1
Exhibit 2.2
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STOCK PURCHASE AGREEMENT
by and between
AMN HEALTHCARE, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, JR.
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for all of the outstanding stock of
NURSES RX, INC.
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June 23, 2000
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TABLE OF CONTENTS
Page
1. SALE AND PURCHASE OF SHARES...................................... 1
1.1. SALE AND PURCHASE OF SHARES........................... 1
1.2. PAYMENT OF PURCHASE PRICE............................. 1
1.3. PURCHASE PRICE ADJUSTMENT............................. 2
1.4. RIGHT TO OFFSET....................................... 4
1.5. DELIVERY OF SHARES.................................... 4
2. CLOSING; CLOSING DATE............................................ 4
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS AS TO
THE COMPANY...................................................... 4
3.1. DUE INCORPORATION AND AUTHORITY....................... 4
3.2. SUBSIDIARIES AND OTHER AFFILIATES..................... 4
3.3. QUALIFICATION......................................... 4
3.4. OUTSTANDING CAPITAL STOCK............................. 4
3.5. OPTIONS OR OTHER RIGHTS............................... 5
3.6. CHARTER DOCUMENTS AND CORPORATE RECORDS............... 5
3.7. FINANCIAL STATEMENTS.................................. 5
3.8. NO MATERIAL ADVERSE CHANGE............................ 6
3.9. TAXES................................................. 6
3.10. COMPLIANCE WITH LAWS.................................. 9
3.11. PERMITS............................................... 9
3.12. NO BREACH............................................. 9
3.13. ENVIRONMENTAL MATTERS................................. 10
3.14. CLAIMS AND PROCEEDINGS................................ 10
3.15. CONTRACTS............................................. 11
3.16. REAL ESTATE........................................... 11
3.17. TANGIBLE PROPERTY..................................... 12
3.18. INTELLECTUAL PROPERTY................................. 13
3.19. TITLE TO PROPERTIES................................... 13
3.20. LIABILITIES........................................... 13
3.21. CUSTOMERS............................................. 14
3.22. EMPLOYEE BENEFIT PLANS................................ 15
3.23. EMPLOYEE RELATIONS.................................... 17
3.24. INSURANCE............................................. 17
3.25. OFFICERS, DIRECTORS AND EMPLOYEES..................... 18
3.26. OPERATIONS OF THE COMPANY............................. 18
3.27. POTENTIAL CONFLICTS OF INTEREST....................... 19
3.28. FULL DISCLOSURE....................................... 20
3.29. EXISTING INDEBTEDNESS................................. 20
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER..................... 21
4.1. TITLE TO THE SHARES................................... 21
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4.2. AUTHORITY TO EXECUTE AND PERFORM AGREEMENT............ 21
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER...................... 22
5.1. DUE INCORPORATION AND AUTHORITY....................... 22
5.2. AUTHORITY TO EXECUTE AND PERFORM AGREEMENT............ 22
5.3. PURCHASE FOR INVESTMENT............................... 22
5.4. CLAIMS AND PROCEEDINGS................................ 22
6. COVENANTS AND AGREEMENTS......................................... 23
6.1. CONDUCT OF BUSINESS; NOTICES.......................... 23
6.2. CORPORATE EXAMINATIONS AND INVESTIGATIONS............. 23
6.3. PUBLICITY............................................. 23
6.4. EXPENSES.............................................. 24
6.5. INDEMNIFICATION OF BROKERAGE.......................... 24
6.6. RELATED PARTIES....................................... 24
6.7. REQUIRED CONSENTS..................................... 24
6.8. PERMIT TRANSFERS...................................... 24
6.9. FURTHER ASSURANCES.................................... 25
6.10. TAXES; SECTION 338(h)(10) ELECTION.................... 25
6.11. TAX RETURN FILING..................................... 26
6.12. FINANCIAL STATEMENTS AND OTHER INFORMATION............ 27
6.13. TAX AUDITS AND OTHER PROCEEDINGS...................... 27
6.14. NON-SOLICITATION BY BUYER OR SELLER ON TERMINATION.... 27
6.15. ACCESS TO COMPANY RECORDS............................. 28
6.16. ACCESS TO FINANCIAL INFORMATION....................... 28
6.17. EXISTING INDEBTEDNESS................................. 28
7. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE BUYER
TO CLOSE......................................................... 29
7.1. REPRESENTATIONS AND COVENANTS......................... 29
7.2. CONSENTS AND APPROVALS................................ 29
7.3. OPINION OF COUNSEL TO THE SELLERS..................... 29
7.4. RESIGNATIONS.......................................... 29
7.5. NO CLAIMS............................................. 29
7.6. TERMINATION OF AGREEMENTS............................. 29
7.7. FIRPTA AFFIDAVIT...................................... 30
8. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE
SELLERS TO CLOSE................................................. 30
8.1. REPRESENTATIONS AND COVENANTS......................... 30
8.2. NO CLAIMS............................................. 30
8.3. OPINION OF COUNSEL TO THE BUYER....................... 30
9. NON-COMPETITION.................................................. 30
9.1. COVENANTS AGAINST COMPETITION......................... 30
9.2. RIGHTS AND REMEDIES UPON BREACH....................... 32
9.3. SEVERABILITY OF COVENANTS............................. 32
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9.4. BLUE-PENCILLING....................................... 32
9.5. ENFORCEABILITY IN JURISDICTIONS....................... 32
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE
SELLERS AFTER CLOSING............................................ 33
11. GENERAL INDEMNIFICATION/EXERCISE OF RIGHT TO OFFSET.............. 33
11.1. OBLIGATION OF THE SELLERS TO INDEMNIFY................ 33
11.2. SUPPLEMENTAL TAX INDEMNIFICATION...................... 34
11.3. SUPPLEMENTAL INTELLECTUAL PROPERTY INDEMNIFICATION.... 34
11.4. OBLIGATION OF THE BUYER TO INDEMNIFY.................. 34
11.5. NOTICE AND OPPORTUNITY TO DEFEND...................... 35
11.6. SCOPE OF INDEMNIFICATION.............................. 36
11.7. EXERCISE OF RIGHT TO OFFSET........................... 37
11.8. INDEMNIFICATION SOLE REMEDY........................... 37
11.9. INDEMNIFICATION OBLIGATION IS NET OF INSURANCE........ 37
12. TERMINATION OF AGREEMENT......................................... 37
12.1. TERMINATION........................................... 37
12.2. SURVIVAL AFTER TERMINATION............................ 38
13. MISCELLANEOUS.................................................... 38
13.1. CERTAIN DEFINITIONS................................... 38
13.2. CONSENT TO JURISDICTION AND SERVICE OF PROCESS........ 44
13.3. NOTICES............................................... 44
13.4. ENTIRE AGREEMENT...................................... 45
13.5. WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES;
PRESERVATION OF REMEDIES.............................. 45
13.6. GOVERNING LAW......................................... 46
13.7. BINDING EFFECT; ASSIGNMENT............................ 46
13.8. USAGE................................................. 46
13.9. COUNTERPARTS.......................................... 46
13.10. EXHIBITS AND SCHEDULES................................ 46
13.11. HEADINGS.............................................. 47
13.12. SEVERABILITY OF PROVISIONS............................ 47
SCHEDULES
1.3 Preliminary Balance Sheet Stipulations
3.2 Subsidiaries and Other Affiliates
3.3 Qualification
3.4 Outstanding Capital Stock
3.7(a) Financial Statements
3.9(b) Subchapter S Elections
3.9(e) Tax -- Statutes of Limitations/Audits/Unassessed Deficiencies
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3.9(f) Tax -- Status of Federal Audits
3.9(g) Tax -- Status of State, County, Local and Foreign Audits
3.9(h) Tax -- 481(a) Adjustments
3.10 Compliance with Laws
3.11 Permits
3.12 Required Consents
3.13 Environmental Matters
3.14 Claims and Proceedings
3.15(a) Contracts
3.15(b)Customer Contracts
3.16(b)Leased Properties
3.18 Intellectual Property
3.19 Title to Properties
3.20 Liabilities
3.21(a) Largest Customers
3.21(b)Customer Relationships
3.22(a) Benefit Plans
3.22(b)Benefit Plan Disclosures
3.23(a)Employees
3.23(b)Laws Relating to Employees
3.24 Insurance
3.25 Officers, Directors and Employees
3.26 Operations of the Company
3.27 Potential Conflicts of Interest
3.29 Existing Indebtedness
6.1(a) Conduct of Business
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of June
23, 2000 by and among AMN HEALTHCARE, INC., a Nevada corporation (the "Buyer"),
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, JR. (each a "Seller" and collectively
the "Sellers") for the purchase and sale of all of the issued and outstanding
shares of capital stock of NURSES RX, INC., a North Carolina corporation (the
"Company").
The Sellers are the beneficial and record owner of all of the
issued and outstanding shares of common stock, no par value (the "Shares"), of
the Company. The Sellers wish to sell to the Buyer, and the Buyer wishes to
purchase from the Sellers, all of the Shares upon the terms and subject to the
conditions of this Agreement.
Certain terms used in this Agreement are defined in Section
13.1.
Accordingly, the parties agree as follows:
1. SALE AND PURCHASE OF SHARES.
1.1. SALE AND PURCHASE OF SHARES. At the closing
provided for in Article 2 (the "Closing") and upon the terms and subject to the
conditions of this Agreement, and in reliance upon the representations,
warranties and agreements of the Sellers, the Buyer shall purchase all of the
Shares for the Purchase Price (as defined in Section 1.2), payable as provided
in Section 1.2.
1.2. PAYMENT OF PURCHASE PRICE.
(a) At the Closing and subject to the terms
of Section 1.3, the Buyer shall deliver to an account designated in writing by
the Sellers, cash by wire transfer of immediately available funds in the
following amount (the "Purchase Price"): (i) $17,000,000, (ii) decreased by the
amount of Existing Indebtedness (as defined in Section 3.29) of the Company as
of the close of business on the business day prior to the Closing Date, if any,
(iii) increased by the extent that Net Working Capital Assets exceed $3,132,500
as of the Closing, and (iv) decreased to the extent that $3,132,500 exceeds Net
Working Capital Assets as of the Closing.
(b) The Buyer shall deliver to an account
designated in writing by the Sellers $2,000,000, provided that the Sellers have
not violated any of the terms or conditions of this Agreement, to be payable by
wire transfer of immediately available funds on the following dates as follows
(the "Deferred Purchase Price Payments"):
June 29, 2001 $666,666
June 28, 2002 $666,667
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June 30, 2003 $666,667
(c) The Buyer shall deliver to an account
designated in writing by the Sellers $1,000,000, provided that the Sellers have
not violated any of the terms or conditions contained in Article 9 hereof, to be
payable by wire transfer of immediately available funds on the following dates
as follows (the "Noncompete Payments"):
June 29, 2001 $333,333
June 28, 2002 $333,333
June 30, 2003 $333,334
1.3. PURCHASE PRICE ADJUSTMENT.
(a) Payment at Closing. Two days prior to
the Closing, the Sellers shall prepare and deliver to the Buyer an estimated
balance sheet of the Company as of the Closing Date (the "Preliminary Balance
Sheet"). The Preliminary Balance Sheet shall be prepared by the Sellers in good
faith and in accordance with GAAP applied on a consistent basis, but consistent
with the stipulations in Schedule 1.3, and shall be accompanied by all
information reasonably necessary to determine the amount of Existing
Indebtedness and Net Working Capital Assets (including a line item for cash) as
of the Closing, to the extent such amounts can be determined or estimated as of
the date of the Preliminary Balance Sheet, and such other information as may be
reasonably requested by the Buyer. At the Closing, the Buyer shall pay to the
Sellers an amount equal to 97.5% of the Purchase Price as calculated in
accordance with Section 1.2, on the basis of the Preliminary Balance Sheet.
(b) Post-Closing Payment of Purchase Price
Adjustments.
(i) Within 45 days after the
Closing Date, the Buyer shall prepare and deliver to the Sellers an unaudited
balance sheet of the Company as of the Closing Date (the "Closing Balance
Sheet"). The Closing Balance Sheet shall be prepared by the Buyer in good faith
and in accordance with GAAP applied on a consistent basis, but consistent with
the stipulations in Schedule 1.3, and shall be accompanied by all information
reasonably necessary to determine the amount of Existing Indebtedness and Net
Working Capital Assets (including a line item for cash) as of the Closing. The
Sellers shall cooperate with the Buyer in the preparation of the Closing Balance
Sheet. In the event that the Buyer fails to deliver the Closing Balance Sheet
within 45 days after the Closing Date, the Preliminary Balance Sheet shall be
deemed to be the Closing Balance Sheet and shall be deemed to be delivered to
the Sellers by the Buyer on the 45th day following the Closing Date.
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(ii) The Buyer shall allow the
Sellers and their agents access at all reasonable times after the Closing Date
to the books, records and accounts of the Company to allow the Sellers to
examine the accuracy of the Closing Balance Sheet. Within 30 days after the date
that the Closing Balance Sheet is delivered by the Buyer to the Sellers, the
Sellers shall complete their examination thereof and may deliver to the Buyer a
written report setting forth any proposed adjustments to the Closing Balance
Sheet (the "Sellers' Dispute Report"). If the Sellers notify the Buyer of their
acceptance of the amount of Existing Indebtedness and Net Working Capital Assets
as of the Closing shown on the Closing Balance Sheet, or if the Sellers fail to
deliver a report of proposed adjustments to the Closing Balance Sheet within the
30 day period specified in the preceding sentence, the amount of Existing
Indebtedness and Net Working Capital Assets as of the Closing shown on the
Closing Balance Sheet shall be conclusive and binding on the parties as of the
last day of such 30 day period.
