STOCK PURCHASE AGREEMENT
Exhibit 10.1
THIS STOCK PURCHASE AGREEMENT
(the “Agreement”) is made and entered into this 14th day of January 2009, by and
among Core Corporate Consulting Group, Inc., a Delaware corporation (“Buyer”)
and WoodCliff Healthcare Investment Partners, LLC, a Delaware limited liability
company (the “Seller”). The Buyer and the Seller are hereinafter sometimes
referred to collectively as the “Parties” or singly as a “Party.”
WHEREAS, the Seller owns
14,400 shares of Class A Series Preferred Stock, par value, $50.00 per share
(the “Preferred Stock”), and 1,739,130 shares of Common Stock, par value, $0.01
per share (the “Common Stock”), of Comprehensive Care Corporation, a Delaware
corporation (“CompCare”); and
WHEREAS, the Seller wishes to
sell the Shares to the Buyer, and the Buyer wishes to purchase the Shares from
the Seller, upon the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in
consideration of the premises and the mutual promises herein made, and in
consideration of the representations, warranties and covenants herein contained,
the Parties agree as follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions. As used in this
Agreement, the following terms shall have the definitions set forth
below:
“Agreement” means this Stock
Purchase Agreement and all amendments hereto.
“Business Day” means any day
other than a Saturday, Sunday or a day on which banks are permitted or required
to be closed in New York, New York.
“Buyer” has the meaning set
forth in the preface above.
“Closing” has the meaning set
forth in Section 2.3.
“Closing Date” has the meaning
set forth in Section 2.3.
“Common Stock” has the meaning
set forth in the preface above.
“CompCare” has the meaning set
forth in the preface above.
“Deposit” measn the $100,000
deposit made by Buyer in partial satisfaction of the Purchase Price and held by
Seller’s attorney in escrow.
“Governmental Entity” means any
government or subdivision thereof, whether domestic or foreign, or any
administrative, governmental or regulatory authority, agency, department,
division, commission, court, tribunal or body, whether domestic, foreign or
multinational.
“Incumbent Directors” means
Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, and Xxxxxxx Xxxxx.
“Law” means any federal, state,
local or foreign law, statute, code, ordinance, rule, regulation, judgment,
order, injunction, decree, arbitration award, agency requirement, license or
permit of any Governmental Entity.
“Party” has the meaning set
forth in the preface above.
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“Person” means an individual,
partnership, corporation, limited liability company, association, joint stock
company, trust, joint venture, unincorporated organization or Governmental
Entity.
“Preferred Stock” has the
meaning set forth in the preface above.
“Purchase Price” means
$1,500,000 which consists of the Deposit plus $1,400,000 to be delivered at
Closing.
“SEC” means the Securities and
Exchange Commission
“Securities Act” means the
Securities Act of 1933, as amended.
“Securities Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“Seller” has the meaning set
forth in the preface above.
“Shares” means the Preferred
Stock and the Common Stock.
1.2 Use of Words and Phrases.
“Herein,” “hereby,” “hereunder,” “hereof,” “hereinabove,” “hereinafter” and
other equivalent words refer to this Agreement as a whole and not solely to the
particular Section of this Agreement in which any such word is used. The
definitions set forth in Section 1.1 hereof include both the singular and the
plural. Whenever used in this Agreement, any pronoun shall be deemed to include
both singular and plural and to cover all genders. All references to dollars in
this Agreement shall mean U.S. dollars.
ARTICLE
II
PURCHASE
AND SALE
2.1 Purchase and Sale of the
Shares. Upon the terms and subject to the conditions of this Agreement,
at the Closing, the Seller shall sell to the Buyer, and the Buyer shall purchase
from the Seller, the Shares.
2.2 Purchase Price; Allocation of Purchase
Price. The aggregate purchase price for the Shares shall be $1,500,000 in
cash (the “Purchase Price”). The Purchase Price shall be allocated as
follows: (i) $1,100,000 as to the Preferred Stock and (ii) $400,000 as to the
Common Stock. At closing the Deposit shall be applied towards payment
of the Purchase Price.
