STAFF BUILDERS, INC.
10Q
11-30-96
EXHIBIT 10.1
ASSET PURCHASE AND SALE AGREEMENT
BY AND AMONG
ATC HEALTHCARE SERVICES, INC. AND STAFF BUILDERS, INC.
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, AND ALL CARE NURSING SERVICE, INC.
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT (hereinafter
referred to as the "Agreement") is made and entered into the 6th the
day of September, 1996 by and among ATC HEALTHCARE SERVICES, INC.,
a Georgia corporation (the "Buyer"), and STAFF BUILDERS,
INC.('Parent'), a Delaware corporation and All Care Nursing Service,
Inc., a New York corporation ("ACNS' or 'Seller') and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ('Secondary Indemnitor').
BACKGROUND
WHEREAS, Seller is desirous of selling to Buyer, and Buyer
is desirous of Purchasing from Seller, certain assets in conjunction
with Seller's staffing services (the 'Business'); and
WHEREAS, Secondary Indemnitor is the present shareholder
of Seller and is willing to indemnify Buyer to the limited extent
provided herein; and
WHEREAS, Parent owns all the issued and outstanding stock
of Buyer and is willing to indemnify Seller and Secondary Indemnitor
to the limited extent provided herein; and
NOW, THEREFORE, for and in consideration of the mutual
agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, Seller,
Buyer, Parent and Secondary Indemnitor covenant, represent, warrant,
stipulate and agree as follows:
ARTICLE 1. PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale of Assets. Seller agrees to sell,
convey and transfer to Buyer, and Buyer agrees to purchase from
Seller on the Closing Date (as defined herein), all customer,
applicant and temporary employee lists, records and agreements, if
any, relating to employees, business records and files, assignments
of existing telephone numbers, contracts (oral and written),
intellectual property, and all other assets which have been used in
connection with, or have been at any time a part of, the Business,
together with all furniture and fixtures, all of which are more
fully set forth on Schedule 1.1 hereto ('Transferred Assets'), to
the extent of assignability, Buyer understands that some of Seller's
contracts, including its lease, are not assignable without consent.
The Transferred Assets as defined herein do not include those
specifically excluded herein as set forth on Schedule 1.1(a)(the
'Excluded Assets'). The Transferred Assets being sold hereunder
shall be delivered to Buyer on the Closing Date. The sale and
transfer shall be effected by bills for sale, assignments, or other
instruments of transfer, in form and substance satisfactory to Buyer
and Seller. Seller agrees that it will, at any time after the
Closing Date, upon the request of the Buyer, execute, acknowledge
and deliver all such further conveyances, assignments and transfers,
as may be reasonably required or necessary for the purpose of
assigning, transferring, conveying and granting to the Buyer good,
valid and marketable title to any and all of the Transferred Assets
being sold hereunder.
1.2 Assumption of Contracts. Buyer agrees to assume all
executory obligations under the Contracts and leases set forth in
Schedule 1.2.
1.3 Assumed Liabilities. Except as specifically
numerated in Schedule 1.3, Buyer shall not in any respect assume
liabilities, debts or obligations of Seller.
ARTICLE 2. CLOSING DATE
2.1 Closing and Closing Date. The Closing hereunder (the
"Closing") shall take place at such place and time and on such date
("Closing Date") as may be agreed to in writing by Seller and Buyer,
but in no event later than 30 days after the date of this Agreement.
ARTICLE 3. PURCHASE PRICE FOR THE TRANSFERRED ASSETS
3.1 Purchase Price for the Transferred Assets. The
purchase price (the "Purchase Price") for the Transferred Assets
shall be Two Million Five Hundred Thousand Dollars ($2,500,000),
payable as follows:
a) $1,300,000 payable at Closing by wired funds to Seller.
b) $1,200,000 by a Promissory Note ('Note') payable over
thirty (30) months with interest at seven (7%) percent per
annum. The principal and interest will be made in equal
quarterly payments. Except for the indemnification under
Section 12.1 hereof for the specific liabilities disclosed to
Buyer in Schedules 4.5b and 4.9, respectively, the Note will
not be subject to offset for any reason. The Note will be
guaranteed by Staff Builders, Inc., as surety ('Guaranty').
The Note and Guaranty will be in the form and substance of
Exhibit III.
3.2 Additional Purchase Price. In addition to the
Purchase Price to be paid pursuant to Section 3.1, Buyer will pay
a sum equal to one and one-half percent (1.5%) of the gross revenues
collected from Harlem Hospital during the twenty-four (24) months
following Closing. This amount is not to be reduced by any inability
of Buyer to maintain any level of gross income from the business and
will be payable quarterly, beginning on October 15, 1996, and
thereafter on the 15th day of the month immediately following the
end of each quarter. This is a joint and several liability of Buyer
and Parent. Each quarterly payment will be accompanied by a
statement showing the calculation of the payment. Seller shall have
the right to examine the relevant books and records to verify the
gross revenues collected from Harlem Hospital during the quarter for
a period of 45 days from the date of receipt of each payment. Such
review of the relevant books and records shall be solely at Seller's
expense and upon a reasonable notice to Buyer. Buyer and Seller
agree to allocate the Additional Purchase Price of 10% to contract
rights and 90% to goodwill and shall file their income tax returns
consistent with such allocation in accordance with Internal Revenue
Code 1060. This provision is not to be construed as any covenant
with respect to a commitment on the part of Buyer to provide
services to Harlem Hospital.
3.3 Adjustment to Additional Purchase Price. The
Additional Purchase Price is subject to adjustment for the
liabilities set forth in Section 3.1(b). During a six-month period
commencing on the Closing Date, the Additional Purchase Price is
subject to further adjustment for a finance charge to be calculated
at 7% per annum to be applied to any payments from Harlem Hospital
received by Buyer more than 45 days after proper invoice, acceptable
to Harlem Hospital. Interest commences on the 46th day.
3.4 Allocation of Purchase Price. Seller and Buyer agree
to be bound by the following allocation of purchase price for federal
income tax purposes in accordance with Internal Revenue Code 1060:
Furniture and Equipment $ 10,000
Non-Compete Agreement $ 100,000
Goodwill $2,390,000
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer both as of
the date hereof and the Closing Date as follows:
4.1 Organization of Seller; Good Standing;
Qualifications
Seller is a corporation, duly organized, and is in good
standing under the laws of the State of New York. Neither the nature
of its assets or business requires Seller to register to conduct
business in any other jurisdictions. Seller has the requisite
corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted.
4.2 Authority
(a) Seller has full power and has taken all actions necessary
to execute, deliver and perform this Agreement and to carry out the
transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the other Transaction Documents
(as hereinafter defined) to which it is a party constitute the
legal, valid and binding obligation of the Seller enforceable
against it in accordance with its terms, except to the extent that
such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting
creditor's rights generally, and (ii) equitable principles which may
limit the availability of certain equitable remedies (such as
specific performance) in certain instances. For purposes of this
Agreement, "Transaction Documents" shall mean this Agreement and the
Schedules hereto, each certificate delivered pursuant hereto, each
Exhibit hereto in executed form and all other documents and
agreements executed and delivered to Buyer pursuant hereto at the
Closing. Nothing contained herein shall be construed as a
representation with respect to the assignability of any contracts,
leases and other agreements. The contracts, leases and other
agreements have been made available to Buyer and speak for
themselves.
(b) Neither the execution or delivery of this Agreement and
the other Transaction Documents nor the consummation of the
transactions contemplated hereby will (i) except for obtaining the
required consents as set forth on Schedule 4.2 and except for
obtaining any consent where the failure to obtain such consent would
not materially or adversely affect the Transferred Assets, conflict
with, constitute a breach, violation or termination of any provision
of any contracts and other agreements to which Seller is a party or
by which any of them is bound, (ii) conflict with or violate the
Articles of Incorporation or By-laws, of Seller (iii) violate any
statute, law, regulation, judgment, rule, order or any other
restriction of any kind or character applicable to Seller, except
for any statute, law, regulation, judgment, rule, order, license,
permit or any other restriction, where the violation thereof would
not materially or adversely effect the Transferred Assets.