(iii) The Buyer and the Sellers
shall use good faith efforts to resolve within 15 days of the delivery of the
Sellers' Dispute Report any dispute involving the amount of Existing
Indebtedness and Net Working Capital Assets as of the Closing, and any
resolution between them as to any disputed amounts shall be final, binding and
conclusive on the parties hereto; provided, however, that, in the absence of any
such resolution within 15 days of the delivery of the Sellers' Dispute Report,
such dispute shall be settled by the determination of a mutually agreed upon
independent accountant, or such other method as to which the Sellers and Buyers
may then agree, which determination shall be binding. Each party will use its
best efforts to expedite such process, and the costs of such independent
accountant shall be paid 50% by the Buyer and 50% by the Sellers.
(iv) If the Purchase Price as
finally determined in accordance with this Section 1.3 is less than the amount
paid by the Buyer to the Sellers at the Closing, then the Sellers shall pay to
the Buyer the amount of such difference by wire transfer of immediately
available funds, within three (3) days after the date on which the Purchase
Price adjustments are finally determined in accordance with this Section 1.3. If
the Purchase Price as finally determined in accordance with this Section 1.3 is
greater than the amount paid by the Buyer to the Sellers at the Closing, then
the Buyer shall pay to the Sellers the amount of such difference, by wire
transfer of immediately available funds to accounts designated in writing by the
Sellers, within three (3) days after the date on which Purchase Price
adjustments are finally determined in accordance with this Section 1.3.
1.4. RIGHT TO OFFSET. Any amounts that the Buyer
is otherwise required to remit to the Sellers under this Article 1 may be offset
and reduced by any amounts owing from the Sellers to the Buyer or its
affiliates.
1.5. DELIVERY OF SHARES. At the Closing, the
Sellers shall deliver to the Buyer stock certificates representing the Shares,
duly endorsed in blank or accompanied by stock powers duly executed in blank, in
proper form for transfer, and with all appropriate stock transfer tax stamps
affixed.
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2. CLOSING; CLOSING DATE. The Closing of the sale and
purchase of the Shares contemplated hereby shall take place at the offices of
Parker, Poe, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 A.M. on June 28, 2000, or such other time or date as the
parties may mutually agree in writing, provided that all of the conditions to
the Closing set forth in Articles 7 and 8 have been satisfied or waived by the
party entitled to waive the same. The time and date upon which the Closing
occurs is herein called the "Closing Date."
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS AS TO
THE COMPANY. Each of the Sellers represents and warrants to the Buyer as
follows:
3.1. DUE INCORPORATION AND AUTHORITY. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of North Carolina and has all requisite corporate power and
lawful authority to own, lease and operate its properties and to carry on its
business as now being and heretofore conducted.
3.2. SUBSIDIARIES AND OTHER AFFILIATES. Except as
otherwise set forth in Schedule 3.2, the Company does not directly or indirectly
own any interest in any other person.
3.3. QUALIFICATION. The Company is duly qualified
or otherwise authorized as a foreign corporation to transact business and is in
good standing in each jurisdiction set forth on Schedule 3.3, which are the only
jurisdictions in which such qualification or authorization is required by Law or
in which the failure to so qualify or be authorized could have a material
adverse effect on the properties, business, results of operations or financial
condition of the Company (the "Condition of the Company"). The Company does not
own or lease real property in any jurisdiction other than its jurisdiction of
organization and the jurisdictions set forth on Schedule 3.3.
3.4. OUTSTANDING CAPITAL STOCK. The Company is
authorized to issue one hundred (100) shares of common stock, no par value (the
"Common Stock"), of which one hundred (100) shares are issued and one hundred
(100) shares are outstanding. The ownership of the Common Stock is set forth on
Schedule 3.4. All of the outstanding shares of Common Stock owned by each of the
Sellers are owned free and clear of any Lien. No other class of capital stock or
other ownership interests of the Company is authorized or outstanding.
3.5. OPTIONS OR OTHER RIGHTS. There is no
outstanding right, subscription, warrant, call, unsatisfied preemptive right,
option or other agreement of any kind to purchase or otherwise to receive from
the Company or the Sellers any of the outstanding, authorized but unissued,
unauthorized or treasury shares of the capital stock or any other security of
the Company, and there is no outstanding security of any kind of the Company
convertible into any such capital stock.
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3.6. CHARTER DOCUMENTS AND CORPORATE RECORDS. The
Sellers have heretofore delivered to the Buyer true and complete copies of the
Articles of Incorporation (certified by the Secretary of State or other
appropriate official of its jurisdiction of incorporation) and By-laws
(certified by the Company's secretary or an assistant secretary), or comparable
instruments, of the Company as in effect on the date hereof. The minute books,
or comparable records, of the Company heretofore have been made available to the
Buyer for its inspection and contain true and complete records of all meetings
and consents in lieu of meeting of the Board of Directors (and any committee
thereof) and shareholders of the Company since the time of the Company's
organization and accurately reflect all transactions referred to in such minutes
and consents in lieu of meeting. The stock books, or comparable records, of the
Company heretofore have been made available to the Buyer for its inspection and
are true and complete.
3.7. FINANCIAL STATEMENTS.
(a) The balance sheets of the Company as of
(i) December 31, 1998 and (ii) December 31, 1999, and the related statements of
income, shareholders' equity and changes in financial position for the years
then ended, including the footnotes thereto, (x) compiled, in the case of
3.7(a)(i) above, and (y) audited, in the case of 3.7(a)(ii) above, by DDK &
Company LLP, independent certified public accountants, which have been delivered
to the Buyer, fairly present the financial position of the Company as at such
dates and the results of operations of the Company for such respective periods
in accordance with GAAP applied on a consistent basis for the periods covered
thereby. (The financial statements of the Company as of December 31, 1999 and
for the year then ended are sometimes herein called the "Financial Statements."
The balance sheet included in the Financial Statements is sometimes herein
called the "Balance Sheet" and December 31, 1999 is sometimes herein called the
"Balance Sheet Date.") The Sellers have also delivered to the Buyer the balance
sheet of the Company as of April 30, 2000 and the related statements of income,
shareholders' equity and changes in financial position for the four months ended
April 30, 2000 (the "Interim Financial Statements".) The Financial Statements
and the Interim Financial Statements are attached hereto as Schedule 3.7(a).
(b) All accounts and notes receivable
reflected on the Balance Sheet, and all accounts and notes receivable arising
subsequent to the Balance Sheet Date, (i) have arisen in the ordinary course of
business of the Company and (ii) subject only to a reserve for bad debts
computed in a manner consistent with past practice and reasonably estimated to
reflect the probable results of collection, have been collected or are
collectible in the ordinary course of business of the Company in the aggregate
recorded amounts thereof in accordance with their terms.
3.8. NO MATERIAL ADVERSE CHANGE. Since the
Balance Sheet Date, there has been no material adverse change in the Condition
of the Company, and the Company knows of no such change which is threatened, nor
to the knowledge of the Company has there been any damage, destruction or loss
which is reasonably possible to
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have or has had a material adverse effect on the Condition of the Company,
whether or not covered by insurance.
3.9. TAXES.
(a) All Federal, state, county, local,
foreign and other taxes (including, without limitation, income, profits,
premium, estimated, excise, sales, use, occupancy, gross receipts, franchise, ad
valorem, severance, capital levy, production, transfer, withholding, employment,
unemployment compensation, payroll related, value added, inventory, social
security, stamp and property taxes, import duties and other governmental
charges, assessments, and charges of any kind whatsoever), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto, and
including expenses associated with contesting any proposed adjustment related to
any of the foregoing (collectively, "Taxes") due or claimed to be due from or
with respect to the Company on or before the date hereof have been timely paid.
(b) The Company (i) timely elected to be
treated as a subchapter S corporation for federal tax purposes and, except as
set forth on Schedule 3.9(b), for the tax purposes of each state in which the
Company is subject to tax, effective on the first day of its first taxable year,
and (ii) where applicable has properly maintained its status as a subchapter S
corporation for all taxable periods since the first day of its first taxable
year and, accordingly, the Sellers will pay when due federal income taxes or
state income taxes with respect to any taxable period beginning with its first
taxable year and through its taxable year (or portion thereof) ending on the
Closing Date, including as a result of the Section 338(h)(10) Election (as
defined in Section 6.10(b) below). Schedule 3.9(b) sets forth each state with
respect to which the Company has made an election to be treated as a subchapter
S corporation. Neither the Sellers nor the Company is aware of any event that
exists or has existed that presents any risk that the status of the Company as a
subchapter S corporation is or has been at any time subject to termination or
revocation.
(c) All returns, reports, declarations,
statements and other information required to be filed by or with respect to the
Company with respect to any Tax (all such returns and other reports, "Tax
Returns") on or before the date hereof have been timely filed and all such Tax
Returns are correct and complete in all material respects, except as provided in
the first sentence of Schedule 3.10. The charges, accruals and reserves on the
books of the Company in respect of any liability for Taxes based on or measured
by net income for any years not finally determined or with respect to which the
applicable statute of limitations has not expired are adequate to satisfy any
assessment for such Taxes for such years. No taxing authority has asserted any
Tax deficiency, lien, or other assessment against the Company which has not been
paid.
(d) No penalties or other charges are or
will become due with respect to the late filing of any Tax Return of the Company
or payment of any Tax
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of the Company required to be filed or paid on or before the Closing Date,
except as provided in the first sentence of Schedule 3.10.
(e) With respect to all Tax Returns of the
Company and except as set forth on Schedule 3.9(e), (i) the statute of
limitations for the assessment of Taxes has expired with respect to all periods
ending on or before December 31, 1995 (provided, the foregoing representation
assumes a statute of limitations of 3 years from the date of filing for each
non-federal return for which an extension has not been granted); (ii) no audit
or other proceeding by any court, governmental or regulatory authority or
similar authority is pending and no extension of time is in force with respect
to any date on which any Tax Return was or is to be filed and no waiver or
agreement is in force for the extension of time for the assessment or payment of
any Tax; and (iii) there is no unassessed deficiency proposed or threatened
against the Company, except as provided in the first sentence of Schedule 3.10.
(f) Schedule 3.9(f) sets forth the status of
Federal Tax audits of the Tax Returns of the Company for each fiscal year for
which the statute of limitations has not expired, including the amounts of any
deficiencies and additions to Tax, interest and penalties indicated on any
notices of proposed deficiency or statutory notices of deficiency, and the
amounts of any payments made by the Company with respect thereto. Each Tax
Return filed by or with respect to the Company for which the Federal Tax audit
has not been completed accurately reflects the amount of liability for Taxes
thereunder and makes all disclosures required by the Internal Revenue Code of
1986, as amended (the "Code") and regulations thereunder and other applicable
provisions of Law.
(g) Schedule 3.9(g) sets forth the status of
state, county, local and foreign Tax audits of the Tax Returns of the Company
for each fiscal year for which the statute of limitations has not expired,
including the amounts of any deficiencies or additions to Tax, interest and
penalties that have been made or proposed, and the amounts of any payments made
by the Company with respect thereto. Each state, county, local and foreign Tax
Return filed by or with respect to the Company for which the state, county,
local or foreign Tax audit has not been completed accurately reflects the amount
of its liability for Taxes thereunder and makes all disclosures required by
applicable provisions of Law.
(h) Except as set forth on Schedule 3.9(h),
the Company has not agreed to and is not required to make any adjustments under
section 481(a) of the Code by reason of a change in accounting method or
otherwise.
(i) The Company has not at any time
consented under Section 341(f)(1) of the Code to have the provisions of Section
341(f)(2) of the Code apply to any sale of its capital stock.
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(j) Reserves and provisions for Taxes
accrued but not due on or before the Closing Date reflected in the Financial
Statements will be adequate as of the Closing Date, in accordance with GAAP.
(k) The liability for Taxes of the Company
as of the Balance Sheet Date will not exceed the accrual for Taxes on the
Balance Sheet and, other than in the ordinary course of business, the liability
of the Company for Taxes (i) has not increased since the Balance Sheet Date and
(ii) will not increase at any time through the Closing Date.
(l) The Company is not a party to, is not
bound by, and has no obligation under any Tax sharing or similar agreement.
(m) There are no Liens for Taxes on the
assets of the Company except for Liens for current Taxes not yet due.
(n) The Company has not been, and is not in
violation (or with notice be in violation) of any applicable law relating to the
payment or withholding of Taxes and the Company has duly and timely withheld
from employee salaries, wages and other compensation and paid over to the
appropriate taxing authorities all material amounts required to be so withheld
and paid over for all periods under all applicable laws.
(o) No closing agreement that could affect
the Taxes of the Company has been entered into by or with respect to the
Company.
(p) No stamp, transfer, documentary, sales,
use, registration and other such Taxes and fees (including, without limitation,
any penalties and interest) incurred in connection with this Agreement and the
transactions contemplated by this Agreement (the "Contemplated Transactions")
will be due and payable in connection with this Agreement and the Contemplated
Transactions.
3.10. COMPLIANCE WITH LAWS. Except as set forth on
Schedule 3.10, the Company is not in violation of any applicable order,
judgment, injunction, award, decree or writ (collectively, "Orders"), or any
applicable law, statute, code, ordinance, regulation or other requirement
(collectively, "Laws") of any government or political subdivision thereof,
whether Federal, state, local or foreign, or any agency or instrumentality of
any such government or political subdivision, or any insurance company or fire
rating and any other similar board or organization or other non-governmental
regulating body (to the extent that the rules, regulations or orders of such
body have the force of law) or any court or arbitrator (collectively,
"Governmental Bodies") (but not including, however, Safety and Environmental
Laws, which are addressed in Section 3.13), and neither the Company nor the
Sellers have received notice that any such violation is being or may be alleged.