2.3 Closing. The closing of the
transactions contemplated by this Agreement (the “Closing”) shall take place at
the offices of CompCare, commencing at 11:00 a.m. EST on January 14, 2009 or
within one (1) Business Day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other place and date
as the Parties may mutually determine (the “Closing Date”).
2.1 Actions Prior to or at
Closing. At the Closing,
(a) the
Seller will deliver to the Buyer
(i) stock
certificates evidencing the Shares duly endorsed in blank, or an affidavit of
lost stock certificates, accompanied by
(ii) stock
powers duly executed in blank;
(iii) a
receipt for the Purchase Price;
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(iv) a copy of
the resolution of the Seller authorizing this Agreement and the transactions
contemplated hereby; and
(v) a copy of
the resolutions of Hythiam, Inc., as the managing member and sole equity holder
of the Seller, authorizing this Agreement and the transaction contemplated
hereby.
(b) the Buyer
will deliver to the Seller
(i) the
Purchase Price minus the Deposit, by wire transfer in immediately available
funds as directed by the Seller.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF SELLER
The
Seller represents and warrants to the Buyer that the statements contained in
this Article III are correct and complete as of the Agreement Date and will be
correct and complete as of the Closing Date.
3.1 Capacity of Seller. The Seller
is a limited liability company duly formed and validly existing under the laws
of the State of Delaware. The Seller has full limited liability company power
and authority to conduct its business as it is presently conducted, to enter
into this Agreement, to carry out the Seller’s obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Seller, and assuming due execution and delivery by
the Buyer, this Agreement constitutes a legal, valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting rights of creditors
generally or by general principles of equity.
3.2 Noncontravention. Neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any Law to the Seller is subject.
Neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated hereby, will violate any provision of the articles
of incorporation or bylaws (or similar governing documents) of the Seller. The
Seller is not a party to any agreement, arrangement or understanding restricting
or otherwise relating to the transfer or voting of said Shares.The Seller is not
required to give notice to, file with or obtain authorization, consent or
approval of any Governmental Entity or any other third party in order for the
Seller to perform its obligations under this Agreement.
3.3 Title to Shares. The Shares
being sold hereunder are all of the Shares owned by the Seller and the Seller
has good and valid title, free and clear of all liens and encumbrances and
claims whatsoever to said Shares, and the Seller has full lawful right, power,
capacity, and authority to sell, assign, transfer and deliver these Shares to
the Buyer pursuant to the terms of this Agreement, to execute and deliver this
Agreement, and to consummate the transactions contemplated hereby, and upon
acquisition of said Shares by the Buyer pursuant to the terms of this Agreement,
the Buyer shall acquire good and valid title to such Shares, free and clear of
all liens, encumbrances and claims whatsoever.
3.4 Litigation. There is no suit,
action, claim, investigation or proceeding pending, or, to the knowledge of
Seller, threatened, against the Seller, nor is there any judgment, decree,
injunction or order of any applicable Governmental Entity or arbitrator
outstanding against the Seller which prevent or affect the consummation of the
transactions contemplated by this Agreement.
3.5 Brokers’ Fees. The Seller has
no any liability or obligation to pay any fees or commissions to any broker,
finder or agent with respect to the transactions contemplated by this
Agreement.
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ARTICLE
IV
REPRESENTATIONS
AND WARRANTIESOF BUYER
The Buyer
represents and warrants to the Seller that the statements contained in this
Article IV are correct and complete as of the Agreement Date and will be correct
and complete as of the Closing Date.
4.1. Organization, Qualification, and
Corporate Power. The Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware.
4.2. Authorization of Transaction.
The execution, delivery and performance of this Agreement by the Buyer has been
duly authorized and approved by the Buyer’s board of directors. The Buyer has
full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder.
Assuming due execution and delivery by the Seller, this Agreement constitutes
the valid and legally binding obligation of the Buyer, enforceable in accordance
with its terms and conditions.
