other reproductions
to Purchaser;
(iv) The personnel records of each employee engaged by Purchaser
upon the effective date of the New York Management Agreement
or upon the New York Closing, as further set forth in Section
9.1;
(v) The Other Assets.
(d) Notwithstanding anything in this Agreement to the contrary, the
following Assets and Properties of the Parent Seller (the "New York Excluded
Assets") shall be excluded from and shall not constitute New York Assets:
(i) Cash (including checks received prior to the close of business
on the New York Closing Date or the effective date of the
Management Agreement, whichever is earlier, whether or not
deposited or cleared prior to the close of business on the New
York Closing Date or the effective date of the Management
Agreement, whichever is earlier), commercial paper,
certificates of deposit and other bank deposits, treasury
bills and other cash equivalents;
(ii) Accounts Receivable, including, without limitation, New York
Accounts Receivable representing monies owed for services
provided prior to the close of business on the New York
Closing Date or the effective date of the Management
Agreement, whichever is earlier and Medicaid Provider Numbers
required for collection;
(iii) The New York Business Licenses, which shall be delivered to
Purchaser upon execution of this Agreement, held in escrow,
and surrendered at the New York Closing;
(iv) Life insurance policies of officers and other employees of
each Seller and all other insurance policies relating to the
operation of the New York Business or any other business of
the Parent Seller;
(v) All assets owned or held by any Benefit Plans;
(vi) All refunds or credits, if any, of Taxes due to or from any
Seller that cannot be assigned by Law;
(vii) The minute books, stock transfer books and corporate seal of
Parent Seller and any other Books and Records relating solely
to the New York Excluded Assets or the Retained Liabilities,
including, without limitation, the Regulated Books and Records
(collectively, the "New York Excluded Books and Records");
(viii) Any rights (including indemnification) and claims and
recoveries under litigation of any Seller against third
parties arising out of or relating to events prior to the New
York Closing Date;
(ix) Each Seller's right, title and interest in any prepaid expense
listed in Section 1.1(b) of the Disclosure Schedule ("NY
Retained Prepaid Expenses");
(x) The name "Star Multi Care Services"; provided, Sellers shall
not use such name in the States of New York and New Jersey to
conduct any home health care business; and
(xi) Each Seller's rights under this Agreement and the Operative
Agreements.
Section 1.2 Liabilities.
In connection with the sale, transfer, conveyance, assignment and
delivery of the New Jersey Assets and New York Assets pursuant to this
Agreement, on the terms and subject to the conditions set forth in this
Agreement, at the New Jersey Closing and New York Closing, respectively,
Purchaser shall assume and agree to pay, perform and discharge when due, the
following obligations of Subsidiary Seller arising in connection with the
operation of the New Jersey Business, as the same shall exist on the New Jersey
Closing Date (the "New Jersey Assumed Liabilities"), and no others: the New York
Business, as the same shall exist on the New York Closing Date (the "New York
Assumed Liabilities")
(a) All obligations of Subsidiary Seller under the New Jersey Real
Property Leases arising and to be performed after the New Jersey Closing,
excluding (A) any such obligations and amounts arising or to be performed prior
to the New Jersey Closing, (B) any such obligations and amounts arising as a
result of the breach or alleged breach by any Seller of its obligations
thereunder, and (C) any obligations and amounts in connection with obtaining a
consent to the assignment of such leases to Purchaser;
(b) All obligations of Subsidiary Seller under the New Jersey Personal
Property Leases arising and to be performed after the New Jersey Closing,
excluding (A) any such obligations and amounts arising or to be performed prior
to the New Jersey Closing, (B) any such obligations and amounts arising as a
result of the breach of alleged breach by any Seller of its obligations
thereunder, and (C) any obligations and amounts in connection with obtaining a
consent to the assignment of such leases to Purchaser; and
(c) All obligations of Sellers under the Business Contracts arising and to
be performed after the New Jersey Closing and/or the New York Closing, excluding
(A) any such obligations arising or to be performed prior to the New Jersey
Closing, (B) any such obligations arising or to be performed prior to the New
York Closing except as provided under the Management Agreement, (C) any such
obligations arising as a result of the breach or alleged breach by any Seller of
its obligations thereunder, and (D) any obligations in connection with obtaining
a consent to the assignment of such contracts to Purchaser.
Section 1.3 Purchase Price; Allocation; Look-Back.
(a) The aggregate purchase price for the New Jersey Assets and the New
York Assets and the covenants of Sellers contained in Article IV is $5,500,000,
(the "Purchase Price"), subject to the New Jersey Look-Back and the New York
Look Back as set forth in Sections 1.5 and 1.7, respectively, and payable by
wire transfer of immediately available funds and by the assumption by Purchaser
of the Assumed Liabilities as provided in Section 1.6(d) below. The parties
hereby agree that for all purposes, including Taxes, the Purchase Price, as
adjusted in accordance with Section 1.5 and 1.7 below, shall be allocated in the
amount of $4,000,000 to the New Jersey Assets (the "New Jersey Purchase Price")
and $1,500,000 to the New York Assets (the "New York Purchase Price").
(b) Each of Sellers and Purchaser agree that any loans made by Purchaser
to Sellers, evidenced in the form of notes issued by Sellers in favor of
Purchaser, shall be repaid at the New York Closing from the New York Purchase
Price.
Section 1.4 New Jersey Closing.
(a) The New Jersey Closing shall take place at the offices of Meltzer,
Lippe, Xxxxxxxxx & Xxxxxxxxx, LLP, 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 00000,
or at such other place as Purchaser and Parent Seller shall mutually agree, at
10:00 A.M. local time, on September 15, 2001, or such later date as the parties
may agree.
(b) At the New Jersey Closing, the Purchaser shall pay $3,900,000 of the
New Jersey Purchase Price, and the balance of the New Jersey Purchase Price to
be held and not paid to the Parent Seller until thirty (30) days after the New
Jersey Closing, subject to New Jersey Look Back in Section 1.5.
Section 1.5 New Jersey Look Back.
The New Jersey Purchase Price shall be reduced or increased as
follows:
(a) The total base weekly amount of Sellers' xxxxxxxx for services to the
customers and patients of Sellers' New Jersey Business is agreed to be $289,589
($15,100,000 / 365 x 7) constituting the "NJ Pre-Look Back Period Base Amount".
(b) The NJ Pre-Look Back Period Base Amount shall be compared to the
average weekly amount billed by Purchaser, for services to the customers and
patients of Sellers' New Jersey Business, for the two (2) weeks immediately
following the New Jersey Closing (the "NJ Look Back Period").
(c) If the average weekly amount for the NJ Look Back Period based upon
the reimbursement rates of the Subsidiary Seller is:
(i) between 90% and 110% of the NJ Pre-Look Back Period Base
Amount, there shall be no reduction or increase in the New
Jersey Purchase Price.
(ii) at least 80% but less than 90% of the NJ Pre-Look Back Period
Base Amount, the payment of the New Jersey Purchase Price
shall be reduced by $250,000 to $3,750,000.
(iii) less than 80% of the NJ Pre-Look Back Period Base Amount, the
payment of the New Jersey Purchase Price shall be reduced by
$500,000 to $3,500,000.
(iv) more than 110% but not more than 120% of the NJ Pre-Look Back
Period Base Amount, the payment of the New Jersey Purchase
Price shall be increased by $250,000 to $4,250,000.
(v) more than 120% of the NJ Pre-Look Back Period Base Amount, the
payment of the New Jersey Purchase Price shall be increased by
$500,000 to $4,500,000.
(d) Credit Toward New York Purchase Price. In the event the NJ Look Back
Period adjustment causes the New Jersey Purchase Price to be less than
$3,900,000, then the Purchaser shall be credited with the difference toward the
New York Purchase Price.
(e) Notwithstanding the foregoing, should the aggregatge revenues for the
NJ Look Back Period and the NY Look Back Period equal or exceed $23,100,000 on
an annual basis, Section 1.5(c) shall not apply and there shall be no reduction
in the New Jersey Purchase Price.
Section 1.6 New York Closing.
(a) The New York Closing shall take place at the offices of Meltzer,
Lippe, Xxxxxxxxx & Xxxxxxxxx, LLP, 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 00000,
or at such other place as Purchaser and Parent Seller shall mutually agree, at
10:00 A.M. local time, within three (3) days after the occurrence of the
following conditions precedent, or such later date as the parties may agree.
(i) The shareholders of the Parent Seller shall, in full
compliance with each of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended,
have approved the transactions related to the sale of New York
Assets as contemplated in this Agreement; and
(ii) The Purchaser shall have received written notification that
the New York State Public Council has granted its approval to
the transaction related to the sale of New York Assets as
contemplated in this Agreement.
(b) At the New York Closing the Management Agreement shall terminate and
sale of the New York Assets shall occur pursuant to Section 1.1(c) of this
Agreement.
(c) At the New York Closing, the Purchaser shall pay $1,200,000 of the New
York Purchase Price, less any amounts credited under Sections 1.3(b) and 1.5(d),
and the balance of the New York Purchase Price, subject to New York Look Back in
Section 1.7.
Section 1.7 New York Look Back.
The New York Purchase Price shall be reduced or increased as
follows:
(a) The total base weekly amount of Sellers' xxxxxxxx for services to the
customers and patients of Sellers' New York Business is agreed to be $153,425
($8,000,000 / 365 x 7) constituting the "NY Pre-Look Back Period Base Amount".
(b) The NY Pre-Look Back Period Base Amount shall be compared to the
average weekly amount billed by Purchaser, for services to the customers and
patients of Sellers' New
York Business, for the two (2) weeks immediately following the effective date of
the Management Agreement (the "NY Look Back Period").
(c) If the average weekly amount for the NY Look Back Period based upon
the reimbursement rates of the Parent Seller is:
(i) between 90% and 110% of the NY Pre-Look Back Period Base
Amount, there shall be no reduction or increase in the New
York Purchase Price.
(ii) at least 80% but less than 90% of the NY Pre-Look Back Period
Base Amount, the New York Purchase Price shall be reduced by
$150,000 to $1,350,000.
(iii) less than 80% of the NY Pre-Look Back Period Base Amount, the
New York Purchase Price shall be reduced by $300,000 to
$1,200,000. (iv) more than 110% but not more than 120% of the
NY Pre-Look Back Period Base Amount, the payment of the New
York Purchase Price shall be increased by $150,000 to
$1,650,000.
(v) more than 120% of the NY Pre-Look Back Period Base Amount, the
payment of the New York Purchase Price shall be increased by
$300,000 to $1,800,000.
(d) Notwithstanding the foregoing, should the aggregatge revenues for the
NJ Look Back Period and the NY Look Back Period equal or exceed $23,100,000 on
an annual basis, Section 1.7(c) shall not apply and there shall be no reduction
in the New York Purchase Price.
Section 1.8 Deliveries - New Jersey.
(a) Simultaneously with the delivery of the New Jersey Purchase Price
described in Section 1.4:
(i) Sellers shall assign and transfer to Purchaser all of their
right, title and interest in and to the New Jersey Assets
(free and clear of all Liens, other than Permitted Liens) by
delivery of (A) a General Assignment and Xxxx of Sale
substantially in the form of Exhibit B hereto (the "General
Assignment"), duly executed by each Seller, (B) an assignment
of the Intellectual Property in form and substance reasonably
satisfactory to Purchaser, and (C) such other good and
sufficient instruments of conveyance, assignment and transfer,
in form and substance reasonably acceptable to Purchaser's
counsel, as shall be effective to vest in Purchaser good title
to the Assets (the General Assignment and the other
instruments referred to in clauses (B) and (C) being
collectively referred to herein as the "Assignment
Instruments");
(ii) Purchaser shall assume from Subsidiary Seller the due payment,
performance and discharge of the Assumed Liabilities by
delivery of (A)
an Assumption Agreement substantially in the form of Exhibit C
hereto (the "Assumption Agreement"), duly executed by
Purchaser, and (B) such other good and sufficient instruments
of assumption, in form and substance reasonably acceptable to
Subsidiary Seller's counsel, as shall be effective to cause
Purchaser to assume the Assumed Liabilities as and to the
extent provided in Section 1.2(a) (the Assumption Agreement
and such other instruments referred to in clause (B) being
collectively referred to herein as the "Assumption
Instruments");
(iii) The Purchaser and Parent Seller shall enter into a management
agreement for the servicing by Purchaser of the customers and
patients for the New York Business of Parent Seller (the
"Management Agreement"), in the form of Exhibit A hereto. The
Management Agreement shall have been submitted to, and is
subject to the approval of, the New York State Department of
Health;
(iv) Sellers shall have obtained and delivered to Purchaser written
consents necessary for the assignment of Business Contracts
relating to customers and patients of the New Jersey Business
and the New York Business by the New Jersey Closing, and to
the extent such consents shall not have been obtained by the
New Jersey Closing and the New York Closing, respectively, or
within thirty (30) days thereafter, the revenues attributable
to such Business Contracts shall not be included in the
calculation of the average weekly amount for the NJ Look Back
Period or the NY Look Back Period, respectively;
(v) In consideration of the New Jersey Purchase Price and to
secure the obligations of Sellers under Sections 1.5 and 1.10
and all other amounts and obligations due and becoming due to
Purchaser by Sellers, the Sellers shall deliver Uniform
Commercial Code 1 financing statements in favor of the
Purchaser securing all of the New Jersey Assets and Properties
of the Sellers, and all of Sellers' New York Assets;
(vi) The Subsidiary Seller shall transfer to Purchaser all cases
for all customers and patients of the New Jersey Business and
the exclusive right to provide services to such customers and
patients; and
(vii) Each of the Sellers and Purchaser shall deliver all other
certificates and other contracts, documents and instruments
required to be delivered under Articles VI and VII.
(b) Simultaneously with the delivery of the New York Purchase Price
described in Section 1.6:
(i) Sellers shall assign and transfer to Purchaser all of their
right, title and interest in and to the New York Assets (free
and clear of all Liens, other than Permitted Liens) by
delivery of (A) a General Assignment and Xxxx of
Sale substantially in the form of Exhibit B hereto (the
"General Assignment"), duly executed by each Seller, (B) an
assignment of the Intellectual Property in form and substance
reasonably satisfactory to Purchaser, and (C) such other good
and sufficient instruments of conveyance, assignment and
transfer, in form and substance reasonably acceptable to
Purchaser's counsel, as shall be effective to vest in
Purchaser good title to the Assets (the General Assignment and
the other instruments referred to in clauses (B) and (C) being
collectively referred to herein as the "Assignment
Instruments");
(ii) The Purchaser shall deliver Uniform Commercial Code financing
statements terminating its security in all of the Assets and
Properties of the Sellers; and
(iii) The Sellers shall deliver to the Purchaser a general release
by National Home Health Care Corp. ("National") in favor of
each of the Sellers and Purchaser in reference to any and all
claims against Sellers and Purchaser specifically including
but not limited to all claims in connection with or involving
this Agreement, the transactions contemplated herein, the
Management Agreement, and the Letter of Intent dated May 23,
2001, executed between National and the Parent Seller.
Section 1.9 Prorations.
(c) The following prorations relating to the New Jersey Assets shall be
made at the New Jersey Closing, with the Subsidiary Seller liable to the extent
such items relate to any time period prior to the New Jersey Closing and
Purchaser liable to the extent such items relate to any time period after the
New Jersey Closing:
(i) Rents, additional rents, taxes, charges for sewer, water,
telephone, electricity, other utilities, New Jersey Tenant
Security Deposits, and other items payable by Subsidiary
Seller under the New Jersey Real Property Leases.
(ii) All other items normally adjusted in connection with similar
transactions.
(d) Subsidiary Seller hereby agrees to pay at or prior to the New Jersey
Closing any and all amounts referred to in clause (i) or (ii) of the preceding
Section 1.9(a) promptly after receipt of notice thereof or make suitable
arrangements at the New Jersey Closing for prompt payment thereof which are
reasonably acceptable to Purchaser in its sole discretion.
(c) Sellers and Purchaser agree that Sellers shall pay a mutually agreed
amount up to $25,000 at the New Jersey Closing toward the Sellers obligations
for vacation pay and bonus compensation to field service workers of the New
Jersey Busisiness and the New York Business.
Section 1.10 Limited Use of Names.
After the New Jersey Closing, the Sellers shall have the
non-exclusive right, for a three (3) year period, to use the name "Amserv Health
Care" in the State of New Jersey in connection with collection of their
pre-closing accounts receivable. The use of such name for any other purpose is
prohibited without the prior written consent of the Purchaser, which shall not
be unreasonably withheld or delayed. Any funds collected that are attributable
to the other party, shall be promptly paid to the other party.
Section 1.11 Further Assurances; Post-Closing Cooperation.
(a) At any time or from time to time after the New Jersey Closing, at
Purchaser's request and without further consideration, Sellers shall execute and
deliver to Purchaser such other instruments of sale, transfer, conveyance,
assignment and confirmation, provide such materials and information and take
such other actions as Purchaser may reasonably deem necessary or desirable in
order to more effectively transfer, convey and assign to Purchaser, and to
confirm Purchaser's title to, all of the New Jersey Assets being purchased, and
to assist Purchaser in exercising all rights with respect thereto, and otherwise
cause Sellers to fulfill their obligations under this Agreement and the
Operative Agreements.
(b) At any time or from time to time after the New York Closing, at
Purchaser's request and without further consideration, Sellers shall execute and
deliver to Purchaser such other instruments of sale, transfer, conveyance,
assignment and confirmation, provide such materials and information and take
such other actions as Purchaser may reasonably deem necessary or desirable in
order to more effectively transfer, convey and assign to Purchaser, and to
confirm Purchaser's title to, all of the New York Assets being purchased, and to
assist Purchaser in exercising all rights with respect thereto, and otherwise
cause Sellers to fulfill their obligations under this Agreement and the
Operative Agreements.