The Company has not made any illegal payment to officers or employees of any
Governmental Body, or made any illegal payment to customers for the sharing of
fees or to customers or suppliers for rebating of
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charges, or engaged in any other illegal reciprocal practice, or made any
illegal payment or given any other illegal consideration to purchasing agents or
other representatives of customers in respect of sales made or to be made by the
Company.
3.11. PERMITS. The Company has all licenses,
permits, exemptions, consents, waivers, authorizations, rights, certificates of
occupancy, franchises, orders or approvals of, and has made all required
registrations with, any Governmental Body that are material to the conduct of
the business of, or the intended use of any properties of, the Company
(collectively, "Permits"), not including, however, Permits relating to
compliance with Safety and Environmental Laws, which are addressed in Section
3.13. All Permits (with the exception of Permits required pursuant to Safety and
Environmental Laws, which are addressed in Section 3.13) are listed on Schedule
3.11 and are in full force and effect; no material violations are or have been
recorded in respect of any Permit; and no proceeding is pending or, to the
knowledge of the Company, threatened to revoke or limit any Permit. The Sellers
will take such action as is necessary to cause the Permits listed on Schedule
3.11 to remain in full force and effect following the consummation of the
Contemplated Transactions.
3.12. NO BREACH. The execution and delivery by the
Sellers of this Agreement and each and every other agreement and instrument
contemplated hereby, the consummation of the transactions contemplated hereby
and thereby and the performance by the Sellers of this Agreement and each such
other agreement and instrument in accordance with their respective terms and
conditions will not (a) violate any provision of the Articles of Incorporation
or By-laws (or comparable instruments) of the Company; (b) require the Company
to obtain any consent, approval, authorization or action of, or make any filing
with or give any notice to, any Governmental Body or any other person, except as
set forth on Schedule 3.12 (collectively, the "Required Consents"); (c) if the
Required Consents are obtained, violate, conflict with or result in the breach
of any of the terms and conditions of, result in a material modification of the
effect of, otherwise cause the termination of or give any other contracting
party the right to terminate, or constitute (or with notice or lapse of time or
both constitute) a default under, any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sale contract, mortgage, license,
franchise, commitment or other binding arrangement (collectively, the
"Contracts") to which the Company is a party or by or to which the Company or
any of its properties is or may be bound or subject, or result in the creation
of any Lien upon any of the properties of the Company pursuant to the terms of
any such Contract; (d) if the Required Consents are obtained, violate any Law of
any Governmental Body; (e) if the Required Consents are obtained, violate any
Order of any Governmental Body applicable to the Company or to its securities,
properties or business; or (f) if the Required Consents are obtained, violate or
result in the revocation or suspension of any Permit.
3.13. ENVIRONMENTAL MATTERS. To the knowledge of
the Sellers, except as disclosed on Schedule 3.13, (i) the property, assets and
operations of Company comply and have been in compliance in all material
respects with all applicable Safety and Environmental Laws; (ii) there is no
Environmental Claim pending or
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threatened against the Company and there is no civil, criminal or administrative
judgment or notice of violation against the Company pursuant to Safety and
Environmental Laws or principles of common law relating to pollution, protection
of the Environment or health and safety; and (iii) there are no past or present
events, conditions, circumstances, activities, practices, incidents, agreements,
actions or plans which may prevent compliance in all material respects with
Safety and Environmental Laws, or which have given rise to or will give rise to
an Environmental Claim or to Environmental Compliance Costs.
3.14. CLAIMS AND PROCEEDINGS. There are no
outstanding Orders of any Governmental Body against or involving the Company.
Except as set forth on Schedule 3.14, there are no actions, causes of action,
suits, claims, complaints, demands, litigations or legal, administrative or
arbitral proceedings or investigations (collectively, "Claims") (whether or not
the defense thereof or liabilities in respect thereof are covered by insurance)
pending or, to the knowledge of the Company, threatened, against or involving
the Company or any of its properties, owned or leased. To the knowledge of the
Company, except as set forth on Schedule 3.14, there is no fact, event or
circumstance that may give rise to any Claim that would be required to be set
forth on Schedule 3.14 if currently pending or threatened. All notices required
to have been given to any insurance company listed as insuring against any Claim
set forth on Schedule 3.14 have been timely and duly given and, except as set
forth on Schedule 3.14, no insurance company has asserted, orally or in writing,
that such Claim is not covered by the applicable policy relating to such Claim.
There are no Claims pending or threatened that would give rise to any right of
indemnification on the part of any director or officer of the Company or the
heirs, executors or administrators of such director or officer, against the
Company or any successor to the business of the Company.
3.15. CONTRACTS. (a) Schedule 3.15(a) sets forth a
true and complete list of all of the Contracts to which the Company is a party
or by or to which the Company or any of its properties may be bound or subject
which involve annual expenditures of over $30,000 per year per Contract, other
than Contracts with travel healthcare employees, facilities or hospitals.
Schedule 3.15(b) sets forth a true and complete list of each of the facilities,
hospitals and travel healthcare employees (identified solely by their employee
identification numbers) with which the Company has a Contract. The Sellers will
provide the Buyer with an updated Schedule 3.15(b) at Closing providing the full
names of such healthcare employees previously only identified by employee
identification numbers.
(b) There have been delivered to the Buyer
true and complete copies of all Contracts entered into with the Company's top
twenty (20) customers, a subset of those Contracts set forth on Schedule 3.15(b)
or set forth on any other Schedule. The Buyer has been given access to all
Contracts listed on Schedules 3.15(a) and 3.15(b) other than those Contracts
with travel healthcare employees. All of the Contracts listed on Schedules
3.15(a) and 3.15(b) are valid and binding and enforceable upon the Company, in
accordance with their terms. The Company is not in breach or default in any
material respect under any of such Contracts,
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nor to the knowledge of the Company does any condition exist that with notice or
lapse of time or both would constitute such a material default thereunder. To
the knowledge of the Company, no other party to any such Contract is in default
thereunder in any material respect nor does any condition exist that with notice
or lapse of time or both would constitute such a material default thereunder.
3.16. REAL ESTATE. (a) No Ownership of Real
Property. The Company does not own any real property and has not owned any real
property during the past twelve months.
(b) Leased Properties. Schedule 3.16(b) is a
true, correct and complete schedule of all leases and other agreements other
than apartment leases for housing for travel healthcare employees on temporary
assignment which apartment leases number less than 400 and which, in the
aggregate, do not require monthly rental payments in excess of $300,000
(collectively, the "Real Property Leases") under which the Company uses or
occupies or has the right to use or occupy, now or in the future, any real
property (the land, buildings and other improvements covered by the Real
Property Leases being herein called the "Leased Real Property"), which Schedule
sets forth the date of and parties to each Real Property Lease, the date of and
parties to each amendment, modification and supplement thereto, the term and
renewal terms (whether or not exercised) thereof, the annual base rent payable
thereunder and a brief description of the Leased Real Property covered thereby.
The Sellers have heretofore delivered to, or caused the Company to have
heretofore delivered to, the Buyer true, correct and complete copies of all Real
Property Leases (including all modifications, amendments and supplements). Each
Real Property Lease is valid, binding and in full force and effect, all rent and
other sums and charges payable by the Company as tenant thereunder are current,
no notice of default under any Real Property Lease has been received by the
Company which remains uncured, no termination notice under any Real Property
Lease has been received by the Company, and to the knowledge of the Company no
uncured default on the part of the Company or, to the knowledge of the Company,
the landlord, exists under any Real Property Lease.
(c) Entire Premises. All of the land,
buildings, structures and other improvements used by the Company in the conduct
of its business are included in the Leased Real Property.
(d) Space Leases. Except as set forth in the
Real Property Leases, no person or entity has been granted by the Company
pursuant to a written agreement or, to the knowledge of the Company, pursuant to
any other agreement, oral or otherwise, any right to the possession, use,
occupancy or enjoyment of the Leased Real Property or any portion thereof.
(e) No Options. Neither the Sellers nor the
Company owns or holds, or is obligated under or a party to, any option, right of
first refusal or other contractual right to purchase, acquire, sell, dispose of
or lease the Leased Real Property or any portion thereof or interest therein.
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(f) Condemnation. The Company have not
received written notice, or, to the knowledge of the Company, any other notice,
oral or otherwise, of any sale or other disposition of the Leased Real Property
or any part thereof.
3.17. TANGIBLE PROPERTY. The facilities,
machinery, equipment, furniture, buildings and other improvements, fixtures,
vehicles, structures, any related capitalized items and other tangible property
material to the business of the Company (collectively, the "Tangible Property")
are in all material respects in adequate operating condition, subject to
continued repair and replacement in accordance with past practice, and are
suitable for their intended use in accordance with past practice. During the
past three years there has not been any significant interruption of the
operations of the Company due to inadequate maintenance of the Tangible
Property.
3.18. INTELLECTUAL PROPERTY. "Intellectual
Property" is hereinafter defined as all of the intangible assets, interests and
rights used in or related to the conduct of the business of the Company or the
Subsidiary, including, without limitation, all corporate names, trade names,
trademarks and service marks (including all applications for registration
thereof and all goodwill associated therewith), patents and patent applications,
copyrights, trade secrets, rights to software and related source code used by
the Company or the Subsidiary (such software and related source code alone shall
hereinafter collectively be referred to as the "Software"). Schedule 3.18 sets
forth a list of all of the Intellectual Property of the Company as well as all
material licenses, sublicenses, and other agreements or permissions under which
the Company is a licensor or licensee or otherwise is authorized to use or
practice any Intellectual Property. The Company owns or otherwise possesses
legally enforceable rights to use, sell, and license, free and clear of any and
all Liens or material restrictions, any and all Intellectual Property used in
the business of the Company as currently conducted or as proposed to be
conducted. The Company has not infringed upon or otherwise violated the
intellectual property rights of any third party or received any claim alleging
any such infringement or other violation. The Company has not been, during the
three years preceding the date hereof, a party to any claim, nor, to the
knowledge of the Company, is any claim threatened or is there any valid ground
for a claim, that challenges the validity, enforceability, ownership or right to
use, sell or license any Intellectual Property owned by the Company. To the
knowledge of the Company, no third party is infringing upon any Intellectual
Property owned by the Company. The Company has taken all necessary and desirable
action to maintain and protect each item of Intellectual Property owned by the
Company. All material Software is held by the Company legitimately, is free from
any significant software defect, performs in conformance with its documentation,
and does not contain any bugs or viruses or any code or mechanism that could be
used to interfere with the operation of the Software.
3.19. TITLE TO PROPERTIES. The Company owns
outright and has good title to all of its properties, including all of the
assets reflected on the Balance Sheet and the properties described in Sections
3.17 and 3.18, in each case free and clear of any Lien, except for (a) Liens
specifically described in the notes to the Financial Statements; (b) properties
disposed of, or subject to purchase or sales orders, in the ordinary course of
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business since the Balance Sheet Date; (c) Liens securing Taxes, assessments,
governmental charges or levies, or the claims of materialmen, carriers,
landlords and like persons, all of which are not yet due and payable or are
being contested in good faith, so long as such contest does not involve any
substantial danger of the sale, forfeiture or loss of any assets; and (d) Liens
set forth on Schedule 3.19.
3.20. LIABILITIES. As at the Balance Sheet Date,
the Company did not have any material direct or indirect indebtedness,
liability, Claim, loss, damage, deficiency, obligation or responsibility, known
or unknown, fixed or unfixed, ▇▇▇▇▇▇ or inchoate, liquidated or unliquidated,
secured or unsecured, accrued, absolute, contingent or otherwise, whether or not
of a kind required by GAAP to be set forth on a financial statement or in the
notes thereto ("Liabilities") that were not fully and adequately reflected or
reserved against on the Balance Sheet or described on any Schedule or in the
notes to the Financial Statements. Except as set forth on Schedule 3.20, the
Company has not, except in the ordinary course of business, incurred any
material Liabilities since the Balance Sheet Date. Neither the Company nor the
Sellers have any knowledge of any circumstance, condition, event or arrangement
that may hereafter give rise to any Liabilities of the Company or any successor
to its business except in the ordinary course of business or as otherwise set
forth on Schedule 3.20.
3.21. CUSTOMERS.
(a) Schedule 3.21(a) lists, by dollar volume
paid for the twelve months ended on the Balance Sheet Date, the twenty largest
customers of the Company (the "Material Customers").
(b) The relationships of the Company with
its customers are good commercial working relationships and, except as set forth
on Schedule 3.21(b), (i) within the last twelve months, no Material Customer has
threatened to cancel or otherwise terminate, or to the knowledge of the Company
intends to cancel or otherwise terminate, its relationship with the Company,
(ii) no Material Customer has during the last twelve months decreased materially
or threatened to decrease or limit materially, or to the knowledge of the
Company intends to modify materially its relationship with the Company or
intends to decrease or limit materially its services to the Company or its usage
or purchase of the services or products of the Company, (iii) to the knowledge
of the Company, the acquisition of the Shares by the Buyer and the consummation
of the Contemplated Transactions will not adversely affect the relationship of
the Company with any of its Material Customers, (iv) within the last twelve
months, no customers have threatened to cancel or otherwise terminate, or to the
knowledge of the Company intend to cancel or otherwise terminate, their
relationships with the Company, the loss of which would have, in the aggregate,
a material adverse effect on the Condition of the Company, (v) within the last
twelve months, no customers have decreased or threatened to decrease or limit,
or to the knowledge of the Company intend to modify their relationships with the
Company to the extent of having, in the aggregate, a material adverse effect on
the Condition of the Company and (vi) to the knowledge of the Company, the
acquisition of the Shares by the Buyers and the consummation of the Contemplated
Transactions will
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not affect the relationships of the Company with any customers to the extent of
having, in the aggregate, a material adverse effect on the Condition of the
Company.
