PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into this 14th day of September, 1998,
among PREMIER HOME HEALTH CARE SERVICES, INC., a New York corporation
("Purchaser"), NATIONAL CARE RESOURCES-NEW YORK, INC., a Colorado corporation
("NCR"), J.J. CARE RESOURCES, INC., a New York corporation ("Seller"), and MEDIX
RESOURCES, INC., a Colorado corporation ("Medix").
RECITALS
Seller is the sole owner of two businesses licensed by New York State as
home health care providers which conduct business under the names STAT
Healthcare Services ("STAT") and Xxxxx Home Care Services ("Xxxxx"),
collectively herein referred to as the "Business". Purchaser desires to purchase
selected Assets (as defined below) of the Business as described herein. Seller
will retain and be responsible for all its liabilities and obligations as of
such closing. Seller is a wholly-owned subsidiary of NCR, which in turn is a
wholly-owned subsidiary of Medix. Medix, NCR and Seller desire to enter into
these transactions with Purchaser.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and in reliance upon the representations and warranties
contained herein, the parties agree as follows:
1. DEFINITIONS
The following terms used in this Agreement shall, unless the context requires
otherwise, have the meanings designated below:
1.1 ASSETS means the following:
(a) goodwill and all slogans or trade names, including the names "STAT",
"Xxxxx" and the other names listed in the Seller's Disclosure
Schedule, and all customer lists relating to the customers of the
Business;
(b) Seller's policy and procedure manuals with respect to the Business;
(c) all of Seller's contracts and other arrangements with its customers
in respect of the Business set forth in Schedule 1.1(c) hereto
annexed;
(d) patient lists, patient records, patient files and other patient
related materials and property with respect to the patients of STAT
and Xxxxx as of the Closing Date set forth in Schedule 1.1(d) STAT
and 1.1(d) Xxxxx hereto ("Patients");
(e) employee lists, employee files, other business files, papers, books,
records, sales and advertising materials and records, sales and
purchase correspondence, correspondence with government agencies and
any correspondence with respect to threats of litigation with
respect to the Business.
1.2 CLOSING DATE has the meaning given to it in Section 11.1
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1.3 CODE means the Internal Revenue Code of 1986, as amended.
1.4 DISCLOSURE SCHEDULE means the schedules and associated documents which
were or are to be delivered (a) by Seller, NCR and Medix initialed by
them, and which will be updated at Closing. ("Seller's Disclosure
Schedule"), and (b) by Purchaser to be initialed and updated at Closing
("Purchaser's Disclosure Schedule").
1.5 PURCHASER means Premier Home Health Care Services, Inc., a New York
corporation.
1.6 TAX OR TAXES means any federal, state, local or foreign income,
gross receipt, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes
under Code Section 59A), custom duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated or
other tax of any kind whatsoever, including any interest, penalty or
addition, whether disputed or not.
1.7 TAX RETURN means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule
or attachment, and including any amendment thereof.
1.8 UNIFORM COMMERCIAL CODE means the Uniform Commercial Code applicable in
the State of New York.
1.9 UNPROFITABLE, for the purposes of this Agreement, means that the cost of
services that STAT or Xxxxx pays to health care aides or other providers
of services to patients (including payroll taxes and other fringe costs)
exceeds the billing rate for such services.
1.10 PARTY means Purchaser as one party, and Medix, NCR and Seller, together as
one party, except where one or more of them is necessarily referred to
separately by the clear context of a provision hereof.
1.11 TRANSACTION means the purchase and sale of the Assets and the related
matters and events contemplated by this Agreement.
1.12 Other terms are as defined herein.
2. ACQUISITION OF THE ASSETS
2.1 PURCHASE OF ASSETS. Subject to the terms and conditions set forth in this
Agreement, at the Closing, Purchaser shall purchase from Seller, and
Seller shall sell to Purchaser, the Assets, free and clear of all
encumbrances, liens, security interests or other claims.
2.2 PURCHASE PRICE FOR SPECIFIC ASSETS; ALLOCATION OF PURCHASE PRICE;
ADJUSTMENT
(a) The aggregate purchase price for the Assets (the "Purchase
Price") is $1,650,000 allocated $1,254,000 for STAT and $396,000
for Xxxxx (subject to Section 2.2(b) hereof), payable as
follows: $1,000,000 in immediately-available funds at the
Closing and the issuance of two promissory notes payable to the
Seller in the principal amounts of $325,000 each, the first of
which ("Promissory Note A") shall be fully negotiable immediately
upon delivery to Seller, bearing interest at the rate of 4% per
annum until paid in full and maturing nine months from the
Closing Date, and the second ("Promissory Note B") shall be
non-negotiable, bearing interest at the rate of 4% per annum on
the principal balance as adjusted or offset subject to adjustment
and offset as provided in Subdivision (b)(iii) of this Section
and in Section 10.2 hereof, and maturing fifteen months after the
Closing Date. (Promissory Note A and Promissory Note B are herein
the "Notes").
(b) The Purchase Price agreed to above assumes that the annualized
xxxxxxxx for the Business is $6,500,000 at the billing rates in
force on the Closing Date. The principal amount of Promissory
Note B shall be subject to adjustment up or down no later than
ninety days after the Closing Date by the issuance of a
replacement Promissory Note B in the adjusted principal amount.
Annualized xxxxxxxx shall be determined by taking the average
weekly xxxxxxxx during the Test Period (as defined below) and
multiplying that average by 52. Any post-Closing adjustment
shall be applied solely as an offset to the principal amount of
Promissory Note B. The Purchase Price shall be adjusted as
follows:
(i) The base annualized xxxxxxxx for STAT and Xxxxx, for the purpose of
calculating the adjustment, if any, shall be $5,000,000 and
$1,500,000, respectively;
(ii) There shall be no adjustment in the Purchase Price if during the
four full calendar weeks commencing September 19, 1998 (the "Test
Period"), the annualized xxxxxxxx of Purchaser for services to
Patients transferred to Purchaser by the Seller are not in excess of
$60,000 below or above the base annualized xxxxxxxx;
(iii) For any reduction in annualized xxxxxxxx of Purchaser for
services during the Test Period to patients transferred from STAT
and Xxxxx in excess of $60,000, in the aggregate, on an
annualized basis, the Purchase Price shall be adjusted downward
by 26% of the portion of the short-fall attributable to former
STAT patients and by 23% of the portion of the short-fall
attributable to former Xxxxx patients, up to a maximum of
$325,000 and offset against the principal amount of Promissory
Note B and shall be reflected in the replacement Promissory Note
B provided for above; and
(iv) For any increase in annualized xxxxxxxx of Purchaser for services
during the Test Period to patients transferred from STAT and Xxxxx
in excess of $60,000, in the aggregate, on an annualized basis, the
Purchase Price shall be adjusted upward in the same manner as the
downward adjustment provided for in subdivision (iii) above is
calculated.
(c) Any transfer or assignment to Purchaser by Seller of any contract
which requires the consent or approval of any third party shall
be made subject to such consent or approval being obtained.
Medix, NCR and Seller will obtain the consent of the other
parties to any such contract for the assignment thereof to
Purchaser. If such consent is not obtained, or if an attempted
assignment thereof would be ineffective so that Purchaser would
not in fact receive all such rights, Medix, NCR and Seller shall
take all reasonable action (including, without limitation, the
appointment of Purchaser as attorney-in-fact for Seller) and do
or cause to be done all such things as shall in the reasonable
judgment of Purchaser be necessary or proper to assure that
Purchaser obtains the benefits under any such contracts.
(d) Anything to the contrary herein notwithstanding, there shall be
excluded from the annualized xxxxxxxx of Purchaser during the
Test Period any xxxxxxxx for services rendered by Purchaser to
any entity that did no either (i) consent in writing to the
assignment to Purchaser of the entity's contract with Seller, or
(ii) executed a new contract from such entity with Purchaser with
the provision by Purchaser of care to the former patients of
Seller, STAT and Xxxxx.
(e) The Purchase Price shall be allocated to the Assets as set forth in
Section 2.2(a) hereof. The parties agree that they will not take a
position on any income tax return or before any governmental agency
or in any judicial proceeding that is inconsistent in any way with
this allocation.