4.3 Approvals; Other Authorizations - Seller. Except
as set forth on Schedule 4.2, no consent, waiver, authorization or
approval of, giving of notice to, or registration or filing or
taking of any other action in connection with, any governmental
authority or of any other person is necessary in connection with the
execution and delivery of this Agreement by Seller and the
consummation of the transactions contemplated hereby. Nothing
contained herein shall be construed as a representation with respect
to the assignability of any contracts, leases and other agreements.
The contracts, leases and other agreements have been made available
to Buyer and speak for themselves.
4.4 Approvals, Licenses and Other Authorizations.
All licenses, permits and other governmental authorizations and
approvals of all federal, state and local governmental authorities
required or necessary for Seller to operate have been duly obtained
and are in full force and effect, except where the failure to so
would not have a material adverse effect upon the financial
condition of Seller. Except as set forth on Schedule 4.2, these
licenses, permits and authorizations are hereby transferred to Buyer
as part of the Transferred Assets. Except as set forth on Schedule
4.2, the sale of the Transferred Assets and the consummation of the
transaction contemplated by this Agreement and the other Transaction
Documents will not result in the termination or revocation of any
license, permit or other governmental authorizations of Seller.
Seller has operated its business in accordance with all applicable
federal, state and local laws, rules and regulations, except where
noncompliance would not have a material and adverse impact on the
financial condition or operations of Seller. There are no
proceedings pending, or to the best of Seller's knowledge,
threatened to restrict, revoke or modify such licenses, permits or
other governmental authorizations and approvals of Seller or to the
best of Seller's knowledge, matters which could give rise to such
proceedings.
4.5 Financial Statements; Liabilities.
(a) Seller has delivered to Buyer a copy of the balance sheet
of Seller as of June 22, 1996, and the related statement of revenues
and expenses, changes in fund balances and statement of cash flows
(the "Financial Statements"). The Financial Statements have been
prepared from the books and records of Seller on a consistent basis
in accordance with generally accepted accounting principles, as of
the date and for the period then ended. The Financial Statements
are based upon the books and records of Seller and fairly represent
the financial position of Seller and its results of operations for
the period then ended.
(b) Seller has delivered to Buyer Seller's financial
statements as of August 17, 1996, (the 'Interim Financial
Statements'). Other than as disclosed in the Financial Statements
and Interim Financial Statements, Seller has no outstanding
liabilities as of the Closing Date and Seller has no knowledge of
any threatened claims, actions or investigations which would result
in the incurrence of any additional liabilities by Seller, except as
set forth in Schedule 4.5(b).
(c) Seller has no indebtedness, liability or obligation of any
character whatsoever, whether or not accrued, whether known or
unknown, fixed or unfixed, ▇▇▇▇▇▇ or inchoate, liquidated or
unliquidated, contingent or otherwise, including without limitation
liabilities for taxes, other governmental charges or pending
lawsuits, other than (i) liabilities reflected in the Financial
statements or Interim Financial Statements or (ii) liabilities since
the date of the Interim Financial Statements as set forth in
Schedule 4.5(b), or as otherwise permitted by this Agreement.
(d) The Seller shall be obligated to pay all taxes, debts,
liabilities and obligations (absolute and contingent) of every kind
and description of the Seller relating to the Business not expressly
assumed by the Buyer hereunder, including, but not limited to,
taxes, trade payables, wages, wage benefits or supplements,
commissions, refunds due, penalties and fines by the State of New
York, pending litigation and claims, including professional
liability claims, arising out of services performed prior to the
Closing Date, except as itemized on Schedule 1.3.
4.6 Absence of Certain Events. Since June 22, 1996
Seller has operated its business in the ordinary and normal course
and there has not been:
(a) any damage, destruction or loss, whether covered by
insurance or not, adversely affecting the assets and properties of
Seller;
(b) except as set forth in Schedule 4.6, any increase or
decrease in the compensation payable or to become payable to any of
Seller's officers or management employees or material change in any
insurance, pension or other benefit plan, payment or arrangement
made to, for or with any of Seller's officers or management
employees, any commission or bonus paid to any of such officers or
management employees or any amendment to any employment agreement or
benefit plan;
(c) any sale, assignment, transfer, lease or other disposition
of any asset of Seller, other than in the ordinary course of
business consistent with past practices;
(d) any acquisition of any assets, other than in the
ordinary course of business consistent with past practices;
(e) any transaction, contract or commitment entered
into which is not in the ordinary course of business and consistent
with past practices;
(f) any material adverse change in the assets, business or
financial condition of Seller;
(g) any amendment to the Articles of Incorporation or By-laws
of Seller;
(h) except set forth on Schedule 4.6, any payment or
commitment to pay severance or termination pay to any officer,
director, employee, agent, consultant or representative of Seller;
(i) any debt or liability other than in the ordinary course of
business or as otherwise permitted pursuant to the terms of this
Agreement.
4.7 Title To and Condition of Properties.
(a) Schedule 4.7 hereto contains a list of all real property
owned or leased by Seller, and a true and complete copy of the deed
therefor and each such lease with respect thereto has been
identified and made available to Buyer. Without limiting the
generality of the foregoing, as to leasehold estates leased by
Seller, as lessee, Seller has quiet and peaceable possession of each
of the leased properties and other than statutory rights of
distraint or similar rights of landlords, Seller has not pledged,
assigned, mortgaged or otherwise encumbered its leasehold interest
in any such leasehold estate. All leases and subleases to which
Seller is a party are in full force and effect, and there are no
material defaults thereunder. With respect to such leases, no
default or event of default on the part of Seller, as lessee, and
to the knowledge of Seller, no default or event of default on the
part of the lessor, under the provisions of any of said leases, and
no event which with the giving of notice or passage of time, or
both, would constitute such default or event of default on the part
of Seller, or to the knowledge of Seller, on the part of any such
lessor, has occurred and is continuing unremedied or unwaived.
(b) Seller has good and valid title to all of The Transferred
Assets and properties, including without limitation all leased real
estate of Seller, free and clear of all liens, security interests,
and other encumbrances, except as set forth on Schedule 4.7 hereto.
(c) The Transferred Assets of Seller including, but not
limited to, all machinery, equipment, furniture and fixtures are in
good operating condition and repair for assets of such age and type,
subject to ordinary wear and tear and the use to which such assets
have been employed.
4.8 Contracts and Commitments. The contracts listed on
Schedule 4.8, ('Contracts') are in full force and effect, and there
exists no default or event of default thereunder which would cause
the termination of such contract. Seller has not received any
notice that any person party to a Contract intends to cancel, modify
or terminate any Contract, and Seller has not given any notice of
cancellation, modification or termination of any Contract. Each
Contract is a valid and binding agreement of Seller enforceable
against Seller in accordance with its terms, and no consent or
approval of the other parties to any Contract or any person pursuant
to any Contract is required for the transfer of the Contract to
Buyer, other than the consents and approvals set forth on Schedule
4.2 hereto.
(b) As of the date hereof, Seller has not made any other
contract or agreements or granted any option to sell or otherwise
transfer any part of its assets or entered into any understanding or
agreement in principle respecting any such transaction with anyone
other than Buyer.
(c) Except as set forth on Schedule 4.8(c), there are no
contracts or commitments between Seller and any affiliate.
4.9 Tax Returns and Tax Audits.
(a) Except as set forth on Schedule 4.9, Seller has filed with
all appropriate governmental agencies all tax or information returns
and tax reports required to be filed and has paid all federal, state
and local income, franchise, sales, property, excise, ad valorem,
employment (including applicable withholdings for FICA, FUTA, and
other required federal, state or municipal withholdings) or other
taxes, and all interest, penalties, assessments or deficiencies
claimed to be due by any such taxing authority for all periods prior
to the current taxable period. No extensions of time to file any
tax returns of Seller have been requested that are currently
effective.
(b) Except as set forth on Schedule 4.9, Seller is not a party
to any pending or threatened action or proceeding by any
governmental taxing authority for assessment or collection of taxes,
and no claim for assessment or collection of taxes has been asserted
against Seller. Seller is not subject to any pending audit or
examination by any governmental taxing authority for assessment or
collection of taxes.