3.22. EMPLOYEE BENEFIT PLANS.
(a) Schedule 3.22(a) lists all Benefit
Plans. With respect to each such plan, Sellers heretofore have delivered, or
have caused the Company heretofore to have delivered, to Buyer, or has made
available to the Buyer or its representatives, true, correct and complete copies
of, to the extent applicable (i) all plan texts and agreements and related trust
agreements or annuity contracts; (ii) all summary plan descriptions and material
employee communications; (iii) the most recent annual report (including all
schedules thereto); (iv) the most recent actuarial valuation; (v) the most
recent annual audited financial statement and opinion; (vi) if the plan is
intended to qualify under Code section 401(a) or 403(a), the most recent
determination or notification letter received from the IRS; and (viii) all
material communications with any Governmental Body (including the DOL, IRS and
PBGC).
(b) Except as disclosed in Schedule 3.22(b):
(i) With respect to each Benefit
Plan, no event has occurred, and there exists no condition or set of
circumstances in connection with which the Company reasonably could, directly or
indirectly (through a Commonly Controlled Entity or otherwise), be subject to
any material liability under ERISA, the Code or any other applicable Law, except
liability for benefits claims and funding obligations payable in the ordinary
course.
(ii) Each Benefit Plan conforms in
all material respects to, and its administration is substantial in compliance
with, all applicable Laws. Each Benefit Plan intended to comply with section
401(a) of the Code uses a standardized prototype plan document for which, to the
knowledge of the Sellers, the prototype sponsor has received a favorable
notification letter from the IRS and, to the knowledge of the Sellers, no
events, circumstances or conditions exist which would jeopardize such plans'
qualified status.
(iii) The Company, and each
Commonly Controlled Entity has made all payments due from such respective entity
to date with respect to each Benefit Plan.
(iv) With respect to each Benefit
Plan, there are no funded benefit obligations for which contributions have not
been made or properly accrued and there are no unfunded benefit obligations that
have not been accounted for by reserves, or otherwise properly footnoted in
accordance with GAAP, on the Financial Statements.
(v) No Benefit Plan is subject to
Code section 412 or ERISA section 302.
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(vi) No Benefit Plan is or was
subject to Title IV of ERISA.
(vii) No Benefit Plan is a
"multiemployer plan" as defined in Code Section 414(f) or ERISA sections 3(37)
or 4001(a)(31). No Benefit Plan is a multiple employer plan within the meaning
of the Code section 413(c) or ERISA sections 4063, 4064 or 4066. No Welfare Plan
is a "multiple employer welfare arrangement" as defined in ERISA section 3(40).
(viii) There are no Claims or Liens
pending or, to the knowledge of the Sellers, threatened (other than routine
claims for benefits) with respect to any Benefit Plan or against the assets of
any Benefit Plan.
(ix) Each Pension Plan that is not
qualified under Code section 401(a) or 403(a) is exempt from Part 2, 3 and 4 of
Title I of ERISA as an unfunded plan that is maintained primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees, pursuant to ERISA sections 201(2), 301(a)(3) and
401(a)(1).
(x) No assets of the Company are
allocated to or held in a "rabbi trust" or similar funding vehicle.
(xi) Each Benefit Plan that is a
"group health plan" (as defined in ERISA section 607(1) or Code section
5001(b)(1)) has been operated at all times in compliance with the provisions of
COBRA and any applicable similar state Law.
(xii) There are no reserves,
assets, surpluses or prepaid premiums with respect to any Welfare Plan.
(xiii) The Company is not obligated
to provide benefits under any Retiree Welfare Plan.
(xiv) The consummation of the
Contemplated Transactions will not under any Benefit Plan or other Company
agreement, policy or commitment (A) entitle any current or former Employee to
severance pay, unemployment compensation or any similar payment; (B) accelerate
the time of payment or vesting, or increase the amount of any compensation due
to, or in respect of, any current or former Employee; (C) result in or satisfy a
condition to the payment of compensation that would, in combination with any
other payment, result in an "excess parachute payment" within the meaning of
Code section 280G(b); or (D) constitute or involve a prohibited transaction (as
defined in ERISA section 406 or Code section 4975), constitute or involve a
breach of fiduciary responsibility within the meaning of ERISA section 502(l) or
otherwise violate Part 4 of Subtitle B of Title I of ERISA.
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(xv) As of the Closing, the Company
and any Commonly Controlled Entity, have not incurred any liability or
obligation under the Worker Adjustment and Retraining Notification Act, as it
may be amended from time to time, and within the 90-day period immediately
following the Closing, will not incur any such liability or obligation if,
during such 90-day period, only terminations of employment in the normal course
of operations occur.
3.23. EMPLOYEE RELATIONS.
(a) Schedule 3.23(a) lists as of the date
hereof the number of Employees in the aggregate, the number of full-time
personnel and the number of contract workers of the Company. Except as disclosed
in Schedule 3.23(a), none of the Employees is represented by a union, and no
union organizing efforts have been conducted within the last five years or are
now being conducted. Except as disclosed in Schedule 3.23(a), the Company has
not at any time during the last five years had, nor to the knowledge of the
Company, is there now threatened, a strike, picket, work stoppage, work slowdown
or other labor dispute.
(b) Except as set forth on Schedule 3.23(b),
the Company has not violated any provision of any Law or Order of any
Governmental Body regarding the terms and conditions of Employees, former
Employees or prospective Employees or other labor-related matters, including,
without limitation, laws, rules, regulations, orders, rulings, decrees,
judgments and awards relating to discrimination, fair labor standards and
occupational health and safety, wrongful discharge or violation of the personal
rights of Employees, former Employees or prospective Employees.
3.24. INSURANCE. Schedule 3.24 sets forth a list
(specifying the insurer, describing each pending claim thereunder of more than
$50,000 and setting forth the aggregate amounts paid out under each such policy
through the date hereof and the aggregate limit, if any, of the insurer's
liability thereunder) of all policies or binders of fire, liability, product
liability, worker's compensation, vehicular and other insurance held by or on
behalf of the Company. Such policies and binders are valid and binding in
accordance with their terms, are in full force and effect, and insure against
risks and liabilities to an extent and in a manner customary in the industries
in which the Company operates. The Company is not in default with respect to any
provision contained in any such policy or binder or has failed to give any
notice or present any claim under any such policy or binder in due and timely
fashion. Except for claims set forth on Schedule 3.24, there are no outstanding
unpaid claims that have been reported to the Company under any such policy or
binder, and the Company has not received any notice of cancellation or
non-renewal of any such policy or binder. Except as set forth on Schedule 3.24,
the Company has not received any notice from any of its insurance carriers or
any Governmental Body that any insurance premiums will or may be materially
increased in the future or that any insurance coverage listed on Schedule 3.24
will or may not be available in the future on substantially the same terms as
now in effect, and to the knowledge of the Company, there is no basis for the
issuance of any such notice or for any such action.
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3.25. OFFICERS, DIRECTORS AND EMPLOYEES. Schedule
3.25 sets forth (a) the name, title and total compensation of each officer and
director of the Company; (b) the name, title and total compensation of each
other Employee, consultant, agent or other representative of the Company whose
annual compensation (including bonuses and commissions) for 1999 exceeded
$50,000; (c) the name, title and total compensation of each other Employee,
consultant, agent or other representative of the Company whose current or
committed annual rate of compensation exceeds $50,000 or is reasonably
anticipated (including bonuses and commissions) to exceed $75,000; (d) all wage
and salary increases, bonuses and increases in any other direct or indirect
compensation received by such persons since the Balance Sheet Date; (e) any
payments or commitments to pay any severance or termination pay to any current
or former officer, director or employee of the Company; and (f) any accrual for,
or any commitment or agreement by the Company to pay, such increases, bonuses or
pay. Except as at forth on Schedule 3.25, none of such persons has notified the
Company whether orally or in writing that he or she will cancel or otherwise
terminate such person's relationship with the Company.
3.26. OPERATIONS OF THE COMPANY. Except as set
forth on Schedule 3.26, since the Balance Sheet Date the Company has not:
(a) declared or paid any dividends or
declared or made any other distributions of any kind to its shareholders, or
made any direct or indirect redemption, retirement, purchase or other
acquisition of any shares of its capital stock;
(b) except for short-term bank borrowings in
the ordinary course of business, incurred any indebtedness for borrowed money;
(c) reduced its cash or short-term
investments or their equivalent, other than to meet cash needs arising in the
ordinary course of business, consistent with past practices;
(d) waived any material right under any
Contract or other agreement of the type required to be set forth on any
Schedule;
(e) made any change in its accounting
methods or practices or made any change in depreciation or amortization policies
or rates adopted by it;
(f) materially changed any of its business
policies, including advertising, investment, marketing, pricing, purchasing,
production, personnel, sales, returns, budget or product acquisition policies;
(g) made any loan or advance to any of its
shareholders, officers, directors, Employees, consultants, agents or other
representatives (other than travel advances made in the ordinary course of
business), or made any other loan or advance otherwise than in the ordinary
course of business;
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(h) except for inventory or equipment in the
ordinary course of business, sold, abandoned or made any other disposition of
any of its properties or assets or made any acquisition of all or any part of
the properties, assets, capital stock or business of any other person;
(i) paid, directly or indirectly, any of its
material Liabilities before the same became due in accordance with its terms or
otherwise than in the ordinary course of business;
(j) terminated or failed to renew, or
received any written threat (that was not subsequently withdrawn) to terminate
or fail to renew, any Contract or other agreement that is or was material to the
Condition of the Company;
(k) amended its Articles of Incorporation or
By-laws (or comparable instruments) or merged with or into or consolidated with
any other person, subdivided or in any way reclassified any shares of its
capital stock or changed or agreed to change in any manner the rights of its
outstanding capital stock or the character of its business; or
(l) engaged in any other material
transaction other than in the ordinary course of business or in any activity or
transaction which has had a material adverse effect on the operations and/or
value of the Company.
3.27. POTENTIAL CONFLICTS OF INTEREST. Except as
set forth on Schedule 3.27, (a) the Sellers do not, (b) no officer, director or
affiliate of the Company or of the Sellers, (c) no relative or spouse (or
relative of such spouse) of any such officer, director or affiliate or of the
Sellers and (d) no entity controlled by one or more of the foregoing:
(i) own(s), directly or indirectly,
any interest in (excepting less than 1% stock holdings for investment purposes
in securities of publicly held and traded companies), or is an officer,
director, employee or consultant of, any person which is, or is engaged in
business as, a competitor, lessor, lessee, supplier, distributor, sales agent or
customer of the Company;
(ii) own(s), directly or
indirectly, in whole or in part, any property that the Company uses in the
conduct of its business; or
(iii) has/have any Claim whatsoever
against, or owes any amount to, the Company, except for claims in the ordinary
course of business such as for accrued vacation pay, accrued benefits under
Benefit Plans, and similar matters and agreements existing on the date hereof.
3.28. FULL DISCLOSURE. No representation or
warranty of the Sellers contained in this Agreement, and no document furnished
by or on behalf of the Company to the Buyer pursuant to this Agreement or in
connection with the
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Contemplated Transactions, contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements made, in the context in which made, not materially false or
misleading. To the knowledge of the Company, there is no fact that the Sellers
have not disclosed to the Buyer in writing that materially adversely affects the
Condition of the Company or the ability of the Sellers to perform this
Agreement.
3.29. EXISTING INDEBTEDNESS. As of the date of
this Agreement and as of the close of business on the day prior to the Closing
Date, (i) all indebtedness of or any obligation of the Company for borrowed
money, whether current, short-term, or long-term, secured or unsecured, (ii) all
indebtedness of the Company for the deferred purchase price for purchases of
property outside the ordinary course which is not evidenced by trade payables,
(iii) all lease obligations of the Company under leases which are capital leases
in accordance with GAAP, (iv) all off-balance sheet financings of the Company
including, without limitation, synthetic leases and project financing, (v) any
payment obligations of the Company in respect of banker's acceptances or letters
of credit (other than stand-by letters of credit in support of ordinary course
trade payables), (vi) any liability of the Company with respect to interest rate
swaps, collars, caps and similar hedging obligations, (vii) any present, future
or contingent obligations of the Company under (A) any phantom stock or equity
appreciation rights, plan or agreement, (B) any consulting, deferred pay-out or
earn-out arrangements in connection with the purchase of any business or entity,
(C) any non-competition agreement, (viii) any accrued bonuses other than
periodic bonuses payable to travel healthcare employees which are included in
the calculation of Net Working Capital Assets, (ix) any accrued Taxes other than
payroll Taxes accrued in the ordinary course of business which are included in
the calculation of Net Working Capital Assets, (x) any accrued and unpaid
interest or any contractual prepayment premiums, penalties or similar
contractual charges resulting from the transactions contemplated hereby or the
discharge of such obligations with respect to any of the foregoing (other than
any such prepayment premiums, penalties of similar contractual charges arising
solely from actions taken by the Buyer after the Closing and not contemplated by
this Agreement), (xi) all indebtedness of or any obligation of the Company owed
to the Sellers or to any affiliate of the Sellers not canceled pursuant to
Section 6.6 hereof and (xii) all indebtedness of or any obligation of the
Company incurred for the personal benefit of the Sellers or any affiliate of the
Sellers, including without limitation, any family members of the Sellers, is
listed on Schedule 3.29 hereto (collectively, but without duplication, the
"Existing Indebtedness"). Notwithstanding the foregoing, in no event will any
item actually included in the computation of Net Working Capital Assets be
included as Existing Indebtedness. The Company shall supplement Schedule 3.29 to
the extent necessary to set forth amounts which are to be included in Existing
Indebtedness as of the close of business on the day prior to the Closing Date,
and, as supplemented, Schedule 3.29 will, as of the close of business on the day
prior to the Closing Date, list all Existing Indebtedness and the amounts
thereof as of the close of business on the day prior to the Closing Date.