2.3 LIABILITIES RETAINED BY SELLER, NCR AND MEDIX.
Except as otherwise expressly stated herein, Purchaser shall not assume or
be bound by or become obligated to pay any liabilities or obligations of
Seller, NCR, Medix or the Business, including without limitation the
following, to the extent based upon acts or events through the Closing
Date or to the extent attributable to a period prior to and through the
Closing Date (the "Retained Liabilities"):
(a) liabilities for personal injuries, or property damage;
(b) liabilities for any and all claims by any employee or former
employee of Seller, NCR, Medix, STAT or Xxxxx, including but not
limited to compensation, vacation pay, sick pay, bonus or any
payments due or accrued or contingently owed, which are itemized
by Seller in Schedule 2.3b annexed hereto, all of which shall be
paid by Seller pursuant to Section 3.22(i) hereof or as provided
hereinbelow; and with respect to vacation pay, liabilities for
any such pay that accrues through December 31, 1998 pursuant to
Seller's pre-Closing policies, which shall be estimated for each
affected employee in Schedule 2.3(b)-2 annexed hereto, and which
Seller will pay to the eligible employees as their rights to such
payments mature pursuant to such policies of Seller, with such
payments being sent by Seller to Purchaser for delivery to the
former employee.
(c) liabilities for claims alleging violation of applicable
environmental laws;
(d) liabilities for any claim for reimbursement or recoupment of funds
previously paid to Seller, NCR, Medix, STAT or Xxxxx, by any payor,
including without limitation, Medicare, Medicaid, insurance
companies, HMO's or other parties;
(e) any liability or obligation arising out of a breach or default by
Seller, NCR, Medix or the Business under any contract or
governmental permit or license;
(f) any claims, liabilities and obligations of any kind arising out of
the operation of the business of Seller, NCR, Medix or the Business
or any affiliate, parent or principal of any of them, or resulting
from the ownership or use of the Assets;
(g) any taxes imposed by any federal, state, county local or foreign
taxing authority, including but not limited to income, franchise,
gross receipts or value added taxes, or any interest, additions to
tax or penalties thereon, accrued for, applicable to or arising from
any period prior to and through the Closing; or
(h) legal, accounting or other professional fees of Seller, NCR, Medix
or the Business.
2.4 COLLECTION OF RECEIVABLES. The accounts receivable of the Business
for services provided through the Closing Date are not included in the
Assets and ownership thereof shall be retained by Seller. Said accounts
receivable shall be collected by Seller, but Seller shall do nothing in
the course of collecting the receivables that will interfere with the
transfer to Purchaser of the patients of STAT and Xxxxx or that will
disturb the relationship between Purchaser and the payors of said
accounts receivable. If Seller receives a payment that, in whole or in
part, is for services rendered on or after the Closing date, Seller
will immediately remit such sum to Purchaser. If Purchaser receives a
payment that, in whole or in part, is for services rendered by Seller
before the Closing Date, Purchaser will immediately remit such sum to
Seller. Seller shall be entitled to institute litigation against a
payor only if a receivable has not been paid within nine months after the
Closing Date, and with the prior written consent of Purchaser, which
consent shall not be unreasonably withheld.
3. REPRESENTATIONS AND WARRANTIES OF SELLER, NCR, MEDIX, STAT
AND XXXXX
Seller, NCR and Medix, jointly and severally represent and warrant to Purchaser
that the statements contained in this Section are true, correct and complete as
of the date of this Agreement, and as of the Closing Date, as follows:
3.1 ORGANIZATION AND QUALIFICATION. Each of Seller, NCR and Medix is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, NCR is duly qualified
and authorized to do business a sa foreign corporation and is in good
standing in New york, and Seller is a New York corporation in good
standing in New York. Each of Seller, NCR and Medix has all requisite
corporate power and authority to own, lease and operate its properties and
to carry on its business as now being conducted. The copies of the
Certificate of Incorporation and the Bylaws of each of Seller, NCR and
Medix, as amended to date, which have been delivered to Purchaser, are
complete and correct, and none of Seller, NCR or Medix is in default under
or in violation of any provision of its Certificate of Incorporation or
Bylaws.
3.2 AUTHORIZATION. This Agreement has been approved by all necessary corporate
action on behalf of Seller, NCR and Medix, has been duly and validly
executed by Seller, NCR and Medix, and the agreements, representations and
warranties contained herein constitute valid and binding obligations,
representations and warranties of each of Seller, NCR and Medix,
enforceable against each in accordance with their terms.
3.3 BULK SALE LAW. Seller is not required to comply with the bulk sale
provisions of the Uniform Commercial Code in connection with the
transactions contemplated hereby.
3.4 NO CONFLICTING AGREEMENTS. The execution and delivery of this Agreement,
and the non-competition agreements by Seller, NCR, Medix, STAT and
Xxxxx, do not, and consummation by them of the transactions contemplated
hereby will not: (i) violate any existing term or provision of any law,
regulation, order, writ, judgment, injunction or decree applicable to
Seller, NCR, Medix, the Business, or any of them, or the Assets,
(ii) conflict with or result in a breach of any of the terms, conditions
or provisions of the Certificate of Incorporation or Bylaws of
Seller, NCR, or Medix, or any of them, or of any agreement or
instrument to which Seller, NCR, Medix, or the Business is a party,
or (iii) result in the creation or imposition of any lien, charge,
security interest, encumbrance, restriction or claim upon the Assets.
3.5 MEDICARE/MEDICAID. Neither Seller nor the Business provides no services
that are billed by Seller to Medicare or to the Medicaid program and
Seller does not receive and for the three (3) years prior to the Closing
has not received any compensation from Medicare on the Medicaid program.
3.6 COMPLIANCE WITH APPLICABLE LAW. The Business has at all times been
conducted by Medix only through Seller, and Seller has at all times been
in full compliance with each legal requirement that is or was applicable
to the Business or to the conduct of its operations or the ownership or
use of any of its assets. No event has occurred or circumstance exists
that (with or without notice or lapse of time) (A) may constitute or
result in a violation by Seller of, or a failure on the part of Seller to
comply with, any legal requirement, or (B) may give rise to any obligation
on the part of Seller to undertake, or to bear all or any portion of the
cost of, any remedial action of any nature.
3.7 CONSENTS AND APPROVALS. The execution and delivery by Seller, NCR and
Medix of this Agreement, and the performance by each of Seller, NCR and
Medix of its obligations hereunder, does not require Seller, NCR or Medix
to obtain any consent, approval, agreement, or action of, or make any
filing with or give any notice to, any corporation, person, entity, or
firm or any public, governmental or judicial authority, including, without
limitation, any landlord, except such as have been duly obtained or made.
3.8 LITIGATION. There is no suit, claim, action or proceeding now pending or
to the best knowledge of Seller, after due inquiry and diligence,
threatened, before any court, administrative or regulatory body, or any
governmental agency which may result in any judgment, order, decree,
liability or other determination which will, or could prevent or have an
adverse effect upon the consummation of the transactions contemplated
hereby, and no employee of Seller, NCR, Medix, STAT or Xxxxx has asserted
a claim of unlawful discrimination, firing, or unlawful action of any
kind, except as set forth in Schedule 3.8. Neither Seller, NCR or Medix is
subject to any judgment, order or decree which has, or reasonably could be
expected to have, an adverse effect upon the Assets or the transaction. At
or prior to the Closing, Seller shall deliver to Purchaser a duplicate
original or a certified copy of an instrument unconditionally terminating
any litigation against Seller or the Business or affecting the Assets or
the Transaction except for litigation specified in the Seller's Disclosure
Schedule with reference to this Section 3.8.
3.9 OTHER CONTRACTS. Except as disclosed in Seller's Disclosure Schedule,
neither Seller, NCR or Medix or any officer, agent or representative of
any of them, has entered into any contract, agreement or commitment for
the sale of the Assets or any of the Assets, directly or indirectly, and
any such contract, agreement or commitment set forth in the Seller's
Disclosure Schedule will be terminated fully and unconditionally by
binding written instrument with a duplicate original or a certified copy
of such instrument delivered to Purchaser prior to the Closing.
3.10 SCHEDULES.
(a) Seller's Disclosure Schedule includes a separate schedule containing
an accurate and complete list and description of each of the
following categories:
(i) All patents, patent applications, patent licenses, trademarks,
trademark registrations, and applications therefor, service marks,
service names, trade names, copyrights and copyright registrations,
and applications therefor, wholly or partially owned or held by
Seller in respect of the Business or used in the operation of the
Business.
(ii) All fire, theft, casualty, liability and other Medix insurance
policies insuring Seller, NCR, Medix, STAT or Xxxxx in respect of
the Business, specifying with respect to each such policy the
name of the insurer, the risk Medix is insured against, the
limits of coverage, the deductible amount (if any), the premium
rate and the date through which coverage will continue by virtue
of premiums already paid. Such policies are with reputable
insurers licensed by New York State, provide adequate coverage
for all normal risks incident to Seller's assets, properties and
business operations and are in character and amount at least
equivalent to that carried by persons engaged in a business
subject to the same or similar perils or hazards.