4.3. Investment. The Shares are
being acquired by the Buyer in a private transaction for its own account and not
with a view to, or for offer or resale in connection with, any distribution
within the meaning of Section 2(11) of the Securities Act. The Buyer hereby
acknowledges that the Shares are unregistered and must be held indefinitely
unless they are subsequently egistered under the Securities Act or an exemption
from such registration is available. The Buyer acknowledges and agrees that it
will not make any disposition of the Shares which will or may involve any of the
Companies or the Seller in a violation of the Securities Act, the Securities
Exchange Act or of any state securities laws. The Buyer is an
Accredited Investor as such term is defined in Rule 501 promulgated under the
Securities Act, is able to hold the Shares indefinitely and bear the loss of the
entire Purchase Price and the entire value of the Shares.
4.4. Risks of
Investment. The Buyer is a sophisticated investor with
knowledge and experience in business and financial matters, has reviewed the
public reports filed by CompCare with the SEC under the Securities Exchange Act,
including the going-concern disclosures, forward-looking statements and risk
factors contained therein, and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and risks in holding the
Shares. Seller has made no representations or warranties to Buyer
regarding the business, financial condition or prospects of CompCare, and the
Buyer has not relied on any representations or warranties with respect to the
value of the Shares or the current or further business, condition or prospects
of CompCare.
4.5. Brokers’ Fee. The Buyer has no
liability or obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transaction contemplated by this
Agreement.
ARTICLE
V
COVENANTS;
ADDITIONAL AGREEMENTS
5.1 General. Each of the Parties
will use its reasonable best efforts to take all action and to do all things
necessary in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in Article VI).
5.2 Regulatory Matters and
Approvals. Each of the Parties will give any notices to, make any filings
with, and use its reasonable best efforts to obtain any authorizations, consents
and approvals of Governmental Entities or other third parties which may be
required to consummate the transactions contemplated by this
Agreement.
5.3 Exclusivity. Until the earlier
of January 16, 2009 or the termination of this Agreement, the Seller will not
initiate the submission of any proposal or offer from any Person relating to the
acquisition of all or substantially all of the Shares.
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5.4 Resignation of Incumbent
Directors. At Closing, Buyer shall have received the resignation of the
Incumbent Directors as directors of CompCare or from any other offices the
Incumebt Directors hold with respect to CompCare, effective as of the
Closing.
5.5 Further Assurances. Following
the Closing, each Party agrees to cooperate fully with the other Party and to
execute such further instruments, documents and agreements and to give such
further written assurances, as may be reasonably requested by any other Party at
that other Party's cost to give effect to the transactions described herein and
contemplated hereby.
ARTICLE
VI
CONDITIONS
TO OBLIGATION TO CLOSE
6.1 Conditions to Obligation of the
Buyer. The obligation of the Buyer to consummate the transactions to be
performed by it in connection with the Closing is subject to the satisfaction of
the following conditions:
(a) the
representations and warranties of the Seller set forth in this Agreement shall
be true and correct in all material respects at and as of the
Closing;
(b) the
Seller shall have performed and complied with all of its covenants hereunder in
all material respects through the Closing;
(c) there
shall not be any judgment, order, decree, stipulation, injunction or charge in
effect preventing consummation of any of the transactions contemplated by this
Agreement;
(d) no
litigation shall be pending (i) challenging or seeking to delay the consummation
of any of the transactions contemplated by this Agreement, or (ii) asserting the
illegality of or seeking to render unenforceable any material provision of this
Agreement;
(e) the Buyer
shall have received the resignations, effective as of the Closing Date, or
evidence of removal as of the Closing, of the Incumbent Directors as directors
of CompCare and each subsidary thereof, and from any other offices the Incumbent
Directors hold with respect to CompCare or any subsidary thereof;
(f) the Buyer
shall have received the documents set forth in Section 2.4 required to be
delivered by the Seller; and
(g) all
actions to be taken by the Seller in connection with the consummation of the
transactions contemplated hereby and all certificates, opinions, instruments and
other documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Buyer.
The Buyer
may waive any condition specified in this Section 6.1 by a writing so stating
delivered to the Seller at or prior to the Closing.