(c) Effective on each Closing Date, the Sellers hereby constitute and
appoint Purchaser the true and lawful attorney of such Seller, with full power
of substitution, in the name of such Seller or Purchaser, but on behalf of and
for the benefit of Purchaser: (i) to demand and receive from time to time any
and all of the respective New Jersey Assets and/or New York Assets and to make
endorsements and give receipts and releases for and in respect of the same and
any part thereof; (ii) to institute, prosecute, compromise and settle any and
all Actions or Proceedings that Purchaser may deem proper in order to collect,
assert or enforce any claim, right or title of any kind in or to the New Jersey
Assets and/or New York Assets; (iii) to defend or compromise any or all Actions
or Proceedings in respect of any of the New Jersey Assets and/or New York
Assets; and (iv) to do all such acts and things in relation to the matters set
forth in the preceding clauses (i) through (iii) as Purchaser shall deem
desirable. Each Seller hereby acknowledges that the appointment hereby made and
the powers hereby granted are coupled with an interest and are not and shall not
be revocable by it in any manner or for any reason. Each Seller shall deliver to
Purchaser at each respective Closing an acknowledged power of attorney to the
foregoing effect executed and acknowledged by such Seller.
(d) Following each Closing, each party shall afford the other party, its
counsel and its accountants, during normal business hours, full and complete
access to the books, records and other data in its possession relating to the
New Jersey Business and/or the New York Business, including, without limitation,
the Regulated Books and Records, with respect to periods prior to each Closing,
and each party shall afford the other party the right to make copies and
extracts therefrom, to the extent that such access may be reasonably requested
by the requesting party in connection with (i) the preparation of Tax Returns,
(ii) the determination or enforcement of rights and obligations under this
Agreement, (iii) compliance with the requirements of any Governmental or
Regulatory Authority, (iv) the determination or enforcement of the rights and
obligations of any party to this Agreement or any of the Operative Agreements,
(v) in connection with any actual or threatened Action or Proceeding or (vi) the
provision of services to patients. Subject to applicable Law (including, without
limitation, any Law relating to the retention of patient records), each party
further agrees for a period extending six years after each Closing Date not to
destroy or otherwise dispose of any such books, records and other data (except
with respect to the Regulated Books and Records) to the other party and such
other party shall not agree in writing to take possession thereof during the ten
day period after such offer is made.
(e) If, in order to properly prepare its Tax Returns, other documents or
reports required to be filed with Governmental or Regulatory Authorities or its
financial statements or to fulfill its obligations hereunder, it is necessary
that a party be furnished with additional information, documents or records
relating to the Business not referred to in paragraph (c) above, and such
information, documents or records are in the possession or control of the other
party, such other party shall use its best efforts to furnish or make available
such information, documents or records (or copies thereof) at the recipient's
request, cost and expense. Any information obtained by any Seller in accordance
with this paragraph or paragraph (d) of this Section shall be held confidential
by such Seller in accordance with Section 14.6.
(f) Notwithstanding anything to the contrary contained in this Section, if
the parties are in an adversarial relationship in litigation or arbitration, the
furnishing of information, documents or records in accordance with paragraphs
(d) or (e) of this Section shall be subject to applicable rules relating to
discovery, except with respect to Regulated Books and Records, which shall
continue to be available as contemplated by this Agreement.
Section 1.12Third-Party Consents.
The Sellers shall obtain the written consent of any third party to the
assignment of any New Jersey Real Property Lease, New Jersey Personal Property
Lease, New Jersey Business Contract or the New York Business Contract to the
Purchaser in all cases in which such consent is or may be required for such
assignment. The provisions of this Section 1.13 shall not affect the obligations
of Sellers to consummate the transactions contemplated by this Agreement.
Article II
Representations and Warranties of Sellers
Sellers hereby jointly and severally represent and warrant to Purchaser as
follows:
Section 2.1 Organization of Seller Entities.
Sellers are each a corporation duly organized, validly existing and
in good standing under the Laws of its jurisdiction of organization, and has
full corporate (or other) power and authority to conduct the Business
(including, without limitation, the New Jersey Business and the New York
Business) and/or any other business conducted by it as and to the extent now
conducted and to own, use, hold and lease the New Jersey Assets, the New York
Assets and/or any other Assets and Properties owned or used by it.
Section 2.2 Authority.
(a) The Sellers have full corporate power and authority to execute and
deliver this Agreement and the Operative Agreements to which it is a party, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, including, without limitation, to
sell and transfer (pursuant to this Agreement) the New Jersey Assets. The
Sellers have full corporate (or other) power and authority to execute and
deliver this Agreement and the Operative Agreements to which it is a party and
to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, including, without limitation, to
sell and transfer (pursuant to this Agreement) the New Jersey Assets.
(b) The execution and delivery by the Sellers of this Agreement and the
Operative Agreements to which the Sellers are a party, and the performance by
the Sellers of their obligations hereunder and thereunder have been duly and
validly authorized by the Board of Directors and the shareholders, where
applicable.
(c) The Board of Directors of Parent Seller has recommended adoption of
this Agreement and the transactions contemplated by this Agreement to the
shareholders of Parent Seller and directed that this Agreement be submitted to
the shareholders of Parent Seller for their consideration. No other corporate
action on the part of Parent Seller, other than obtaining Parent Seller
Shareholders' Approval, is necessary. No other corporate action on the part of
any Subsidiary Seller is necessary.
(d) This Agreement, has been duly and validly executed and delivered by
each Seller and constitutes, and upon the execution and delivery by each Seller
of the Operative Agreements to which it is a party, such Operative Agreements
shall constitute, legal, valid and binding obligations of each Seller
enforceable against each Seller in accordance with their terms.
Section 2.3 No Conflicts.
The execution and delivery by each of the Sellers of this Agreement
does not, and the execution and delivery by each of the Sellers of the Operative
Agreements to which they are a party, the performance by each the Sellers of
their respective obligations under this Agreement, and such Operative Agreements
and the consummation of the transactions contemplated hereby and thereby shall
not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the articles of incorporation or by-laws (or other
organizational documents) of Sellers;
(b) subject to obtaining the consents, approvals and actions, making the
filings and giving the notices disclosed in Section 2.3 of the Disclosure
Schedule, conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to Sellers or any of their respective
Assets and Properties; or
(c) except as disclosed in Section 2.3 of the Disclosure Schedule, (i)
conflict with or result in a violation or breach of, (ii) constitute (with or
without notice or lapse of time or both) a default under, (iii) require Seller
to obtain any consent, approval or action of, make any filing with or give any
notice to any Person as a result or under the terms of, or (iv) result in the
creation or imposition of any Lien upon Sellers or any of their respective
Assets and Properties, under any Contract or License to which Sellers are a
party or by which any of their respective Assets and Properties is bound or
otherwise subject.
Section 2.4 Governmental Approvals and Filings.
Except as disclosed in Section 2.4 of the Disclosure Schedule, no
consent, approval or action of, filing with or notice to any Governmental or
Regulatory Authority on the part of Sellers are required in connection with the
execution, delivery and performance of this Agreement or any of the Operative
Agreements to which the Sellers are a party or the consummation of the
transactions contemplated hereby or thereby.
Section 2.5 New Jersey and New York Business Books and Records.
Except as set forth in Section 2.5 of the Disclosure Schedule, the
New Jersey and New York Business Books and Records are recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon or held by any
means (including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are under the exclusive ownership and direct control of theSellers.
Section 2.6 Financial Statements.
Prior to the execution of this Agreement, Sellers have delivered to
Purchaser true and complete copies of the following financial statements:
(a) the unaudited consolidated balance sheet of the Parent Seller as of
February 28, 2001 and, with respect to Parent Seller, the related unaudited
statements of income and cash flows for the nine months then ended;
(b) the audited consolidated balance sheets of Parent Seller as of May 31,
2000, 1999 and 1998, and the related audited statement of income, cash flows and
shareholders equity for each fiscal year then ended, together with a true and
correct copy of the report on such audited information by Xxxxx Xxxxxxxxxx & Co.
LLP, and all letters from such accountants with respect to the results of such
audits; and
(c) the unaudited balance sheets of the New Jersey Business as of May 31,
2000 and 1999 and the related unaudited statements of income and cash flows for
each fiscal year then ended;
Except as set forth in the notes thereto and as disclosed in Section 2.6
of the Disclosure Schedule, all such financial statements (i) were prepared on a
consistent basis and in accordance with GAAP, (ii) fairly present the financial
condition and results of operations of the Business and Seller, as applicable,
as of the respective dates thereof and for the respective periods covered, and
(iii) were compiled from Books and Records regularly maintained by Parent
Seller's management and used to prepare the consolidated financial statements of
Parent Seller in accordance with the GAAP. Parent Seller has maintained such
Books and Records in a manner sufficient to permit the preparation of financial
statements in accordance with GAAP.
Section 2.7 Absence of Changes.
Except for the execution and delivery of this Agreement the
Operative Agreement and the transactions to take place pursuant hereto on or
prior to each Closing Date and except as disclosed in Section 2.7 of the
Disclosure Schedule, since the Annual Financial Statement Date there has not
been any material adverse change, or any event or development which,
individually or together with other such events, could reasonably be expected to
result in a material adverse change in the Condition of Subsidiary Seller, , the
New Jersey Business, Condition of Parent Seller, or the New York Business.
Without limiting the foregoing, except the application of the proceeds thereof
in accordance with this Agreement or as disclosed in Section 2.7 of the
Disclosure Schedule, there has not occurred, between the Annual Financial
Statement Date and the date hereof, any of the following:
(a) (i) any increase in the salary, wages or other compensation of the
employee of Sellers whose annual salary is, or after giving effect to such
change would be, $25,000 or more; (ii) any establishment or modification of (A)
targets, goals, pools or similar provisions in respect of any fiscal year under
any Benefit Plan or any employment-related Contract or other compensation
arrangement with or for any employee of Sellers or (B) salary ranges, increase
guidelines or similar provisions in respect of any Benefit Plan or any
employment-related Contract or other compensation arrangement with or for any
employee of Sellers; or (iii) any adoption, entering into or becoming bound by,
any Benefit Plan, employment-related Contract or collective bargaining
agreement, or amendment, modification or termination (partial or complete) of
any Benefit Plan, employment-related Contract or collective bargaining
agreement, except to the extent required by applicable Law;
(b) (i) incurrence by Sellers of Indebtedness in an aggregate principal
amount exceeding $25,000 (net of any amounts discharged during such period) or
(ii) any voluntary purchase, cancellation, prepayment or complete or partial
discharge in advance of a scheduled
payment date with respect to, or waiver of any right of Sellers under, any
Indebtedness of or owing to such Sellers;
(c) any physical damage, destruction or other casualty loss (whether or
not covered by insurance) affecting any of the plants real or personal property
or equipment used or held for use by Sellers in an aggregate amount exceeding
$10,000;
(d) any material change in (A) any pricing, investment, accounting,
financial reporting, inventory, credit, allowance or Tax practice or policy of
Sellers or the Business or the New Jersey Business or (B) any method of
calculating any bad debt, contingency or other reserve of Sellers or the
Business or the New Jersey Business for accounting, financial reporting or Tax
purposes;
(f) (i) any acquisition or disposition of any Assets and Properties used
or held for use by Sellers or in the conduct of the Business or the New Jersey
Business, other than Inventory in the ordinary course of business consistent
with past practice and other acquisitions or dispositions not exceeding in
either case $20,000 in the aggregate; or (ii) any creation or incurrence of a
Lien, other than a Permitted Lien, on any Assets and Properties used or held for
use by Sellers or in the conduct of the Business or the New Jersey Business;
(g) any entering into, amendment, modification, termination (partial or
complete) or granting of a waiver under or giving any consent with respect to
(A) any Contract which is required (or had it been in effect on the date hereof
would have been required) to be disclosed in the Disclosure Schedule pursuant to
Section 2.15(a) or (B) any License disclosed in Section 1.1(a) of the Disclosure
Schedule;
(h) capital expenditures or commitments for additions to property, plant
or equipment used or held for use in the conduct of the Business, the New Jersey
Business or the New York Business constituting capital assets in an aggregate
amount exceeding $20,000;
(i) any transaction involving the Business, the New York Business or the
New Jersey Business or with any officer, director or Affiliate of Seller (A)
outside the ordinary course of business consistent with past practice or (B)
other than on an arm's-length basis;
(j) any entering into of a Contract to do or engage in any of the
foregoing after the date hereof; or
(k) any other transactions in the aggregate amount of more than $10,000
directly involving, or directly affecting, Sellers or the Business, the New York
Business or the New Jersey Assets outside the ordinary course of business
consistent with past practice.
Section 2.8 No Undisclosed Liabilities.
Except as reflected or reserved against in the balance sheet
included in the Annual Financial Statements or in the notes thereto or as
disclosed in Section 2.8 of the Disclosure Schedule or any other Section of the
Disclosure Schedule, there are no Liabilities against, relating to or affecting
Sellers, the Business, the New Jersey Business, the New York Business,
the New York Assets or any of the New Jersey Assets, as the case may be, other
than Liabilities (i) incurred in the ordinary course of business consistent with
past practice or (ii) which, individually or in the aggregate, are not material
to the Condition of Sellers, the Business, the New Jersey Business or the New
Jersey Assets, the New York Business or the New York Assets as the case may be.
Section 2.9 No Approval of Shareholders of Parent Seller.
Each of the Sellers represent and warrant that no approval by the
shareholders of the Parent Seller is required in connection with the sale of the
New Jersey Assets or the New Jersey Closing or entering into the Management
Agreement.
Section 2.10 Legal Proceedings.
Except as disclosed in Section 2.10 of the Disclosure Schedule (with
paragraph references corresponding to those set forth below):
(a) there are no Actions or Proceedings pending, threatened or, to the
Knowledge of Seller, contemplated against, relating to or affecting Sellers
(either with respect to the Business, the New Jersey Business, the New York
Business or any of their respective Assets and Properties or otherwise) that (i)
could reasonably be expected to result in the issuance of an Order restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement, or any of the Operative
Agreements or otherwise result in a material diminution of the benefits
contemplated by this Agreement, or any of the Operative Agreements to Purchaser,
or (ii) if determined adversely to Sellers could reasonably be expected to
result in (x) any injunction or other equitable relief that would interfere in
any material respect with the Business, the New Jersey Business, the New York
Business or the Condition of Sellers or (y) Losses by such Seller, individually
or in the aggregate with Losses in respect of other such Actions or Proceedings,
exceeding $25,000;
(b) there are no facts or circumstances Known to any Seller that could
give rise to any Action or Proceeding that would be required to be disclosed
pursuant to clause (a) above; and
(c) there are no Orders outstanding against Sellers (with respect to the
Business, the New Jersey Business or otherwise).
Prior to the execution of this Agreement, Sellers have delivered to
Purchaser all responses of counsel to auditors' requests for information
delivered in connection with Parent Seller's most recently prepared audited
consolidated financial statements (together with any updates provided by such
counsel) regarding Actions or Proceedings pending or threatened against,
relating to or affecting Sellers, the Business, the New York Business or the New
Jersey Business.
Section 2.11 Compliance With Laws and Orders.
Except as disclosed in Section 2.11 of the Disclosure Schedule, none
of the Sellers are, nor have Sellers at any time within the last five years
been, nor have Sellers received
any notice that it is or has at any time within the last five years been, in
violation of or in default under any Law or Order.
Section 2.12 Real Property.
(a) Section 1.1(a)(i) of the Disclosure Schedule contains a true and
correct list of each parcel of real property leased by any Seller and used or
held for use in connection with the New Jersey Business. Subsidiary Seller has a
valid and subsisting leasehold estate in and the right to quiet enjoyment of the
real properties subject to the New Jersey Real Property Leases described in
Section 1.1(a)(i) of the Disclosure Schedule for the full term thereof. Each New
Jersey Real Property Lease is a legal, valid and binding agreement, enforceable
in accordance with its terms against the Seller that is a party thereto and of
each other Person that is a party thereto, and except as set forth in Section
2.12(a) of the Disclosure Schedule, there is no, nor has Subsidiary Seller
received any notice of any, default (or any condition or event which, after
notice or lapse of time or both, would constitute a default) thereunder. No
Seller owes any brokerage commissions with respect to any such leased space.
Sellers have delivered to Purchaser prior to the execution of this Agreement
true and complete copies of all New Jersey Real Property Leases (including any
amendments and renewal letters).
(b) Sellers do not own any real property nor do they, as landlord, lease
or sublease any real property.
Section 2.13 Tangible Personal Property.
(a) Sellers collectively are in possession of and have good title to, or
have valid leasehold interests in or valid rights under Contracts to use, all of
the New Jersey Tangible Personal Property, all of which (other than New Jersey
Tangible Personal Property acquired since the Annual Financial Statement Date
and New Jersey Tangible Personal Property disposed of since such date, both in
the ordinary course of business consistent with past practice) is reflected on
the balance sheet included in the Quarterly Financial Statements. Purchaser
shall have the right to inspect and inventory the New Jersey Tangible Personal
Property within three days prior to the New Jersey Closing.
(b) All the New Jersey Tangible Personal Property owned, used or held for
use by Subsidiary Seller is free and clear of all Liens, other than Permitted
Liens and Liens disclosed in Section 2.13 of the Disclosure Schedule, and is now
and at the New Jersey Closing Date will be, in good working order and condition,
ordinary wear and tear excepted, and its use complies in all material respects
with all applicable Laws.
Section 2.14 Intellectual Property Rights.