4.10 Insurance. Attached hereto as Schedule 4.10 is a
list and description of all general liability, director and officer,
property and casualty insurance policies currently in force
providing coverage on behalf of Seller including, without
limitation, for the following: malpractice or negligent or grossly
negligent acts or omissions by Seller or its employees or agents and
for general liability of Seller, general casualty, property damage
and flood insurance. All of such insurance is now in full force and
effect and premiums with respect to such policies have been paid to
keep such insurance in full force and effect through the dates set
forth on Schedule 4.10. True and complete copies of all such
policies and any endorsements thereof have been identified and made
available to Buyer. There are no outstanding unpaid claims for
insurance with respect to the insurance policies of Seller. Seller
has not received any notice of cancellation or non-renewal with
respect to the insurance policies providing coverage of Seller.
4.11 No Litigation, Adverse Events or Violations.
(a) Except as set forth on Schedule 4.11 hereto, there is to
Seller's Knowledge no other action, suit, claim or other proceeding
pending against Seller. To the best of Seller's knowledge there is
no action, suit, claim or other proceeding threatened against
Seller. There are no injunctions or orders entered, pending or to
the best of Seller's knowledge, threatened against Seller.
(b) Except as set forth on Schedule 4.11, Seller is in
compliance with applicable federal, state and local laws, relating
or applicable to it where the violation of or noncompliance with
which would have a material adverse effect on the financial
condition or operations of Seller.
(c) Except as set forth in Schedule 4.11, there are no
actions, suits or claims or proceedings pending or, to the knowledge
of Seller, threatened that would give rise to any right of
indemnification on the part of any director or officer of Seller or
the heirs, executors or administrators of any such director or
officer, against Seller.
4.12 Labor Agreements. Seller is not and has never been
a party to and is not bound by any collective bargaining agreement.
4.13 Employee Benefit Plans.
(a) Except as set forth on Schedule 4.13 hereto, Seller does
not have any Benefit Plans, as defined in paragraph (l) below, nor
has Seller maintained or contributed to any Benefit Plans subject to
Title IV of ERISA.
(b) All persons who participate in the operations of each
Benefit Plan (including but not limited to the members of any plan
committee, all plan fiduciaries, all plan administrators, Seller,
its Board of Directors, and all relevant employees of the Seller)
act and have always acted with respect to each Benefit Plan in all
material respects in accordance with the requirements of all
applicable laws (including but not limited to the Employee
Retirement Income Security Act of 1974, as amended, and any rules
and regulations promulgated thereunder ("ERISA") and the Internal
Revenue Code of 1986, as amended, and any rules and regulations
promulgated thereunder (the "Code") and in accordance with the terms
and conditions of each such Benefit Plan.
(c) All Benefit Plans are now, and have always been
established, maintained and operated in all material respects in
accordance with all applicable laws (including but not limited to
ERISA and the Code) and in accordance with the terms and conditions
of each such Plan.
(d) Except as set forth on Schedule 4.13, all returns,
reports, disclosure statements and elections required to be made
under all applicable laws (including but not limited to ERISA and
the Code) with respect to the Benefit Plans have been timely and
accurately filed, delivered, or made.
(e) With respect to any of the Benefit Plans, no reportable
events (within the meaning of ERISA and the Code, respectively),
prohibited transactions (within the meaning of Section 4975 of the
Code) or party-in-interest transactions (within the meaning of
Section 406 of ERISA) have occurred.
(f) Except as described in Schedule 4.13 hereto and except with
respect to income taxes on benefits paid or provided, no income,
excise or other tax or penalty (federal or state) has been waived or
excused, has been paid or is owed by any person (including but not
limited to any Benefit Plan, any plan fiduciary and Seller) with
respect to the operations of, or any transactions with respect to,
any Benefit Plan. No action has been taken, nor has there been any
failure to take any action, nor is any action or failure to take
action contemplated, that would subject any person or entity to any
liability for any tax or penalty in connection with any Benefit Plan
(including but not limited to any tax or penalty for the failure to
withhold income taxes in connection with fringe benefits).
(g) Except as set forth on Schedule 4.13, all contributions
required to be made to or with respect to each Benefit Plan have
been completely and timely made.
(h) All benefits or other payments required to be made under
or by any Benefit Plan have been completely and timely paid.
(i) There has been no merger, consolidation or transfer of
assets or liabilities (including but not limited to a split up or
split off) with respect to any Benefit Plan.
(j) There are no actions, suits or claims (other than routine
claims for benefits) pending or threatened against the Benefit Plans
or their assets, or arising out of such Benefit Plans, including but
not limited to any action, suit or claim by or on behalf of the
Benefit Plans or by any employee of the Seller alleging a breach or
breaches of fiduciary duties or violations of applicable state or
federal law which could result in liability on the part of either
Seller or the Benefit Plans under ERISA or any other law, and, to
Seller's best knowledge, no facts exist which could give rise to any
such actions, suits or claims.
(k) Seller has identified and made available to Buyer true and
complete copies of all current and prior material documents,
including all amendments thereto, with respect to each of the
Benefit Plans set forth in Schedule 4.13 hereto, and Seller hereby
agrees to transfer to Buyer, upon Closing, all records in connection
with any Benefit Plan expressly assumed by Buyer hereunder. All
such records shall accurately state the history of each participant
and beneficiary in connection with each Benefit Plan and accurately
state the benefits earned by and/or owed to each such person under
each Benefit Plan.
(l) For purposes of this Section 4.13, the term "Benefit Plan"
includes but is not limited to (i) pension, retirement, profit
sharing, stock bonus, and non-qualified deferred compensation plans,
(ii) disability, medical, dental, worker's compensation, health
insurance, life insurance, and incentive plans, (iii) vacation
benefits and fringe benefits, (iv) any other employee benefit plan
as such term is defined in Section 3(3) of ERISA, and (v) any
cafeteria plan, accident and health plan (including self-insured
medical reimbursement plan), or dependent care assistance program
(as such terms are defined in Sections 125, 105 and 129,
respectively of the Code).
(m) Seller has complied in all material respects with the
continuation coverage requirements of Section 4980B of the Code
which applies to any employees of Seller prior to the Closing.
(n) Seller's agreements and representations made in this
Section 4.13 are effective solely to the extent that Seller's breach
of the same will result in Buyer being liable to any third party due
to Buyer's purchase of the Transferred Assets. It is expressly
agreed that Buyer does not assume and does not in any way become
liable for any of Seller's employee benefit plan obligations of any
kind or type and further that Buyer shall not become subrogated to
any of Seller's employees' rights against Seller, if any.
4.14 Trade Names. Seller does not conduct business under
any name other than those listed on Schedule 4.14.
4.15 ▇▇▇▇▇▇▇▇.
(a) All ▇▇▇▇▇▇▇▇ by Seller relating to the Business are true
and correct in all material respects and are in compliance in all
material respects with all applicable laws and regulations.
(b) Neither Seller nor any of its respective officers,
directors, employees or agents, on behalf of or for the benefit of
Seller, directly or indirectly, has (i) offered or paid any amount
to, or made any financial arrangements with, any of Seller's past
or present customers or potential customers in order to obtain
business from such customers, other than standard pricing or
discount arrangements consistent with proper business practices,
(ii) except for incidental gifts of nominal value given, or agreed
to be given, is aware that there has been made, or that there is an
agreement to make, any gift or gratuitous payment of any kind,
nature or description (whether in money, property or services) to
any past or present customer, supplier, source of financing,
landlord, sub-tenant, license or anyone else at any time, (iii)
agreed to make, or is aware that there is any agreement to make, any
political contribution or any contributions, payment or gifts of
their respective funds or property to or for the private use of any
governmental official, employee or agent where either the payment or
the purpose of such contribution, payment or gift related to the
business of Seller and is illegal under the laws of the United
States, any state thereof or any other jurisdiction (foreign or
domestic), or (iv) made, or agreed to make, or is aware that there
have been, or that there is, any agreement to make, any payments to
any person with the intention or understanding that any part of such
payment was to be used directly or indirectly for the benefit of any
past or present customer, employee, supplier or landlord of Seller,
or for any purpose other than that reflected in the documents
supporting the payments.