6.2 Conditions to Obligation of
Seller. The obligation of the Seller to consummate the transactions to be
performed by it in connection with the Closing is subject to satisfaction of the
following conditions:
(a) the
representations and warranties of the Buyer set forth in this Agreement shall be
true and correct in all material respects at and as of the Closing
Date;
(b) the Buyer
shall have performed and complied with all of its covenants hereunder in all
material respects through the Closing;
(c) there
shall not be any judgment, order, decree, stipulation, injunction or charge in
effect preventing consummation of any of the transactions contemplated by this
Agreement;
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(d) the Buyer
shall have delivered to the Seller the Purchase Price;
(e) all
actions to be taken by the Buyer in connection with the consummation of the
transactions contemplated hereby and all certificates, opinions, instruments and
other documents required to effect the transactions contemplated hereby will be
reasonable satisfactory in form and substance to the Seller.
The
Seller may waive any condition specified in this Section 6.2 by a writing so
stating delivered to the Buyer at or prior to the Closing.
6.3 Deemed Waiver. If either Party
is not obligated to consummate the Closing pursuant to this Agreement, but
nevertheless elects to consummate the Closing, and the other Party is obligated
to consummate the Closing, the Parties shall proceed with the consummation of
the Closing as if all Parties were obligated to do so, and the Party who is not
obligated to proceed but elects to do so shall be deemed to have specifically
waived in writing, as provided in Section 6.1 and Section 6.2, as the case may
be, the fulfillment of the condition or conditions, the nonfulfillment of which
excused the obligation of said Party to perform pursuant to this Agreement as
contemplated by Section 6.1 and Section 6.2, as the case may be.
ARTICLE
VII
TERMINATION
7.1 Termination of Agreement. The
Parties may terminate this Agreement as provided below:
(a) the
Parties may terminate this Agreement by mutual written consent at any time prior
to the Closing Date;
(b) the Buyer
(if the Buyer is not then in breach of this Agreement) may terminate this
Agreement by giving written notice to the Seller at any time prior to Closing in
the event the representations and warranties of the Seller set forth in this
Agreement shall not be true and correct in all material respects;
(c) the
Seller (if the Seller is not then in breach of this Agreement) may terminate
this Agreement by giving written notice to the Seller at any time prior to
Closing in the event the representations and warranties of the Buyer set forth
in this Agreement;
(d) Either of
the Parties may terminate this Agreement if any court or Governmental Entity has
issued a final and non-appealable order, decree or ruling permanently
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement.
7.2 Effect of
Termination.
(a) Except
as hereinafter provided in this Section 7.2, if the Parties terminates this
Agreement pursuant to Section 7.1(a), all rights and obligations of the Parties
hereunder shall terminate without any liability of either Party.
(b) In
the event the Buyer terminates this Agreement pursuant to Section 7.1(b), the
Buyer shall be entitled to pursue all legal and equitable remedies against the
Seller for such breach or failure to perform, including, but not limited to,
specific performance.
(c) In
the event the Seller terminates this Agreement pursuant to Section 7.1(c), the
Seller shall be entitled to pursue all legal and equitable remedies against the
Buyer for such breach or failure to perform, including, but not limited to,
specific performance.
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(d) All
costs, fees and expenses (including reasonable attorneys’ fees and expenses)
incurred by the nonbreaching Party in connection with enforcing its rights
hereunder with respect to a breach shall be paid by the breaching
Party.
ARTICLE
VIII
SURVIVAL;
INDEMNIFICATION
8.1 Survival. The Parties agree
that the representations and warranties contained in this Agreement shall
survive the Closing
8.2 Indemnification of the Buyer.
From and after the Closing:
The
Seller agrees to indemnify the Buyer and hold it harmless against and in respect
of any and all damages, losses, expenses, costs, obligations and liabilities,
including reasonable attorneys’ fees (collectively, “Losses”), incurred by the
Buyer that arise or result from (as determined in each case by an order of a
court of competent jurisdiction or by written agreement of the Seller and the
Buyer) any breach of any of the representations or warranties contained in this
Agreement or contained in any document delivered at the Closing by the Seller
pursuant to this Agreement.