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4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each
of the Sellers represents and warrants to the Buyer as follows:
4.1. TITLE TO THE SHARES. As of the Closing Date,
each of the Sellers shall own beneficially and of record, free and clear of any
Lien, or shall own of record and have full power and authority to convey free
and clear of any Lien, the Shares and, upon delivery of and payment for such
Shares at the Closing as herein provided, each of the Sellers will convey to the
Buyer good and valid title thereto, free and clear of any Lien.
4.2. AUTHORITY TO EXECUTE AND PERFORM AGREEMENT.
Each of the Sellers has full legal right and power and all authority and
approvals required to enter into, execute and deliver this Agreement and each
and every agreement and instrument contemplated hereby to which such Seller is
or will be a party and to perform fully such Seller's obligations hereunder and
thereunder. This Agreement has been duly executed and delivered by each of the
Sellers, and on the Closing Date, each and every agreement and instrument
contemplated hereby to which each Seller is a party will be duly executed and
delivered by such Seller and (assuming due execution and delivery hereof and
thereof by the other parties hereto and thereto) this Agreement and each such
other agreement and instrument will be valid and binding obligations of each
Seller enforceable against each Seller in accordance with their respective
terms. The execution and delivery by each Seller of this Agreement and each and
every agreement and instrument contemplated hereby to which such Seller is a
party, the consummation of the transactions contemplated hereby and thereby and
the performance by each Seller of this Agreement and each such other agreement
and instrument in accordance with their respective terms and conditions will not
(a) require such Seller to obtain any consent, approval, authorization or action
of, or make any filing with or give any notice to, any Governmental Body or any
other person, except for the Required Consents; (b) if the Required Consents are
obtained, violate, conflict with or result in the breach of any of the terms and
conditions of, result in a material modification of the effect of, otherwise
cause the termination of or give any other contracting party the right to
terminate, or constitute (or with notice or lapse of time or both constitute) a
default under, any Contract to which such Seller is a party or by or to which
such Seller is or the Shares are or may be bound or subject; (c) if the Required
Consents are obtained, violate any Law or Order of any Governmental Body
applicable to such Seller or to the Shares; or (d) result in the creation of any
Lien on the Shares.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The
Buyer represents and warrants to the Sellers as follows:
5.1. DUE INCORPORATION AND AUTHORITY. The Buyer
is a corporation duly organized, validly existing and in good standing under the
Laws of the State of Nevada and has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as now
being and as heretofore conducted.
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5.2. AUTHORITY TO EXECUTE AND PERFORM AGREEMENT.
The Buyer has the full legal right and power and all authority and approvals
required to enter into, execute and deliver this Agreement and each and every
agreement and instrument contemplated hereby to which the Buyer is or will be a
party and to perform fully its obligations hereunder and thereunder. This
Agreement has been duly executed and delivered by the Buyer, and on the Closing
Date, each and every agreement and instrument contemplated hereby to which the
Buyer is a party will be duly executed and delivered by the Buyer and (assuming
due execution and delivery hereof and thereof by the other parties hereto and
thereto) this Agreement and each such other agreement and instrument will be
valid and binding obligations of the Buyer enforceable against the Buyer in
accordance with their respective terms. The execution and delivery by the Buyer
of this Agreement and each and every other agreement and instrument contemplated
hereby to which the Buyer is a party, the consummation of the transactions
contemplated hereby and thereby and the performance by the Buyer of this
Agreement and each such other agreement and instrument in accordance with their
respective terms and conditions will not (a) violate any provision of the
Articles of Incorporation or By-laws (or comparable instruments) of the Buyer;
(b) require the Buyer to obtain any consent, approval, authorization or action
of, or make any filing with or give any notice to, any Governmental Body or any
other person; (c) violate, conflict with or result in the breach of any of the
terms and conditions of, result in a material modification of the effect of,
otherwise cause the termination of or give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time or both constitute)
a default under, any Contract to which the Buyer is a party or by or to which
the Buyer or any of its properties is or may be bound or subject; or (d) violate
any Law or Order of any Governmental Body applicable to the Buyer.
5.3. PURCHASE FOR INVESTMENT. The Buyer is
purchasing the Shares for its own account for investment and not for resale or
distribution.
5.4. CLAIMS AND PROCEEDINGS. There are no Claims
pending, or to the knowledge of the Buyer threatened, involving, affecting or
relating to the transactions contemplated in this Agreement or which would
prohibit the buyer from consummating the transactions contemplated in this
Agreement nor is any basis known to the Buyer for any such actions, suit,
proceeding or investigation.
6. COVENANTS AND AGREEMENTS.
6.1. CONDUCT OF BUSINESS; NOTICES.
(a) From the date hereof through the Closing
Date, other than as set forth on Schedule 6.1(a), the Sellers agree that they
(i) shall cause the Company to conduct its business in the ordinary course and,
without the prior written consent of the Buyer, not to undertake any of the
actions specified in Section 3.26; and (ii) shall cause the Company to conduct
its business in a manner such that the representations and warranties contained
in Article 3 shall continue to be true and correct
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on and as of the Closing Date as if made on and as of the Closing Date; and
(iii) shall conduct their affairs in a manner such that the representations and
warranties contained in Article 4 shall continue to be true and correct on and
as of the Closing Date as if made on and as of the Closing Date.
(b) The Sellers shall give the Buyer prompt
notice of any event, condition or circumstance occurring from the date hereof
through the Closing Date that would constitute a violation or breach of (i) any
representation or warranty of any party, whether made as of the date hereof or
as of the Closing Date, or (ii) any covenant of the Sellers contained in this
Agreement. The Sellers will update the Schedules to this Agreement on or prior
to the Closing Date to reflect any events, conditions or circumstances occurring
after the date hereof and required to be reflected on such Schedules; provided
that all such updates shall be deemed not to have been made for purposes of
determining whether the condition of the Buyer to complete the Closing as set
forth in Section 7.1 has been satisfied.
6.2. CORPORATE EXAMINATIONS AND INVESTIGATIONS.
Until the Closing Date, the Sellers shall permit employees and representatives
of the Buyer to visit and inspect the Company and any of its properties, to
examine its corporate, financial and operating records and make copies thereof
or abstracts therefrom, and to discuss its affairs, finances, and accounts with
its directors, officers and independent public accountants, all at such
reasonable times during normal business hours and as often as may be reasonably
requested upon reasonable advance notice to the Sellers, and the Sellers shall
cooperate fully therewith. Notwithstanding the foregoing, any and all requests
for access for examinations or investigations as described above shall be made
and scheduled in advance through ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Jr., or
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇. No investigation by the Buyer shall diminish or obviate any of
the representations, warranties, covenants or agreements of the Sellers
contained in this Agreement.
6.3. PUBLICITY. The parties agree that no
publicity release or announcement concerning this Agreement or the Contemplated
Transactions shall be made without advance approval thereof by the Sellers and
the Buyer.
6.4. EXPENSES. The parties to this Agreement
shall, except as otherwise specifically provided herein, bear their respective
expenses incurred in connection with the preparation, execution and performance
of this Agreement and the Contemplated Transactions, including all fees and
expenses of agents, representatives, counsel and accountants.
6.5. INDEMNIFICATION OF BROKERAGE. Each of the
Sellers represents and warrants to the Buyer that no broker, finder, agent or
similar intermediary (a "Broker") has acted on behalf of the Company or the
Sellers in connection with this Agreement or the Contemplated Transactions, and
that there are no brokerage commissions, finder's fees or similar fees or
commissions payable in connection therewith based on any agreement, arrangement
or understanding with the Company or
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the Sellers, or any action taken by the Company or the Sellers. Each of the
Sellers agrees to indemnify and hold harmless the Buyer from any Claim or demand
for commission or other compensation by any Broker claiming to have been
employed by or on behalf of the Company or a Sellers, and to bear the cost of
legal expenses incurred in defending against any such claim. The Buyer
represents and warrants to the Sellers that no Broker has acted on behalf of the
Buyer in connection with this Agreement or the Contemplated Transactions, and
that there are no brokerage commissions, finders' fees or similar fees or
commissions payable in connection therewith based on any agreement, arrangement
or understanding with the Buyer, or any action taken by the Buyer. The Buyer
agrees to indemnify and hold harmless the Sellers from any Claim or demand for
commission or other compensation by any Broker claiming to have been employed by
or on behalf of the Buyer, and to bear the cost of legal expenses incurred in
defending against any such claim.
6.6. RELATED PARTIES. The Sellers shall, prior to
the Closing, pay or cause to be paid to the Company, as the case may be, all
amounts owed to the Company by the Sellers or any affiliate of the Sellers. At
and as of the Closing, any debts of the Company owed to the Sellers or to any
affiliate of the Sellers shall be canceled.
6.7. REQUIRED CONSENTS. The Sellers shall, prior
to the Closing, obtain or make, at their sole expense, all Required Consents and
undertake all actions, incur all expenses, costs and obligations, and provide
all bonds, guarantees or other financial instruments required pursuant to the
Required Consents. Each of the Sellers agrees to indemnify and hold harmless the
Buyer from any costs, expenses, obligations or liabilities arising in connection
with or pursuant to any of the Required Consents.
6.8. PERMIT TRANSFERS. The Sellers shall, by July
31, 2000, at their sole expense, cause the transfer, reissuance or modification
of any Permits to the extent that such is required to cause the Permits to
remain in full force and effect in the possession of the Company, after the
Closing. The Buyer shall cooperate with the Sellers in their efforts to cause
such transfer, reissuance or modification of any Permits. Each of the Sellers
agrees to bear the entire financial burden and hold harmless the Buyer for any
costs, expenses, obligations or liabilities arising in connection with or
pursuant to any of the above described Permit Transfers, reissuances or
modifications, except as otherwise noted on Schedule 3.11.
6.9. FURTHER ASSURANCES. Each of the parties
shall execute such documents and take such further actions as may be reasonably
required to carry out the provisions hereof and the Contemplated Transactions.
Each such party shall use its or her commercially reasonable efforts to fulfill
or obtain the fulfillment of the conditions to the Closing set forth in Articles
7 and 8.
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6.10. TAXES; SECTION 338(h)(10) ELECTION.
(a) As the only shareholders of an S
corporation, the Sellers will pay and discharge and be responsible for any and
all Taxes due or payable by the Sellers and by the Company for any taxable year
or taxable period (or portion thereof) ending on or before the Closing Date
including, without limitation, any liability that the Sellers may owe as
individuals in any jurisdiction in which the Company is treated as an S
corporation. In addition, the Sellers will pay and discharge and be responsible
for any State taxes (including, without limitation, excise and franchise taxes)
due or payable by the Company for any taxable year or taxable period (or portion
thereof) ending on or before the Closing Date, including, without limitation,
any liability that the Sellers may owe as an individual in any jurisdiction in
which the Company is treated as an S corporation. Any income, excise and
franchise taxes due or payable as a result of the Section 338(h)(10) Election
(as hereinafter defined) shall be borne by the Sellers. For purposes of this
Section 6.10, and as required in connection with the Section 338(h)(10)
Election, the current fiscal year of the Company will be treated as two separate
tax years, one beginning on January 1, 2000 and ending on the Closing Date and
the other beginning on the date after the Closing Date and ending at the end of
the 2000 fiscal year of the Company. The books and records of the Company will
be closed at the close of business on the Closing Date.
(b) The Buyer, the Sellers, and the Company
agree to make a timely election under Section 338(h)(10) of the Code, and also
under provisions of state and local law similar to the provisions of Section 338
of the Code (including, but not limited to, Sections 338(h)(10) and 338(g) of
the Code), where allowable (whether such election is made jointly by the Buyer
and Sellers, or by the Company), in respect of the Contemplated Transactions
(the "Section 338(h)(10) Election"), thereby causing such Contemplated
Transactions to be treated as a purchase or sale of assets of the Company for
federal purposes and to the extent allowed by state, local and foreign tax laws.
On all returns relating to Taxes based on or measured by net income, the Sellers
and the Buyer will report the transfers under this Agreement consistent with the
Section 338(h)(10) Election. None of the Sellers, the Buyer or the Company will
take a position on any Tax Return contrary to the Section 338(h)(10) Election
unless required to do so by applicable state, local or foreign tax laws or
pursuant to a determination as defined in Section 1313(a) of the Code. Each of
the parties shall take any action required to effect state, local and foreign
tax law conformity with application of the Section 338(h)(10) Election to the
extent allowed by law.