(iii) All contracts, agreements, commitments or licenses relating to
patents, trademarks, trade names, copyrights, inventions, processes,
know-how, formulae or trade secrets to which Seller, NCR or Medix is
a party or by which it is bound.
(iv) All procedure and policy manuals of STAT and Xxxxx;
(v) All Governmental Approvals which have been issued to Seller, NCR,
Medix, STAT or Xxxxx in respect of the Business during the three
year period prior to the Closing (collectively, the "Seller
licenses"), and all reports by government or private regulatory or
administrative agencies to or concerning the Business or the Seller;
(vi) All institutional customers with which Seller has done business in
connection with the Business since January 1, 1997, setting forth
the commencement date of such business relationship (stating "prior
to 1997" if applicable) and the end of such relationship that has
terminated prior to the date hereof.
(vii) All current employees of Sellers, NCR, and Medix, with respect to
the Business, describing each as full-time (regularly 20 hours or
more per week) or part-time (regularly less than 20 hours per week),
describing the duties of each, as well as a list of all temporary or
part-time employees placed as supplemental staff in the course of
the Business from January 1, 1997 to date, together with salary,
wage rate, and other compensation of each employee.
(viii) All of the contracts, agreements, leases, licenses and commitments
listed on Seller's Disclosure Schedule are valid and binding,
enforceable in accordance with their respective terms, in full force
and effect and, except as otherwise specified in the Disclosure
Schedule, the enforceability thereof will not be affected by the
sale of Assets contemplated hereby, so that, after the Closing,
Purchaser will continue to be entitled to the full benefits thereof.
(ix) Except as disclosed in Seller's Disclosure Schedule, there is not
under any such contract, agreement, license or commitment any
existing default, or event which, after notice or lapse of time,
or both, would constitute a default or result in a right to
accelerate or loss of rights, and none of such contracts,
agreements, leases, licenses or commitments is, either when
considered singly or in the aggregate with others, unduly
burdensome, onerous or materially adverse to the Business, or its
properties, assets, earnings or prospects, or likely, either
before or after the Closing, to result in any material loss or
liability. None of said contracts, agreements, licenses or
commitments for the provision of services by the Business, is
Unprofitable. None of Seller's, NCR's or Medix's existing or
completed contracts in respect of the Business is subject to
renegotiating with any governmental body or other contracting
entity.
(x) True and complete copies of all contracts, agreements, leases,
licenses and other documents listed on Seller's Disclosure Schedule
(together with any and all amendments thereto) have been delivered
to Purchaser and initialed by Seller's President or Secretary and
identified with a reference to this Section of this Agreement.
3.11 BROKERS. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Seller, NCR and Medix
directly with representatives of Purchaser, without the intervention of
any person on behalf of Seller or Medix in such manner as to give rise to
any valid claim by any person against any party hereto for a finder's fee,
brokerage commission, or similar payment.
3.12 NO KNOWN ADVERSE EFFECTS. As of the date hereof and as of the Closing
Date, except for general economic conditions and public information
concerning health care regulatory and funding matters and the health care
industry generally, there are no facts known to Seller, NCR or Medix or to
their officers, directors or employees after due inquiry which have not
been set forth in writing in this Agreement or disclosed in the other
documents, certificates, or written statements furnished to Purchaser by
or on behalf of Seller or Medix in connection with this Agreement or the
Transaction or referred to specifically herein, and which materially and
adversely affect or may in the future materially and adversely affect, the
Assets in the hands of Purchaser or which would or may in the future
materially and adversely affect the Purchaser's ability to operate the
Business.
3.13 TAXES. Seller, NCR and Medix jointly and severally agree to pay all sales
and transfer taxes arising out of the transfer of the Assets and shall be
responsible for all personal property taxes for the business of Seller
through the date of the Closing. Purchaser shall not be responsible for
any business, occupation, withholding or similar Tax, or any Taxes of any
kind related to the Assets or the Business for any period prior to the
Closing, all of which Seller, NCR and Medix agree to pay from the Purchase
Price at the Closing if then due. At or prior to the Closing, Seller, NCR
and Medix will file with the appropriate tax authorities all returns,
forms and schedules for withholding tax and all other taxes (federal,
state and local that are due or ascertainable up to and including the
Closing Date, including wiltholding and all payroll taxes and mandatory
payroll related charges for all payroll periods ended on or before the
Closing Date. Seller shall deliver to Purchaser at the Closing copies
thereof, together with proof of payment of all such taxes and interest and
penalties, if any. At the Closing, Seller shall deliver to Purchaser a
list of all taxes of any kind coming due after the closing, the due date
on each such tax and a reasonable estimate of the amount thereof which
shall not exceed in the aggregate $4,500.00. Seller, NCR and Medix agree
to file any such return form and schedule within ten (10) days after the
Closing, or by the time they are due to be filed without penalty, and to
pay the tax with interest and penalty, if any, and promptly after filing
and payment, to deliver to Purchaser copies of such filed documents and
proof of payment. If any such document or payment is challenged by a
taxing authority, Seller, NCR and Medix shall promptly deliver to
Purchaser copies of any related notice or other communication, and any
response thereto.
3.14 INTELLECTUAL PROPERTY. Seller's use of the name "STAT", "Xxxxx" and
every other trade name, service name or logo currently used by Seller
in the conduct of the Business does not conflict with the rights of any
third party. Seller has filed all such instruments and documents as
are required for it duly to do business in the State of New York under
the names "STAT" or "Xxxxx". Copies of same are annexed hereto as
Exhibit 3.14.
3.15 JCAHO ACCREDITATION. STAT and Xxxxx are validly accredited by JCAHO.
Copies of such accreditations are annexed hereto as Exhibit 3.15.
3.16 NO CHANGE IN RELATIONS WITH CUSTOMERS. Except as otherwise specified in
Seller's Disclosure Schedule, none of Seller, NCR, Medix, or the Business
or any of their officers or directors, has knowledge that any customers of
the Business intend to cease doing business with the Business, or
materially to alter the amount of the business that they are presently
doing with Seller, whether as a result of the transactions contemplated
hereby or otherwise.
3.17 COMPLIANCE WITH ENVIRONMENTAL LAWS. None of Seller, NCR,Medix, STAT
or Xxxxx, owns any real property with respect to or in connection with the
Business and each of them has been at all times prior, and presently
is, in compliance with all federal and state environmental statutes
or laws concerning environmental protection and the use or disposal of
hazardous substances at or in respect of its leased real property.
Purchaser shall not incur any environmental liability as a result of
actions or omissions by Seller, NCR, Medix, STAT or Xxxxx, or any of
their predecessors or affiliates.
3.18 FINANCIAL STATEMENTS.
(a) The following financial statements have been delivered to Purchaser:
(i) by Medix, copies of its audited financial statements for the
fiscal years ended December __, 1996 and December 28, 1997,
and its unaudited financial statements for the three months
ended March 31, 1998 and June 30, 1998;
(ii) by Seller, copies of its unaudited financial statements with
respect to the Business for the fiscal years ended on or about
December 31, 1996 and December 31, 1997, and for the three
months ended March 31, 1998 and June 30, 1998; and
(b) The Financial Statements are based upon the information contained in
the books and records of Seller and fairly and accurately present
the financial condition of the Business as of the dates thereof and
results of operations for the periods referred to therein.
3.19 NO MATERIAL ADVERSE CHANGES. Since the latest sheet date set forth in the
Financial Statement, and up to and including the date of this Agreement,
there has been no change materially adverse in the Business, or in its
assets, financial condition, gross profit, operating results, customer,
employee or supplier relations, condition or prospects, except as
heretofore disclosed in writing to the Purchaser. From the date of this
Agreement, up to and including the Closing Date, there will be no such
material adverse change. If, in Purchaser's reasonable opinion, a material
adverse change occurred, or occurs hereafter, Purchaser, at its option,
may terminate the transaction contemplated herein.
3.20 ABSENCE OF DEVELOPMENTS. Since Seller's acquisition of the Business of
Xxxxx on April 17, 1996 and of STAT on July 17, 1996, Seller, NCR and
Medix have conducted the Business only through Seller, STAT and Xxxxx, and
only through employees and other staffing persons which were hired and
retained by Seller, STAT or Xxxxx. Since the date of such acquisition and
as of the date hereof and as of the Closing Date, Seller in respect of the
Business has:
(a) conducted operations of the Business only in the regular and
ordinary course and in compliance with all applicable laws and
regulations;
(b) maintained reasonable kinds and amounts of business insurance
coverage;
(c) committed no waste of assets;
(d) not disposed or otherwise changed the nature of any Asset other than
in the ordinary course of business;
(e) not created or suffered to exist any lien, charge or encumbrance on
any Asset or incurred any indebtedness for borrowed money other than
in the ordinary course which is secured by one or more of the
Assets;
(f) used its best efforts to maintain and preserve its business
organization intact and maintain its re- lationships with suppliers,
employees, customers and others;
(g) refrained from making any material capital expenditures or
commitments for additions to the property, plant or equipment or
entering into transactions which could materially alter or affect
operations;
(h) not experienced any changes in reimbursement or reimbursement
policies from third-party payers as a result of changes in third
party payor policies, practices, procedures or schedules;
(i) not engaged in any unusual or novel methods of billing and
collection, purchase, sale, lease, management, equipment servicing
or repair, accounting or operation that vary from Seller's usual and
customary past practice; and not changed any aspect of its procedure
for maintaining its books of account and records.