(a) Sellers have interests in and make use only of the Intellectual
Property disclosed in Section 1.1(a)(vi) and Section 1.1(c)(ii) of the
Disclosure Schedule in connection with the conduct of the New Jersey Business
and New York Business, respectively, all of which such Intellectual Property
Sellers either have all right, title and interest in or valid and binding rights
under Contract to use. No other Intellectual Property is used or necessary in
the conduct of the New Jersey Business and the New York Business. Except as
disclosed in Section 2.14(a) of the Disclosure Schedule, (i) Sellers have the
exclusive right to use the Intellectual Property disclosed
in Section 1.1(a)(vi) of the Disclosure Schedule, (ii) all registrations with
and applications to Governmental or Regulatory Authorities in respect of such
Intellectual Property are valid and in full force and effect and are not subject
to the payment of any Taxes or maintenance fees or the taking of any other
actions by any Seller to maintain their validity or effectiveness, (iii) there
are no restrictions on the direct or indirect transfer of any Contract, or any
interest therein, held by any Seller in respect of such Intellectual Property,
(iv) Sellers have delivered to Purchaser prior to the execution of this
Agreement documentation with respect to any invention, process, design, computer
program or other know-how or trade secret included in such Intellectual
Property, which documentation is accurate in all material respects and
reasonably sufficient in detail and content to identify and explain such
invention, process, design, computer program or other know-how or trade secret
and to facilitate its full and proper use without reliance on the special
knowledge or memory of any Person, (v) Sellers have taken reasonable security
measures to protect the secrecy, confidentiality and value of its trade secrets
in respect of the Business, (vi) no Seller is, nor has any Seller received, any
notice that it is in default (or with the giving of notice or lapse of time or
both, would be in default) under any Contract to use such Intellectual Property
and (vii) to the Knowledge of each Seller, no such Intellectual Property is
being infringed by any other Person.
(b) Sellers have not received notice that Sellers are infringing upon any
Intellectual Property of any other Person, no claim is pending or, has been made
to such effect that has not been resolved and Sellers are not infringing upon
any Intellectual Property of any other Person.
Section 2.15 Contracts.
(c) Section 2.15(a) of the Disclosure Schedule (with paragraph references
corresponding to those set forth below) contains a true and complete list of
each of the following Contracts or other arrangements (true and complete copies
or, if none, reasonably complete and accurate written descriptions of which,
together with all amendments and supplements thereto and all waivers of any
terms thereof, have been delivered to Purchaser prior to the execution of this
Agreement) to which Sellers are a party or by which any of the New Jersey Assets
and New York Assets is bound:
(i) (A) all Contracts (excluding Benefit Plans) providing for the
commitment of employment or consultation services for a
specified or unspecified term to, or otherwise relating to
employment or the termination of employment of, any employee
of Sellers, the name, position and rate of compensation of
each such employee party to such a Contract and the expiration
date of each such Contract; and (B) any written or unwritten
representations, commitments, promises, communications or
courses of conduct (excluding Benefit Plans and any such
Contracts referred to in clause (A)) involving an obligation
of Sellers to make payments pursuant to policies adopted and
announced by Sellers prior hereto, in any year, other than
with respect to salary or incentive compensation payments in
the ordinary course of business, to any employee or any group
of employees;
(ii) all Contracts with any Person containing any provision or
covenant prohibiting or limiting the ability of Sellers to
engage in any business
activity or compete with any Person in connection with the
Business or, except as provided in Section 4.10, prohibiting
or limiting the ability of any Person to compete with Sellers;
(iii) all partnership, joint venture, shareholders' or other similar
Contracts with any Person;
(iv) all Contracts with distributors, dealers, manufacturer's
representatives, sales agencies or franchises with whom
Sellers deal;
(v) all Contracts relating to the future disposition or
acquisition of any Assets and Properties, other than
dispositions or acquisitions of Inventory in the ordinary
course of business consistent with past practice;
(vi) all collective bargaining or similar labor Contracts covering
any employee of Sellers; and
(vii) all other Contracts (other than Benefit Plans, the Real
Property Leases and insurance policies listed in Section 2.17
of the Disclosure Schedule) with respect to the Business that
(A) involve the payment or potential payment, pursuant to the
terms of any such Contract, by or to Sellers of more than
$5,000 annually and (B) cannot be terminated within 60 days
after giving notice of termination without resulting in any
material cost or penalty to Sellers.
(d) Each Contract required to be disclosed in Section 2.15(a) of the
Disclosure Schedule is in full force and effect and constitutes a legal, valid
and binding agreement, enforceable in accordance with its terms, of each party
thereto, and except as disclosed in Section 2.15(b) of the Disclosure Schedule,
Sellers, nor to the Knowledge of any Seller, any other party to such Contract
is, or has received notice that it is, in violation or breach of or default
under any such Contract (or with notice or lapse of time or both, would be in
violation or breach of or default under any such Contract) in any material
respect.
(e) Except as disclosed in Section 2.15(c) of the Disclosure Schedule, the
execution, delivery and performance by each Seller of this Agreement and the
Operative Agreements to which such Seller is a party, and the consummation of
the transactions contemplated hereby and thereby, shall not (i) result in or
give to any Person any right of termination, cancellation, acceleration or
modification in or with respect to, (ii) result in or give to any Person any
additional rights or entitlement to increased, additional, accelerated or
guaranteed payments under, or (iii) result in the creation or imposition of, any
Lien, other than Permitted Liens, in each instance upon Sellers or any of their
respective Assets and Properties under any Contract to which any such Seller is
a party.
Section 2.16 Licenses.
(f) Section 1.1(a)(vii) and Section 1.1(c)(iii) of the Disclosure Schedule
contains a true and complete list of all material Licenses used or held for use
in the New Jersey Business and New York Business (and all pending applications
for any such Licenses), setting forth the
grantor, the grantee, the function and the expiration and renewal date of each.
Prior to the execution of this Agreement, Sellers have delivered to Purchaser
true and complete copies of all such Licenses. Except as disclosed in Section
2.16(a) of the Disclosure Schedule (with paragraph references corresponding to
those set forth below):
(i) Sellers own or validly hold all Licenses that are material,
individually or in the aggregate, to the Business;
(ii) each New Jersey and New York Business License is valid,
binding and in full force and effect;
(iii) Sellers are not, nor have they received any notice that they
are, in default (or with the giving of notice or lapse of time
or both, would be in default) under any Business License
(including, without limitation, any New Jersey and New York
Business License); and
(iv) the execution, delivery and performance by each Seller of this
Agreement and the Operative Agreements to which they are a
party, and the consummation of the transactions contemplated
hereby and thereby, shall not (A) result in or give to any
Person any right of termination, cancellation, acceleration or
modification in or with respect to, (B) result in or give to
any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under, or (C)
result in the creation or imposition of any Lien, other than
Permitted Liens, upon any Seller or any of its Assets and
Properties under, any Business License (including, without
limitation, any New Jersey and New York Business License).
Section 2.17 Insurance.
Section 2.17 of the Disclosure Schedule contains a true and complete
list (including the names and addresses of the insurers, the names of the
Persons to whom such Policies have been issued, the expiration dates thereof,
the annual premiums and payment terms thereof, whether it is a "claims made" or
an "occurrence" policy and a brief description of the interests insured thereby)
of all liability, property, workers' compensation and other insurance policies
currently in effect that insure Sellers, the Business, the New Jersey Business
and New York Business, any employee of Sellers or the New Jersey and New York
Assets. Each such insurance policy is valid and binding and in full force and
effect, no premiums due thereunder have not been paid and no Seller has received
any notice of cancellation or termination in respect of any such policy or is in
default thereunder. Such insurance policies are placed with financially sound
and reputable insurers and, in light of the nature of the business conducted by
the Business and the New Jersey Assets, are in amounts and have coverages that
are reasonable and customary for Persons engaged in such businesses and having
such Assets and Properties. No Seller and no Person to whom any such policy has
been issued has received notice that any insurer under any policy referred to in
this Section is denying liability with respect to a claim thereunder or
defending under a reservation of rights clause.
Section 2.18 Affiliate Transactions.
(g) Except as disclosed in Section 2.18(a) of the Disclosure Schedule, (i)
no officer, director or Affiliate of Sellers provided or caused to be provided
any assets, services or facilities to Sellers or otherwise used or held for use
in connection with the Business, and (ii) neither Sellers nor the Business
provides or causes to be provided any assets, services or facilities to any such
officer, director or Affiliate.
(h) Except as disclosed in Section 2.18(b) of the Disclosure Schedule,
each of the transactions listed in Section 2.18(a) of the Disclosure Schedule is
engaged in on an arm's-length basis.
Section 2.19 Employees; Labor Relations.
Except as disclosed in Section 2.19 of the Disclosure Schedule, (i)
no employee of Sellers is presently a member of a collective bargaining unit and
there are no threatened, or to the Knowledge of each Seller, contemplated
attempts to organize for collective bargaining purposes any of such employees,
and (ii) no unfair labor practice complaint or sex, age, race or other
discrimination claim has been brought during the last five years against Sellers
before the National Labor Relations Board, the Equal Employment Opportunity
Commission or any other Governmental or Regulatory Authority. Since January 1,
1995 there has been no work stoppage, strike or other concerted action by
employees of Sellers. During that period, each Seller has complied in all
material respects with all applicable Laws relating to the employment of labor,
including, without limitation those relating to wages, hours and collective
bargaining.
Section 2.20 Substantial Customers and Suppliers.
(i) Section 2.20(a) of the Disclosure Schedule lists all material
customers of the New Jersey Business, on the basis of revenues for goods sold or
services provided for the most recently completed fiscal year.
(j) Section 2.20(b) of the Disclosure Schedule lists the ten largest
suppliers of the New Jersey Business, on the basis of cost of goods or services
purchased for the most recently completed fiscal year.
(k) Except as disclosed in Section 2.20(c) of the Disclosure Schedule, no
such customer or supplier has ceased or materially reduced its purchases from,
use of the services of, or sales or provision of services to the New Jersey
Business since the Annual Financial Statement Date, or has threatened to cease
or materially reduce such purchases, use, sales or provision of services after
the date hereof.
(l) Except as disclosed in Section 2.20(d) of the Disclosure Schedule, to
the Knowledge of each Seller, no such customer or supplier is threatened with
bankruptcy or insolvency.
(m) Section 2.20(a) of the Disclosure Schedule lists all material
customers of the New York Business, on the basis of revenues for goods sold or
services provided for the most recently completed fiscal year.
(n) Section 2.20(b) of the Disclosure Schedule lists the ten largest
suppliers of the New York Business, on the basis of cost of goods or services
purchased for the most recently completed fiscal year.
(o) Except as disclosed in Section 2.20(c) of the Disclosure Schedule, no
such customer or supplier has ceased or materially reduced its purchases from,
use of the services of, or sales or provision of services to the New York
Business since the Annual Financial Statement Date, or has threatened to cease
or materially reduce such purchases, use, sales or provision of services after
the date hereof.
(p) Except as disclosed in Section 2.20(d) of the Disclosure Schedule, to
the Knowledge of each Seller, no such customer or supplier is threatened with
bankruptcy or insolvency.
Section 2.21 Inventory.
All of the Inventory set forth on the balance sheet included with
the Quarterly Financial Statements consists of a quality and quantity usable and
salable in the ordinary course of business consistent with past practice,
subject to normal and customary allowances in the industry for spoilage, damage
and outdated items. All items included in the Inventory are the property of the
respective Sellers, free and clear of any Lien other than Permitted Liens, have
not been pledged as collateral, are not held by such Seller on consignment from
others and conform in all material respects to all standards applicable to such
inventory or its use or sale imposed by Governmental or Regulatory Authorities.
Section 2.22 Vehicles.
(q) Section 1.1(a)(viii) of the Disclosure Schedule contains a true and
complete list of all motor vehicles owned or leased by Sellers and used or held
for use in the conduct of the New Jersey Business. Except as disclosed in
Section 2.22(a) of the Disclosure Schedule, the respective Sellers have good and
valid title to, or have valid leasehold interests in or valid rights under
Contract to use, each New Jersey Vehicle, free and clear of all Liens other than
Permitted Liens.
Section 2.23 No Guarantees.
Except as set forth on Section 2.23 of the Disclosure Schedule, none
of the Liabilities of the Business or of Sellers is guaranteed by or subject to
a similar contingent obligation of any other Person, nor has any Seller
guaranteed or become subject to a similar contingent obligation in respect of
the Liabilities of any customer, supplier or other Person to whom Sellers sell
goods or provides services or with whom Sellers otherwise have significant
business relationships.
Section 2.24 Entire Business.
The sale of the New Jersey Assets and the New York Assets by Sellers
to Purchaser pursuant to this Agreement shall effectively convey to Purchaser
the entire New Jersey Business, New York Business and all of the tangible and
intangible property used by Sellers
(whether owned, leased or held under license by Sellers, by any of Seller's
Affiliates or by others) in connection with the conduct of the New Jersey
Business and the intangible property used by Sellers in connection with the New
York Business as heretofore conducted by Sellers (except for the New Jersey
Excluded Assets and the New York Excluded Assets) including, without limitation,
all tangible Assets and Properties of Sellers reflected in the balance sheet
included in the Quarterly Financial Statements and Assets and Properties
acquired since the Quarterly Financial Statement Date in the conduct of the New
Jersey Business and the New York Business, other than the New Jersey Excluded
Assets, the New York Excluded Assets and Assets and Properties disposed of since
such date, consistent with Section 2.6. Except as disclosed in Section 2.24 of
the Disclosure Schedule, there are no shared facilities or services which are
used in connection with any business or other operations of any Seller or any of
Sellers' Affiliates other than the New Jersey Business and the New York
Business.
Section 2.25 Brokers.
Except as and to the extent set forth on Section 2.25 of the
Disclosure Schedule, all negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Parent Seller directly
with Purchaser without the intervention of any Person on behalf of Parent Seller
(or any other Seller) in such manner as to give rise to any valid claim by any
Person against Purchaser for a finder's fee, brokerage commission or similar
payment.
Section 2.26 Fairness Opinion.
Parent Seller have received prior to the New York Closing the
opinion of Xxxxxx Xxxxx, to the effect that, as of the date hereof, the terms of
the sale of the New York and the New Jersey Business to Purchaser are fair to
Parent Seller and its shareholders, from a financial point of view and shall
provide to Purchaser a copy of the written confirmation of such opinion promptly
after receipt thereof.
Section 2.27 State Takeover Statutes.
The Board of Directors of Parent Seller has approved the sale of the
New Jersey Business, this Agreement and the consummation of the other
transactions contemplated hereby, and such approval is sufficient to render
inapplicable the provisions of any "fair price" or other anti-takeover statute
or similar Laws (including, without limitation, Section 912 of the New York
Business Corporation Law).
Section 2.28 Investment Company.
No Seller is, and no Seller is controlled by, an "investment
company," as defined in the Investment Company Act of 1940, as amended. Upon
consummation of the transactions contemplated hereby no Seller will be, and no
Seller will be controlled by, such an "investment company."
Section 2.29 Cooperation.
Sellers shall fully cooperate with Purchaser in the preparation of
all required applications to government agencies in the States of New Jersey and
New York and their
localities, and in promptly providing to Purchaser and to such government
agencies whatever documents, statements and information related to such
applications and the processing thereof, as any such agency or Purchaser may
request.
Section 2.30 Disclosure.
(r) All material facts relating to the Condition of the Sellers and the
Business have been disclosed to Purchaser in or in connection with this
Agreement. No representation or warranty contained in this Agreement, and no
statement contained in the Disclosure Schedule or in any certificate, list or
other writing furnished to Purchaser pursuant to any provision of this Agreement
(including without limitation the Financial Statements), contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements herein or therein, in the light of the
circumstances under which they were made, not misleading.
(s) Sellers shall have disclosed to National in writing the execution of
this Agreement and the Operative Agreements. A copy of such notice shall be set
forth at section 2.30 of the Disclosure Schedule.
Section 2.31 Accreditation.
Sellers represent that the New Jersey Business and the New York Business
are duly accredited by Joint Commission on Accreditation of Home Care
Organizations, the New Jersey Business is duly accredited by the Commission on
Accreditation of Home Care, and such accreditations will remain in force through
the respective Closing Dates.
Article III
Representations and Warranties of Purchaser
Purchaser hereby represents and warrants to Sellers as follows:
Section 3.1 Organization.
Purchaser is a corporation, duly organized, validly existing and in
good standing under the Laws of the state of New York. Purchaser has full
organizational power and authority to enter into this Agreement, the Management
Agreement and the Operative Agreements to which it is a party, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby.
Section 3.2 Authority.
The execution and delivery by Purchaser of this Agreement and the
Operative Agreements to which it is a party, and the performance by Purchaser of
its obligations hereunder and thereunder, have been duly and validly authorized
by the Board of Directors of Purchaser, no other corporate action on the part of
Purchaser or its shareholders is necessary. This Agreement has been duly and
validly executed and delivered by Purchaser and constitutes, and upon the
execution and delivery by Purchaser of the Operative Agreements to which it is a
party, such
Operative Agreements shall constitute, legal, valid and binding obligations of
Purchaser enforceable against Purchaser in accordance with their respective
terms.
Section 3.3 No Conflicts.
The execution and delivery by Purchaser of this Agreement does not,
and the execution and delivery by Purchaser of the Operative Agreements to which
it is a party, the performance by Purchaser of its obligations under this
Agreement and such Operative Agreements and the consummation of the transactions
contemplated hereby and thereby shall not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the certificate of incorporation or bylaws (or other
comparable charter document) of Purchaser; or
(b) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require Purchaser to obtain any consent, approval or action of, make any
filing with or give any notice to any Person as a result or under the terms of,
or (iv) result in the creation or imposition of any Lien upon Purchaser or any
of its Assets or Properties under, any Contract or License to which Purchaser is
a party or by which any of its Assets and Properties is bound.
Section 3.4 Legal Proceedings.
There are no Actions or Proceedings pending or, to the Knowledge of
Purchaser, threatened against, relating to or affecting Purchaser or any of its
Assets and Properties which could reasonably be expected to result in the
issuance of an Order restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement, the Security Agreement or any of the Operative Agreements.
Section 3.5 Brokers.