(c) In connection with the Section
338(h)(10) Election, the Buyer and the Sellers mutually shall (i) determine the
"Modified Aggregate Deemed Sales Price" of the assets of the Company (within the
meaning of, and in accordance with, Treasury Regulations Section
1.338(h)(10)-1(f) or comparable provisions for state, local and foreign law)
(the "MADSP Determination"), and (ii) determine the allocations of the "Modified
Aggregate Deemed Sales Price" in accordance with Section 338(b)(5) of the Code
and Treasury Regulations Section 1.338(b)-2T promulgated thereunder (and
comparable provisions for state, local and foreign law) (the "MADSP
Allocations"). The
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Buyer and the Sellers shall be bound by the MADSP Determination and MADSP
Allocations for purposes of determining any Taxes.
6.11. TAX RETURN FILING.
(a) The Sellers shall cause the Company to
prepare, in a manner consistent with past practices, and timely file (including
extensions of time to file) all Tax Returns required to be filed by the Company,
the due date of which (without extensions) occurs on or before the Closing Date
and pay (i) all Taxes due with respect to any such Tax Returns, and (ii) all
other Taxes due or claimed to be due from or with respect to the Company on or
before the Closing Date.
(b) The Sellers will prepare and file any
Tax Returns due to be filed by the Company after the Closing Date but relating
to periods of time prior to the Closing Date, with the understanding that such
Tax Returns will be subject to the consent of the Buyer prior to filing, which
consent shall not be unreasonably withheld.
(c) Notwithstanding subsections (a) and (b)
of this Section 6.11, the Buyer, rather than the Sellers, shall be responsible
for preparing and filing annual returns/Forms 5500 and any other Tax Returns
relating to any Benefit Plan, the due date of which (with extensions) occurs
after the Closing Date.
(d) The Sellers will take whatever action is
necessary to maintain the S status of the Company for federal purposes and for
the purposes of each state listed in Schedule 3.9(b) as a state in which the
Company is treated as an S corporation, through the Closing Date, including as a
result of the Section 338(h)(10) Election.
(e) Except in connection with the Section
338(h)(10) Election, the Sellers will not cause the Company to make any
additional federal tax elections under the Code with respect to the Company for
any tax period ending after the Closing Date.
6.12. FINANCIAL STATEMENTS AND OTHER INFORMATION.
Between the date hereof and the Closing, the Company shall deliver to the Buyer,
in form and substance satisfactory to the Buyer, as soon as available, but in
any event not later than seventeen (17) days after the end of each calendar
month, the unaudited balance sheet of the Company, and the related statements of
operations and cash flows for such month and for the period commencing on the
first day of the fiscal year and ending on the last day of such month, all
certified by an appropriate officer of the Company as presenting fairly the
financial condition as of such date and results of operations and cash flows for
the periods indicated in conformity with GAAP applied on a consistent basis,
subject to normal year-end adjustments and the absence of footnotes required by
GAAP.
6.13. TAX AUDITS AND OTHER PROCEEDINGS. The Buyer,
the Company and each of the Sellers shall cooperate fully, as and to the extent
reasonably
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requested by any other party, in connection with any Tax audit, litigation or
other Tax proceedings relating to the business of the Company. Such cooperation
shall include the retention and, upon any other party's request, the provision
of records and information reasonably relevant to any such audit, litigation or
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any records and information
provided hereunder. The Buyer, the Company and each of the Sellers further agree
to furnish or cause to be furnished to each other, as promptly as practicable,
such information and assistance relating to the Company as is reasonably
necessary to the preparation and filing of any Tax Return, claim for refund or
other required or optional filings relating to Tax matters, for the preparation
for and proof of facts during any Tax audit, for the preparation for any Tax
protest, for the prosecution or defense of any suit or other proceeding relating
to Tax matters and for the answer to any inquiry relating to Tax matters by any
Governmental Body.
6.14. NON-SOLICITATION BY BUYER OR SELLER ON
TERMINATION. If this Agreement is terminated prior to Closing pursuant to
Article 12 hereof, for a period of two (2) years after the date of such
termination, then (a) neither the Buyer nor any affiliate of the Buyer shall,
directly or indirectly solicit to hire any corporate staff person employed by
Seller with whom they have had contact or who became known to Buyer solely in
connection with the proposed transaction, and (b) neither the Seller nor any
affiliate of the Seller shall directly or indirectly hire any corporate staff
person employed by the Buyer with whom they have had contact or who became known
to the Seller solely in connection with the proposed transaction. This provision
will in no way prevent the Buyer of the Seller from hiring temporary/travel
nurses or other health professionals who apply to each party through the normal
course of business.
6.15. ACCESS TO COMPANY RECORDS. As may reasonably
be necessary to enable the Sellers to: (i) comply with reporting, filing or
other requirements imposed by any foreign, local, state or federal court, agency
or regulatory body; (ii) assert or defend any claims or allegations in any
litigation or arbitration or in any administrative or legal proceeding other
than claims or allegations that the Sellers have asserted against the Buyer; or
(iii) subject to clause (ii) above, perform the Sellers' obligations under this
Agreement, after the Closing Date, the Buyer will provide to the Sellers and to
their respective counsel and other representatives, upon request (subject to any
limitations that are reasonably required to preserve any applicable
attorney-client privilege or third-party confidentiality obligation), access for
inspection and copying to all relevant files and records, Permits, Contracts and
any other information existing as of the Closing Date and relating to the
business of the Company, and will make its personnel reasonably available to
provide any such necessary information. The Sellers, when requesting such
information or assistance, shall reimburse the Buyer for all out-of-pocket costs
and expenses incurred by the Buyer in providing such information and in
rendering such assistance. The access to files, books and records contemplated
by this Section 6.15 shall be during normal business hours and upon not less
than two (2) business days' prior written request and shall be subject to such
reasonable limitations as the Buyer may impose to preserve any confidentiality
of information contained therein. For a period of
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seven (7) years after the Closing Date, the Buyer shall keep and preserve all
medical and other records of the Company in its possession which are existing as
of the Closing Date and which are required to be kept and preserved (i) by any
applicable federal or state law or regulation or (ii) in connection with any
claim or controversy still pending involving the Company.
6.16. ACCESS TO FINANCIAL INFORMATION. After the
Closing Date, the Buyer will provide to the Sellers, upon request, quarterly
financial statements of Buyer and Buyer's parent for so long as any amounts
described in Section 1.2 are unpaid. The Seller agrees to keep these financial
statements confidential and agrees not to disclose these financial statements to
any other person.
6.17. EXISTING INDEBTEDNESS. As of the close of
business on the business day prior to the Closing Date, the Buyer shall have
received from the Sellers: (i) a letter dated that same day from NationsBank
N.A. stating the principal of and interest on, and all other amounts owing in
respect of, the stepdown revolving loan entered into on February 4, 1998 by and
between NationsBank N.A. and the Company (the "Revolving Loan")' (ii) a letter
from the Sellers dated that same day detailing all Existing Indebtedness; and
(iii) a letter from NationsBank N.A. dated that same day stating that once the
Revolving Loan is repaid in full, the commitments thereunder shall terminate and
that all guarantees in respect of, and all Liens securing, any such obligations
shall be released (or arrangements satisfactory to Buyer shall be made).
7. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE BUYER
TO CLOSE. The obligation of the Buyer to enter into and complete the Closing is
subject, at the option of the Buyer acting in accordance with the provisions of
Article 12 with respect to termination of this Agreement, to the fulfillment on
or prior to the Closing Date of the following conditions, any one or more of
which may be waived by the Buyer:
7.1. REPRESENTATIONS AND COVENANTS. The
representations and warranties of the Sellers contained in this Agreement shall
be true in all material respects on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date. The Sellers shall
have performed and complied with all covenants and agreements required by this
Agreement to be performed or complied with by the Sellers on or prior to the
Closing Date. The Sellers shall have delivered to the Buyer a certificate, dated
the date of the Closing and signed by the Sellers, to the foregoing effect.
7.2. CONSENTS AND APPROVALS. All Required
Consents shall have been obtained and be in full force and effect, and the Buyer
shall have been furnished with evidence reasonably satisfactory to it that such
Required Consents have been granted and obtained.
7.3. OPINION OF COUNSEL TO THE SELLERS. The Buyer
shall have received the opinion of Parker, Poe, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ L.L.P.,
counsel to the Sellers,
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dated the date of the Closing, addressed to the Buyer, in a form reasonably
satisfactory to the Buyer.
7.4. RESIGNATIONS. All resignations of directors
and officers of the Company which have been previously requested in writing by
the Buyer shall have been delivered to the Buyer.
7.5. NO CLAIMS. No Claims shall be pending or, to
the knowledge of the Buyer or the Company, threatened, before any Governmental
Body to restrain or prohibit, or to obtain damages or a discovery order in
respect of, this Agreement or the consummation of the Contemplated Transactions
or which has had or may have, in the reasonable judgment of the Buyer, a
materially adverse effect on the Condition of the Company.
7.6. TERMINATION OF AGREEMENTS. The Buyer shall
have received evidence satisfactory to it of the termination of all Contracts
required to be terminated pursuant to Section 6.6 and of the release of any
obligations under such Contracts of the Company.
7.7. FIRPTA AFFIDAVIT. The Buyer shall have
received an affidavit of each of the Sellers sworn to under penalty of perjury,
setting forth the Seller's name, address and Federal tax identification number
and stating that the Seller is not a "foreign person" within the meaning of
section 1445 of the Code.
8. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE SELLERS
TO CLOSE. The obligation of the Sellers to enter into and complete the Closing
is subject, at the option of the Sellers acting in accordance with the
provisions of Article 12 with respect to termination of this Agreement, to the
fulfillment on or prior to the Closing Date of the following conditions, any one
or more of which may be waived by the Sellers:
8.1. REPRESENTATIONS AND COVENANTS. The
representations and warranties of the Buyer contained in this Agreement shall be
true in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of the Closing Date. The Buyer shall have
performed and complied with all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing Date
(including, without limitation, the payment of 97.5% of the Purchase Price as
determined under Section 1.3(a)). The Buyer shall have delivered to the Sellers
a certificate, dated the date of the Closing and signed by an officer of the
Buyer, to the foregoing effect.
8.2. NO CLAIMS. No Claims shall be pending or, to
the knowledge of the Buyer or the Company threatened, before any Governmental
Body to restrain or prohibit, or to obtain damages or a discovery order in
respect of, this Agreement or the consummation of the Contemplated Transactions.
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8.3. OPINION OF COUNSEL TO THE BUYER. The Sellers
shall have received the opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel to the Buyer, dated the date of the Closing, addressed to the Sellers,
in a form reasonably satisfactory to the Sellers.
9. NON-COMPETITION.
9.1. COVENANTS AGAINST COMPETITION. Each of the
Sellers acknowledges that (i) the Company is engaged in the business of placing
temporary and permanent nurses and other medical professionals and medical
technicians as health providers or otherwise providing services in healthcare
facilities (the "Company Business"); (ii) the Company Business is conducted
within the United States and Canada; (iii) each Seller's relationship with the
Company has given each Seller and will continue to give each Seller trade
secrets of and confidential information concerning the Company; (iv) the
agreements and covenants contained in this Article 9 are essential to protect
the business and goodwill of the Company, all of the outstanding Shares of which
are being purchased by the Buyer; and (v) the Buyer would not purchase the
Shares or make the Noncompete Payments but for such agreements and covenants.
Accordingly, each of the Sellers and the Buyer covenants and agrees as follows:
(a) Non-Compete.
(i) For a period of four (4) years
following the Closing (the "Restricted Period"), the Seller shall not in the
United States and Canada (the "Territory") or through means of the so-called
World-Wide-Web, Internet or any so-called "on-line" service or other electronic
media (the "Internet Means"), directly or indirectly, (x) engage in the Company
Business for the Seller's own account; (y) except as agreed to in writing by the
Buyer and the Sellers, render any services to any person engaged in such
activities; or (z) become interested in any such person in any capacity,
including as a partner, shareholder, principal, agent, trustee or consultant;
provided, however, the Sellers may own, directly or indirectly, solely as an
investment, securities of any person traded on any national securities exchange
if the Sellers are not a controlling person of, or a member of a group which
controls, such person and does not, directly or indirectly, own 1% or more of
any class of securities of such person.
(ii) As used herein, "Internet"
shall mean the computer-generated, computer-mediated, or computer-assisted
transmission, reception, recordation or display arising from any network or
other connection of instruments or devices now known or hereafter invented
capable of transmission, reception, recordation and/or display (such instruments
or devices to include, without limitation, computers, laptops, cellular or PCS
telephones, pagers, PDAs, wireless transmitters or receivers, modems, radios,
televisions, satellite receivers, cable networks, smart cards, and set-top
boxes).
(b) Confidential Information; Personal
Relationships. Each of the Sellers promises and agrees that, either during the
Restricted Period or at any
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time thereafter, such Seller will not disclose to any person not employed by the
Company or not engaged to render services to the Company, and that such Seller
will not use for the benefit of such Seller or others, any Confidential
Information or Trade Secrets of the Company and other affiliates obtained by
such Seller; provided, however, that this provision shall not preclude such
Seller from use or disclosure of information if (i) use or disclosure of such
information shall be required by applicable Law or Order of any Governmental
Body or (ii) such information is readily ascertainable from public or published
information or trade sources (other than information known generally to the
public as a result of a violation of this Section 9.1 by such Seller).
(c) Property of the Company. All memoranda,
notes, lists, records and other documents (and all copies thereof), including
such items stored in computer memories, on microfiche or by any other means,
made or compiled by or on behalf of the Sellers, or made available to the
Sellers relating to the Company, are and shall be the property of the Company,
and shall be delivered to the Company promptly after the Closing or at any other
time on request.