3.21 TAX MATTERS. As of the date hereof and the Closing Date:
(a) Seller, NCR, and Medix each has filed all Tax Returns that it was
required to file in connection with the Business. All such Tax
Returns were correct and complete in all material respects. All
Taxes owed by Seller, NCR and Medix with respect to the Business
(whether or not shown on any Tax Return) have been paid. None of
Seller, NCR or medix is currently the beneficiary of any
extension of time within which to file any such Tax Return. No
claim has ever been made by an authority in a jurisdiction where
Seller, NCR or Medix does not file Tax Returns that it is or may
be subject to taxation by that jurisdiction. There are no
encumbrances on any of the Assets that arose in connection with
any failure (or alleged failure) to pay any Taxes.
(b) Each of Seller, NCR and Medix has withheld and paid all Taxes
required to have been withheld and paid by it in connection with
amounts paid or owing to any employee, independent contractor,
creditor or, shareholder or the Business or any third party that has
dealt with the Business.
(c) There is no dispute or claim concerning any liability for Taxes of
Seller, NCR, Medix, or the Business, in connection with the Business
(i) claimed or raised by any authority in writing or orally with any
directors or officers of Seller, NCR, or Medix, or (ii) as to
which any such person has knowledge based upon personal contact
with any agent of such authority. The Seller's Disclosure Schedule
lists all federal, state, local and foreign income Tax Returns
filed by Medix, NCR, Seller, or the Business, or any predecessor
with respect to the Business for taxable periods ended on or after
December 31, 1992, and indicates those Tax Returns that currently
are the subject of audit. The Seller has delivered to the Purchaser
correct and complete copies of all federal Income Tax Returns,
examination reports, and statements of deficiencies filed,
assessed against or agreed upon with respect to the Business by
Medix, NCR, Seller, or their predecessors since December 31, 1992.
3.22 EMPLOYEES.
(a) Except as disclosed in the Disclosure Schedule, no employee of
Seller, NCR or Medix in respect of the Business has notified Seller,
NCR or Medix that he or she will not, and none of Seller, NCR or
Medix has any knowledge that any such employee will not, accept
employment with Purchaser following the Closing;
(b) Each of Seller, NCR and Medix has in respect of the Business
complied in all material respects with all employment contracts and
all laws relating to the employment of labor, including provisions
thereof relating to wages, hours, equal opportunity, collective
bargaining and the payment of social security and other taxes;
(c) None of Seller, NCR or Medix has any material labor relations
problem pending and its labor relations are satisfactory;
(d) There has been no union organizing activity in respect of the
Business and Seller is not aware of any contemplated effort in this
regard;
(e) There are no worker's compensation, sexual harassment,
discrimination or other claims pending against Seller, NCR or Medix
in respect of the Business nor are Seller, NCR or Medix aware of any
facts that would give rise to such claims;
(f) Except as disclosed in the Disclosure Schedule with a reference to
this Section, no employee of Seller, NCR or Medix is subject to any
secrecy or non-competition agreement or any other agreement or
restriction of any kind that would impede in any way the ability of
such employee to carry out fully all activities of such employee in
furtherance of the business of Purchaser following the Closing;
(g) Purchaser is not and shall not be under any obligation whatever to
offer employment to any employee of the Business, and if Purchaser
employs any such employee of the Business, which is entirely and
solely within Purchaser's discretion, it shall be as a "new hire";
(h) No employee or former employee of Seller, NCR or Medix has any claim
with respect to any intellectual property rights of Seller;
(i) No employee of the Seller or of the Business, is now, or will by the
passage of time hereafter become, entitled to receive any vacation
time, vacation pay or severance pay attributable to services
rendered prior to the Closing Date, except as otherwise set forth in
the Seller's Disclosure Schedule and subject to provisions of
Section 2.3(b), and at the Closing Seller shall pay all such sums to
which an employee may be entitled;
(j) Seller is not a party to any union, collective bargaining or any
similar agreement;
(k) Seller is not providing or obligated to provide any profit-sharing,
deferred compensation, bonus, savings, pension, retainer,
retirement, welfare or incentive plan or agreement, except as set
forth in Seller's Disclosure Schedule, and at or prior to the
Closing Seller shall pay any sums that are due or accrued under or
in relation to any disclosed item;
(l) Seller is not a party to any written or oral employment agreement
with any of its personnel.
3.23 GIFTS.
(a) Except as described in the Seller's Disclosure Schedule with a
reference to this Section, none of Seller, NCR or Medix nor any
of their officers, directors or shareholders has made or agreed
to make gifts of money, other property or similar benefits (other
than incidental gifts of articles of nominal value (to any actual
or potential customer, supplier, governmental employee, political
party, candidate for office, governmental agency or
instrumentality or any other person in a position to assist or
hinder Seller, NCR, Medix, STAT or Xxxxx in connection with any
actual or proposed business transaction.
(b) None of Seller, NCR or Medix nor any of their officers,
directors, employees or agents has directly or indirectly paid or
delivered any fee, occasion, or other money or property, however
characterized, to any physician or any other party that is in any
manner remuneration for the referral of patients to or that is in
any manner remuneration for purchasing any item of service from
Seller, NCR or Medix, nor received any payment or anything of
value that is in any manner remuneration for referring patients
to any healthcare provider or for purchasing any item or service.
3.24 SELLER'S LICENSES. STAT and Xxxxx are duly licensed by New York State as
home care services agencies under Article 36 of the New York State Public
Health Law (such Licenses being hereinafter as "Licenses". Copies of all
such Licenses are annexed as Schedule 3.24. Each of Seller's Licenses is
valid and in full force and effect as of the date hereof and as of the
Closing Date, and except as expressly set forth in the Disclosure
Schedule, no License of Seller is subject to any limitation, restriction,
probation or other qualification. Each of Seller, NCR and Medix has
operated within the scope of the provisions of all Seller's Licenses.
There is not pending, or threatened, any investigation or proceeding which
could result in the termination, revocation, limitation, suspension,
restriction or impairment of any of Seller's Licenses or the imposition of
any fine, penalty or other sanctions for violation of any requirements of
any of Seller's Licenses or any applicable law, regulation or governmental
policy. Seller now has and has had at all relevant times all governmental
Approvals as are necessary in respect of the Business in order to enable
Seller to own and conduct the Business and to occupy and lease its real
property, each such currently effective item being listed in the
Disclosure Schedule.
3.25 MATERIAL MISSTATEMENTS OR OMISSIONS. Neither this Agreement nor any other
document, certificate or statement furnished to Purchaser by or on behalf
of Seller, NCR or Medix in connection with this Agreement or the
transactions contemplated hereby contains any untrue statement of a
material fact, or omits any material fact necessary to make the statements
contained herein or therein not misleading in light of the context in
which they were made.
3.26 NO LIENS OR JUDGMENTS. Except as disclosed in Seller's Disclosure
Schedule, there are no outstanding judgments or liens of any kind that
affect any of the Assets or the Business, and any disclosed judgments and
liens so disclosed will be released, modified or subordinated by
instruments reasonably satisfactory to Purchaser's counsel delivered by
Seller at the Closing.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller, NCR and Medix that the statements
contained in this Section are true, correct and complete as of the date of this
Agreement and, except as otherwise expressly provided in this Agreement, shall
be true, correct and complete on the Closing Date as though made on the Closing
Date as follows:
4.1 ORGANIZATION AND QUALIFICATION OF PURCHASER. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of
the State of New York and has the full corporate power and authority to
own and operate its properties and to carry on its business. The nature of
the business conducted by Purchaser and the properties owned, leased or
operated by Purchaser do not require Purchaser to qualify as a foreign
corporation in any jurisdiction.
4.2 AUTHORIZATION. This Agreement has been approved by all necessary corporate
action on behalf of Purchaser, has been duly and validly executed by
Purchaser, and the agreements, representations, and warranties contained
herein constitute valid and binding obligations, representations, and
warranties of Purchaser, enforceable in accordance with its terms.