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Purchaser directly with Parent
Seller without the intervention of any Person on behalf of Purchaser in such
manner as to give rise to any valid claim by any Person against any Seller for a
finder's fee, brokerage commission or similar payment.
Section 3.6 Availability of Financing.
Purchaser has, and as of each Closing shall have, the financing and
the financial resources to enable Purchaser to consummate the transactions
contemplated by this Agreement.
Article IV
Covenants of Sellers
Sellers covenant and agree with Purchaser that, at all times from
and after the date hereof until each respective Closing and, with respect to any
covenant or agreement by its terms to be performed in whole or in part after the
Closing, for the period specified therein or, if no period is specified therein,
indefinitely, Sellers shall, and shall cause each other Seller to, comply with
all covenants and provisions of this Article IV, except to the extent Purchaser
may otherwise consent in writing:
Section 4.1 Regulatory and Other Approvals.
Sellers shall, and shall cause each other Seller to, as promptly as
practicable, (a) take all steps necessary, appropriate or desirable to assist
Purchaser to obtain all consents, approvals or actions of, make all filings
with, and give all notices to, Governmental or Regulatory Authorities or any
other Person required of Sellers to consummate the transactions contemplated
hereby and by the Operative Agreements, including, without limitation, those
described in Sections 2.4 of the Disclosure Schedule, (b) provide such other
information and communications to such Governmental or Regulatory Authorities or
other Persons as Purchaser or such Governmental or Regulatory Authorities or
other Persons may reasonably request in connection therewith, and (c) cooperate
with Purchaser with respect to any matter relating to the foregoing. Sellers
shall cause each other to, provide prompt notification to Purchaser when any
such consent, approval, action, filing or notice referred to in clause (a) above
is obtained, taken, made or given, as applicable, and shall advise Purchaser of
any communications (and, unless precluded by Law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by this
Agreement or any of the Operative Agreements.
Section 4.2 Investigation by Purchaser.
Sellers shall, and shall cause each of the Sellers to, (a) provide
Purchaser and its officers, directors, employees, agents, counsel, accountants,
financial advisors, consultants and other representatives (collectively,
"Representatives") with full access, upon reasonable prior notice and during
normal business hours, to (i) the employees of Sellers, (ii) such other officers
and agents of the Sellers or the conduct of the Business, (iii) Sellers'
accountants, (iv) the New Jersey and the New York Assets, and (v) information
about the employees of Sellers (including, without limitation, information about
their services and patients, their home phone numbers and their home addresses)
and (b) furnish Purchaser and such other Persons with all such information and
data (including without limitation copies of Business Contracts, Business
Licenses, Benefit Plans and other Books and Records) concerning Sellers, the
Business, the Assets and the Assumed Liabilities as Purchaser or any of such
other Persons reasonably may request in connection with such investigation.
Section 4.3 No Solicitations or Business Dispositions.
(a) Sellers shall not take, nor shall Sellers permit each other or any
Affiliate of any of the Sellers (or authorize or permit any investment banker,
financial advisor, attorney, accountant or other Person retained by or acting
for or on behalf of Sellers or any such Affiliate) to take, directly or
indirectly, any action to solicit, encourage, receive, negotiate, assist or
otherwise facilitate (including by furnishing confidential information with
respect to Sellers or their New Jersey or New York Business or permitting access
to the Assets and Properties and Books and Records of Sellers) any offer or
inquiry from any Person involving the New York Business or the
New Jersey Business, other than Purchaser or Affiliates of Purchaser, (i) to
engage in, other than in connection with the transactions contemplated by this
Agreement (or otherwise with Purchaser) any (x) merger or other business
combination involving Sellers, (y) sale or other disposition of all or any
substantial part of any assets or properties of any of the Sellers or (z)
transaction involving the acquisition of 10% or more of the equity interests in,
or more than 10% of the assets of, Sellers (each of the foregoing referred to in
the preceding clauses (x) through (z) is referred to as a "Business
Disposition"), (ii) to reach any agreement or understanding (whether or not such
agreement or understanding is absolute, revocable, contingent or conditional)
for, or otherwise attempt to consummate, any Business Disposition, or (iii) to
furnish or cause to be furnished any information with respect to any Seller or
any of its subsidiaries to any Person who Seller or any such Affiliate Knows or
has reason to believe is in the process of considering any transaction that
would result in a Business Disposition.
(b) Nothing contained in this Section 4.3 shall prohibit (i) Parent Seller
from, in response to an unsolicited, bona fide written proposal with respect to
a Business Disposition that the Board of Directors of Parent Seller (or a duly
authorized committee thereof) determines in good faith, based on the advice of
its legal counsel and financial advisors, constitutes a Superior Proposal (as
defined in Section 4.3(d) below) furnishing information to the party making such
Superior Proposal to the extent that the Board of Directors of Parent Seller (or
a duly authorized committee thereof), after consultation with its legal counsel
and financial advisors, determines in good faith that it is necessary to do so
for it to act in accordance with its fiduciary duties under applicable law or
(ii) the Board of Directors of Parent Seller from taking and disclosing to the
shareholders of Parent Seller a position with respect to a tender or exchange
offer by a third party required under Rules 14d-9 and 14e-2(a) under the
Exchange Act or from making any disclosure to the shareholders of Parent Seller
that, in the reasonable judgment of the Board of Directors of Parent Seller
after consultation with legal counsel, may be required under applicable law.
(c) In addition to the obligations of the Sellers set forth in Section
4.3(a) (and notwithstanding the provisions of Section 4.3(b), prior to the
termination hereof, Parent Seller shall, and each of the Sellers shall cause
Parent Seller to, as promptly as practicable, and in any event within one
Business Day after receipt thereof, advise Purchaser orally and in writing of
any request for information that any Seller reasonably believes could lead to a
Business Disposition or of any proposal or inquiry with respect thereto; the
material terms and conditions of such request, proposal or inquiry, and the
identity of the person or group making any such request, proposal or inquiry and
a copy of any and all written materials received from or on behalf of such
person or group. Parent Seller shall, and each other Seller shall cause Parent
Seller to, keep Purchaser informed in all material respects of the status and
details (including material amendments or proposed amendments) of any such
request, proposal or inquiry.
(d) For purposes of this Agreement, "Superior Proposal" means a proposal
with respect to a Business Disposition relating to the acquisition of a majority
of the outstanding voting securities, or all or substantially all of the assets
of Parent Seller, which requires a net payment of at least $6,500,000 by the
prospective purchaser.
Section 4.4 Conduct of Business.
From the date hereof until earlier to occur of the New York Closing
Date or the termination of this Agreement, each of the Sellers shall, and shall
cause each other to, operate the business and operations conducted by them
(including, without limitation, the Business and the New Jersey Business) only
in the ordinary course consistent with past practice and in compliance with all
applicable Laws and Orders (and, promptly following receipt thereof, give to
Purchaser copies of any notice received from and Governmental or Regulatory
Authority or other Person alleging any violation of any such Law or Order), pay
its debts and taxes when due subject to good faith disputes over such debts or
taxes, pay or perform other material obligations when due, and use its
commercially reasonable efforts consistent with past practices and policies to
(x) preserve intact their respective present business organization, (y) keep
available the services of their respective present officers and employees and
(z) preserve their respective relationships with customers, suppliers,
distributors, licensors, licensees and others with which they have significant
business dealings.
(a) During the period from the date of this Agreement and continuing until
the earlier of the New York Closing Date or the termination of this Agreement
pursuant to its terms, each of the Sellers shall:
(i) (A) preserve intact the present business organization and
reputation of the Business and the New Jersey and New York
Business, (B) keep available (subject to dismissals and
retirements in the ordinary course of business consistent with
past practice) the services of the managerial employees of
Sellers, (C) maintain the assets of the Business and the New
Jersey and New York Business in good working order and
condition, ordinary wear and tear excepted, (D) maintain the
good will of customers, suppliers, lenders and other Persons
to whom Sellers sell goods or provides services or with whom
Sellers otherwise have significant business relationships, and
(E) continue all current sales, marketing and promotional
activities;
(ii) promptly inform Purchaser immediately after Sellers have
Knowledge or have reason to have Knowledge that any management
employee of Sellers that works in connection with the Business
shall leave the employ of Sellers or determines to leave the
employ of Sellers;
(iii) except to the extent required by applicable Law, (A) cause the
Books and Records of Sellers to be maintained in the usual,
regular and ordinary manner, and (B) not permit any material
change in any pricing, investment, accounting, financial
reporting, inventory, credit, allowance or Tax practice or
policy of Sellers that would adversely affect it; and
(iv) (A) maintain in full force and effect until the Closings
substantially the same levels of coverage as the insurance
afforded under the Contracts listed in Section 2.15 of the
Disclosure Schedule, (B) cause such insurance coverage to
continue to be provided at the expense of Sellers for at least
two years after the New York Closing Date with respect to
products liability claims for products manufactured or sold
prior to the Closing Date and at least 10 days after the New
York Closing Date for all other
insurance, in all cases on substantially the same terms and
conditions as provided on the date of this Agreement except
that Purchaser shall be named as an additional insured, and
(C) cause any and all benefits under such Contracts paid or
payable with respect to the New Jersey Assets and New York
Assets or the Business to be paid to Sellers.
(b) Without limiting the generality of the provisions set forth in Section
4.4(a), except as permitted by the terms of this Agreement, without the prior
written consent of Purchaser (which consent may be withheld or delayed, in
Purchaser's discretion), during the period from the date of this Agreement and
continuing until the earlier of the New York Closing Date or the termination of
this Agreement pursuant to its terms, in regards to the New York Business and
the New Jersey Business, Sellers shall not:
(i) adopt any change to any of their respective certificates of
incorporation or bylaws (or similar organizational documents);
(ii) except for the transactions contemplated hereby, acquire or
agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or a portion of the assets
(other than in the ordinary course of business) of, or by any
other manner, any business or any corporation, partnership,
association or other business organization or division
thereof, or otherwise acquire or agree to enter into any joint
ventures, strategic partnerships or alliances;
(iii) sell, lease, license or otherwise dispose of any material
assets or property except pursuant to existing contracts or
commitments that are disclosed in this Agreement;
(iv) grant or agree or offer to grant any severance or termination
pay to any officer or employee, or adopt any new severance
plan, or amend or modify or alter in any manner any severance
plan, agreement or arrangement existing on the date hereof;
(v) transfer or license to any person or entity or otherwise
extend, amend or modify any rights to any Intellectual
Property used or held for use by Sellers, or enter into grants
to transfer or license to any person future patent rights,
other than in the ordinary course of business consistent with
past practices; provided, however, that in no event shall
Sellers license on an exclusive basis or sell any such
Intellectual Property;
(vi) (A) set aside or pay any dividends on, or make other
distributions in respect of, its capital stock, other than
dividends and distributions by a direct or indirect
wholly-owned entity to its parent, (B) split, combine or
reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of, or
in substitution for, shares of its capital stock, or (C)
purchase, redeem or otherwise acquire any shares of
capital stock of Sellers or any other securities thereof or
any rights, warrants or options to acquire any such shares or
other securities;
(vii) issue, deliver, sell, pledge or otherwise encumber any shares
of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or
convertible securities;
(viii) make any change to its accounting methods, principles or
practices, except as may be approved in writing by Purchaser
prior to such change, and Purchaser may withhold or delay its
approval in its sole discretion;
(ix) modify or amend in any material respect or terminate any
existing Contract affecting the use, possession or operation
of any properties or assets used by Sellers; grant or
otherwise create or consent to the creation of any easement,
covenant, restriction, assessment or charge affecting any
owned property or leased property or any part thereof; convey,
assign, sublease, license or otherwise transfer all or any
portion of any owned property or leased property or any
interest or rights therein; or make any adverse changes in the
construction or condition of any such property;
(x) (A) incur any Indebtedness for borrowed money or guarantee any
such Indebtedness of another Person; (B) issue or sell any
debt securities or options, warrants, calls or other rights to
acquire any debt securities of Sellers; (C) enter into any
"keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the
economic effect of any of the foregoing; (D) incur any
Indebtedness that shall enable the holder thereof to have
recourse against any assets or properties of Sellers
(including, without limitation, the New Jersey Assets and New
York Assets to be acquired by Purchaser hereunder); (E) create
any Liens on any Assets and Properties of Sellers;
(xi) enter into any employment contract or collective bargaining
agreement, except, in each case, as may be required by law;
(xii) violate, breach or default under in any respect, or take or
fail to take any action that (with or without notice or lapse
of time or both) would constitute a violation or breach of, or
default under, any term or provision of any Contract to which
Sellers are a party or any License used by Sellers;
(xiii) (A) pay, discharge, settle or satisfy any litigation (whether
or not commenced prior to the date of this Agreement) or any
Claims, Liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than
the payment, discharge, settlement or satisfaction, of any
Claims in an amount that do not, in the aggregate, exceed
$25,000, or (B) waive any material benefits of, agree to
modify in any manner,
terminate, release any person from or knowingly fail to
enforce any material confidentiality or similar agreement to
which Sellers are a party or a beneficiary;
(xiv) modify, amend or terminate any Contract to which Sellers are a
party or License used by Sellers or waive, delay the exercise
of, release or assign any rights or claims under any such
Contract or License;
(xv) incur or enter into any Contract requiring Sellers to pay in
excess of $25,000;
(xvi) make any Tax election or accounting method change inconsistent
with past practice that, individually or in the aggregate,
would be reasonably likely to adversely affect in any material
respect the Tax liability or Tax attributes Sellers, settle or
compromise any material Tax liability, or consent to any
extension or waiver of any limitation period with respect to
Taxes;
(xvii) acquire or dispose of any Assets and Properties used or held
for use in the conduct of the business conducted by Sellers
(including, without limitation, the Business and the New
Jersey Business and New York Business), or create or incur any
Lien, other than a Permitted Lien, on any Assets and
Properties used or held for use in the conduct of the business
conducted by Sellers (including, without limitation, the
Business and the New Jersey Business and New York Business);
(xviii) engage in any transaction with any officer, director or
Affiliate or Sellers, other than pursuant to existing
agreements set forth on Section 4.4(u) of the Disclosure
Schedule;
(xix) make any capital expenditures of commitments for additions to
property, plant or equipment constituting capital assets in an
aggregate amount exceeding $1,000; or
(xx) agree in writing or otherwise to take any of the actions
described in Section 4.4(c)(i) through (xix) above.
Section 4.5 Financial Statements and Reports; Filings.
(a) As promptly as practicable and in any event no later than 45 days (or
50 days in the event Parent Seller timely files with the SEC a notification
under SEC Rule 12(b)-25 after the end of each fiscal quarter ending after the
date hereof and before the New York Closing Date, Parent Seller shall, and each
other Seller shall cause Parent Seller to, deliver to Purchaser true and
complete copies of the unaudited balance sheet, and the related unaudited
statement of operations, of the Business, the New Jersey Business and New York
Business and Parent Seller, as of and for the fiscal quarter and the portion of
the fiscal year then ended, which financial statements shall be prepared on a
basis consistent with the Quarterly Financial Statement.
(b) As promptly as practicable, Parent Seller shall, and each other Seller
shall cause Parent Seller to, deliver to Purchaser copies of all License
applications and other filings made by them in connection with the operation of
the Business after the date hereof and before the Closing Date with any
Governmental or Regulatory Authority (other than routine, recurring filings made
in the ordinary course of business consistent with past practice), including
without limitation all statements and reports filed by Parent Seller with the
SEC.
Section 4.6 Employee Matters.
Except as may be required by Law or set forth on Schedule 2.7(i) of
the Disclosure Schedule, with respect to the New York Business and the New
Jersey Business, each Seller shall, and each Seller cause each other Seller to,
refrain from directly or indirectly:
(a) making any representation or promise, oral or written, to any employee
of a Seller concerning any Benefit Plan, except for statements as to the rights
or accrued benefits of any such employee under the terms of any Benefit Plan;
(b) making any increase in the salary, wages or other compensation of any
employee of Sellers (or any other employee);
(c) adopting, entering into or becoming bound by any Benefit Plan,
employment-related Contract or collective bargaining agreement or any of the
employees of Sellers, or amending, modifying or terminating (partially or
completely) any such Benefit Plan, employment-related Contract or collective
bargaining agreement, except to the extent required by applicable Law and, in
the event compliance with legal requirements presents options, only to the
extent that the option which Sellers reasonably believe to be the least costly
is chosen; or
(d) establishing or modifying any (i) targets, goals, pools or similar
provisions in respect of any fiscal year under any Benefit Plan or any
employment-related Contract or other compensation arrangement with or for
employees of Sellers or (ii) salary ranges, increase guidelines or similar
provisions in respect of any Benefit Plan or any employment-related Contract or
other compensation arrangement with or for employees of Sellers.
Each Seller shall, and each Seller shall cause each other Seller to,
administer each Benefit Plan, or cause the same to be so administered, in all
material respects in accordance with the applicable provisions of the Code,
ERISA and all other applicable Laws. Each Seller shall, and each Seller shall
cause each other Seller to, promptly notify Purchaser in writing of each receipt
by Sellers (and furnish Purchaser with copies) of any notice of investigation or
administrative proceeding by the IRS, Department of Labor, PBGC or other Person
involving any Benefit Plan.
Section 4.7 Security Deposits.
Each Seller shall, and shall cause each other Seller to, take all
actions necessary to transfer to Purchaser on the New Jersey Closing Date all of
Sellers' right, title and interest in and to the New Jersey Tenant Security
Deposits.
Section 4.8 Delivery of Books and Records, Etc.; Removal of Property.