(d) Employees of the Company. Except as
agreed to in writing by the Buyer and the Sellers, during the Restricted Period,
the Sellers shall not, directly or indirectly, hire or solicit any Employee or
encourage any such Employee to leave such employment.
9.2. RIGHTS AND REMEDIES UPON BREACH. If either
Seller breaches, or threatens to commit a breach of, any of the provisions of
Section 9.1 (the "Restrictive Covenants"), the Buyer and the Company shall have
the following rights and remedies, each of which rights and remedies shall be
independent of the others and severally enforceable, and each of which is in
addition to, and not in lieu of, any other rights and remedies available to the
Buyer and the Company under Law or in equity:
(a) Specific Performance. The right and
remedy to have the Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or threatened breach of
the Restrictive Covenants would cause irreparable injury to the Buyer and the
Company and that money damages would not provide an adequate remedy to the Buyer
and the Company.
(b) Accounting. The right and remedy to
require the breaching Seller to account for and pay over to the Buyer or the
Company, all compensation, profits, monies, accruals, increments or other
benefits derived or received by the Seller as the result of any transactions by
the Seller constituting a breach of the Restrictive Covenants.
9.3. SEVERABILITY OF COVENANTS. Each of the
Sellers acknowledges and agrees that as to him or her, as the case may be, the
Restrictive Covenants are reasonable and valid in geographical and temporal
scope and in all other respects. If any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable as to
any Seller, the remainder of the Restrictive
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Covenants shall not thereby be affected and shall be given full effect as to
that Seller, without regard to the invalid portions.
9.4. BLUE-PENCILLING. If any court determines
that any of the Restrictive Covenants, or any part thereof, is unenforceable as
to either Seller because of the duration or geographic scope of such provision,
such court shall have the power to reduce the duration or scope of such
provision, as the case may be, as to such Seller, and, in its reduced form, such
provision shall then be enforceable.
9.5. ENFORCEABILITY IN JURISDICTIONS. The Buyer
and the Sellers intend to and hereby confer jurisdiction to enforce the
Restrictive Covenants upon the courts of any jurisdiction within the
geographical scope of the Restrictive Covenants. If the courts of any one or
more of such jurisdictions hold the Restrictive Covenants unenforceable by
reason of the breadth of such scope or otherwise, it is the intention of the
Buyer and the Sellers that such determination not bar or in any way affect the
Buyer's or the Company's right to the relief provided above in the courts of any
other jurisdiction within the geographical scope of the Restrictive Covenants,
as to breaches of the Restrictive Covenants in such other respective
jurisdictions, the Restrictive Covenants as they relate to each jurisdiction
being, for this purpose, severable into diverse and independent covenants.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE
SELLERS AFTER CLOSING. Notwithstanding any right of the Buyer to investigate
fully the affairs of the Company and notwithstanding any knowledge of facts
determined or determinable by the Buyer pursuant to such investigation or right
of investigation, the Buyer has the right to rely fully upon the
representations, warranties, covenants and agreements of the Sellers contained
in this Agreement or in any documents delivered pursuant to this Agreement. All
such representations, warranties, covenants and agreements shall survive the
execution and delivery of this Agreement and the Closing hereunder as provided
herein. Except for those representations and warranties in Sections 3.4, 3.5,
3.29, 4.1 and 6.5 (all of which representations and warranties shall survive
without limitation), all representations and warranties of the Sellers contained
in this Agreement shall terminate and expire (a) twenty-four (24) months after
the Closing Date, with respect to any General Claim or Safety and Environmental
Claim based upon, arising out of or otherwise in respect of any fact,
circumstance or Claim of which the Buyer prior to that date shall not have given
written notice to the Sellers as provided in Section 11.4 below; (b) with
respect to any Tax Claim, on the later of (i) the date upon which the liability
to which any such Tax Claim may relate is barred by all applicable statutes of
limitations and (ii) the date upon which any claim for refund or credit related
to such Tax Claim is barred by all applicable statutes of limitations; and (c)
with respect to any ERISA Claim, on the date upon which the liability to which
any such ERISA Claim may relate is barred by all applicable statutes of
limitations.
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11. GENERAL INDEMNIFICATION/EXERCISE OF RIGHT TO OFFSET.
11.1. OBLIGATION OF THE SELLERS TO INDEMNIFY.
Subject to the limitations contained in Article 10 and Section 11.6, the Sellers
agree, jointly and severally, to indemnify, defend and hold harmless the Buyer
(and its directors, officers, employees, affiliates, successors and assigns)
from and against all Claims, losses, liabilities, damages, deficiencies,
judgments, assessments, fines, settlements, costs or expenses (including
interest, penalties and fees, reasonable expenses and disbursements of
attorneys, experts, personnel and consultants incurred by the indemnified party
in any action or proceeding between the indemnifying party and the indemnified
party or between the indemnified party and any third party, or otherwise)
("Losses") based upon, arising out of or otherwise in respect of any inaccuracy
in or any breach of any representation, warranty, covenant or agreement of the
Sellers contained in this Agreement or in any documents delivered by the Sellers
pursuant to this Agreement; provided, that the Sellers may at their option
offset any amounts owing to the Buyer under this Section 11.1 on a
dollar-for-dollar basis by any amounts owing from the Buyer to the Sellers.
11.2. SUPPLEMENTAL TAX INDEMNIFICATION. The
Sellers agree, jointly and severally, to indemnify the Buyer (i) for all Taxes
which the Sellers are responsible to pay pursuant to Section 6.10 hereof and
(ii) for any liability for any Taxes imposed on the Company pursuant to federal,
state, local or foreign law attributable to any periods ending on or before the
Closing Date (or for the portion of any period up through the Closing Date to
the extent a period does not close on such date). Any indemnity payments to or
from the Sellers or to or from the Buyer pursuant to this Agreement, whether
under this Section 11.2 or otherwise, shall be treated by the Buyer and the
Sellers as purchase price adjustments for all tax purposes. All indemnification
obligations set forth in this Section 11.2 shall be treated as Tax Claims for
purposes of the survival provisions of Section 10.
11.3. SUPPLEMENTAL INTELLECTUAL PROPERTY
INDEMNIFICATION. The Sellers agree, jointly and severally, to indemnify the
Buyer for all Losses arising out of or attributable to any failure of the
company to have obtained (i) United States federal registration or (ii)
ownership or commercially reasonable written licenses for any Intellectual
Property (whether or not such Intellectual Property is set forth on Schedule
3.18). Without limiting the foregoing, the Sellers agree to jointly and
severally indemnify the Buyer for all Losses incurred by the Buyer or the
Company in obtaining (i) United States federal registration or (ii) ownership or
commercially reasonable written licenses, as the case may be, for any such
Intellectual Property. The obligation of the Sellers under this Section 11.3
shall only be limited by the provisions of Section 11.6(b), (d) and (e).
11.4. OBLIGATION OF THE BUYER TO INDEMNIFY. The
Buyer agrees to indemnify, defend and hold harmless the Sellers from and against
all Losses based upon, arising out of or otherwise in respect of (i) any
inaccuracy in or any breach of any
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representation, warranty, covenant or agreement of the Buyer contained in this
Agreement or in any documents delivered by the Buyer pursuant to this Agreement;
provided, that the Buyer may offset any amounts owing to the Sellers under this
Section 11.4 on a dollar-for-dollar basis by any amounts owing from the Sellers
to the Buyer or its affiliates, and (ii) claims arising from the operation of
the business of the Company after the Closing Date that are not based upon,
related to or arise from any breach of any representation, warranty or covenant
of the Sellers in this Agreement.
11.5. NOTICE AND OPPORTUNITY TO DEFEND.
(a) Notice of Asserted Liability. The party
making a claim under this Article 11 is referred to as the "Indemnitee," and the
party against whom such claims are asserted under this Article 11 is referred to
as the "Indemnifying Party." All claims by any Indemnitee under this Article 11
shall be asserted and resolved as follows: Promptly after receipt by the
Indemnitee of notice of any Claim or circumstances which, with the lapse of
time, would or might give rise to a Claim or the commencement (or threatened
commencement) of a Claim including any action, proceeding or investigation (an
"Asserted Liability") that may result in a Loss, the Indemnitee shall give
notice thereof (the "Claims Notice") to the Indemnifying Party. The Claims
Notice shall describe the Asserted Liability in reasonable detail, and shall
indicate the amount (estimated, if necessary and to the extent feasible) of the
Loss that has been or may be suffered by the Indemnitee. The omission of any
Indemnitee to so notify the Indemnifying Party of any such Claims Notice shall
not relieve the Indemnifying Party from any liability which it may have to such
Indemnitee unless, and only to the extent that, such omission results in the
Indemnifying Party's forfeiture of substantive rights or defenses.
(b) Opportunity to Defend.
(i) The Indemnifying Party may
elect to compromise or defend, at such party's own expense and by such party's
own counsel, any Asserted Liability, except any Asserted Liability by any
customer of the Company with respect to the business conducted by the Company
prior to the Closing, which shall be subject to Section 11.4(b)(ii). If the
Indemnifying Party elects to compromise or defend such Asserted Liability, it
shall within 30 days (or sooner, if the nature of the Asserted Liability so
requires) notify the Indemnitee of such party's intent to do so, and the
Indemnitee shall cooperate, at the expense of the Indemnifying Party, in the
compromise of, or defense against, such Asserted Liability. If the Indemnifying
Party elects not to compromise or defend the Asserted Liability, fails to notify
the Indemnitee of such party's election as herein provided or contests such
party's obligation to indemnify under this Agreement, the Indemnitee may pay,
compromise or defend such Asserted Liability. Notwithstanding the foregoing,
neither the Indemnifying Party nor the Indemnitee may settle or compromise any
Asserted Liability over the objection of the other; provided, however, consent
to settlement or compromise shall not be unreasonably withheld. In any event,
the Indemnitee and the Indemnifying Party may participate, at their own expense,
in the defense of such Asserted Liability. If the Indemnifying Party chooses to
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defend any Asserted Liability, the Indemnitee shall make available to the
Indemnifying Party any books, records or other documents within such party's
control that are necessary or appropriate for such defense.
(ii) Notwithstanding anything to
the contrary in Section 11.4(b)(i), in the case of any Asserted Liability by any
customer of the Company with respect to the business conducted by the Company
prior to the Closing in connection with which the Buyer may make a claim against
the Sellers for indemnification pursuant to Section 11.1, the Buyer shall have
the exclusive right at its option to defend any such Asserted Liability, subject
to the duty of the Buyer to consult with the Indemnifying Party and such party's
attorneys in connection with such defense and provided that no such Asserted
Liability shall be compromised or settled by the Buyer without the prior consent
of the Indemnifying Party, which consent shall not be unreasonably withheld. The
Indemnifying Party shall have the right to recommend in good faith to the Buyer
proposals to compromise or settle Asserted Liabilities brought by a supplier,
distributor, sales agent or customer, and the Buyer agrees to present such
proposed compromises or settlements to such supplier, distributor or customer.
All amounts required to be paid in connection with any such Asserted Liability
pursuant to the determination of any Governmental Body, and all amounts required
to be paid in connection with any such compromise or settlement consented to by
the Indemnifying Party, shall be borne and paid by the Indemnifying Party. The
parties agree to cooperate fully with one another in the defense, compromise or
settlement of any such Asserted Liability.
11.6. SCOPE OF INDEMNIFICATION. The
indemnification provided for in Section 11.1 and 11.3 shall be subject to the
following limitations:
(a) The Sellers shall not be obligated to
pay any amounts for indemnification under Section 11.1 until the aggregate
amounts claimed for indemnification for breaches of representations and
warranties under Section 11.1, equal or exceed $200,000 (the "Basket Amount"),
whereupon the Sellers shall be obligated to pay in full all such amounts for
such indemnification in excess of the Basket Amount.
(b) Notwithstanding anything to the contrary
stated herein, (i) in no event shall the Sellers be collectively obligated to
pay an aggregate amount in excess of $15,000,000 for indemnification under
Section 11.1 for breaches of representations and warranties and indemnification
under Section 11.3, and (ii) neither Seller shall be individually obligated to
pay an aggregate amount in excess of payments received pursuant to this
Agreement for indemnification under Section 11.1 for breaches of representations
and warranties and indemnification under Section 11.3.
(c) Notwithstanding anything to the contrary
stated herein, the limitation of the Sellers' liability under this Agreement set
out above at Sections 11.6(a) and (b) shall not limit the obligation of the
Sellers to make payments for indemnification under this Article 11 if the losses
giving rise to claims for indemnification (A) arise from any representations and
warranties which are incorrect or
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breached due to fraud by the Sellers or (B) arise from inaccuracies or breaches
of the representations and warranties of the Sellers contained in Sections 3.1,
3.2, 3.4, 3.5, 3.9, 3.29, 4.1, 4.2, and 6.5.
(d) In no event shall the Sellers be
collectively obligated to pay an aggregate amount in excess of $6,000,000 for
indemnification under Section 11.3, and neither Seller shall be individually
obligated to pay an aggregate amount in excess of payments received pursuant to
this Agreement for indemnification under Section 11.3.
(e) Section 11.3 shall terminate and expire
thirty (30) months after the Closing Date.