4.16 Directors, Officers and Employees. Set forth on
Schedule 4.16 is a true and compete list of the officers of Seller
and each employee of Seller, together with the current position of
each such employee and the current amount of salaries and bonuses
of each such employee. Schedule 4.16 also sets forth whether Seller
has entered into a written employment agreement with any such
person, and a true and complete copy of each such employment
agreement has been made available to Buyer.
4.17 Fees. Seller has not, directly or indirectly,
retained any financial advisor, broker, agent or finder or paid or
agreed to pay any financial advisor, broker, agent or finder on
account of this Agreement or the transaction contemplated thereby.
4.18 No Adverse Action. There are no actions, suits,
claims or other proceedings pending or, to the best of Seller's
knowledge, threatened or injunctions or orders entered, pending or,
to the best of Seller's knowledge, threatened against Seller, to
restrain or prohibit the consummation of the transactions
contemplated hereby.
4.19 Full Disclosure. Seller has disclosed to Buyer all
material facts relating to Seller and its operations and has not
omitted to disclose to Buyer any material fact relating to Seller,
or its operations necessary to make the statements made herein not
misleading.
4.20 Severance Pay. The Closing of the transaction
contemplated hereunder shall not result in any severance obligations
with respect to employees of Seller.
4.21 Operation Of The Business. The Transferred Assets
constitute assets which are necessary to the Business of Seller as
conducted at present and all such Transferred Assets of Seller are
being transferred to Buyer on the Closing Date. Nothing contained
herein shall be construed as a representation with respect to the
assignability of any contracts, leases and other agreements. The
contracts, leases and other agreements have been made available to
Buyer and speak for themselves.
4.22 Files. All of the client, applicant and employee
files being transferred by Seller to Buyer hereunder contain all
documentation required by, and comply in all material respects with,
applicable laws, rules and regulations and, to the best of Seller's
knowledge, no copies or originals of any such files required to be
maintained have been removed by any officer, director, agent or
employee of Seller or by any third-party. The books and records of
the Seller relating to the Business, including, but not limited to,
operating data, sales promotional data, advertising material and
customer lists are complete and correct in all Material respects.
Such books and records have been made available to the Buyer or will
be delivered to the Buyer on the Closing Date. Buyer agrees to
allow Seller or its representatives access to the books and records
transferred hereunder for a period of six (6) years from the date of
closing subject to adequate and reasonable notice. This section
shall apply only to files of Seller subsequent to December 31, 1994.
All prior files shall be retained by ▇▇. ▇▇▇▇▇▇▇▇ and be available
to Buyer upon reasonable notice for the period ending six (6) years
from the date of Closing.
4.23 Environmental Compliance, Hazardous and Medical
Waste.
(a) Seller owns no real property, Seller has been at all
times prior hereto, and presently is, in compliance with all federal
and state environmental statutes or laws concerning environmental
protection and the use or disposal of hazardous material.
(b) Neither Seller, nor to the best of Sellers knowledge has
any other person ever used the office of Seller as a facility for
the manufacture, processing, distribution, use, transport, handling,
storage, treatment or disposal of any Hazardous Material.
(c) The office of Seller and its operations and services are in
full compliance with all Federal, state and local Environmental
Laws, and all federal, state or local environmental statutes,
ordinances, rules and regulations relating to emissions, discharges,
disposal or releases of pollutants, contaminants, chemicals, medical
or hazardous substances or waste into the environment or otherwise
relating to the manufacture, processing, use, treatment, storage,
disposal, transportation or handling of pollutants, chemicals,
contaminants or industrial, toxic, medical or hazardous substances
or wastes.
(d) To Seller's Knowledge, the office of Seller has never
contained either asbestos, PCBs or other toxic materials, whether
used in construction or stored thereon.
(e) (i) To Seller's knowledge, there are no Hazardous
Materials, the presence of which is limited, regulated or prohibited
by any federal, state or local governmental authority or agency
having jurisdiction over the office of Seller, or which are
otherwise known to pose a hazard to health or safety of occupants of
the office of Seller, located on, in or under the office or used in
connection therewith; or (ii) Seller has fully disclosed to the
Buyer in writing the existence, extent and nature of any Hazardous
Materials, which Seller is legally authorized and empowered to
maintain on, in or under the office of Seller or use in connection
therewith, and Seller has obtained all licenses, permits and
approvals required with respect thereto, and is in full compliance
with all of the terms, conditions and requirements of such licenses,
permits and approvals.
(f) Between the date of this Agreement and the Closing Date,
Seller agrees that it shall promptly notify Buyer in writing of any
change in the nature or extent of any Hazardous Materials
maintained, in the office of Seller or used in connection therewith,
and will transmit to Buyer copies of any citations, orders, notices
or other material governmental or other communication received with
respect to any Hazardous Materials.
(g) Seller has not caused or permitted to exist, as a result
of an intentional or unintentional act or omission on its part, a
releasing, discharging, spilling, leaking, pumping, emitting,
pouring, emptying or dumping of 'Hazardous Material' into waters or
onto lands of any state or the waters of the United States, or into
waters where damage may result to the lands, waters, fish,
shellfish, wildlife, biota, air and other resources owned, managed,
held in trust or otherwise controlled by any state or the United
States, unless said release, spill, or leak is pursuant to and in
compliance with the conditions of a permit issued by the appropriate
federal, state or local governmental authorities.
(h) Seller has not received notice of any past, present or
future events, conditions, circumstances, activities, practices,
incidents, actions or plans which may interfere with or prevent
compliance or continued compliance with any environmental law or any
regulation, code, plan, order, decree, judgment, injunction, notice
or demand letter issued, entered, promulgated or approved
thereunder, or which may give rise to any statutory or common law
legal liability, or otherwise form the basis of any claim, action,
demand, suit, proceeding, hearing, study or investigation, based on
or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling, or the
emission, discharge, release or threatened release into the
environment, of any hazardous material, whether with respect to the
office of Seller or otherwise (hereinafter an 'Environmental
Complaint'). Without limiting the foregoing, Seller has not
received a summons, citation, notice of violation, directive, letter
or other communication, written or oral, from any local or municipal
agency or department, any state or the U.S. Government concerning
any intentional or unintentional action or omission on Seller's part
which had resulted in the releasing, discharging, disposing,
spilling, leaking, pumping, pouring, emitting, emptying or dumping
of hazardous materials into waters or onto lands of the State of New
York, or waters of the United States, or into any waters where
damage may have resulted to the lands, waters, fish, shellfish,
wildlife, biota, air and other resources owned, managed, held in
trust or otherwise controlled by any state or the United States.
(i) There is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice or demand letter, notice of
violation, investigation, or proceeding pending or threatened
against the Seller or any Shareholder relating in any way to any
Environmental Law or any plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved
thereunder.
(j) Seller and Shareholders, jointly and severally, hereby
agree to indemnify, reimburse, defend and hold harmless Buyer, its
officers, directors, employees, successors and assigns from and
against all demands, claims, civil or criminal actions or causes of
action, liens, assessments, civil or criminal penalties or fines,
losses, damages, liabilities, obligations, costs, disbursements,
expenses or fees of any kind or of any nature (including, without
limitation, cleanup costs, attorneys', legal assistants',
consultants' or experts' fees and disbursements and costs of
litigation) which may at any time be imposed upon, incurred by or
awarded against Buyer, related to or resulting from: (1) the breach
of any representation or warranty under this Agreement; (2) pursuant
to or in connection with the application of any Environmental Law,
to the acts or omissions of Seller environmental damage or personal
injury alleged to have been caused, in whole or in part, by the
manufacture, processing, distribution, use, handling,
transportation, treatment, storage, or disposal of any Hazardous
Materials; or (3) the presence, whether past or present of any
Hazardous Materials placed by Seller, in or about the office.