8.3 Indemnification of the Seller.
From and after the Closing, the Buyer agrees to indemnify the Seller and hold
the Seller harmless against and in respect of any and all Losses which arise or
result from any breach of any of the representations or warranties of the Buyer
contained in this Agreement or in any document delivered pursuant to this
Agreement.
ARTICLE
IX
MISCELLANEOUS
9.1 Press Releases and Public
Announcements. Neither Party shall issue any press release or make any
public announcement relating to the subject matter of this Agreement without the
prior written approval of the other Party; provided, however, that either Party
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its best
efforts to advise the other Party prior to making the disclosure).
9.2 No Third-Party Beneficiaries.
This Agreement shall not confer any rights or remedies upon any Person other
than the Parties and their respective successors and permitted
assigns.
9.3 Agreement. This Agreement
constitutes the entire agreement among the Parties and supersedes any prior
understandings, agreements or representations by or among the Parties, written
or oral, to the extent they relate in any way to the subject matter
hereof.
9.4 Succession and Assignment.
This Agreement shall be binding upon and inure to the benefit of the Parties
named herein and their respective successors and permitted assigns. No Party may
assign either this Agreement or any of its rights, interests or obligations
hereunder without the prior written approval of the other Party.
9.5 Counterparts. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same instrument.
For purposes hereof, facsimile copies hereof and facsimile signatures hereof
shall be authorized and deemed effective.
9.6 Headings. The Section headings
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.
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9.7 Notices. All notices,
requests, demands, claims, and other communications hereunder will be in
writing. Any notice, request, demand, claim or other communication hereunder
shall be deemed duly given upon receipt if it is sent by registered or certified
mail, return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:
If to
Seller:
Woodcliff
Healthcare Investment Partners, LLC
c/o
Hythiam, Inc., its Managing Member
00000
Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn:
Xxxx Xxxxxxxx, President & COO
Fax: (000)
000-0000
Email: xxxxxxxxx@xxxxxxx.xxx
If to
Buyer:
Core
Corporate Consulting Group, Inc.
0000
Xxxxxxxxxx Xxxx
Xxxxx
000
Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn:
Xxxxx Xxxxxx
Fax:
Email:
xxxxx@xxxx.xxx
Either
Party may also send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail or electronic mail), but no such notice, request,
demand, claim or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Either Party
may change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
9.8 Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to any choice or conflict of law provision or
rule (whether of the State of Delaware or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
Delaware.
9.9 Amendments and Waivers. The
Parties may mutually amend any provision of this Agreement at any time prior to
the Closing. No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by each of the Parties. No waiver
by either Party of any default, misrepresentation or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent occurrence.
9.10 Severability. Any term or
provision of this Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other
jurisdiction.
9.11 Construction. The Parties have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or disfavoring either Party
by virtue of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local or foreign statute or law shall be deemed
also to refer to all rules
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and
regulations promulgated thereunder, unless the context otherwise requires. The
word “including” shall mean including without limitation.
9.12 Fees and Expenses. Except as
otherwise provided herein, the reasonable costs, fees and expenses incurred in
connection with the negotiation, drafting and execution of this Agreement and
the consummation of the transactions contemplated hereby (including the
reasonable fees and expenses of counsel, accountants and appraisers) shall be
paid by the Party incurring such fees or expenses.
IN WITNESS WHEREOF, the
Parties hereto have executed this Agreement on the date first above
written.
| Core Corporate Consulting Group, Inc. | |
|
By:
|
/s/ Xxxxx X. Xxxxxx |
| Name: | Xxxxx X. Xxxxxx |
| Its: | President |
| Woodcliff Healthcare Investment Partners, LLC | |
| By: | Hythiam, Inc. |
| Its: | Managing Member |
|
By:
|
/s/ Xxxxxx X. Xxxxxx |
| Name: | Xxxxxx X. Xxxxxx |
| Its: | Chairman & CEO |
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