On the New Jersey Closing Date and the New York Closing Date, each
Seller shall deliver or make available to Purchaser at the locations at which
the New Jersey Business and the New York Business is conducted, all of the New
Jersey and New York Business Books and Records, such other New Jersey Assets and
New York Assets as and all of the Regulated Books and Records are in any
Seller's possession at other locations, and if at any time after the Closing any
Seller discovers in its possession or under its control any other New Jersey or
New York Business Books and Records or other Assets, such Seller shall, and each
other Seller shall cause such Seller to, forthwith deliver such New Jersey and
New York Business Books and Records or other New Jersey Assets and New York
Assets to Purchaser.
Section 4.9 Noncompetition.
(a) Each Seller shall for a period of three years from the New York
Closing Date, refrain from, either alone or in conjunction with any other
Person, or directly or indirectly through any of their present or future
Affiliates, employees or consultants:
(i) employing, engaging, soliciting or seeking to employ or engage
any Person who within the prior six months had been an
employee of Purchaser or any of its Affiliates engaged in the
Business;
(ii) causing or attempting to cause (A) any client, customer or
supplier of the Business to terminate or materially reduce its
business with Purchaser or any of its Affiliates or (B) any
officer, employee or consultant of Purchaser or any of its
Affiliates engaged in the Business to resign or sever a
relationship with Purchaser or any of its Affiliates;
(iii) disclosing (unless compelled by judicial or administrative
process) or using any confidential or secret information
relating to the Business or any client, customer or supplier
of the Business; or
(iv) participating or engaging in (other than through the ownership
of 5% or less of any class of securities registered under the
Exchange Act), or otherwise lending assistance (financial or
otherwise) to any Person participating or engaged in, any of
the lines of business which comprised the New Jersey Business
or the New York Business on the New Jersey Closing Date or New
York Closing Date, respectively, in the State of New Jersey or
New York.
(b) The parties hereto recognize that the Laws and public policies of the
various states of the United States may differ as to the validity and
enforceability of covenants similar to those set forth in this Section. It is
the intention of the parties that the provisions of this Section be enforced to
the fullest extent permissible under the Laws and policies of each jurisdiction
in which enforcement may be sought, and that the unenforceability (or the
modification to conform to such Laws or policies) of any provisions of this
Section shall not render unenforceable, or impair, the remainder of the
provisions of this Section. Accordingly, if any provision of this Section shall
be determined to be invalid or unenforceable, such invalidity or
unenforceability shall be deemed to apply only with respect to the operation of
such provision in the particular
jurisdiction in which such determination is made and not with respect to any
other provision or jurisdiction.
(c) The parties hereto acknowledge and agree that any remedy at Law for
any breach of the provisions of this Section would be inadequate, and each
Seller hereby consents to the granting by any court of an injunction or other
equitable relief, without the necessity of actual monetary loss being proved, in
order that the breach or threatened breach of such provisions may be effectively
restrained.
Section 4.10 Preparation of Proxy Statement.
Parent Seller shall, and each other Seller shall cause Parent Seller
to, prepare and file with the SEC a proxy statement or information statement
relating to the Seller Shareholders' Meeting (the "Proxy Statement") as soon as
reasonably practicable after the date hereof, and shall use its best efforts to
have the Proxy Statement cleared by the SEC. If at any time prior to the New
York Closing Date any event shall occur that should be set forth in an amendment
of or a supplement to the Proxy Statement, Parent Seller shall, and each other
Seller shall cause Parent Seller to, prepare and file with the SEC such
amendment or supplement as soon thereafter as is reasonably practicable. Parent
Seller shall, and each other Seller shall cause Parent Seller to, notify
Purchaser of the receipt of any comments of the SEC with respect to the Proxy
Statement and of any requests by the SEC for any amendment or supplement thereto
or for additional information, and shall promptly provide (or cause to be
provided) to Purchaser copies of all correspondence between Parent Seller or any
representative of Parent Seller and the SEC with respect to the Proxy Statement.
Parent Seller shall, and each other Seller shall cause Parent Seller to, and
each other Seller shall cause Parent Seller to, promptly give Purchaser and its
counsel the opportunity to review the Proxy Statement and all responses to
requests for additional information by and replies to comments of the SEC before
their being filed with, or sent to, the SEC. Parent Seller agrees to use its
best efforts, (and each other Seller agrees to cause Parent Seller to use its
best efforts to) after consultation with the other parties hereto, to respond
promptly to all such comments of and requests by the SEC and to cause the Proxy
Statement to be mailed to the stockholders entitled to vote at Parent Seller
Shareholders' Meeting at the earliest practicable time (but in no event later
than November 30, 2001).
Section 4.11 Approval of Shareholders.
Parent Seller shall, through the Board of Directors of Parent
Seller, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Parent Seller Shareholders' Meeting") for the purpose of
voting on the adoption of this Agreement (the "Parent Seller Shareholders'
Approval") and approving the actions and transactions contemplated by this
Agreement as soon as reasonably practicable after the date hereof (but in no
event later than January 31, 2002). Subject to the exercise of fiduciary
obligations under applicable law as advised in writing by outside counsel (a
copy of which shall be promptly provided to Purchaser) and compliance with
Section 4.3, Parent Seller shall through the Board of Directors of Parent
Seller, include in the Proxy Statement the recommendation of the Board of
Directors of Seller that the shareholders of Parent Seller adopt this Agreement
and shall use its best efforts to obtain such adoption.
Section 4.12 Notice and Cure.
Each Seller shall, and shall cause each other Seller to, notify
Purchaser in writing (where appropriate, through updates to the Disclosure
Schedule) of, and contemporaneously shall provide Purchaser with true and
complete copies of any and all information or documents relating to; and each
Seller shall use best efforts to cure before the New Jersey Closing or New York
Closing, any event, transaction or circumstance, as soon as practicable after it
becomes Known to any Seller, occurring after the date of this Agreement that
causes or shall cause any covenant or agreement of any Seller under this
Agreement to be breached or that renders or shall render untrue any
representation or warranty of any Seller contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance.
No notice given pursuant to this Section shall have any effect on the
representations, warranties, covenants or agreements contained in this Agreement
for purposes of determining satisfaction of any condition contained herein or
shall in any way limit Purchaser's right to seek indemnity under Article XI.
Section 4.13 Satisfaction of Conditions.
Each Seller shall execute and deliver at the New Jersey Closing and
the New York Closing each Operative Agreement that each Seller is required
hereby to execute and deliver as a condition to the New Jersey and the New York
Closing, shall take all commercially reasonable steps necessary or desirable and
proceed diligently and in good faith to satisfy each other condition to the
obligations of Purchaser contained in this Agreement and shall not take or fail
to take any action that could reasonably be expected to result in the
non-satisfaction of any such condition.
Section 4.14 Maintenance of Regulated Books and Records.
Notwithstanding anything in this Agreement to the contrary,
following the New Jersey Closing Date and the effective date of the Management
Agreement each Seller shall maintain or cause to be maintained, at the sole cost
and expense of the Sellers on a joint and several basis, in strict compliance
with all applicable Laws, all Books and Records that, pursuant to such Laws, are
required to be maintained and preserved by Seller, including, without
limitation, the patient files and records of each Seller other than records of
patients whose care is transferred to Purchaser which records shall be delivered
to Purchaser (collectively, the "Regulated Books and Records"). Each Seller
agrees that it shall not, and each Seller shall cause each other Seller not to,
enter into any transaction (including, without limitation, a merger,
consolidation, recapitalization or sale of all or a material portion of such
Seller's Assets and Properties), pay any dividends, discontinue the conduct of
all or a material portion of its business or liquidate or dissolve unless and
until provision for such maintenance (which such maintenance shall include,
without limitation, payment in advance with respect thereto) has been
established to the reasonable satisfaction of Purchaser (in no event shall such
maintenance be deemed to be to the reasonable satisfaction of Purchaser in the
event Purchaser is required to assume responsibility of any kind for such
maintenance by virtue of the terms of this Section 4.14 or otherwise, which such
responsibility shall remain solely with the applicable Sellers in accordance
with applicable Laws). In connection with any such maintenance, Purchaser shall
be provided any and all access to such Regulated Books and Records to the
maximum extent
contemplated by this Agreement for a period of at least seven years after the
New York Closing Date.
Article V
Covenants of Purchaser
Purchaser covenants and agrees with Sellers that, at all times from and
after the date hereof until the New York Closing, Purchaser shall comply with
all covenants and provisions of this Article V, except to the extent Parent
Seller may otherwise consent in writing:
Section 5.1 Notice and Cure.
Purchaser shall notify Parent Seller in writing of, and
contemporaneously shall provide Parent Seller with true and complete copies of
any and all information or documents relating to, and shall use all commercially
reasonable efforts to cure before the New York Closing, any event, transaction
or circumstance, as soon as practicable after it becomes known to Purchaser,
occurring after the date of this Agreement that causes or shall cause any
covenant or agreement of Purchaser under this Agreement to be breached or that
renders or shall render untrue any representation or warranty of Purchaser
contained in this Agreement as if the same were made on or as of the date of
such event, transaction or circumstance. No notice given pursuant to this
Section shall have any effect on the representations, warranties, covenants or
agreements contained in this Agreement for purposes of determining satisfaction
of any condition contained herein or shall in any way limit any Seller's right
to seek indemnity under Article XI.
Section 5.2 Satisfaction of Conditions.
Purchaser shall execute and deliver at the New Jersey Closing and
New York Closing each Operative Agreement that Purchaser is hereby required to
execute and deliver as a condition to the New Jersey Closing and New York
Closing, shall take all commercially reasonable steps necessary or desirable and
proceed diligently and in good faith to satisfy each other condition to the
obligations of Sellers contained in this Agreement and shall not take or fail to
take any action that could reasonably be expected to result in the
non-satisfaction of any such condition.
Section 5.3 Regulatory and Other Approvals.
Purchaser shall take all steps reasonably necessary and appropriate
to obtain required consents, approvals or other governmental actions.
Article VI
Conditions to Obligations of Purchaser
The obligation of Purchaser hereunder to purchase the New Jersey Assets
and the New York Assets to assume and to pay, perform and discharge the Assumed
Liabilities is subject to the satisfaction, at or before the New Jersey Closing
and New York Closing, of each of the following conditions (all or any of which
may be waived in whole or in part by Purchaser in its
sole discretion); provided, however, that Purchaser shall have the right to
waive all or any part of each such condition and to close the transactions
contemplated hereby without, however, releasing any Seller from any covenant,
obligation or agreement contained herein or from an Liability from any Loss
sustained by Purchaser by reason of the breach by any Seller of any covenant,
obligation or agreement contained herein or by reason of any misrepresentation
made by any Seller; provided, further, however, that Purchaser's participation
in the New Jersey Closing and New York Closing shall not in any way be deemed to
be a waiver of any Claim that it may have hereunder for any breach of any
misrepresentation, warranty, covenant or agreement made by any Seller:
Section 6.1 Representations and Warranties.
Each of the representations and warranties made by Seller in this
Agreement (other than those made as of a specified date earlier than the New
Jersey Closing and New York Closing Date) shall be true and correct in all
material respects on and as of the respective Closing Date as though such
representation or warranty was made on and as of the New Jersey Closing and New
York Closing Date, and any representation or warranty made as of a specified
date earlier than the New Jersey Closing and New York Closing Date shall have
been true and correct in all material respects on and as of such earlier date.
Section 6.2 Performance.
Sellers shall have performed and complied with, in all material
respects, each agreement, covenant and obligation required by this Agreement to
be so performed or complied with by Sellers at or before the New Jersey Closing
and New York Closing. Sellers shall have fully cooperated with governmental
agencies and Purchaser as represented in Section 2.29 hereof.
Section 6.3 Officers' Certificates.
Sellers shall have delivered to Purchaser certificated, dated as of
both the New Jersey Closing Date and New York Closing Date and executed in the
name and on behalf of each Seller by the Chairman of the Board, the President or
the Chief Executive Officer of each such Seller, substantially in the form and
to the effect of Exhibit E hereto, and certificates, dated the New Jersey
Closing Date and New York Closing Date and executed by the Secretary of each
Seller, substantially in the form and to the effect of Exhibit F hereto.
Section 6.4 Orders and Laws.
There shall not be in effect on the New Jersey Closing Date and New
York Closing Date any Order or Law restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement or any of the Operative Agreements or which could
reasonably be expected to otherwise result in a material diminution of the
benefits of the transactions contemplated by this Agreement or any of the
Operative Agreements to Purchaser, and there shall not be pending or threatened
on the New Jersey Closing Date and New York Closing Date any Action or
Proceeding in, before or by any Governmental or Regulatory Authority which could
reasonably be expected to result in the issuance of any such Order or the
enactment, promulgation or deemed applicability to Purchaser or the transactions
contemplated by this Agreement or any of the Operative Agreements of any such
Law.
Section 6.5 Regulatory Consents and Approvals.
All consents, approvals and actions of, filings with and notices to
any Governmental or Regulatory Authority necessary to permit Purchaser and
Sellers to perform their obligations under this Agreement and the Operative
Agreements and to consummate the transactions contemplated hereby and thereby
(a) shall have been duly obtained, made or given, (b) shall be in form and
substance reasonably satisfactory to Purchaser, (c) shall not be subject to the
satisfaction of any condition that has not been satisfied or waived and (d)
shall be in full force and effect, and all terminations or expirations of
waiting periods imposed by any Governmental or Regulatory Authority necessary
for the consummation of the transactions contemplated by this Agreement and the
Operative Agreements shall have occurred.
Section 6.6 Third Party Consents.
The consents (or in lieu thereof waivers) (x) listed in Section 6.6
of the Disclosure Schedule and (y) all other consents (or in lieu thereof
waivers) to the performance by Purchaser and each Seller of their obligations
under this Agreement and the Operative Agreements or to the consummation of the
transactions contemplated hereby and thereby as are required under any Contract
to which Purchaser or Sellers are a party or by which any of their respective
Assets and Properties are bound (a) shall have been obtained, (b) shall be in
form and substance reasonably satisfactory to Purchaser, (c) shall not be
subject to the satisfaction of any condition that has not been satisfied or
waived and (d) shall be in full force and effect.
Section 6.7 New Jersey Real Property Leases.
Sellers shall have delivered to Purchaser an estoppel certificate
and written consent to assignment from the lessor if such consent is required
pursuant to the terms of the respective lease, for each of the New Jersey Real
Property Leases described in Section 1.1(a)(i) of the Disclosure Schedule, in
form and substance reasonably satisfactory to Purchaser.
Section 6.8 Management Agreement.
Sellers and Purchaser shall have entered into the Management
Agreement.
Section 6.9 Due Diligence.
Purchaser shall have completed a due diligence review of each Seller
and the Business and be satisfied in all respects with the results obtained.
Section 6.10 Deliveries.
Sellers shall have duly executed and delivered to Purchaser the
General Assignment and the other Assignment Instruments.
Section 6.11 Proceedings.
All proceedings to be taken on the part of any Seller in connection
with the transactions contemplated by this Agreement and all documents incident
thereto shall be reasonably satisfactory in form and substance to Purchaser, and
Purchaser shall have received copies of all such documents and other evidences
as Purchaser may reasonably request in order to establish the consummation of
such transactions and the taking of all proceedings in connection therewith.
Section 6.12 No Material Adverse Change.
There shall not have occurred a material adverse change in the
Condition of Sellers, or any Seller, including without limitation, a material
adverse change in the Medicaid reimbursement, third party billing and/or direct
billing, customer and employee relations or
business prospects. There shall not have occurred a material adverse change in
the Condition of Purchaser.
Article VII
Conditions to Obligations of Sellers
The obligation of Sellers hereunder to sell the New Jersey Assets is
subject to the satisfaction, at or before the New Jersey Closing, of each of the
following conditions (all or any of which may be waived in whole or in part by
Sellers in their sole discretion); provided, however, that Sellers shall have
the right to waive all or any part of each such condition and to close the
transactions contemplated hereby without, however, releasing any Seller from any
covenant, obligation or agreement contained herein or from an Liability from any
Loss sustained by any Seller by reason of the breach by Purchaser of any
covenant, obligation or agreement contained herein or by reason of any
misrepresentation made by Purchaser; provided, further, however, that Sellers'
participation in the New Jersey Closing shall not in any way be deemed to be a
waiver of any Claim that it may have hereunder for any breach of any
misrepresentation, warranty, covenant or agreement made by Purchaser:
Section 7.1 Representations and Warranties.
Each of the representations and warranties made by Purchaser in this
Agreement shall (other than those made as of a specified date earlier than the
New Jersey Closing Date and New York Closing Date) be true and correct in all
material respects on and as of the New Jersey Closing Date and New York Closing
Date as though such representation or warranty was made on and as of the New
Jersey Closing Date and New York Closing Date and any representation or warranty
made as of a specified date earlier than the New Jersey Closing Date and New
York Closing Date shall have been true and correct in all material respects on
and as of such earlier date.
Section 7.2 Performance.
Purchaser shall have performed and complied with, in all material
respects, each agreement, covenant and obligation required by this Agreement to
be so performed or complied with by Purchaser at or before the Closing.
Section 7.3 Officers' Certificates.
Purchaser shall have delivered to Sellers certificates, executed in
the name and on behalf of Purchaser by the Chairman of the Board, the President
or the Chief Executive Officer of Purchaser, substantially in the form and to
the effect of Exhibit H hereto, on the New Jersey Closing Date and dated that
date with respect to the New Jersey Closing, and on the New York Closing Date
and executed by the Secretary of Purchaser, substantially in the form and to the
effect of Exhibit I hereto.
Section 7.4 Orders and Laws.
There shall not be in effect on the New Jersey Closing Date and New
York Closing Date any Order or Law restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement or any of the Operative Agreements or which could
reasonably be expected to otherwise result in a material diminution of the
benefits of the transactions contemplated by this Agreement or any of the
Operative Agreements to Sellers, and there shall not be pending or threatened on
the New Jersey Closing Date and New York Closing Date any Action or Proceeding
in, before or by any Governmental or Regulatory Authority which could reasonably
be expected to result in the issuance of any such Order or the enactment,
promulgation or deemed applicability to Sellers or the transactions contemplated
by this Agreement or any of the Operative Agreements of any such Law.