4.3. NO CONFLICTING AGREEMENTS. Except as set forth in the Purchaser's
---------------------------
Disclosure Schedule with a reference to this Section, the execution and
delivery of this Agreement by Purchaser does not, and consummation by
Purchaser of the transactions contemplated hereby will not: (i) violate
any existing terms or provision of any law, regulation, order, writ,
judgment, injunction or decree applicable to Purchaser, (ii) conflict with
or result in a breach of any of the terms, conditions or provisions of the
Certificate of Incorporation or Bylaws of Purchaser or of any agreement or
instrument to which Purchaser is a party, or (iii) result in the creation
or imposition of any lien, charge, security interest, encumbrance,
restriction or claim upon Purchaser or any of its assets.
4.4 COMPLIANCE WITH APPLICABLE LAW. None of Purchaser or any of its officers,
directors or employees knows of any facts which would result in, nor has
any of them received any notice or information of, any violation, probable
violation or default by Purchaser under any applicable law, regulation or
order of any governmental department, commission, board or agency or
instrumentality, domestic or foreign, having jurisdiction over Purchaser's
operations which could materially adversely affect the business,
operations, financial condition, properties or assets of Purchaser or its
ability to consummate the Transaction.
4.5 LITIGATION. Except as disclosed in Purchaser's Disclosure Schedule, there
are no actions, proceedings or investigations pending, or to the knowledge
of Purchaser, threatened, against Purchaser or any of its officers or
directors, before any court or administrative agency or administrative
officer.
4.6 MATERIAL MISSTATEMENTS OR OMISSIONS. Neither this Agreement nor any other
documents, certificate or statement furnished to Seller or Medix by or on
behalf of Purchaser in connection with this Agreement contains any untrue
statement of a material fact, or omits to state any material fact
necessary to make the statements contained herein and therein not
misleading in light of the context in which they were made.
4.7 CONSENTS AND APPROVALS. The execution and delivery by Purchaser of this
Agreement, and the performance by Purchaser of its obligations hereunder,
do not require Purchaser to obtain any consent, approval or action of, or
make any filing with or give any notice to, any corporation, person or
firm or any public, governmental or judicial authority except (i) such as
have been duly obtained or made, as the case may be, (ii) those consents
and approvals described in the Purchaser's Disclosure Schedule with a
reference to this Section, and (iii) those which the failure to obtain
would not have a material adverse effect on the Transaction.
4.8 BROKERS. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by representatives of Purchaser
directly with Seller and Medix, without the intervention of any person on
behalf of Purchaser in such manner as to give rise to any valid claim by
any person retained by Purchaser against Seller or Medix for a finder's
fee, brokerage commission or similar payment.
5. PRE-CLOSING COVENANTS OF SELLER, NCR AND MEDIX
Each of Seller, NCR and Medix hereby covenants and agrees that, between the date
hereof and the Closing, it will comply with the provisions of this Section,
except to the extent Purchaser may otherwise consent in writing.
5.1 INSPECTION OF PROPERTIES AND BOOKS.
(a) Seller, NCR and Medix shall, at reasonable times acceptable to
both parties, assist any individual or individuals designated by
Purchaser with reasonable prior notice to visit or inspect any
property of Seller, NCR or Medix with respect to the Business,
including books of accounts and records with respect to the
Business, to make extracts or copies of such books and records
and to discuss the affairs, finances and accounts of Seller with
its officers, and shall use its best efforts to obtain access for
Purchaser to accountants' work papers. Purchaser agrees to treat
all such material (the "Evaluation Material") confidentially, and
shall not disclose any Evaluation Material or any information
contained therein to any party, except as otherwise set forth
herein; provided however, that Purchaser is authorized to
disclose the Evaluation Material to its investment bankers,
financial advisors and legal counsel. Purchaser shall instruct
its investment bankers, financial advisors, legal counsel,
officers, directors, employees, agents or representatives of the
confidential nature of the Evaluation Material and shall be
responsible for insuring that the Evaluation Material is kept
confidential by such persons.
(b) In the event the Closing is not consummated, all Evaluation
Material shall be returned to Seller within ten days of a request
thereof, with the understanding that Purchaser shall retain no
copies of the Evaluation Material and shall not disclose to any
other party the Evaluation Material or information contained
therein, with the exception of (i) disclosure by Purchaser, (ii)
information included in the Evaluation Material which is first
disclosed by a third party not bound by a confidentiality
agreement with Seller, or (iii) information required to be
disclosed in any registration statement or periodic report under
the disclosure requirements of applicable federal and state
securities laws, it being agreed that prior to making any
disclosure pursuant to this clause (iii), Purchaser shall first
provide Seller with reasonable (under the circumstances) advance
notice of the disclosure, and if Seller does not consent to the
disclosure, Purchaser may make the disclosure only after
providing Seller with an opinion of counsel explaining the basis
for the disclosure and the legal requirements therefor.
5.2 OTHER CONTRACTS. None of Seller, NCR or Medix shall enter into or become
subject to any agreement, transaction, or commitment which would restrict
or impair the obligation or ability of Seller, NCR and Medix to comply
with all of the terms of this Agreement.
5.3 ONGOING OPERATIONS. Seller shall carry on its business diligently and
substantially in the same manner as heretofore conducted. The Business
shall be conducted only in the ordinary course and none of Seller, NCR nor
Medix shall take any action except in the ordinary course of the Business,
on an arm-length basis and in accordance in all material respects with all
applicable laws, rules and regulations and Seller's past custom and
industry Practice. Seller shall not enter into any transaction or accept
any patient at payment rates that will be Unprofitable, nor reduce its
payment rates without the prior written consent of the Purchaser.
5.4 INDEBTEDNESS. Seller will not create, incur, assume, guarantee or
otherwise become liable with respect to any indebtedness related or
connect with, or secured by, the Assets or the Business, except in the
ordinary course of its business, and in no event greater than an aggregate
of $5,000 without the written consent of Purchaser.
5.5 RECORDS, MONTHLY FINANCIAL STATEMENTS. Seller shall Maintain its books,
accounts and records in the usual, regular and ordinary manner, and shall,
upon Purchaser's request, promptly provide Purchaser with monthly
financial statements for such month prepared on a basis consistent with
the Financial Statements.
5.6 NOTICE OF BREACH. Promptly after becoming aware of the occurrence or
threatened occurrence of any event which would cause or constitute a
breach of any warranty, representation, covenant or agreement of Seller,
NCR or Medix contained herein, Seller shall give notice in writing of such
event or threatened event to Purchaser and use all reasonable efforts to
prevent or promptly remedy such breach or threatened breach.
5.7 EMPLOYMENT MATTERS. With respect to the Business, none of Seller, NCR or
Medix shall, directly or indirectly, without the written consent of
Purchaser, or as otherwise agreed to herein, (i) (enter into or modify any
employment severance or similar agreements or arrangements with, or grant
any bonuses, salary increases, severance or termination paid to any
officers or directors or executive employees who are not shareholders or
(ii) except in the ordinary course of business, take any action with
respect to the grant of any bonuses, salary increases, severance or
termination pay or with respect to any increase of benefits payable in
effect on the date hereof for any of its employees who are not officers,
directors or executive employees. With respect to the Business, Seller,
NCR and Medix shall not adopt or award any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, trust, fund or group
arrangement for, the benefit or welfare of any employees of Seller of the
Business.
5.8 INSURANCE. Prior to Closing, none of Seller, NCR or Medix shall cancel or
terminate its current Insurance policies or cause any of the coverage
thereunder to lapse, unless simultaneously with such termination,
cancellation or lapse, replacement policies providing coverage equal to or
greater than the coverage under the canceled terminated or lapsed policies
for substantially similar premiums are in full force and effect. Seller
shall obtain and maintain in force, at its expense, for a period of three
years after the closing, professional liability insurance covering claims
based on Seller's operation of the Business up to and including the
Closing Date.
5.9 PRESERVATION OF BUSINESS. Each of Seller, NCR and Medix shall with respect
to the Business (i) use its best efforts in good faith to preserve intact
the business organization and goodwill, keep available the services of
Seller's officers and employees as a group and maintain satisfactory
relationships with suppliers, distributors, customers and others having
business relationships with Seller, (ii) upon request, confer on a regular
basis with representatives of Purchaser to report operational matters and
the general status of ongoing operations, (iii) not take any action which
would render, or which reasonably may be expected to render, any
representation or warranty made by Seller or Medix in the Agreement untrue
at the Closing, (iv) notify Purchaser of any emergency or other change in
the normal course of Seller's business or in the operation of Seller's
properties and of any governmental or third party complaints,
investigations or hearings (or communications indicating that the same may
be contemplated), and (v) promptly notify Purchaser in writing if Seller,
NCR or Medix or its representatives shall discover that any representation
or warranty made by Seller, NCR or Medix in this Agreement was when made,
or has subsequently become up to including the Closing Date untrue in any
respect.