Those liabilities, losses, claims, damages and expenses
for which Buyer is indemnified under this Agreement shall be
reimbursable to Buyer at Buyer's option to make payments with
respect thereto, without any requirement of waiting for ultimate
outcome of any litigation, claim or other proceeding, and Seller or
Shareholders or any of them, shall pay such liability, losses,
claims, damages and expenses to Buyer as so incurred within thirty
(30) days after notice from Buyer itemizing the amounts incurred to
the date of such notice.
(k) The provisions of this indemnification relating to
Environmental Laws and Hazardous Materials shall be in addition to,
and a remedy independent of, the Seller's and Shareholder's
obligation for general indemnification under Article 12 herein and
this indemnification shall not be limited in any respect by any term
or condition of such Article 12 Indemnification.
(l) If Seller fails to comply herewith or shall be discovered
to be in breach of this Section 4.24 prior to Closing, Buyer may, in
addition to terminating this Agreement as provided by Article 10
herein, recover from Seller and Shareholder, who jointly and
severally agree to pay, for any expensed incurred by Buyer in the
Buyer's efforts to purchase the Assets including, without
limitation, expenses incurred as a result of Buyer's inspections of
the office, records and other matters.
(m) In the event Buyer is denied any use or disposal permits
requested from the applicable Federal, state or local government
prior to the Closing Date, Buyer may, at its election, terminate
this Agreement and neither party shall have any further rights or
obligations pursuant to this Agreement.
4.24 Bulk Sales Compliance. All actions required to be
taken by the Seller in order to comply with any applicable state
bulk transfer statute will be timely taken prior to Closing. If
Seller does not comply with the Bulk Sales Act, Seller will
indemnify and save Buyer harmless from all costs, expenses, and
damages arising from such noncompliance.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller, both as of the
date hereof and as of the Closing Date, as follows:
5.1 Organization of Buyer; Good Standing. Buyer is a
corporation, duly organized, validly existing and in good standing
under the laws of the State of Georgia. Buyer's operating
subsidiary, which will acquire the Transferred Assets following the
closing and operating the Business will be qualified to do business
in New York. Buyer has the requisite corporate power and authority
to own, lease and operate its properties and to conduct its business
as currently conducted. Buyer is not currently qualified to do
business in New York and this transaction, as contemplated with the
subsequent transfer of the Transferred Assets to aforesaid operating
subsidiary will not require the Buyer to qualify itself to do
business in New York.
5.2 Authority.
(a) Buyer has full corporate power and has taken all
action necessary to execute, deliver and perform this Agreement and
to carry out the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the other Transaction
Documents to which Buyer is a party constitute legal, valid and
binding obligations of Buyer enforceable against Buyer in accordance
with its terms, except to the extent that such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, and similar laws affecting creditors' rights generally,
and (ii) equitable principles which may limit the availability of
certain equitable remedies (such as specific performance) in certain
instances.
(b) Neither the execution nor delivery of this Agreement
and the other Transaction Documents nor the consummation of the
transactions contemplated hereby will (i) except for obtaining any
consent, where the failure to obtain such consent would not
materially or adversely affect the assets or the financial condition
of Buyer, conflict with, constitute a breach, violation or
termination of any provision of any contracts and other agreements
to which Buyer is a party or by which it is bound, (ii) conflict
with or violate the Articles of Incorporation or By-laws of Buyer,
or (iii) violate any law, regulation, judgment, rule, order or any
other restriction of any other kind or character applicable to Buyer
or any of its properties or assets, the violation of which could
have a material adverse effect on the financial condition or
business operations of Buyer.
5.3 No Adverse Action. There are no actions, suits,
claims or other proceedings pending or, to the best of Buyer's
knowledge, threatened or injunctions or orders entered, pending or,
to the best of Buyer's knowledge, threatened against Buyer, to
restrain or prohibit the consummation of the transactions
contemplated hereby.
5.4 Material Misstatements or Omissions. Neither this
Agreement nor any other documents, certificate or statement
furnished to Seller by or on behalf of Buyer or Parent in connection
with this Agreement contains any untrue statement of material fact,
or omits any material fact necessary to make the statements
contained herein and therein not misleading in light of the context
in which they are made.
5.5 Fees. Buyer has not, directly or indirectly,
retained any financial advisor, broker, agent or finder or paid or
agreed to pay any financial advisor, broker, agency or finder on
account of this Agreement or the transaction contemplated hereby.
5.6 No Material Adverse Changes. Since the date of
Parent's consolidated financial statement for the quarterly period
ending May 31, 1996, there have been no changes materially adverse
to Parent and its subsidiaries, and their assets, financial
condition, operating results or business condition, taken as a
whole.
5.7 Inspection and Value. Buyer has formed its own
opinion as to the value of the Transferred Assets. Seller's
warranties include only the express written warranties that are
contained in this Agreement. Buyer has inspected the Transferred
Assets to the full extent of its desire and Seller has given Buyer
ample opportunity to conduct such inspections.
5.8 Compliance with Applicable Law. None of the Buyer
or Parent offices have advised either Buyer or the Parent and to
the best of the Buyer's knowledge, neither Buyer nor Parent has
received any notice or information of any violation, possible
violation, or default by Buyer under any applicable law,
regulation or order of any governmental department, commission,
board or agency or instrumentality, domestic or foreign, having
jurisdiction over Buyer's operations which could materially
adversely affect the ability to consummate the transaction
contemplated hereby and to pay the Note delivered to Seller
pursuant to this Agreement.
5.9 Consents and Approvals. Except with respect to
Mellon Bank, the execution and delivery by Buyer of this
Agreement, and the performance by Buyer and Parent of their
obligations hereunder, do not require Buyer or Parent 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.
5.10 Litigation. None of the Buyer or Parent offices
have advised either Buyer or the Parent and to the best of the
Buyer's knowledge, there are no actions, proceedings or
investigations pending or threatened against Buyer or Parent
before any court or administrative agency which could materially
adversely affect the Buyer's ability to consummate the transaction
contemplated hereby and to pay the Note delivered to Seller
pursuant to this Agreement.
5.11 No Known Adverse Effects. To the best of Buyer's
and Parent's knowledge, there is no material adverse fact known to
Buyer's or Parent's Senior Executive management, which when taken
as a whole, would materially adversely effect the financial
ability of Buyer or Parent to perform their financial obligations
under this Agreement.
ARTICLE 6. COVENANTS AND AGREEMENTS OF SELLER
6.1 Actions Pending Closing. From the date hereof to the
Closing, except as otherwise contemplated by this Agreement, Seller
covenants and agrees as follows:
(a) Seller will be operated in the usual and ordinary
manner consistent with past practices and will preserve its present
business organization, and preserve its present relationships with
persons having business dealings with it and to take such actions as
are necessary and to cause the transition of such business
operations and employee and other relationships to Buyer following
the Closing, as contemplated by this Agreement.
(b) Seller will not, without Buyer's consent, increase
or decrease the compensation payable or to become payable by Seller
to any officer or employee of Seller, or make any change in any
insurance, pension or other employee benefit plan, pay any
commission or bonus to any of such officers or employees, other than
in the normal course of business consistent with existing personnel
policies, nor will Seller amend any employment agreement between
SELLER and any employee of Seller.
(c) Except as otherwise provided herein, Seller will not
(i) mortgage, pledge, create or permit to exist any lien or security
interest against any of its assets, except for the liens and
security interests set forth on Schedule 6.1 hereto and except for
liens securing property acquired by Seller in the ordinary course of
business and as otherwise permitted pursuant to this Agreement (the
"Permitted Exceptions"); (ii) fail to maintain its assets in the
usual and ordinary course of business consistent with past
practices; (iii) sell, assign, transfer, lease or otherwise dispose
of any of its assets or acquire any assets or any interest therein,
except in each case in the usual and ordinary course of business;
(iv) terminate, modify or change any of the Contracts; and (v) enter
into any transaction, contract or commitment obligating Seller in
excess of $5,000 which is not in the usual and ordinary course of
Seller's business.
(d) All assets of Seller will be used, operated,
maintained and repaired in the usual and ordinary course of Seller's
business consistent with past practices.