Section 7.5 Regulatory Consents and Approvals.
All consents, approvals and actions of, filings with and notices to
any Governmental or Regulatory Authority necessary to permit Purchaser and
Sellers to perform their obligations under this Agreement and the Operative
Agreements and to consummate the transactions contemplated hereby and thereby
(a) shall have been duly obtained, made or given, (b) shall not be subject to
the satisfaction of any condition that has not been satisfied or waived and (c)
shall be in full force and effect, and all terminations or expirations of
waiting periods imposed by any Governmental or Regulatory Authority necessary
for the consummation of the transactions contemplated by this Agreement and the
Operative Agreements shall have occurred.
Section 7.6 Deliveries.
Purchaser shall have duly executed and delivered to Sellers (a) the
Assumption Agreement and the other Assumption Instruments and (b) the Management
Agreement.
Section 7.7 Proceedings.
All proceedings to be taken on the part of Purchaser in connection
with the transactions contemplated by this Agreement and all documents incident
thereto shall be reasonably satisfactory in form and substance to Sellers, and
Sellers shall have received copies of all such documents and other evidences as
Sellers may reasonably request in order to establish the consummation of such
transactions and the taking of all proceedings in connection therewith.
Section 7.8 Delivery of Purchase Price.
Purchaser shall have delivered the Purchase Price in the manner set
forth in Section 1.3.
Article VIII
Tax Matters And Post-Closing Taxes
Section 8.1 Transfer Taxes.
Each Seller shall, and each Seller shall cause each other Seller to,
duly and timely pay sales, use, transfer, real property transfer, recording,
gains, stock transfer and other similar taxes and fees or liability for such
taxes or fees ("Transfer Taxes") arising out of or in connection with the
transactions effected pursuant to this Agreement. Each Seller shall, and each
Seller shall cause each other Seller to, promptly provide Purchaser with copies
of all Tax Returns and other documents required to be filed with respect to the
Transfer Taxes prior to the filing thereof, and shall give Purchaser a copy of
each such Tax Return or other document as filed, together with proof of payment
of the Tax shown thereon. Transfer taxes, if any, in connection with this
transaction, which are customarily the responsibility of a seller, shall be paid
by Sellers.
Section 8.2 Cooperation.
Each Seller, on the one hand, and Purchaser, on the other hand,
shall provide the other party hereto with such assistance as may reasonably be
requested by such party, at such party's cost and expense, in connection with
the preparation and filing of any financial statement, Tax Return, audit or
other examination by any taxing authority, and any judicial or administrative
proceedings relating to liability for Taxes attributable to the New Jersey
Assets and the New York Assets or the operation of the New Jersey Business and
the New York Business. Each Seller shall cause each other Seller to provide any
assistance referred to in the preceding sentence.
Section 8.3 Tax Matters.
Sellers represent and warrant that the New Jersey Assets and the New
York Assets, when transferred to Purchaser, shall be free and clear of any and
all Liens of any nature for Taxes, except Liens for Taxes not yet due and
Transfer Taxes, and Sellers shall indemnify Purchaser against any such Liens for
Taxes in accordance with the provisions of Article XI.
Section 8.4 Payments.
All indemnity payments due under this Agreement shall be made
without offset or withholding of any nature for Taxes.
Article IX
Employee Matters
Section 9.1 Employee.
(a) Purchaser shall not be obligated to offer employment to any employee
of any Seller and Purchaser shall not assume or be responsible in any way for
any Seller's obligations,
liabilities or responsibilities to such employees. Sellers shall make available
to Purchaser all employee files for the New York Business and the New Jersey
Business at least two weeks prior to the New Jersey Closing, which such files
shall be held in escrow and returned promptly after the New Jersey Closing to
Sellers with respect to any employees not engaged by Purchaser.
(b) Purchaser shall not be deemed to be a successor employer with respect
to the employment of any employees of any Seller or with respect to any Seller
Plan maintained for the benefit of any employees of any Seller. In the event any
employees of any Seller shall be deemed to have been terminated by reason of the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, all liability for all severance and other
similar benefits to any such Employee shall be the sole responsibility of the
Sellers.
(c) Purchaser may offer employment on an "at will" basis to any employees
of any Seller. Each Seller shall, and each Seller shall cause each other Seller
to, use their respective best efforts to encourage its employees who are offered
employment by Purchaser, to continue their employment with the respective
employing Seller until the applicable Closing, and to accept such offer from
Purchaser, subject to the provisions of Section 4.6 and Sections 9.1(a) and (b).
(d) The parties hereto expressly acknowledge that Purchaser shall not be
liable for any claims arising out of or accruing under the Sellers' Plans.
(e) Each Seller hereby agrees that, up until the New Jersey Closing Date
and the effective date of the Management Agreement, it shall provide all
compensation, including without limitation all benefits under all Seller Plans,
in all forms to all employees of each Seller timely and properly in the ordinary
course consistent with past practice. Sellers shall pay to all such employees,
at or prior to the New Jersey Closing Date with respect to employees of the New
Jersey Business, and at or prior to the effective date of the Management
Agreement with respect to the New York Business, all wages and benefits due to
such employees including all accruals. Each Seller further agrees that it
promptly will provide upon request any and all information reasonably requested
by Purchaser in order to provide Purchaser with the opportunity to ascertain
continuing compliance with this Section 9.1.
Section 9.2 No Third Party Beneficiaries.
All provisions contained in this Article IX are included for the
sole benefit of the respective parties hereto and do not and shall not create
any right in any other person, including, without limitation, any employee of
any Seller, any Seller Plan or any beneficiary thereof.
Article X
Survival Of Representations, Warranties, Covenants And Agreements
Section 10.1 Survival of Representations, Warranties, Covenants and Agreements.
Notwithstanding any right of Purchaser (whether or not exercised) to
investigate the Business or any right of any party (whether or not exercised) to
investigate the accuracy of the representations and warranties of the other
party contained in this Agreement, Sellers and Purchaser have the right to rely
fully upon the representations, warranties, covenants and agreements of the
other contained in this Agreement. The representations, warranties, covenants
and agreements of Sellers and Purchaser contained in this Agreement shall
survive the Closing (a) for a period of two years following the New York Closing
Date, except for the noncompetition provisions of Section 4.9 which shall be for
three years following the New York Closing Date with respect to (i) the
representations and warranties contained in Articles II and III, and (ii) the
covenants and agreements contained in Sections 1.10, Articles IV and V,14.6,
Article VIII and (insofar as they relate to ERISA or the Code) and Article IX,
(b) until 24 months in the case of all other representations and warranties and
any covenant or agreement to be performed in whole or in part on or prior to the
Closing, or (c) with respect to each other covenant or agreement contained in
this Agreement, until 60 days following the last date on which such covenant or
agreement is to be performed or, if no such date is specified, for a period of
two years following the New York Closing Date; provided, however, that any
representation, warranty, covenant or agreement that would otherwise terminate
in accordance with clause (a), (b) or (c) above shall continue to survive if a
Claim Notice or Indemnity Notice (as applicable) shall have been timely given
under Article XI on or prior to such termination date, until the related claim
for indemnification has been satisfied or otherwise resolved as provided in
Article XI.
Article XI
Indemnification
Section 11.1 Indemnification.
(a) Subject to the other Sections of this Article XI, Sellers shall
jointly and severally indemnify the Purchaser Indemnified Parties in respect of,
and hold each of them harmless from and against, any and all Losses suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to (i) any breach of representation
or warranty made by any Seller in this Agreement or any Losses in respect of any
third-party claim made based upon facts alleged that, if true, would constitute
such breach, (ii) any breach or nonfulfillment of or failure to perform any
covenant or agreement on the part of Seller contained in this Agreement, (iii) a
Retained Liability, (iv) liabilities (other than Assumed Liabilities) created or
incurred by Seller from and after the New Jersey Closing Date and New York
Closing Date, (v) any condition, event or liability existing or occurring at or
prior to the Closing relating in any way to the ownership of the New Jersey
Business and/or New York Business prior to New Jersey Closing and New York
Closing Date, respectively, or (vi) any action brought by National.
(b) Subject to the other Sections of this Article XI, Purchaser shall
indemnify the Seller Indemnified Parties in respect of, and hold each of them
harmless from and against, any and all Losses suffered, incurred or sustained by
any of them or to which any of them becomes subject, resulting from, arising out
of or relating to (i) any breach of representation or warranty made by Purchaser
in this Agreement or any Losses in respect of any third-party claim made
based upon facts alleged that, if true, would constitute such breach, (ii) any
breach or nonfulfillment of or failure to perform any covenant or agreement on
the part of Purchaser contained in this Agreement, (iii) an Assumed Liability,
or (iv) liabilities (other than Retained Liabilities) created or incurred by
Purchaser from and after the New Jersey Closing Date and New York Closing Date.
Section 11.2 Method of Asserting Claims.
All claims for indemnification by any Indemnified Party under
Section 11.1 shall be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which an Indemnified
Party might seek indemnity under Section 11.1 is asserted against or sought to
be collected from such Indemnified Party by a Person other than Seller or any
Affiliate of Seller or of Purchaser (a "Third Party Claim"), the Indemnified
Party shall promptly deliver a Claim Notice to the Indemnifying Party. If the
Indemnified Party fails to promptly provide the Claim Notice with reasonable
promptness after the Indemnified Party receives notice of such Third Party
Claim, the Indemnifying Party shall not be obligated to indemnify the
Indemnified Party with respect to such Third Party Claim to the extent that the
Indemnifying Party's ability to defend has been irreparably prejudiced by such
failure of the Indemnified Party. The Indemnifying Party shall notify the
Indemnified Party as soon as practicable within the Dispute Period whether the
Indemnifying Party disputes its liability to the Indemnified Party under Section
11.1 and whether the Indemnifying Party desires, at its sole cost and expense,
to defend the Indemnified Party against such Third Party Claim.
(i) If the Indemnifying Party notifies the Indemnified Party
within the Dispute Period that the Indemnifying Party desires
to defend the Indemnified Party with respect to the Third
Party Claim pursuant to this Section 11.2(a), then the
Indemnifying Party shall have the right to defend, with
counsel selected by the Indemnifing Party and reasonably
satisfactory to the Indemnified Party, at the sole cost and
expense of the Indemnifying Party, such Third Party Claim by
all appropriate proceedings, which proceedings shall be
vigorously and diligently prosecuted by the Indemnifying Party
to a final conclusion or shall be settled at the discretion of
the Indemnifying Party (but only with the consent of the
Indemnified Party, which consent shall not be unreasonably
withheld, in the case of any settlement that provides for any
relief other than the payment of monetary damages as to which
the Indemnified Party shall be indemnified in full). In such
event Indemnifying Party shall be deemed to have waived its
right to dispute its liability to the Indemnified Party under
Section 11.1 with respect to any Third Party Claim as to which
it elects to control the defense. The Indemnifying Party shall
have full control of such defense and proceedings, including
any compromise or settlement thereof; provided, however, that
the Indemnified Party may, at the sole cost and expense of the
Indemnified Party, at any time prior to the Indemnifying
Party's delivery of the notice referred to in the first
sentence of this Section 11.2(a)(i), file any motion, answer
or other pleadings or
take any other action that the Indemnified Party reasonably
believes to be necessary or appropriate to protect its
interests; provided, further, however, that if requested by
the Indemnifying Party, the Indemnified Party shall provide
reasonable cooperation to the Indemnifying Party in contesting
any Third Party Claim that the Indemnifying Party elects to
contest. The Indemnified Party may retain separate counsel to
represent it and participate in, but not control, any defense
or settlement of any Third Party Claim controlled by the
Indemnifying Party pursuant to this Section 11.2(a)(i), and
the Indemnified Party shall bear its own costs and expenses
with respect to such separate counsel unless (x) the
Indemnifying Party shall have agreed to pay those fees and
expenses, (y) the Indemnifying Party shall have failed to
assume and carry out the defense of the Third Party Claim or
shall have failed to employ counsel selected by the
Indemnifing Party and reasonably satisfactory to the
Indemnified Party in the Third Party Claim, or (z) the named
parties in the Third Party Claim (including any impleaded
parties) include both the Indemnified Party and the
Indemnifying Party, and the Indemnified Party shall on any
grounds reasonably determine (including, without limitation,
upon advice of counsel) that there may be one or more legal
defenses available to the Indemnified Party that are different
from or additional to those available to the Indemnifying
Party (in which case, if the Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the
defense of such Third Party Claim or proceeding on behalf of
the Indemnified Party, it being understood, however, that the
Indemnifying Party shall not, in connection with any one
action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for the Indemnified
Party, which firm shall be designated in writing by the
Indemnified Party). Notwithstanding the foregoing, the
Indemnified Party may retain or take over the control of the
defense or settlement of any Third Party Claim the defense of
which the Indemnifying Party has elected to control if the
Indemnified Party irrevocably waives its right to indemnity
under Section 11.1 with respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified
Party within the Dispute Period that the Indemnifying Party
desires to defend the Third Party Claim pursuant to Section
11.2(a), or if the Indemnifying Party gives such notice but
fails to prosecute vigorously and diligently or settle the
Third Party Claim, or if the Third Party Claim seeks an order,
injunction or other equitable relief against the Indemnified
Party which could materially interfere with the business,
operations, assets, condition or prospects of the Indemnified
Party, then the Indemnified Party shall have the right to
defend, at the sole cost and expense of the Indemnifying
Party, the Third Party Claim by all appropriate proceedings,
which proceedings shall be prosecuted by the Indemnified Party
in good faith or shall be settled at the discretion of the
Indemnified Party (with the consent of the Indemnifying Party,
which consent shall not be unreasonably withheld). The
Indemnified Party shall have full control of such defense and
proceedings, including, without limitation, any compromise or
settlement thereof; provided, however, that if requested by
the Indemnified Party, the Indemnifying Party shall provide
reasonable cooperation and assistance to the Indemnified Party
and its counsel in contesting any Third Party Claim which the
Indemnified Party is contesting. The Indemnifying Party may
participate in, but not control, any defense or settlement
controlled by the Indemnified Party pursuant to this Section
11.2(a)(ii), and the Indemnifying Party shall bear its own
costs and expenses with respect to such participation. If the
Indemnifying Party notifies the Indemnified Party that it does
not dispute its liability to the Indemnified Party with
respect to the Third Party Claim under Section 11.1 or fails
to notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes its liability to the
Indemnified Party with respect to such Third Party Claim, the
Loss arising from such Third Party Claim shall be conclusively
deemed a liability of the Indemnifying Party under Section
11.1 and the Indemnifying Party shall pay the amount of such
Loss to the Indemnified Party on demand following the final
determination thereof. If the Indemnifying Party has timely
disputed its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party shall proceed in
good faith to negotiate a resolution of such dispute, and if
not resolved through negotiations within the Resolution
Period, such dispute shall be resolved by arbitration in
accordance with Section 11.2(c).
(b) In the event any Indemnified Party should have a claim under Section
11.1 against any Indemnifying Party that does not involve a Third Party Claim,
the Indemnified Party shall deliver an Indemnity Notice with reasonable
promptness to the Indemnifying Party. The failure by any Indemnified Party to
give the Indemnity Notice shall not impair such party's rights hereunder except
to the extent that an Indemnifying Party demonstrates that it has been
irreparably prejudiced thereby. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim described in such Indemnity
Notice or fails to notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes the claim described in such Indemnity
Notice, the Loss arising from the claim specified in such Indemnity Notice shall
be conclusively deemed a liability of the Indemnifying Party under Section 11.1
and the Indemnifying Party shall pay the amount of such Loss to the Indemnified
Party on demand following the final determination thereof. If the Indemnifying
Party has timely disputed its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute, and if not resolved through negotiations
within the Resolution Period, such dispute shall be resolved by arbitration in
accordance with Section 11.2(c).
(c) Any dispute submitted to arbitration pursuant to this Section 11.2
shall be finally and conclusively determined by the decision of a board of
arbitration consisting of three members (hereinafter sometimes called the "Board
of Arbitration") selected as hereinafter provided. Each of the Indemnified Party
and the Indemnifying Party shall select one member and the third member shall be
selected by mutual agreement of the other members, or if the other members fail
to reach agreement on a third member within 20 days after their selection, such
third member shall thereafter be selected by the American Arbitration
Association upon application made to it for a third member possessing expertise
or experience appropriate to the dispute jointly by the Indemnified Party and
the Indemnifying Party. The Board of Arbitration shall meet in New York City or
such other place as a majority of the members of the Board of Arbitration
determines more appropriate, and shall reach and render a decision in writing
(concurred with by a majority of the members of the Board of Arbitration) with
respect to the amount, if any, which the Indemnifying Party is required to pay
to the Indemnified Party in respect of a claim filed by the Indemnified Party.
In connection with rendering its decisions, the Board of Arbitration shall adopt
and follow such rules and procedures as a majority of the members of the Board
of Arbitration deems necessary or appropriate. To the extent practical,
decisions of the Board of Arbitration shall be rendered no more than 30 days
following commencement of proceedings with respect thereto. The Board of
Arbitration shall cause its written decision to be delivered to the Indemnified
Party and the Indemnifying Party. Any decision made by the Board of Arbitration
(either prior to or after the expiration of such 30 day period) shall be final,
binding and conclusive on the Indemnified Party and the Indemnifying Party and
entitled to be enforced by either such party to the fullest extent permitted by
law and entered in any court of competent jurisdiction. Each party to any
arbitration shall bear its own expense in relation thereto, including but not
limited to such party's attorneys' fees, if any, and the expenses and fees of
the Board of Arbitration shall be divided between the Indemnifying Party and the
Indemnified Party in the same proportion as the portion of the related claim
determined by the Board of Arbitration to be payable to the Indemnified Party
bears to the portion of such claim determined not to be so payable.