5.10 BEST EFFORTS. Each of Seller, NCR and Medix agrees to use its best efforts
in good faith to satisfy the various conditions to Closing and to
consummate the transactions provided for herein as expeditiously as
possible. Neither Seller nor Medix will take or permit to be taken any
action that would be in breach of the terms or provisions of this
Agreement or that would cause any of its representations and warranties
contained herein to be or become untrue.
5.11 ADDITIONAL DISCLOSURE. From the date of this Agreement to and including
the Closing Date, Seller, NCR and Medix will advise Purchaser of each
event subsequent to the date hereof which would have had to be disclosed
on any schedule or exhibit to this Agreement had it occurred prior to the
date hereof. Seller and Medix will provide a certificate to the Purchaser
at Closing regarding no change to, and a reaffirmation of, their
representations and warranties contained herein.
5.12 EXCLUSIVITY. From the date of this Agreement, and unless and until this
Agreement is terminated by mutual written agreement of the parties,
Seller, NCR and Medix agree that they will not, either directly or
indirectly, or through any officer, director, agent or otherwise, (i)
solicit, initiate or accept any other inquiries, proposals or offers from
any other potential or prospective purchaser or merger partner, or any
entity or person, relating to a sale or transfer of any of the Assets or
the securities of any of them, or (ii) without the express written consent
of Purchaser, participate in any discussions or negotiations with respect
to any sale, transfer or other disposition of any of the Assets or the
securities of any of them. Any violation by Seller, NCR or Medix of this
Section shall constitute a material breach of this Agreement for which
Seller, NCR and Medix shall be jointly and severally liable to Purchaser
for liquidated damages of $100,000, which sum Seller, NCR and Medix agree
is reasonable in the circumstances.
6. PRE-CLOSING COVENANTS OF PURCHASER
Purchaser hereby covenants and agrees that, between the date hereof and the
Closing, it will comply with the provisions of this Section, except to the
extent Seller may otherwise consent in writing.
6.1 OTHER CONTRACTS. Except in the ordinary course of business, Purchaser
shall not enter into or become subject to any agreement, transaction or
commitment which would restrict or impair the obligation or ability of
Purchaser to comply with all of the terms of this Agreement.
6.2 FULFILL OBLIGATIONS. Purchaser shall take all action that is necessary in
good faith to satisfy the conditions of closing and to consummate the
transactions provided for herein. Purchaser will not take or knowingly
permit to be taken any action that would be in breach of the terms or
provisions of this Agreement.
6.3 ADDITIONAL DISCLOSURE. From the date of this Agreement to and including
the Closing Date, Purchaser will advise Seller of each event subsequent to
the date hereof which would have had to be disclosed on any schedule or
exhibit to this Agreement had it occurred prior to the date hereof.
7. POST-CLOSING COVENANTS
The parties hereto agree as follows with respect to the period following the
Closing:
7.1 FURTHER ASSURANCES. If any time after the Closing, any further action is
necessary or desirable to carry out the purposes of this Agreement, each
of the parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other party
reasonably may request, all at the sole cost and expense of the requesting
party unless the requesting party is entitled to indemnification therefor
under this Agreement.
7.2 NON-COMPETITION. During the three-year period beginning with the Closing,
none of Seller, NCR, Medix or Xxxx Xxxxx will directly or indirectly,
without the written permission of Purchaser:
(a) engage in any aspect of any health or therapy related business
within Westchester, Nassau, Rockland, Suffolk, Queens, Kings, Bronx,
New York or Richmond Counties in the State of New York (with the
exception of Cymedix Lynx Corporation which shall not engage in any
kind of home care business, but which may engage in the business of
developing and providing computer software for use by health care
providers);
(b) hire or otherwise retain any person who was an employee or
consultant to Seller or Purchaser, or (as to the Business) Medix, at
any time during the one-year immediately prior to such hiring or
other retainer, and at the Closing such parties will execute and
deliver Non-Competition Agreements.
7.3 ACCESS TO RECORDS. During the three-year period after the Closing,
Purchaser will give to Seller reasonable access to the books and records
of the Business for periods prior to the Closing, including records
prepared by Health Care Partners and made routinely available to Seller.
7.4 For ninety (90) days after the Closing, Purchaser, at the request of
Seller, shall at reasonable times acceptable to both Parties shall assist
representatives of Seller to inspect the pertinent books of account and
records of Purchaser relating to any adjustments to the amount of
Promissory Note B as provided in Section 2.2(b) hereof, and to discuss
Purchaser's receipts during the Test Period for services to Patients, and
to make extracts or copies of such portions of said books and records as
the Parties may mutually agree.
7.5 CESSATION OF SELLER'S OPERATIONS. On the Closing Date, Seller shall:
(a) suspend all the operations of STAT and Xxxxx as licensed
home care service agencies;
(b) notify the New York State Department of Health of the
intention to surrender the Licenses of STAT and Xxxxx; deliver
the Licenses to Purchaser to be surrendered to the Department
of Health thirty (30) days after the Closing Date.
(c) lay off all of its field service personnel.
8. CONDITIONS PRECEDENT TO CLOSING
8.1 CONDITIONS PRECEDENT TO OBLIGATION OF SELLER, NCR AND MEDIX. The
obligations of Seller, NCR and Medix to consummate and effect this
Agreement are subject to the satisfaction in all material respects, on or
before the Closing Date, of the following conditions (unless waived by
Seller in writing in the manner provided in this Agreement:
(a) The representations and warranties of Purchaser set forth in this
Agreement shall be accurate in all material respects on and as of
the Closing as though made on and as of the Closing (except where
stated to be as of an earlier date);
(b) Purchaser shall have performed all obligations and complied with all
covenants required to be performed or to be complied with by
Purchaser under this Agreement prior to or at the Closing Date
including payment of the Purchase Price and the delivery of all
documents required at the Closing;
(c) Seller shall have received a certificate dated the Closing Date and
signed by the President of Purchaser to the effect that the
representations and warranties made by Purchaser in this Agreement
are true and accurate in all material respects as of the Closing,
which certificate shall be in the form of Exhibit 8.1(c) to this
Agreement;
(d) All action necessary to authorize the execution, delivery and
performance of this Agreement by Purchaser and the consummation of
the transactions contemplated hereby shall have been duly and
validly taken by Purchaser; and
(e) Purchaser shall have furnished Seller with copies of resolutions
adopted or executed by Purchaser in connection with such actions,
certified by the Secretary of Purchaser.
8.2 CONDITIONS PRECEDENT TO OBLIGATION OF PURCHASER. The obligation of
Purchaser to consummate and effect this Agreement are subject to the
satisfaction in all material respects, on or before the Closing Date, of
the following conditions (unless waived by Purchaser in writing in the
manner provided in this Agreement):
(a) The representations and warranties of Seller, NCR and Medix, set
forth in this Agreement, and in any Schedules or Exhibits annexed
shall be accurate in all materials respects on and as of the Closing
as though made on and as of the Closing (except where expressly
stated to be as of an earlier date);
(b) Seller, NCR and Medix shall each have performed all obligations and
complied with all covenants required to be performed or to be
complied with by it under this Agreement prior to the Closing;
(c) Purchaser shall have received a certificate dated as of the Closing
and signed by the President of Seller, NCR and Medix to the effect
that the representations and warranties made by Seller, NCR and
Medix in this Agree- ment are true and accurate in all material
respects as of the Closing in the form attached as Exhibit 8.2(c);
(d) All action necessary to authorize the execution, delivery and
performance of this Agreement by Seller, NCR and Medix and the
consummation of the transactions contemplated hereby shall have been
duly and validly taken by Seller, NCR and Medix;
(e) Seller, NCR and Medix shall have furnished Purchaser with copies of
all consents or resolutions adopted or executed by Seller, NCR and
Medix in connection with such actions, certified by the Secretary of
Seller, NCR and Medix;
(f) There shall have been no event or change occurring between the
execution of this Agreement and the Closing which in the aggregate
may be deemed to have an adverse effect on the business, operations,
financial condition or properties of the Business which is material
to purchaser as purchaser of the Assets;
(g) There shall be no actions, proceedings or inves-tigations pending or
threatened against Seller, NCR or Medix or its officers or directors
before any court, any administrative agency or administrative
officer or executive. Seller shall have delivered to Purchaser at or
prior to the Closing, the instruments required under Sections 3.8
and 3.9;
(h) Seller shall have obtained, or caused to be obtained, and shall
have delivered to Purchaser, each consent and approval necessary
in order that the transactions contemplated herein not constitute
a breach or violation of, or result in a right of termination or
acceleration of, or creation of any encumbrance on any of the
Assets, pursuant to the provisions of any agreement, arrangement
or undertaking of or affecting Seller, NCR, Medix, STAT or Xxxxx
or any license, franchise or permit of or affecting Seller, NCR,
Medix, STAT or Xxxxx;
(i) All material governmental filings, authorizations and approvals that
are required for the consummation of the transactions contemplated
hereby shall have been duly made and obtained by Seller, NCR and
Medix (excepting filing required by Purchaser pursuant to applicable
securities laws);
(j) Purchaser shall not have discovered any fact or circumstance
existing as of the date of this Agreement or as of the Closing
Date which has not been disclosed to Purchaser as of this date of
this Agreement (or as of the Closing Date) regarding the
Business, Assets, liabilities, properties, condition (financial
or otherwise), results of operations or prospects of Seller which
is, individually or in the aggregate with other such facts and
circumstances, materially adverse to Seller or the value of the
Assets;
(k) There shall have been no damage, destruction or loss of or to any of
the Assets, whether or not covered by insurance, which in the
aggregate, has or would be reasonably likely to have a material
adverse effect on Seller;
(l) Seller, NCR and Medix, and Seller's Principals shall have executed
and delivered to Purchaser their Non-Competition Agreements in the
form annexed hereto as Exhibit 8.2(e);
(m) Seller shall have obtained and delivered to Purchaser at or prior
to the closing the written consent from Montefiore Medical Center
and Xxxx Xxxxxxx Home for the assignment to Purchaser of the
contract between each of them and Seller, NCR, Medix, STAT or
Xxxxx for the provision of services or staff, and for the
transfer to Purchaser of their patients receiving home care
service from Seller, and such assignments shall be executed by
Seller and delivered to Purchaser at the Closing.