(e) Seller will not permit any insurance policy naming
it as a beneficiary or a loss payable payee covering any of its
assets or its operations to be canceled, terminated or modified or
any of the coverage thereunder to lapse unless simultaneously with
such termination or cancellation, replacement policies, reasonably
satisfactory to Buyer, providing substantially the same coverage are
in full force and effect.
(f) Seller will timely file (including all applicable
extensions) all tax returns and reports required to be filed with
any federal, state or local governments or governmental agencies.
Seller will timely file (including all applicable extensions) the
federal and state income tax returns with respect to Seller's
operations for the period January 1, 1996 through and including the
day before the Closing Date and make all payments required in
connection therewith.
(g) With respect to any Contracts of Seller which, in
accordance with their terms, will terminate due to the expiration
of the term thereof prior to the Closing Date, Seller shall use good
faith efforts to extend such Contracts; provided, however, that in
the event any such extension would require payment of rentals or
other compensation by Seller in excess of that currently paid or
would require Seller to agree to terms which are materially and
adversely different from the present terms of such Contract, then
Seller shall not extend such Contract without obtaining Buyer's
prior written consent, which shall not be unreasonable withheld, to
such terms and extension.
(h) From the date hereof, through and including the
Closing Date, Seller shall not amend its Articles of Incorporation
or By-laws.
(i) Seller will operate its business through the Closing
Date so that the representations and warranties of Seller made to
Buyer in this Agreement shall be true and correct at Closing Date as
if made on the Closing Date (except for representations and
warranties made in Sections 4.1, 4.5, 4.16 and 4.17 with respect to
Financial Statements and other financial information of Seller which
expressly relate to an earlier date or time, which representations
shall be true and correct on and as of the specific date or times
referred to therein); provided however that Seller shall promptly
disclose to Buyer any information contained in the Schedules to this
Agreement which, because of an event occurring after the date
hereof, is incomplete or is no longer correct as of all times after
the date hereof until the Closing Date.
6.2 Consents. Seller shall use good faith efforts and
cooperate with Buyer in obtaining all necessary consents required
for the transfer of the Transferred Assets to Buyer.
6.3 Material Misstatements or Omissions. Neither this
Agreement nor any other documents, certificate or statement
furnished to Buyer by or on behalf of Seller or Secondary Indemnitor
in connection with this Agreement contains any untrue statement of
material fact, or omits any material fact necessary to make the
statements contained herein and therein not misleading in light of
the context in which they are made.
6.4 Fees. Seller has not, directly or indirectly,
retained any financial advisor, broker, agent or finder or paid or
agreed to pay any financial advisor, broker, agency or finder on
account of this Agreement or the transaction contemplated hereby.
ARTICLE 7. COVENANTS AND AGREEMENTS OF BUYER
Buyer hereby covenants and agrees with Seller as
follows:
7.1 Consents. From and after the date hereof Buyer shall
use good faith efforts and cooperate with Seller in obtaining all
necessary consents required for the transfer of the Transferred
Assets to Buyer.
7.2 Post-Closing Access to Information. Seller and Buyer
acknowledge that subsequent to Closing each party may need access to
information or documents in the control or possession of the other
party for the purposes of concluding the transactions herein
contemplated, audits, compliance with governmental requirements and
regulations, and the prosecution or defense of third party claims.
Accordingly, Seller and Buyer agree that after Closing each will
make reasonably available to the other's agents, independent
auditors and/or governmental agencies upon written request and at
the expense of the requesting party such documents and information
as may be available relating to the Transferred Assets of Seller for
periods prior and subsequent to Closing to the extent necessary to
facilitate concluding the transactions herein contemplated,
preparation of tax returns, audits, compliance with governmental
requirements and regulations, the prosecution or defense of claims
and other matters.
7.3 Employees. Except as indicated on Schedule 4.16,
buyer agrees to offer each employee listed on Schedule 4.16 a
similar position with Buyer or its subsidiary, at the same rate of
pay.
ARTICLE 8. CONDITIONS TO BUYER'S OBLIGATION TO
CONSUMMATE THE TRANSACTION
Each and every obligation of Buyer to be performed
hereunder is subject to the satisfaction on or prior to the Closing
Date of the conditions set forth below, any one or more of which may
be waived by Buyer.
8.1 Compliance with Agreement. Seller shall have
performed all of their obligations and agreements, and complied, in
all material respects, with all covenants, warranties and conditions
contained in this Agreement which are required to be performed or
complied with by them on or prior to the Closing Date, and Seller
shall have delivered a certificate to such effect to Buyer at
Closing.
8.2 Representations and Warranties. The representations
and warranties of Seller contained in this Agreement and the other
Transaction Documents shall be true, complete and correct, in all
material respects, on and as of the date made and as of the Closing
Date with the same force and effect as though such representations
and warranties had been made or given on the Closing Date, and
Seller shall have delivered a certificate to such effect to Buyer at
Closing.
8.3 Approvals and Consents. The material consents,
approvals and waivers as set forth on Schedule 8.3 hereto necessary
in order to consummate the transactions contemplated hereby shall
have been obtained.
8.4 No Litigation. No action or proceeding before a
court or any other governmental agency or body shall have been
instituted or threatened to restrain or prohibit the transactions
herein contemplated or which would prohibit Buyer's purchase of the
Transferred Assets.
8.5 No Material Adverse Change. No event or condition
resulting in a materially adverse change in the financial condition
of Seller or its assets shall have occurred and be continuing.
8.6 Opinion of Counsel. Buyer shall have received an
opinion of Seller's legal counsel, dated the Closing Date,
substantially in the form of Exhibit I hereto.
8.7 Deliveries. Buyer shall have received from Seller
all of the other documents required to be delivered by them pursuant
to Section ll.l(a) of this Agreement.
8.8 Consulting Agreement. Buyer shall have received the
Consulting Agreement substantially in the form of Exhibit II hereto
duly executed by Secondary Indemnitor, and such Consulting Agreement
shall be in full force and effect and constitute a legal, valid and
binding obligation of the Secondary Indemnitor and enforceable
against him in accordance with its terms.
8.9 Corporate Name. Within five (5) days following the
Closing Seller shall file with the office of the Secretary of the
State of New York such instruments necessary under applicable law
to change Seller's corporate name to a name which does not contain
the words All Care Nursing Service. Within ten (10) days following
such name change, Seller shall cooperate with Buyer so that Buyer
can reserve the corporate name All Care Nursing Service for the
benefit of Buyer. Seller shall at its own expense cause to be
delivered to Buyer certificate issued by The Secretary of State's
office evidencing Sellers name change.
ARTICLE 9. CONDITIONS TO SELLER'S OBLIGATION
TO CONSUMMATE THE TRANSACTION
Each and every obligation of Seller to be performed at or
before the Closing hereunder is subject to the satisfaction on or
prior to the Closing Date of the conditions set forth below, any one
or more of which may be waived by Seller:
9.1 Compliance with Agreement. Buyer shall have
performed all of its obligations and agreements and complied, in all
material respects, with all covenants, warranties and conditions
contained in this Agreement which are required to be performed or
complied with by Buyer on or prior to the Closing Date, and the
President of the Buyer shall have delivered a certificate to such
effect to Seller on the Closing Date.
9.2 Representations and Warranties. The representations
and warranties of Buyer contained in this Agreement and the other
Transaction Documents shall be true, complete and correct, in all
material respects, on and as of the date made and as of the Closing
Date with the same force and effect as though such representations
and warranties had been given on the Closing Date, and the President
of Buyer shall have delivered a certificate to such effect to Seller
at closing.
9.3 Approvals and Consents. The material consents,
approvals and waivers as set forth on Schedule 8.3 hereto necessary
in order to consummate the transactions contemplated hereby shall
have been obtained.
9.4 No Litigation. No action or proceeding before a
court or any other governmental agency or body shall have been
instituted or threatened to restrain or prohibit the transactions
herein contemplated or which would prohibit Buyer's purchase of the
Transferred Assets.
9.5 Deliveries. Seller shall receive from Buyer all of
the other documents required to be delivered by Buyer pursuant to
Section ll.l(b) of this Agreement.