Section 11.3 Right to Set-Off.
Purchaser shall have the right to set-off the amount of any and all
Losses for which any Seller may be or become liable to Purchaser hereunder
against any sums otherwise payable to any Seller hereunder or any other Contract
executed and delivered to any Seller pursuant to this Agreement or otherwise
contemplated hereby.
Article XII
Termination
Section 12.1 Termination.
This Agreement may be terminated, and the transactions contemplated
hereby may be abandoned:
(a) at any time before the New Jersey Closing, by mutual written agreement
of Sellers and Purchaser;
(b) by Parent Seller upon delivery of written notice thereof to Purchaser
if:
(i) The Board of Directors of Parent Seller determines in good
faith with the advice of outside legal counsel that, in the
exercise of the fiduciary obligations of such Board of
Directors under applicable law, such termination is required
by reason of a Superior Proposal; or
(ii) There has been a breach in any material respect of any of the
representations, warranties, covenants or agreements of the
Purchaser set forth in this Agreement;
(iii) The New Jersey Closing shall not have occurred on or before
January 31, 2002; provided, however, that the right of Parent
Seller to terminate this Agreement under this Section
12.1(b)(iii) shall not be available to the extent that Sellers
failure to fulfill any obligation under this Agreement shall
have been the sole cause of the failure of the Closing to have
occurred on or before such date
(c) by Purchaser upon delivery of written notice thereof to Sellers if:
(i) The Board of Directors of Parent Seller shall have withdrawn
or modified its determination that this Agreement and the
transactions contemplated hereby are fair to and in the best
interests of Parent Seller's shareholders or its approval or
recommendation of this Agreement and such transactions;
(ii) There has been a breach or default of any of the
representations, warranties, covenants or agreements of any
Seller set forth in this Agreement or any other Operative
Agreement;
(iii) The Parent Seller Shareholders' Meeting shall have concluded
without approval by the shareholders of Parent Seller of this
Agreement and the transactions contemplated hereby;
(iv) A Triggering Event shall have occurred; or
(v) The New Jersey Closing shall not have occurred on or before
January 31, 2002; provided, however, that the right of
Purchaser to terminate this Agreement under this Section
12.1(c)(v) shall not be available to the extent that
Purchaser's failure to fulfill any obligation under this
Agreement shall have been the sole cause of the failure of the
Closing to have occurred on or before such date; or
(d) by either Purchaser or Parent Seller if there shall be any applicable
Law or regulation that makes the Closing illegal or if any Governmental or
Regulatory Authority shall have issued an Order (which such Order the parties
hereto shall use their commercially reasonable efforts to lift) permanently
enjoining, restraining or otherwise prohibiting the Closing and the consummation
of the transactions contemplated by this Agreement, which such Order shall have
become final and non-appealable.
Section 12.2 Effect of Termination.
(a) If this Agreement is validly terminated pursuant to Section 12.1, this
Agreement shall forthwith become null and void, and there shall be no liability
or obligation on the part of Seller or Purchaser (or any of their respective
officers, directors, employees, agents or other representatives or Affiliates),
except as provided in Sections 12.2(b) and (c).
(b) If Purchaser shall have terminated this Agreement pursuant to Section
12.1(c)(i), (ii), , (iv) or (v), and pursuant to Section 12.1(c)(iii) if the
termination of this Agreement occurs before the New Jersey Closing, then Parent
Seller shall, and each other Seller shall cause Parent Seller to, promptly, but
in any event no later than one Business Day after the date of such termination,
pay to Purchaser a fee equal to $1,000,000 in immediately available funds (the
"Sellers' Termination Fee"). Sellers acknowledge that the agreements contained
in this Section 12.2(b) are integral parts of the transactions contemplated by
this Agreement and that, without such agreements, Purchaser would not enter into
this Agreement. Accordingly, if Parent Seller fails to pay in a timely manner
the amounts due pursuant to this Section 12.2(b), and, in order to obtain such
payment, Purchaser makes a claim that results in a judgment against any Seller,
Parent Seller shall, and each of the other Sellers shall cause Parent Seller to,
pay to Purchaser its reasonable costs and expenses (including reasonable
attorneys' fees and expenses) in connection with such suit, together with
interest on the amounts set forth in this Section 12.2(b) at the prime rate of
Chase Manhattan Bank in effect on the date such payment was required to be made.
Purchaser agrees that the payments provided for in this Section 12.2(b) shall be
the sole and exclusive remedy of Purchaser upon termination of this Agreement
where such payments have been made, and such remedies shall be limited to the
sums stipulated in this Section 12.2(b), regardless of the circumstances giving
rise to such termination.
(c) If Parent Seller shall have terminated this Agreement pursuant to
Section 12.1(b)(i), (ii) or (iii), then Purchaser shall promptly, but in any
event no later than one Business Day after the date of such termination, pay to
Parent Seller a fee equal to $1,000,000 in immediately available funds (the
"Purchaser's Termination Fee"). Purchaser acknowledges that the agreements
contained in this Section 12.2(c) are integral parts of the transactions
contemplated by this Agreement and that, without such agreements, Purchaser
would not enter into this Agreement. Accordingly, if Purchaser fails to pay in a
timely manner the amounts due pursuant to this Section 12.2(c), and, in order to
obtain such payment, any Seller makes a claim that results in a judgment against
Purchaser, Purchaser shall pay to Parent Seller its reasonable costs and
expenses (including reasonable attorneys' fees and expenses) in connection with
such suit, together with interest on the amounts set forth in this Section
12.2(c) at the prime rate of Chase Manhattan Bank in effect on the date such
payment was required to be made. Each Seller agrees that the payments provided
for in this Section 12.2(c) shall be the sole and exclusive remedy of Sellers
upon termination of this Agreement where such payments have been made, and such
remedies shall be limited to the sums stipulated in this Section 12.2(c),
regardless of the circumstances giving rise to such termination.
Article XIII
Definitions
Section 13.1 Definitions.
(a) Defined Terms. As used in this Agreement, the following defined terms
have the meanings indicated below:
"Accounts Receivable" means all trade accounts receivable, chattel paper,
instruments and all notes, bonds and other evidences of Indebtedness of, and
rights to receive payments arising out of, or in connection with, the sale or
lease of goods, or the provision of services provided in the conduct of the
business conducted by the Seller Entities (including, without limitation, the
Business), if any, relating to such accounts, chattel paper, instruments and
other evidences of Indebtedness or any other general intangibles or obligations,
including, without limitation, any rights of each Seller with respect to any
third party collection procedures or any other Actions or Proceedings which have
been commenced in connection therewith;
"Actions" or "Proceedings" means any action, suit, proceeding, arbitration
or Governmental or Regulatory Authority investigation or audit.
"Affiliate" means any Person that directly, or indirectly, through one of
more intermediaries, controls or is controlled by or is under common control
with, the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by Contract or otherwise and, in
any event and without limitation of the previous sentence, any Person owning 10%
or more of the voting securities of another Person shall be deemed to control
that Person.
"Agreement" means this Purchase Agreement and the Exhibits and the
Disclosure Schedules hereto and the certificates delivered in accordance with
Sections 6.3 and 7.3, as all of the same shall be amended from time to time in
accordance with the terms hereof.
"Annual Financial Statement Date" means the last day of the most recent
fiscal of Parent Seller for which Financial Statements are delivered to
Purchaser pursuant to Section 2.6.
"Annual Financial Statements" means the Financial Statements for the most
recent fiscal quarter of the Parent Seller delivered to Purchaser pursuant to
Section 2.6.
"Assets and Properties" of any Person means all assets and properties of
every kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the good will related thereto,
operated, owned or leased by such Person, including without limitation cash,
cash equivalents, Investment Assets, accounts and notes receivable, chattel
paper, documents, instruments, general intangibles, real estate, equipment,
inventory, goods and Intellectual Property.
"Assignment Instruments" has the meaning ascribed to it in Section
1.8(a)(i).
"Assumption Agreement" has the meaning ascribed to it in Section
1.8(a)(ii).
"Assumption Instruments" has the meaning ascribed to it in Section
1.8(a)(ii).
"Benefit Plan" means any Plan established by Seller, or any predecessor or
Affiliate of Seller, existing at the Closing Date or prior thereto, to which
Seller contributes or has contributed on behalf of any employee of Sellers,
former employee of Sellers or director, or under which any employee of Sellers,
former employee of Sellers or director of Sellers or any beneficiary thereof is
covered, is eligible for coverage or has benefit rights.
"Board of Arbitration" has the meaning ascribed to it in Section 11.2(c).
"Books and Records" of any Person means all files, documents, instruments,
papers, books and records relating to the business, operations, condition of
(financial or other), results of operations and Assets and Properties of such
Person, including without limitation financial statements, Tax Returns and
related work papers and letters from accountants, budgets, pricing guidelines,
ledgers, journals, deeds, title policies, minute books, stock certificates and
books, stock transfer ledgers, Contracts, Licenses, customer lists, patient
lists, computer files and programs, retrieval programs, operating data and plans
and environmental studies and plans.
"Business Contracts" means all Contracts (other than the Real Property
Leases and the Personal Property Leases) to which any Seller is a party and that
are used in the conduct of the Business, including without limitation, Contracts
relating to patients, suppliers, sales representatives, distributors, purchase
orders, marketing arrangements and manufacturing arrangements, all of which
shall be assigned and transferred to Purchaser at the respective Closing, at the
sole expense of Sellers.
"Business Day" means a day other than Saturday, Sunday or any day on which
banks located in the State of New York is authorized or obligated to close.
"Business Disposition" has the meaning ascribed to it in Section 4.3.
"Business Licenses" means all Licenses (including applications therefor)
used in the conduct of the Business.
"Business" has the meaning ascribed to it in the recitals to this
Agreement.
"Claim Notice" means written notification pursuant to Section 11.2(a) of a
Third Party Claim as to which indemnity under Section 11.1 is sought by an
Indemnified Party, enclosing a copy of all papers served, if any, and specifying
the nature of and basis for such Third Party Claim and for the Indemnified
Party's claim against the Indemnifying Party under Section 11.1, together with
the amount or, if not then reasonably determinable, the estimated amount,
determined in good faith, of the Loss arising from such Third Party Claim.
"Closings" means the New Jersey Closing and the New York Closing.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Condition" of any Person or thing means, with respect to such Person or
thing, the business, condition (financial or otherwise), results of operations,
Assets and Properties and prospects of such Person or thing.
"Contract" means any agreement, lease, license, evidence of Indebtedness,
mortgage, indenture, security agreement or other contract (whether written or
oral).
"Defined Benefit Plan" means each Benefit Plan which is subject to Part 3
of Title I of ERISA, Section 412 of the Code or Title IV of ERISA.
"Disclosure Schedule" means the record delivered to Purchaser by Sellers
herewith and dated as of the date hereof, containing all lists, descriptions,
exceptions and other information and materials as are required to be included
therein by Seller pursuant to this Agreement.
"Dispute Period" means the period ending 30 days following receipt by an
Indemnifying Party of either a Claim Notice or an Indemnity Notice.
"Environmental Claim" means, with respect to any Person, any written or
oral notice, claim, demand or other communication (collectively, a "claim") by
any other Person alleging or asserting such Person's liability for investigatory
costs, cleanup costs, Governmental or Regulatory Authority response costs,
damages to natural resources or other property, personal injuries, fines or
penalties arising out of, based on or resulting from (a) the presence, or
Release into the environment, of any Hazardous Material at any location, whether
or not owned by such Person, or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include, without limitation, any claim by any
Governmental or Regulatory Authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" means any Law or Order relating to the regulation or
protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes.
"ERISA Affiliate" means any Person who is in the same controlled group of
corporations or who is under common control with any Seller (within the meaning
of Section 414 of the Code).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Estoppel Certificate" means the written certification, issued not more
than 30 days prior to the Closing Date by a lessor, sublessor or other party to
a lease or occupancy agreement, stating (a) that such lease or occupancy
agreement is (i) in full force and effect, and (ii) has not been modified or
amended except as described therein, (b) the date to which rental has been paid,
(c) that no default or event of default exists thereunder, and (d) that to the
best of the knowledge of the issuer thereof, no event has occurred which, with
the giving of notice or lapse of time or both, would be a default or event of
default thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Assets" has the meaning ascribed to it in Section 1.1(b).
"Excluded Books and Records" has the meaning ascribed to it in Section
1.1(b)(vii).
"Financial Statements" means the financial statements delivered to
Purchaser pursuant to Section 2.6 or 4.5.
"GAAP" means generally accepted accounting principles, consistently
applied throughout the specified period and in the immediately prior comparable
period.
"General Assignment" has the meaning ascribed to it in Section 1.8(b)(i).
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"Hazardous Material" means (A) any petroleum or petroleum products,
flammable explosives, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs); (B) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants" or words of similar import under any Environmental Law; and
(C) any other chemical or other material or substance, exposure to which is now
or hereafter prohibited, limited or regulated by any Governmental or Regulatory
Authority under any Environmental Law.
"Indebtedness" of any Person means all obligations of such Person (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases, and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.
"Indemnified Party" means any Person claiming indemnification under any
provision of Article XI.
"Indemnifying Party" means any Person against whom a claim for
indemnification is being asserted under any provision of Article XI.
"Indemnity Notice" means written notification pursuant to Section 11.2(b)
of a claim for indemnity under Article XI by an Indemnified Party, specifying
the nature of and basis for such claim, together with the amount or, if not then
reasonably determinable, the estimated amount, determined in good faith, of the
Loss arising from such claim.
"Intangible Personal Property" means all Intellectual Property used or
held for use in the conduct of the Business (including each Seller's good will
therein) and all rights, privileges, claims, causes of action and options
relating or pertaining to the Business or the Assets, including but not limited
to all Intellectual Property associated with the name "Star" and any variations
thereof
"Intellectual Property" means all patents and patent rights, trademarks
and trademark rights, trade names and trade name rights, service marks and
service xxxx rights, service names and service name rights, brand names,
inventions, processes, formulae, copyrights and copyright rights, trade dress,
business and product names, logos, slogans, trade secrets, industrial models,
processes, designs, methodologies, computer programs (including all source
codes) and related documentation, technical information, manufacturing,
engineering and technical drawings, know-how and all pending applications for
and registrations of patents, trademarks, service marks and copyrights.
"Inventory" means, with respect to any Person, all inventories of raw
materials, work-in-process, finished goods, products under research and
development, demonstration equipment, office and other supplies, parts,
packaging materials and other accessories related thereto which are held at, or
are in transit from or to, the locations at which the business of such Person is
conducted, or located at customers' premises on consignment, including, without
limitation, any of the foregoing purchased subject to any conditional sales or
title retention agreement in favor of any third party, together with all rights
of such Person against suppliers of such inventories.
"Investment Assets" means all debentures, notes and other evidences of
Indebtedness, stocks, securities (including rights to purchase and securities
convertible into or exchangeable for other securities), interests in joint
ventures and general and limited partnerships, mortgage loans and other
investment or portfolio assets owned of record or beneficially by any Seller
(other than trade receivables generated in the ordinary course of business of
any Seller).
"IRS" means the United States Internal Revenue Service.
"Knowledge" of a Person or "Known" to a Person means the knowledge of any
officer, director or employee of such Person.
"Laws" means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"Liabilities" means all Indebtedness, obligations and other liabilities of
a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or to become due).
"Licenses" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security interest, lease,
lien, adverse claim, levy, charge or other encumbrance of any kind, or any
conditional sale Contract, title retention Contract or other Contract to give
any of the foregoing.
"Loss" means any and all damages, fines, fees, penalties, deficiencies,
Taxes, losses expenses (including without limitation interest, court costs, fees
of attorneys, accountants and other experts or other expenses of litigation or
other proceedings or of any claim, default or assessment).
"New Jersey Assets" has the meaning ascribed to it in Section 1.1(a).
"New Jersey Accounts Receivable" means all Accounts Receivable occurring
in, or arising out of, the conduct of the New Jersey Business.
"New Jersey Business" has the meaning ascribed to it in the recitals to
this Agreement.
"New Jersey Business Books and Records" means all Books and Records used
or held for use in the conduct of the New Jersey Business or otherwise relating
to the New Jersey Assets, other than the Excluded Books and Records.
"New Jersey Business Contracts" means all Business Contracts used in the
conduct of the New Jersey Business and identified in Section 1.1(a)(iv) of the
Disclosure Schedule.
"New Jersey Business Licenses" means all Business Licenses used in the
conduct of the New Jersey Business, including, without limitation, the Licenses
listed in Section 1.1(a)(vii)(A) of the Disclosure Schedule, but excluding the
Licenses listed on Section 1.1(a)(vii)(B) of the Disclosure Schedule.
"New Jersey Intangible Personal Property" means all Intangible Personal
Property that in any way relates to the New Jersey Business, including, without
limitation, the items listed in Section 1.1(a)(vi) of the Disclosure Schedule.
"New Jersey Other Assets" means all Other Assets used or held for use in
connection with the New Jersey Business, except as otherwise provided in Section
1.1(b).
"New Jersey Personal Property Leases" means all of the Personal Property
Leases described in Section 1.1(a)(iii) of the Disclosure Schedule.
"New Jersey Prepaid Expenses" means all prepaid expenses relating to the
New Jersey Business [to the extent listed on the Closing Statement].
"New Jersey Real Property Leases" means all Real Property Leases described
in Section 1.1(a)(i) of the Disclosure Schedule.
"New Jersey Tangible Personal Property" means all Tangible Personal
Property used or held for use in the conduct of the New Jersey Business at the
locations at which the New Jersey Business is conducted or at customers'
premises on consignment, or otherwise used or held for use by any Seller in the
conduct of the New Jersey Business (including, without limitation, the items
listed in Section 1.1(a)(ii) of the Disclosure Schedule).
"New Jersey Tenant Security Deposits" means all Tenant Security Deposits
under any New Jersey Real Property Lease.