(n) Seller shall have obtained and delivered to Purchaser at or prior
to the closing releases and duly executed UCC-3 forms in
duplicate for all liens and security agreements affecting Seller,
NCR, Medix, STAT or Xxxxx, or affecting any of the Assets,
including but not limited to liens in favor of Paxxon Services,
Inc., Xxxxx Home Care Services, Inc., HealthPartners Funding,
L.P. and HCFP Funding, Inc. Said UCC-3 forms either to terminate
such liens or to subordinate or modify the liens so as not to
prevent or interfere with the transaction contemplated by this
Agreement, and to be inform reasonably satisfactory to
Purchaser's counsel.
(o) Seller shall have delivered to Purchaser at or prior to the
closing personnel files for all employees of the Business,
containing all current documentation required by the Public
Health Law and the regulations of the Department of Health of New
York State Section 505.14 of the social services regulations, and
any other law or regulations of any governmental body having
jurisdiction over or applicable to the Business including, but
not limited to, valid certificates substantiating the
professional or paraprofessional status of each employee, I-9
forms, reports of medical examination and inoculations,
references, records of in-service training and performance
evaluations.
8.3 WAIVER OF CONDITIONS PRECEDENT. Purchaser or Seller may waive any or all
of the conditions precedent for each of their respective benefits set
forth in this Section, either prospectively or retroactively, by giving
written notice of such waiver to the other party or parties. No waiver of
any condition precedent pursuant to this Section shall, unless otherwise
expressly stated in such written notice of waiver, extend to any other
covenant or agreement contained herein or to any other condition
precedent.
8.4 REMEDIES OF PURCHASER. If Purchaser has satisfied all conditions set forth
in Section 8.1 or offers to satisfy them at the Closing (except for any
such conditions that have been waived by Seller), and if Seller fails or
refuses to close the transaction contemplated hereby, Purchaser shall have
the right to specific performance of this Agreement, and to injunctive
relief to prevent the sale by Seller to any other person or entity of the
Assets, or any of them or the sale or transfer of the securities of
Seller, NCR or Medix; and Seller, NCR and Medix shall be liable to
Purchaser for liquidated damages of $100,000. Seller, NCR and Medix agree
that said amount is reasonable in the circumstances and that liquidated
damages are appropriate in view of the fact that Purchaser will sustain
substantial damages if Seller fails or refuses to consummate the
transaction, but that it will be very difficult to measure the damages of
Purchaser. Said remedies shall not be exclusive of each other or of any
other remedies available to Purchaser at law or in equity.
8.5 REMEDIES OF SELLER. (a) If Seller has satisfied all conditions set forth
in Section 8.2 or offers and is able to satisfy them at the Closing
(except for any such conditions that have been waived by Purchaser), and
if Purchaser fails or refuses to close the transaction contemplated
hereby, Seller shall have the right to specific performance of this
Agreement; and Purchaser shall be liable to Seller for liquidated damages
of $100,000 it being agreed by Purchaser that said amount is reasonable in
the circumstances and that liquidated damages are appropriate in view of
the fact that Seller will sustain substantial damages if Purchaser fails
or refuses to consummate the transaction, but that it will be very
difficult to measure the damages of Seller. Said remedies shall not be
exclusive of each other or of any other remedies available to Seller at
law or in equity;
(b) Purchaser and Seller have scheduled the Closing of this transaction
for September 14, 1998 at 10:00 a.m. If Seller has satisfied all
conditions set forth in Section 8.2 or offers and is able to satisfy at
the Closing all remaining conditions (except for any such conditions that
have been waived by Purchaser) and if the Closing Date is adjourned at
Purchaser's sole request, Purchaser shall pay to Seller the sum of
$5,000.00 for each business day of delay caused by Purchaser to compensate
for any expense and inconvenience that may be sustained by Seller by
reason of such adjournment.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
9.1 The representations, warranties, covenants and agreements made by the
respective parties in this Agreement or in any certificate executed and
delivered in connection with the transactions contemplated hereby shall
survive the Closing for a period of fifteen (15) months following the
Closing, except that representations as to Taxes or claims by Medicare or
Medicaid shall survive without limit as to time. All covenants,
agreements, representations and warranties made herein or pursuant shall
be deemed to be material and to have been relied upon by the parties,
notwithstanding any investigation heretofore or hereafter made by or on
behalf of the parties prior to the Closing or any knowledge of any breach
or other event which is obtained or learned prior to the Closing.
10. INDEMNIFICATION
10.1 INDEMNIFICATION.
(a) Seller, NCR and Medix jointly and severally agree to indemnify
Purchaser in respect of, and hold Purchaser harmless against, any
and all damages, claims, deficiencies, losses, and expenses
(including, without limitation, legal and investigation costs and
other fees) in attempting to avoid the same or in defending against
the same) (collectively "Damages") resulting from:
(i) any misrepresentation, breach of warranty, or non-fulfillment or
failure to perform any covenant or agreement on the part of Seller,
NCR or Medix made as a part of or contained in this Agreement or any
Schedule or Exhibit annexed hereto or in any certificate executed
and delivered pursuant to this Agreement or in connection with the
transactions contemplated hereby,
(ii) any liabilities of Seller, NCR, Medix STAT or Xxxxx arising or
attributable to any period prior to the Closing, including, in
addition to any and all other liabilities, any adverse judgment or
order that may result from litigation, excepted from Section 3.8
hereof.
(iii) the operation of the Business by Seller, NCR, Medix, STAT or Xxxxx
prior to the Closing or affecting the business or the assets.
(b) Purchaser agrees to indemnify Seller, NCR and Medix in respect of,
and hold Seller, NCR and Medix harmless against, any and all Damages
resulting from:
(i) any misrepresentation, breach of warranty, or non-fulfillment or
failure to perform any covenant or agreement on the part of
Purchaser made as a part of or contained in this Agreement or any
Schedule or Exhibit annexed hereto or in any certificate executed
and delivered pursuant to this Agreement or in connection with the
transactions contemplated hereby; and
(ii) Purchaser's operation of the Business after the Closing.
10.2 PURCHASER'S RIGHT OF OFFSET. Purchaser shall have the right to offset
against the sum due under Promissory Note B, any obligations to Purchaser
for Damages (subject to the $5,000 exclusion contained in Section 10.3
hereof) pursuant to the Indemnification set forth in Section 10.1(a)
hereof and any claims by creditors or others against or affecting the
Business or the Assets which are asserted on or before the maturity date
of Promissory Note B. Promissory Note B shall be endorsed with a legend
that it is subject to this right of offset and it shall be held in escrow
by Purchaser's attorney. On the maturity date of Note B, such Note or the
amended or replacement Note B, as appropriate, shall be released from
escrow and delivered to Seller, with the principal amount reduced by the
aggregate of any offsets and adjustments permitted by this Agreement and
any then outstanding claims.