ARTICLE 10. TERMINATION
10.1 Termination Prior to the Closing Date.
Notwithstanding anything herein to the contrary, this Agreement may
be terminated at any time:
(i) On or prior to the Closing Date by mutual
written consent of Buyer and Seller.
(ii) By Buyer, if the conditions specified in
Article 8 have not been satisfied or waived by Buyer as
of the Closing Date;
(iii) By Seller, if the conditions specified in
Article 9 have not been satisfied or waived by Seller as
of the Closing Date;
(iv) By Buyer or Seller, on November 1, 1996 , if the
Closing has not occurred by such date;
(v) At the election of the Seller prior to the
Closing Date, if the Buyer has breached any
representation, warranty, covenant or agreement contained
in this Agreement;
(vi) At the election of the Buyer prior to the
Closing Date, if the Seller has breached any
representation, warranty, covenant or agreement contained
in this Agreement;
(vii) At the election of the Seller or the Buyer, if
any legal proceeding is commenced or threatened by any
court or governmental agency directed against the
consummation of the Closing or any other transaction
contemplated under this Agreement; or
In the event of the termination of this Agreement pursuant to this
Section 10.1 this Agreement shall automatically terminate and be of
no further force and effect, and there shall be no liability
hereunder (except if termination occurs pursuant to clauses (v) or
(vi) above), or in respect of the transaction contemplated hereby.
ARTICLE 11. DELIVERIES AT AND AFTER CLOSING
11.1 Deliveries at Closing. (a) At Closing, Seller shall
deliver to Buyer:
(i) a ▇▇▇▇ of Sale and Assignment of Lease duly
executed by Seller;
(ii) certificates, dated the Closing Date, required
to be delivered by Seller to Buyer pursuant to Sections
8.1 and 8.2 hereof;
(iii) a Certificate of an authorized officer of Seller
certifying: that all necessary corporate action by the
Board of Directors of Seller has been taken to authorize
the consummation of the transactions provided for in this
Agreement. Such certificate shall attach or set forth
verbatim the resolutions adopted by the Board of Directors
of Seller;
(iv) with respect to Seller, good standing
certificate and tax clearance letter from the State of New
York;
(v) the opinion of Seller's counsel required
pursuant to Section 8.7 hereof;
(vi) Consulting Agreement for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in
the form set forth in Exhibit II.
(vii) Non-Competition Agreement for Seller in the
form set forth in Exhibit III.
(b) At Closing, Buyer shall deliver to Seller:
(i) certificates, dated the Closing Date,
required to be delivered by Buyer to Seller pursuant to
Sections 9.1 and 9.2 thereof;
(ii) a certificate of an authorized officer of Buyer
certifying that all necessary corporate action by the
Board of Directors of Buyer has been taken to authorize
the consummation of the transactions provided for in this
Agreement. Such certificate shall attach or set forth
verbatim the resolutions adopted by the Board of Directors
of Buyer;
(iii) The Purchase Price and Note specified in
Section 3.2.
ARTICLE 12. INDEMNIFICATION
12.1 Seller's Indemnity of Buyer.
(a) Seller shall indemnify Buyer and hold it harmless
from and against:
(i) any and all damages, expenses and losses
suffered, paid or incurred, or to be suffered, paid or
incurred in the future, by Buyer arising out of any
inaccuracies in or any breach of any representation,
covenant, agreement or warranty on the part of Seller
herein contained or in any other Transaction Document;
and
(ii) any and all reasonable costs and expenses of
Buyer related to clause (i) above including reasonable
attorney's fees in connection with the prosecution,
defense or appeal of any suit or action in connection
therewith.
(iii) The operations of the Business after the date
of Closing.
(All of such items described in paragraphs (i) and (ii)
above are collectively referred to hereinafter as the "Buyer's
Loss.")
(b) Whenever it shall come to the attention of Buyer that
it has suffered or incurred, or may suffer or incur, any Buyer's
Loss, Buyer shall give prompt written notice to Seller of such
anticipated or actual loss, damage, cost or expense, and Buyer will
permit Seller, at Seller's option and expense, to conduct the
defense against any such claims or actions, and will cooperate with
Seller in such defense in such manner as Seller may reasonably
request. If Seller elect not to, or fail to, defend against such
claims or actions, Buyer shall have the right to defend against such
claims or actions at Seller's expense. If Buyer shall defend
against such claim or action at Seller's expense, Buyer agrees that
it will not settle or permit the settlement of any matter giving
rise to any Buyer's Loss without the prior written consent of Seller
(which consent will not be unreasonably withheld).
(c) Buyer's right to assert a claim against Seller for
indemnification pursuant to this Section 12.2 shall survive the
Closing.
(d) In the event Seller has insufficient funds to honor
the indemnity under this Article, the Secondary Indemnitor shall be
jointly and severely liable.
12.2 Buyer's Indemnity of Seller.
(a) Buyer shall indemnify Seller and hold it harmless
from and against:
(i) any and all damages, expenses and losses
suffered, paid or incurred, or to be suffered, paid or
incurred in the future, by Seller arising out of any
inaccuracies in or breach of any representation, covenant,
agreement or warranty on the part of Buyer herein
contained or in any other Transaction Document;
(ii) any and all reasonable costs and expenses of
Seller related to clause (i) above including reasonable
attorney's fees in connection with the prosecution,
defense or appeal of any suit or action in connection
therewith.
(iii) Buyer's operation of the business after the
date of Closing.
(All of such items described in paragraphs (i) and (ii)
above are collectively referred to hereinafter as the "Seller
Loss.")
(b) Whenever it shall come to the attention of Seller
that it has suffered or incurred, or may suffer or incur, any
Seller's Loss, Seller shall give prompt written notice to Buyer of
such anticipated or actual loss, damage, cost or expense, and Seller
will permit Buyer, at Buyer's option and expense, to conduct the
defense against any such claims or actions, and will cooperate with
Buyer in such defense in such manner as Buyer may reasonably
request. If Buyer elects not to, or fails to, defend against such
claims or actions, Seller shall have the right to defend against
such claims or actions at Buyer's expense. If Seller shall defend
against such claim or actions at Buyer's expense, Seller agree that
it will not settle or permit the settlement of any matter giving
rise to any Seller Loss without the prior written consent of Buyer.
(c) Seller's right to assert a claim against Buyer for
indemnification pursuant to this Section 12.2 shall survive the
Closing.
(d) In the event Buyer has insufficient funds to honor
the indemnity under this Article, Parent shall be jointly and
severally liable.
12.3 The obligations of the respective parties under
Sections 12.1 and 12.2 shall not be effective until the aggregate
'Seller Loss' or 'Buyer Loss', as the case may be, exceeds $1,000.
ARTICLE 13. MISCELLANEOUS
13.1 Survival. Notwithstanding any right of the Buyer to
fully investigate the business and operations of Seller, the Buyer
shall be entitled to rely fully on the representations, warranties,
covenants and agreements of Seller contained in this Agreement and
the other Transaction Documents. The representations, warranties,
covenants and agreements made by the parties herein shall survive
for a period of 30 months after the Closing unless a different
period is specifically indicated. This Section 13.1 is not intended
to create any rights in any third-party beneficiaries.
13.2 Notices. Any notice, request, consent or
communication under this Agreement shall be effective only if it is
in writing and personally delivered or sent by a nationally
recognized overnight delivery service, with delivery confirmed, or
telexed or telecopied, with receipt confirmed (provided that if
telexed or telecopied, with a copy also send by regular United
States mail), or deposited in the United States mail, with postage
prepaid thereon, certified or registered mail, return receipt
requested, addressed as follows:
If to Seller: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & Halperin P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer: ATC Healthcare Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
V.P. & General Manager
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To: ATC Healthcare Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. Silver, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Secondary
Indemnitor: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or such other persons and/or addresses as shall be
furnished in writing by any party to the other party, and shall be
deemed to have been given as of the date when so personally
delivered, or the next day when delivered during business hours to
such overnight delivery service properly addressed or when receipt
of a telex or telecopy is confirmed, or upon the earlier to occur
of receipt or five (5) business days after mailed as provided above,
as the case may be, unless the sending party has actual knowledge
that such notice was not received by the intended recipient.