"New Jersey Vehicles" means all Vehicles used or held for use in the
conduct of the New Jersey Business, including, without limitation, the Vehicles
listed in Section 1.1(a)(viii) of the Disclosure Schedule.
"New York Assets" has the meaning ascribed to it in Section 1.1(c).
"New York Accounts Receivable" means all Accounts Receivable occurring in,
or arising out of, the conduct of the New York Business.
"New York Business" has the meaning ascribed to it in the recitals to this
Agreement.
"New York Business Books and Records" means all Books and Records used or
held for use in the conduct of the New York Business or otherwise relating to
the New York Assets, other than the Excluded Books and Records.
"New York Business Contracts" means all Business Contracts used in the
conduct of the New York Business and identified in Section 1.1(c)(i) of the
Disclosure Schedule.
"New York Business Licenses" means all Business Licenses used in the
conduct of the New York Business, including, without limitation, the Licenses
listed in Section 1.1(a)(iii)(A) of the Disclosure Schedule, but excluding the
Licenses listed on Section 1.1(a)(iii)(B) of the Disclosure Schedule.
"New York Intangible Personal Property" means all Intangible Personal
Property that in any way relates to the New York Business, including, without
limitation, the items listed in Section 1.1(a)(ii) of the Disclosure Schedule.
"New Jersey Assumed Liabilities" has the meaning ascribed to it in Section
1.2(a).
"New Jersey Closing Date" means the date the Purchaser and Parent Seller
mutually agree upon in writing.
"New York Closing Date" means the date the Purchaser and Parent Seller
mutually agree upon in writing.
"New Jersey Closing" means the closing of the transactions contemplated by
Section 1.6.
"New York Closing" means the closing of the transactions contemplated by
Section 1.6.
"Operative Agreements" means, collectively, the General Assignment and the
other Assignment Instruments, the Assumption Agreement, and the other Assumption
Instruments.
"Order" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether preliminary
or final).
"Other Assets" means, other than the New Jersey Assets, all Assets and
Properties of any Seller used or held for use in connection with the Business.
"Parent Seller" has the meaning ascribed to it in the preamble to this
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation established under
ERISA.
"Permitted Lien" means (i) any Lien for Taxes not yet due or delinquent or
being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, (ii) any statutory Lien
arising in the ordinary course of business by operation of Law with respect to a
Liability that is not yet due or delinquent, (iii) any minor imperfection of
title or similar Lien which individually or in the aggregate with other such
Liens does not materially impair the value of the property subject to such Lien
or the use of such property in the conduct of the Business, and (iv) any Lien
securing an obligation of a Seller to Purchaser. All such Liens are set forth in
the Disclosure Schedule.
"Person" means any natural person, corporation, limited liability company,
general partnership, limited partnership, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority.
"Personal Property Leases" means all of the leases of Tangible Personal
Property as to which any Seller is the lessee or sublessee, together with any
options to purchase the underlying property.
"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, including, but not limited to, any "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
"Prepaid Expenses" means all prepaid expenses relating to the Business,
but excluding from and after the Closing Date any Retained Prepaid Expenses.
"Purchase Price" has the meaning ascribed to it in Section 1.3.
"Purchaser Indemnified Parties" means Purchaser and its officers,
directors, employees, agents and Affiliates.
"Purchaser" has the meaning ascribed to it in the preamble of this
Agreement.
"Qualified Plan" means each Benefit Plan which is intended to qualify
under Section 401 of the Code.
"Quarterly Financial Statement Date" means the last date of the most
recent fiscal quarter for Parent Seller for which Financial Statements are
delivered to Purchaser pursuant to Section 2.6.
"Quarterly Financial Statements" means the Financial Statements that are
delivered to Purchaser pursuant to Section 2.6.
"Real Property Leases" means all leases and subleases of real property as
to which Sellers are the lessee or sublessee, together with any options to
purchase the underlying property and leasehold improvements thereon, and in each
case all other rights, subleases, licenses, permits, deposits and profits
appurtenant to or related to such leases and subleases.
"Regulated Books and Records" has the meaning ascribed to it in Section
4.14.
"Release" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including, without limitation, the movement of Hazardous
Materials through ambient air, soil, surface water, ground water, wetlands, land
or subsurface strata.
"Representatives" has the meaning ascribed to it in Section 4.2.
"Resolution Period" means the period ending thirty (30) days following
receipt by an Indemnified Party of a written notice from an Indemnifying Party
stating that it disputes all or any portion of a claim set forth in a Claim
Notice or an Indemnity Notice.
"Retained Liabilities" has the meaning ascribed to it in Section 1.2(b).
"Retained Prepaid Expenses" has the meaning ascribed to it in Section
1.2(b).
"SEC" means the United States Securities and Exchange Commission.
"Seller Entities" has the meaning ascribed to it in the recitals to this
Agreement
"Seller Indemnified Parties" means each Seller and its officers,
directors, employees, agents and Affiliates.
"Subsidiary Seller" has the meaning ascribed to it in the preamble to this
Agreement.
"Tangible Personal Property" means all furniture, fixtures, equipment,
machinery, office supplies and other tangible personal property (other than
Inventory and Vehicles) used or held for use in the conduct of the Business at
the locations at which the Business is conducted or at customers' premises on
consignment, or otherwise used or held for use by Seller in the conduct of the
Business.
"Tangible Personal Property" means all furniture, fixtures, equipment,
machinery, office supplies and other tangible personal property (other than
Inventory and Vehicles) used or held for use in the conduct of the Business at
the locations at which the Business is conducted or at customers' premises on
consignment, or otherwise used or held for use by Seller in the conduct of the
Business.
"Tax Return" means a report, return or other information (including any
amendments) required to be supplied to a governmental entity by Seller with
respect to Taxes including, where permitted or required, combined or
consolidated returns for any group of entities that includes Seller.
"Taxes" means all taxes, charges, fees, levies or other assessments,
including, without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, payroll, employment,
social security, unemployment, excise, license, production, estimated,
occupation, property, capital gain, registration, governmental pension or
insurance, withholding, royalty, severance, stamp or documentary, value added,
or other tax, charge, assessment, duty, levy, compulsory loan, or other direct
or indirect impost of any nature whatsoever (including any interest, additions
to tax, or civil or criminal penalties thereon) of the United States or any
jurisdiction therein, or any domestic state, county, city or other political
subdivision or any jurisdiction therein.
"Tenant Security Deposits" means all security deposits deposited by or on
behalf of any Seller as lessee or sublessee under any of the Real Property
Leases.
"Termination Fee" has the meaning ascribed to it in Sections 12.2(b) and
(c).
"Third Party Claim" has the meaning ascribed to it in Section 11.2(a).
"Transfer Taxes" has the meaning ascribed to it in Section 8.1.
"Triggering Event" means, at any time prior to the New Jersey Closing, (i)
the recommendation by the Board of Directors of Parent Seller to the
shareholders of Parent Seller or the approval by the Board of Directors of
Parent Seller of any Business Disposition, (ii) the public withdrawal, amendment
or modification in a manner adverse to Purchaser of the approval by the Board of
Directors of Parent Seller of this Agreement and the transactions contemplated
hereby, (iii) the breach by any Seller of any provision of Section 4.3 of this
Agreement, (iv) the public announcement by any third-party of a Business
Disposition if Parent Seller shall not, within 10 Business Days after such
announcement, have publicly recommended to the shareholders of Parent Seller the
rejection by such shareholders of such Business Disposition and the shareholders
shall reject such Business Disposition before the final date for closing the
transactions hereunder, or (v) the transactions contemplated hereby; provided
however, that in no event shall a Triggering Event include a "stop, look and
listed" communication of the nature contemplated by Rule 14d-9(f) under the
Exchange Act with respect to any unsolicited tender offer or exchange offer
that, if concluded in accordance with the terms thereof, would constitute a
Business Disposition.
"Vehicles" means all motor vehicles owned or leased by any Seller and used
or held for use in the conduct of the Business.
(b) Construction of Certain Terms and Phrases. Unless the context of this
Agreement otherwise requires, (i) words of any gender include each other gender;
(ii) words using the singular or plural number also include the plural or
singular number, respectively; (iii) the terms "hereof," "herein," "hereby" and
any derivatives thereof or similar words refer to this entire Agreement; (iv)
the terms "Article" or "Section" refer to the specified Article or Section of
this Agreement; and (v) the phrases "ordinary course of business" and "ordinary
course of business consistent with past practice" refer to the business and
practice of Seller in connection with the Business. Whenever this Agreement
refers to a number of days, such number shall refer to calendar days unless
Business Days are specified. All accounting terms used herein and not expressly
defined herein shall have the meanings given to them under GAAP.
Article XIV
Miscellaneous
Section 14.1 Notices.
All notices and other communications required or permitted to be
given pursuant to this Agreement shall be in writing signed by the sender, and
shall be deemed duly given (a) on the date delivered if personally delivered,
(b) on the date sent by telecopier with automatic confirmation by the
transmitting machine showing the proper number of pages were transmitted without
error, (c) on the business day after being sent by Federal Express or another
recognized overnight mail service for next day or next business day delivery, or
(d) five business days after mailing, if mailed by United States postage-prepaid
certified or registered mail, return receipt requested, in each case addressed
to following addresses (or at such other address or telecopier number for a
party as shall be specified by like notice):
If to Purchaser to:
Premier Home Healthcare Services, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Meltzer, Lippe, Xxxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
If to any Seller to:
c/o Star Multi Care Services, Inc.
00 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Meritz & Xxxxx XXX
Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
Section 14.2 Bulk Sales Act.
The parties hereby waive compliance with the bulk sales act or
comparable statutory provisions of each applicable jurisdiction.
Section 14.3 Entire Agreement.
This Agreement, the Management Agreement and the Operative
Agreements supersede all prior discussions and agreements between the parties
hereto with respect to the subject matter hereof and thereof.
Section 14.4 Expenses.
Each party shall pay its own costs and expenses incurred in
connection with the negotiation, execution and closing of this Agreement and the
transactions contemplated hereby and thereby.
Section 14.5 Public Announcements.
Sellers and Purchaser shall obtain the other party's prior approval
of a press release to be issued immediately following the Closings announcing
the consummation of the transactions contemplated by this Agreement, and of any
subsequent press release. At all times at or before any Closing, no Seller shall
cause, suffer or permit any other Seller to, and Purchaser shall not, issue or
make any reports, statements or releases to the public with respect to this
Agreement or the transactions contemplated hereby without the consent of the
other, which consent shall not be unreasonably withheld. If either party is
unable to obtain the approval of its public report, statement or release from
the other party and such report, statement or release is, in the opinion of
legal counsel to such party, required by Law in order to discharge such party's
disclosure obligations, then such party may make or issue the legally required
report, statement or release and promptly furnish the other party with a copy
thereof.
Section 14.6 Confidentiality.
Each party hereto shall hold, and shall use its best efforts to
cause its Affiliates and their respective Representatives to hold, in strict
confidence from any Person unless (i) compelled to disclose by judicial or
administrative process (including, without limitation, in connection with
obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of Governmental or Regulatory Authorities) or by other
requirements of Law or (ii) disclosed in an Action or Proceeding brought by a
party hereto in pursuit of its rights or in the exercise of its remedies
hereunder, all documents and information concerning the other party or any of
its Affiliates furnished to it by the other party or such other party's
Representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such documents or information can
be shown to have been (a) previously known by the party receiving such documents
or information, (b) in the public domain (either prior to or after the
furnishing of such documents or information hereunder) through no fault of such
receiving party, or (c) later acquired by the receiving party from another
source if the receiving party is not aware that such source is under an
obligation to another party hereto to keep such documents and information
confidential; provided, however, that following the Closings the foregoing
restrictions shall not apply to Purchaser's use of documents and information
furnished by Sellers hereunder concerning the New Jersey Business or the New
Jersey Assets, or the New York Business or the New York Assets. In the event the
transactions contemplated hereby are not consummated, upon the request of the
other party, each party hereto shall, and shall cause its Affiliates and their
respective Representatives to, promptly redeliver or destroy all copies of
documents and information furnished by the other party in connection with this
Agreement or the transactions contemplated hereby and certify to the other party
as to such destruction. This Section shall survive the Closing of this
transation.
Section 14.7 Waiver.
Any term or condition of this Agreement may be waived at any time by
the party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf
of the party waiving such term or condition. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
Section 14.7 Amendment.
This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by or on behalf of each party hereto.
Section 14.8 No Third Party Beneficiary.
The terms and provisions of this Agreement are intended solely for
the benefit of each party hereto and their respective successors or permitted
assigns, and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person other than any Person entitled to
indemnity under Article XI.
Section 14.9 No Assignment; Binding Effect.
Neither this Agreement nor any right, interest or obligation
hereunder may be assigned by any party hereto without the prior written consent
of the other party hereto, and any attempt to do so shall be void, except (a)
for assignments and transfers by operation of Law, and (b) that Purchaser may
assign any or all of its rights, interests and obligations hereunder (including
without limitation its rights under Article XI) to (i) a wholly-owned
subsidiary, provided that any such subsidiary agrees in writing to be bound by
all of the terms, conditions and provisions contained herein, (ii) any
post-Closing purchaser of the New Jersey Business or a substantial part of the
New Jersey Assets, (iii) any post-Closing purchaser of the New York Businesss or
a substantial part of the New York Assets, or (iv) any financial institution
providing purchase money or other financing to Purchaser from time to time as
collateral security for such financing, but no such assignment referred to in
clause (i) or (ii) shall relieve Purchaser of its obligations hereunder. Subject
to the preceding sentence, this Agreement is binding upon, inures to the benefit
of and is enforceable by the parties hereto and their respective successors and
assigns.
Section 14.10 Headings.
The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
Section 14.11 Jurisdiction and Service of Process.
Each of the parties hereto hereby irrevocably consents and submits
to the exclusive jurisdiction of the United States District Court for the
Eastern District of New York in connection with any dispute or other proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, waives any objection to venue in such District (unless such court lacks
jurisdiction with respect to such dispute or other proceeding, in which case,
each of the parties hereto irrevocably consents to the jurisdiction of the
courts of the State of New York in Nassau County in connection with such dispute
or other proceeding and waives any objection to venue in the state of New York)
and agrees that in personam service of any summons, complaint, notice or other
process relating to such dispute may be effected in the manner provided by
Section 14.1.
Section 14.12 Severability.
If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated herein is not affected in any manner materially adverse to any
party hereto.
Section 14.13 Governing Law.
This Agreement shall be governed by and construed in accordance with
the Laws of the State of New York applicable to contracts executed and performed
entirely in such state.
Section 14.14 Counterparts.
This Agreement may be signed in one or more counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received counterparts hereof signed by all of
the other parties hereto. This Purchase Agreement has been executed and
delivered by the parties as of the date first written above.
PREMIER HOME HEALTHCARE SERVICES, INC.
By:
-------------------------------------
Name:
Title:
STAR MULTI CARE SERVICES, INC.
By:
-------------------------------------
Name:
Title:
AMSERV HEALTH CARE OF NEW JERSEY, INC.
By:
-------------------------------------
Name:
Title:
PURCHASE AGREEMENT
Dated as of July 3, 2001
among
PREMIER HOME HEALTHCARE SERVICES, INC.
("Purchaser")
STAR MULTI CARE SERVICES, INC.
("Parent Seller")
and
AMSERV HEALTH CARE OF NEW JERSEY, INC.
("Subsidiary Seller")
Exhibits
Exhibit A Management Agreement
Exhibit B General Assignment and Xxxx of Sale
Exhibit C Assumption Agreement
Exhibit E Officers' Certificate of Sellers
Exhibit F Opinion of Counsel to Seller
Exhibit H Officer's Certificate of Purchaser
Exhibit I Secretary's Certificate of Purchaser
ii
Schedules
Section 1.1(a)(i) Real Property Leases
Section 1.1(a)(ii) Tangible Personal Property
Section 1.1(a)(iii) Personal Property Leases
Section 1.1(a)(iv) New Jersey Business Contracts
Section 1.1(a)(vi) Intangible Personal Property
Section 1.1(a)(vii)(A) Business Licenses Transferred
Section 1.1(a)(vii)(B) Business Licenses Not Transferred
Section 1.1(a)(viii) Vehicles
Section 1.1(b)(vi) Retained Real And Personal Property
Section 1.5(b)(i) Procedures and Policies Used in Preparing Closing
Statement
Section 2.3 No Conflicts
Section 2.4 Governmental Approvals And Filings
Section 2.5 Books And Records
Section 2.6 Financial Statements
Section 2.7 Absence Of Changes
Section 2.8 No Undisclosed Liabilities
Section 2.9(d) Subsidiary
Section 2.10 Legal Proceedings
Section 2.11 Compliance With Laws And Orders
Section 2.12(a) Benefit Plans; ERISA
Section 2.12(c) Benefit Plans; ERISA
Section 2.13(a) Notices of Defaults received under New Jersey Real
Property Leases
Section 2.13(b) [Intentionally Omitted]
Section 2.14 Tangible Personal Property
Section 2.15(a) Liens on Intellectual Property of by Sellers
Section 2.15(b) [Intentionally Omitted]
Section 2.16(a) Contracts
Section 2.17(b) [Intentionally Omitted]
Section 2.18 Insurance
Section 2.19(a) Affiliate Transactions
Section 2.20 Employees; Labor Relations
Section 2.21 Environmental Matters.
Section 2.22 Substantial Customers And Suppliers
Section 2.23 Accounts Receivable
Section 2.25(a) Exceptions to Title of Vehicles Owned by Sellers
Section 2.25(b) [Intentionally Omitted]
Section 2.26 Guarantees
Section 2.27 Entire Business
Section 2.28 Brokers
Section 2.30 Consents Of Existing Secured Lenders
Section 4.17 Existing Senior Indebtedness
Section 6.6 Third Party Consents
iii