10.3 LIMITATION OF LIABILITY. Neither party shall be liable to the other party
to this Agreement except to the extent that the aggregate amount of
Damages for which they would otherwise (but for this provision) be liable
under this Section, net of any related insurance payments actually
collected, exceeds in the aggregate the sum of $5,000.00 and then only to
the extent of such excess.
10.4 OTHER RIGHTS AND REMEDIES NOT AFFECTED.. The indemnification rights of the
parties under this Section are independent of and in addition to such
rights and remedies as the parties may have a law or in equity or
otherwise for any misrepresentations, breach of warranty or failure to
fulfill any agreement or covenant hereunder on the part of any party
including without limitation the right to seek specific performance,
rescission or restitution, none of which rights or remedies shall be
affected or diminished hereby.
11. CLOSING
11.1 CLOSING. The closing of this Agreement (the "Closing") shall take place on
or about September 14, 1998 at the office of Purchaser, Premier Home
Health Care Services, Inc., 000 Xxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000
or, at Purchaser's option, at the office of the attorneys for Purchaser,
Xxxxxxx & Xxxxxxxxxx, P.C., 000 Xxxx Xxxx Xxxx, Xxxxx 000, Xxxxxx Xxxx,
Xxx Xxxx 00000, or at such other place as the parties may agree.
11.2 SELLER, NCR'S AND MEDIX'S DELIVERIES AT CLOSING. At the Closing, Seller,
NCR, and Medix, will deliver the following documents to the Purchaser, all
of which shall be reasonably satisfactory in form and substance to the
Purchaser and its counsel:
(a) Xxxx of Sale for the specific Assets in the form attached to this
Agreement.
(b) All consents, approvals and authorizations, all notices and all
registrations and filings required to be obtained, given or made
under any law, statute, rule, regulation, judgment, order,
injunction, contract, agreement or other instrument to which
Seller, NCR or Medix is subject, bound or a party, or by which
Seller, NCR or Medix or any of its properties is bound or
subject, in each case which is required to permit the
consummation of the transactions contemplated by the Agreement
without contravention, violation or breach by Seller, NCR or
Medix of any of the terms thereof.
(c) Certificates of good standing for Seller, NCR, and Medix, from the
Secretary of the State of Colorado and, with respect to Seller, NCR,
STAT and Xxxxx, the Secretary of State of New York, dated not
earlier than sixty days prior to the Closing Date.
(d) Certified copy of resolutions of the Board of Directors and the
shareholders of Seller, NCR, and Medix, authorizing, inter alia, the
execution and delivery of this Agreement, the sale of the Assets and
the Business to Purchaser and the other transactions contemplated
under this Agreement.
(e) Such business records related to the Assets and the Business as may
be reasonably requested by the Purchaser, including, without
limitation, employee and personnel files and applications, patient
files, plans of care, payroll, tax related records and financial
data.
(f) Officer's Certificate in the form attached as Exhibit C to this
Agreement.
(g) Such other documents, instruments, certificates and agreements, as
Purchaser and its counsel may reasonably request.
11.3 PURCHASER'S DELIVERIES AT CLOSING. At the Closing, Purchaser shall deliver
the following documents to Seller, NCR and Medix, all of which shall be in
a form reasonably acceptable to Seller, NCR and Medix and their counsel:
(a) Immediately available funds in the amount of $1,000,000,
representing a portion of the Purchase Price.
(b) Promissory Note "A".
(c) Promissory Note "B" to be delivered and held in escrow pursuant to
Section 10.2.
(d) Certificate of good standing for Purchaser, dated as of a date not
more than 30 days prior to the date of Closing, from the Secretary
of State of the State of New York.
(e) Certified copy of resolutions of the Board of Directors of Purchaser
authorizing, inter alia, the execution and delivery of this
Agreement and the Notes, the purchase of the Assets, and the other
transactions contemplated hereby.
(f) Officer's Certificate in the form attached as Exhibit C to this
Agreement.
(g) Such other documents, instruments, certificates and agreements
including without limitation, and as are necessary to the
consummation of the transactions contemplated hereby.
12. MISCELLANEOUS
12.1 NOTICE. All notices and communications required or permitted to be given
hereunder shall be in writing, signed by the sender, and delivered by
personal delivery overnight courier service or by registered mail to:
IF TO SELLER, NCR OR MEDIX:
Medix Resources, Inc.
Attn: Xxxx X. Xxxxx, President
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Fax No. (000) 000-0000
WITH A COPY TO:
Xxxx Xxxxxxx, Esq.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax No. (000) 000-0000
IF TO PURCHASER:
Premier Home Health Care Services, Inc.
Attn: Xxxxxx Xxxxxxx, Xx., President
000 Xxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Fax No. (000) 000-0000
WITH A COPY TO:
Xxxxxxx & Xxxxxxxxxx, P.C.
Attn: Xxxxxx X. Xxxxxxx, Esq.
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Fax No. (000) 000-0000
or such other address as shall have been furnished in writing. Receipt by, or
filing with, the respective parties of any communications shall be deemed to
have occurred for the purpose of this Agreement, when personally delivered, or
on the next business day if sent by overnight courier, or two days after deposit
thereof, postage prepaid, properly addressed, in the United States mail, with a
copy sent by facsimile.
12.2 ENTIRE AND SOLE AGREEMENT. This Agreement, including all Exhibits and
Schedules (which by this reference shall incorporate herein all such
Exhibits and Schedules as if more fully set forth herein), constitutes the
entire agreement between the parties and as of Closing supersedes all
agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject
matter hereof. After Closing, neither party shall be bound by or charged
with any oral or written agreements, representations, warranties,
statements, promises or understandings not specifically set forth or
referred to in this Agreement or in the Schedules, Exhibits, certificates
or documents delivered in connection herewith or referred to herein.
12.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this Agreement,
all covenants and agreements of the parties contained in this Agreement
shall be binding upon and inure to the benefit of the respective
successors and permitted assigns of the parties and the heirs, personal
representatives, executors and assigns of Seller, NCR and Medix. This
Agreement may not be assigned by any party without the prior express
written consent of the other parties.
12.4 EXPENSES. Each party shall be solely responsible for payment of all
expenses incurred by it in connection with the consummation of this
Agreement and the transactions contemplated hereunder, except as otherwise
provided herein. None of Seller, NCR's or Medix's expenses with respect to
this transaction shall be charged to the Business or shall otherwise
reduce the Assets.
12.5 SALES TAXES. Seller, NCR and Medix jointly and severally agree to and
shall at the Closing pay all New York and other state or local taxes in
connection with this transaction and shall indemnify Purchaser against any
liability for any such taxes.
12.6 SEVERABILITY. Should any one or more of the provisions of this Agreement
be determined to be illegal or unenforceable, all other provisions of this
Agreement shall be given effect separately, from the provision or
provisions determined to be illegal or unenforceable and shall not be
affected thereby.
12.7 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York without
regard to conflicts of laws principles.
12.8 COUNTERPARTS. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be an original, but all of which
together shall constitute one and the same Agreement.
12.9 AMENDMENTS. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in
writing.
12.10 NO THIRD PARTY BENEFICIARY. The terms and provisions of this Agreement are
intended solely for the benefit of the parties, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other person or
entity.
12.11 HEADINGS. The headings in this Agreement are for purposes of convenience
and easy reference only and shall not limit or otherwise affect the
meaning hereof.
12.12 DISPUTES. In the event of any dispute which arises between the parties and
which relates to the subject matter of this Agreement, the parties
acknowledge and agree that any such dispute shall be submitted for binding
arbitration in Westchester County, New York, in accordance with the
Commercial Arbitration Rules established by the American Arbitration
Association or, if such association is not then in existence, an
independent association of arbitrators which may be designated by
agreement of the parties. In the event the parties are unable to agree on
an independent association of arbitrators from which arbitrators may be
drawn, either party may apply to the Supreme Court, Westchester County,
for appointment of arbitrators; however, such application will only be
made in the event the American Arbitration Association is not then in
existence. The arbitrator(s) shall make detailed written findings to
support their award. The prevailing party in any such arbitration
proceeding shall be awarded such costs and
expenses (including reasonable attorney's fees and expert witness fees) as
were incurred by the prevailing party as a result of the institution and
prosecution of the arbitration proceeding and to enter judgment upon any
such award or to enforce such award or judgment, including appellate
proceedings. The parties expressly submit to the jurisdiction of the
Supreme Court, Westchester County, for any such proceedings.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the day and year first written above.
PREMIER HOME HEALTH CARE J.J. CARE RESOURCES,
SERVICES, INC., PURCHASER INC., SELLER
BY: BY:
President President
MEDIX RESOURCES, INC. NATIONAL CARE RESOURCES-
NEW YORK, INC.
BY: BY:
President President
CONFIRMED AS TO SECTION 7.2
XXXX X. XXXXX