13.3 Parties in Interest and Assignment.
(a) This Agreement is binding upon and is for the benefit
of the parties hereto and their respective successors and assigns.
(b) Neither this Agreement nor any of the rights or
duties of any party hereto may be transferred or assigned to any
person except by a written agreement executed by all of the parties
hereto; provided, however, that Buyer may assign its rights or
delegate its duties hereunder to a wholly owned subsidiary of Buyer.
(c) It is expressly agreed that this Agreement is not
intended to create any rights in respect of any third-party
beneficiaries.
13.4 Modification. This Agreement may not be amended or
modified except by writing signed by an the parties or authorized
officer of all of the parties hereto. No waiver of the performance
or breach of, or default under, any condition or obligation hereof
shall be deemed to be a waiver of any other performance, or breach
of, or default under the same or any other condition or obligation
of this Agreement.
13.5 Entire Agreement. This Agreement, together with
those related agreements contemplated by this Agreement, embodies
the entire agreement between the parties hereto and cancels and
supersedes all previous agreements and understandings relating to
the subject matter of this Agreement, written or oral, between the
parties hereto. There are no agreements, representations, or
warranties between the parties other than those set forth or
provided herein.
13.6 Execution in Multiple Counterparts. This Agreement
may be executed in multiple counterparts, each of which shall be
deemed an original but all of which together shall constitute one
and the same instrument.
13.7 Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
13.8 Governing Law.
(a) This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the laws of the State
of New York applicable to agreements made and to be performed
entirely within such state, including all matters of enforcement,
validity and performance.
(b) Policy. Any claim between the parties arising out
of or relating to this Agreement, shall be determined by binding
arbitration under the Commercial Arbitration Rules of the American
Arbitration Association ('AAA rules') as modified by the provisions
of this Agreement; provided that the total award by a single
arbitrator (as opposed to a majority of the arbitrator (s)) shall
not exceed $250,000 including interest, attorneys' fees and costs.
If either party demands a total award greater than $250,000 there
shall be three (3) neutral arbitrators. If the parties cannot agree
on the identity of the arbitrator(s) within fifteen (15) days of the
arbitration demand, the arbitrator (s) shall be selected in
accordance with AAA rules. At least on arbitrator shall be an
attorney with over fifteen (15) years' experience. Whether a claim
is covered by this agreement shall be determined by the arbitrator
(s). All statutes of limitations which would otherwise be
applicable shall apply to any arbitration proceedings hereunder.
The arbitration shall be conducted in the English language in Nassau
County, New York.
(c) Hearing. The arbitrator (s) shall take such steps
as may be necessary to hold a private hearing within one hundred
eighty (180) days of the arbitration demand; to conclude the hearing
within three (3) days; and to render a written decision not later
than twenty (20) days after the hearing. The parties have included
these time limits in order to expedite the proceeding, but they are
not jurisdictional, and the arbitrator (s) may for good cause afford
or permit reasonable extensions or delays, which shall not affect
the validity of the award. The written decision shall contain a
brief statement of the claim (s) determined and the award made on
each claim. In making the decision and award, the arbitrator (s)
shall apply applicable law. The arbitrator (s) may award injunctive
relief or any other remedy available from a judge, and shall award
reasonable attorneys' fees and costs to the prevailing party but
shall not have the power to award punitive damages.
(d) Procedures. There shall be no discovery or
substantive motions, except the arbitrator (s) shall authorize such
discovery as may be shown to be necessary to ensure a fair hearing.
The arbitrator (s) shall not be bound by the rules of evidence or of
civil procedure, but rather may consider such writings and oral
presentations as reasonable business people would use in the conduct
of their day-to day affairs, and may require the parties to submit
some or all of their case by written declaration or such other
manner of presentation as the arbitrator (s) may determine to be
appropriate. The parties intend to limit live testimony and cross-
examination to the extent necessary to ensure a fair hearing on
material issues.
(e) Arbitration Decision. The award of the arbitrator
(s) shall be final and non-appealable, absent fraud, collusion or
willful misconduct by the arbitrator (s). The award may be
confirmed and enforced in any court having jurisdiction and the
parties hereby consent to the jurisdiction and venue of the courts
of the State of New York or any federal court located in such state
for such purposes. The parties hereby waive all defenses as to
personal jurisdiction, venue and sovereign immunity from
jurisdiction, attachment and execution in any proceeding to confirm
or enforce the award and prevails shall be paid its full costs and
attorneys' fees by the other party.
(f) Injunctive Relief. Either party may seek temporary
or preliminary injunctive relief from any court having jurisdiction
in the event of a breach of this agreement. The parties consent to
the jurisdiction and venue of the courts of the State of New York,
including all federal courts located therein. By obtaining any such
remedy neither party shall waive the provisions of subparagraphs (a)
through (f) above; and any issues or claims which arise in
connection with such injunctive in accordance with subparagraphs (a)
through (f) above.
13.9 Schedules. All of the Schedules and Exhibits
attached hereto are incorporated herein and made a part of this
Agreement by this reference thereto.
13.10 Severability. In case one or more of the provisions
contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, the invalidity or
illegality or unenforceability shall not affect any other provision
and this Agreement shall be construed as if the invalid, illegal or
unenforceable provision had never been contained in it.
13.11 Certain Post Closing Matters. Following the
Closing, Seller agree to cooperate with Buyer and shall take such
actions, deliver such documents to Buyer and execute such
documents as Buyer may reasonably request in order to carry out the
purpose of this Agreement and the other Transaction Documents.
13.12 Sales or Transfer Taxes. Seller shall pay all
sales and use taxes, if any, assessed in connection with the
transactions contemplated herein. Seller shall pay all transfer,
recording, or other such taxes or charges assessable on account of
the transactions contemplated herein.
13.13 Binding Effect. This Agreement is binding upon all
successors and assigns of the respective parties, including but not
limited to the operating subsidiary of Buyer which operates the
business.
13.14 Temporary Use of Seller's Checking Account. Should
Buyer wish Seller to make payroll payments on behalf of Buyer until
Buyer receives its customized checks; Buyer shall maintain the
required balance in Seller's checking account and shall be
responsible for all tax requirements and obligations. Nothing
contained herein is intended to result in Sellers or Secondary
Indemnitor being deemed to be an Employer or 'responsible person'
under the Internal Revenue Code. Buyer and Parent agree to hold
Seller and Secondary Indemnitor harmless and the indemnity of
Article 12.2 applies with respect to any such temporary use of
Sellers checking account under this provision. In the event of any
inconsistency between this provision and other provisions of this
Agreement, this provision shall control.
13.15 The parties hereto acknowledge that the transaction
contemplated under this Agreement is to be closed on the same date
as the signing and delivery, rendering some provisions of this
Agreement moot. In the event of inconsistency between any
provisions of this Agreement and Paragraph 13.15, this Paragraph
shall control.
13.16 Collections of Accounts Receivable
(a) Although Seller is transferring its trade name to
Buyer, Seller shall retain the limited right to use its trade name
for the purpose of collecting the retained accounts receivable and
paying obligations.
(b) Seller shall request customers to mail checks for
payments of the retained accounts receivable to the attention of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and to designate on the check the invoice date.
If any party receives a check which was intended by the customer as
payment to the other party, it shall not negotiate or deposit the
check, but shall immediately forward it to the other party.
(c) Seller shall invoice and receive payment for all
shifts completed through week 37, the designated cut off point
agreed to by the parties at Closing.
(d) Seller agrees that if its invoices to Harlem Hospital
aren't paid within 90 days of closing and Buyer has any invoices to
Harlem Hospital which are unpaid for 15 days, Seller will advise the
Hospital not to pay Seller until each such invoice of Buyer has been
paid.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first above written.
ATC HEALTHCARE SERVICES, INC.
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
STAFF BUILDERS, INC.
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
ALL CARE NURSING SERVICE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SECONDARY INDEMNITOR:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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