11.7. EXERCISE OF RIGHT TO OFFSET. The parties may
exercise any right to offset available to them in this Agreement only in
accordance with the provisions of this Section 11.7. Either party's right to
offset may be exercised only after the delivery of the written notice of the
party exercising such right to offset (the "Offsetting Party") delivered to the
other party (the "Other Party") of its intention to exercise such right. The
Offsetting Party shall give the Other Party prompt written notice of any right
to offset and its intention to exercise such right (which written notice shall
be accompanied by reasonable supporting documentation of any amounts owing from
the Other Party to the Offsetting Party and giving rise to such right to
offset).
11.8. INDEMNIFICATION SOLE REMEDY. After the
Closing Date, except as provided in Section 1.4, indemnification pursuant to
this Article 11 shall be the sole and exclusive remedy of any party for breach
of any representation, warranty or covenant in this Agreement (other than those
found in Article 9), except with regard to any fraudulent misrepresentations or
other fraudulent acts of the other party or parties.
11.9. INDEMNIFICATION OBLIGATION IS NET OF
INSURANCE. With respect to each claim of indemnification under this Article 11,
the amount of indemnification shall be net of any recovery by the indemnified
party with respect to such claim under any insurance policy; provided that, such
indemnification is not reasonably expected to have an adverse effect on the
Buyer's premiums. In which case, however, indemnification shall be limited to
the present value of any increase reasonably determined by the Buyer to result
from such claim.
12. TERMINATION OF AGREEMENT.
12.1. TERMINATION. This Agreement may be
terminated prior to the Closing as follows:
(a) at the election of the Sellers, acting
jointly, if any one or more of the conditions to the obligation of the Sellers
to close set forth in Article 8 has not been fulfilled as of the scheduled
Closing Date;
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(b) at the election of the Buyer, if any one
or more of the conditions to the obligation of the Buyer to close set forth in
Article 7 has not been fulfilled as of the scheduled Closing Date;
(c) at the election of the Sellers, acting
jointly, or the Buyer, if any legal proceeding is commenced or threatened by any
Governmental Body seeking to prevent the consummation of the Closing or any
other Contemplated Transaction and the Sellers, acting jointly, or the Buyer, as
the case may be, reasonably and in good ▇▇▇▇▇ ▇▇▇▇▇ it impracticable or
inadvisable to proceed in view of such legal proceeding;
(d) at the election of the Sellers, acting
jointly, if the Buyer has breached any material representation, warranty,
covenant or agreement contained in this Agreement, which breach cannot be or is
not cured by the Closing Date;
(e) at the election of the Buyer, if either
of the Sellers has breached any material representation, warranty, covenant or
agreement contained in this Agreement, which breach cannot be or is not cured by
the Closing Date; or
(f) at any time on or prior to the Closing
Date, by mutual written consent of the Sellers, acting jointly, and the Buyer.
If this Agreement so terminates, it shall become null and void
and have no further force or effect, except as provided in Section 12.2.
12.2. SURVIVAL AFTER TERMINATION. If this
Agreement terminates pursuant to Section 12.1 and the Contemplated Transactions
are not consummated, this Agreement shall become null and void and have no
further force or effect, except that any such termination shall be without
prejudice to the rights of any party on account of the nonsatisfaction of the
conditions set forth in Articles 7 and 8 resulting from the intentional or
willful breach or violation of the representations, warranties, covenants or
agreements of another party under this Agreement. Notwithstanding anything in
this Agreement to the contrary, the provisions of Sections 6.3, 6.4 and 6.5,
this Section 12.2 and Article 13 shall survive any termination of this
Agreement.
13. MISCELLANEOUS.
13.1. CERTAIN DEFINITIONS.
(a) As used in this Agreement, the following
terms have the following meanings:
"affiliate" means, with respect to any person, any other person
controlling, controlled by or under common control with, or the parents, spouse,
lineal descendants or beneficiaries of, such person.
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"Benefit Plan" means any employee benefit plan, arrangement, policy or
commitment (whether or not an employee benefit plan within the meaning of
section 3(3) of ERISA), including any employment or individual consulting
agreements for personal services, or deferred compensation agreement, executive
compensation, bonus, incentive, pension, profit-sharing, savings, retirement,
stock option, stock purchase or severance pay plan, any life, health, disability
or accident insurance plan or any holiday or vacation practice, as to which the
Company, or any Commonly Controlled Entity has or in the future reasonably could
have any direct or indirect, actual or contingent material liability.
"COBRA" means the provisions of Code section 4980B and Part 6 of
Subtitle B of Title I of ERISA.
"Commercially Reasonable Costs" means the costs, payments and expenses
which a prudent person, acting in a commercially reasonable manner and seeking
to minimize or mitigate his expenses to the extent reasonably practicable, would
expend to resolve the matter; provided, however, that any payments or expenses
expended pursuant to an Order, a written demand for remedial or compliance
action or a written demand for payment by any Governmental Body shall be deemed
to be Commercially Reasonable Costs.
"Commonly Controlled Entity" means any entity which is under common
control with the Company within the meaning of Code section 414(b), (c), (m),
(o) or (t).
"Confidential Information" means any information other than Trade
Secrets that is not generally available to the public and that is treated as
confidential or proprietary by the Company.
"DOL" means the United States Department of Labor.
"Employee" means any individual employed by the Company.
"Environment" means navigable waters, waters of the contiguous zone,
ocean waters, natural resources, surface waters, ground water, drinking water
supply, land surface, subsurface strata, ambient air, both inside and outside of
buildings and structures, man-made buildings and structures, and plant and
animal life on earth.
"Environmental Claims" means any notification, whether direct or
indirect, formal or informal, written or oral, pursuant to Safety and
Environmental Laws or principles of common law relating to pollution, protection
of the Environment or health and safety, that any of the current or past
operations of the Company, or any by-product thereof, or any of the property
currently or formerly owned, leased or operated by the Company, or the
operations or property of any predecessor of the Company, is or may be
implicated in or subject to any Claim, Order, hearing, notice, agreement or
evaluation by any Governmental Body or any other person.
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"Environmental Compliance Costs" means any expenditures, costs,
assessments or expenses (including any expenditures, costs, assessments or
expenses in connection with the conduct of any Remedial Action, as well as
reasonable fees, disbursements and expenses of attorneys, experts, personnel and
consultants), whether direct or indirect, necessary to cause the operations,
real property, assets, equipment or facilities owned, leased, operated or used
by the Company to be in material compliance with any and all requirements, as in
effect at the Closing Date, of Safety and Environmental Laws, principles of
common law concerning pollution, protection of the Environment or health and
safety, or Permits issued pursuant to Safety and Environmental Laws; provided,
however, that Environmental Compliance Costs do not include expenditures, costs,
assessments or expenses necessary in connection with normal maintenance of such
real property, assets, equipment or facilities or the replacement of equipment
in the normal course of events due to ordinary wear and tear.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Claim" means any claim based upon, arising out of or otherwise
in respect of any inaccuracy in or any breach of representation or warranty of
the Sellers contained in Section 3.22.
"GAAP" means generally accepted accounting principles in the United
States.
"General Claim" means any claim (other than a Tax Claim, a Safety and
Environmental Claim or an ERISA Claim) based upon, arising out of or otherwise
in respect of any inaccuracy in or any breach of any representation or warranty
of the Sellers contained in this Agreement.
"Hazardous Substance" means any toxic waste, pollutant, contaminant,
hazardous substance, toxic substance, hazardous waste, special waste, industrial
substance or waste, petroleum or petroleum-derived substance or waste,
radioactive substance or waste, or any constituent of any such substance or
waste, or any other substance regulated under or defined by any Safety and
Environmental Law.
"IRS" means the Internal Revenue Service.
"knowledge of the Company" or any variant thereof means the knowledge
of any of the following: President ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President of Human Resources ▇▇▇▇▇▇ ▇▇▇▇▇, Vice President
of Sales ▇▇▇▇▇▇ ▇▇▇▇, Manager of Nursing Services ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Training and
Database Manager ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Operating Officer ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Jr.,
Director of Contractual Services ▇▇▇ ▇▇▇▇▇▇▇ or Director of IT ▇▇▇▇▇ ▇▇▇▇▇▇▇.
"Lien" means any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, license, charge, option, right of first refusal,
easement, servitude, or similar encumbrance to title.
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"Net Working Capital Assets" means, at any date, all assets of the
Company that are classified as current assets, minus all liabilities of the
Company that are classified as current liabilities (excluding components of
Existing Indebtedness), as of such date, including, without limitation, all
normalized balances that are expected to be received or paid, all calculated in
accordance with GAAP. "Net Working Capital Assets" may be a negative amount.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any Benefit Plan which is a pension plan within
the meaning of ERISA section 3(2) (regardless of whether the plan is covered by
ERISA).
"person" means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
"property" or "properties" means real, personal or mixed property,
tangible or intangible.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
or through the indoor or outdoor Environment or into, through or out of any
property, including the movement of Hazardous Substances through or in the air,
soil, surface water, ground water or property.
"Remedial Action" means all actions, whether voluntary or involuntary,
reasonably necessary to materially comply with, or discharge any obligation
under, Safety and Environmental Laws to (i) clean up, remove, treat, cover or in
any other way adjust Hazardous Substances in the indoor or outdoor Environment;
(ii) prevent or control the Release of Hazardous Substances so that they do not
migrate or endanger or threaten to endanger public health or welfare or the
Environment; or (iii) perform remedial studies, investigations, restoration and
post-remedial studies, investigations and monitoring on, about or in any real
property.
"Retiree Welfare Plan" means any Welfare Plan that provides benefits to
current or former Employees beyond their retirement or other termination of
service (other than coverage mandated by COBRA, the cost of which is fully paid
by the current or former Employee or his or her dependents) or any applicable
state law.
"Safety and Environmental Claim" means any claim based upon, arising
out of or otherwise in respect of any inaccuracy in or any breach of any
representation or warranty of the Sellers contained in this Agreement related to
Safety and Environmental Laws.
"Safety and Environmental Laws" means all Laws and Orders relating to
pollution, protection of the Environment, public or worker health and safety, or
the emission, discharge, release or threatened release of Hazardous Substances
into the Environment or otherwise relating to the manufacture, processing,
distribution, use,
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treatment, storage, disposal, transport or handling of Hazardous Substances
including the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601 et seq., the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901 et seq., the Toxic Substances Control Act, 15
U.S.C. Section 2601 et seq., the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq.,
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 121 et
seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq., the
Asbestos Hazard Emergency Response Act, 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act, 42 U.S.C. Section 300f et seq., the Oil Pollution Act of
1990, 33 U.S.C. Section 2701 et seq., and analogous state acts.
"Tax Claim" means any claim based upon, arising out of or otherwise in
respect of any inaccuracy in or any breach of any representation or warranty of
the Sellers contained in this Agreement related to Taxes.
"Title Defects" means any Lien, restrictive covenant, encroachment or
other survey defect.
"Trade Secrets" means any trade secrets, research records, processes,
procedures, manufacturing formulae, technical know-how, technology, blue prints,
designs, plans, inventions (whether patentable and whether reduced to practice),
invention disclosures and improvements thereto.
"Welfare Plan" means any Benefit Plan which is a welfare plan within
the meaning of ERISA section 3(1) (regardless of whether the plan is covered by
ERISA).
(b) The following capitalized terms are
defined in the following Sections of this Agreement:
Term Section
---- -------
Agreement Preamble
Asserted Liability 11.5(a)
Balance Sheet 3.7
Balance Sheet Date 3.7
Basket Amount 11.6(a)
Broker 6.5
Buyer Preamble
Claims 3.14
Claims Notice 11.5(a)
Closing 1.1
Closing Balance Sheet 1.3(b)
Closing Date 2
Code 3.9(f)
Common Stock 3.4
Company Preamble
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Term Section
---- -------
Company Business 9.1
Condition of the Company 3.3
Contemplated Transactions 3.9(p)
Contracts 3.12
Deferred Purchase Price Payments 1.2(b)
Existing Indebtedness 3.29
Financial Statements 3.7
Governmental Bodies 3.10
Indemnifying Party 11.5(a)
Indemnitee 11.5(a)
Intellectual Property 3.18
Interim Financial Statements 3.7
Internet 9.1(a)
Internet Means 9.1(a)
Laws 3.10
Leased Real Property 3.16(b)
Liabilities 3.20
Losses 11.1
MADSP Allocations 6.10(c)
MADSP Determination 6.10(c)
Material Customers 3.21(a)
Modified Aggregate Deemed Sales Price 6.10(c)
Noncompete Payments 1.2(c)
Offsetting Party 11.8
Other Party 11.8
Orders 3.10
Permits 3.11
Preliminary Balance Sheet 1.3(a)
Purchase Price 1.2(a)
Real Property Leases 3.16(b)
Required Consents 3.12
Restricted Period 9.1(a)
Restrictive Covenants 9.2
Section 338(h)(10) 6.10(b)
Revolving Loan 6.17
Seller Preamble
Sellers Preamble
Seller's Dispute Report 1.3(b)
Shares Preamble
Software 3.18
Tangible Property 3.17
Tax Returns 3.9(c)
Taxes 3.9(a)
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Term Section
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Territory 9.1(a)
13.2. CONSENT TO JURISDICTION AND SERVICE OF
PROCESS. Any Claim arising out of or relating to this Agreement or the
Contemplated Transactions may be instituted in any Federal court of the Southern
District of New York or any state court located in New York County, State of New
York, and each party agrees not to assert, by way of motion, as a defense or
otherwise, in any such Claim, any Claim that it is not subject personally to the
jurisdiction of such court, that the Claim is brought in an inconvenient forum,
that the venue of the Claim is improper or that this Agreement or the subject
matter hereof may not be enforced in or by such court. Each party further
irrevocably submits to the jurisdiction of such court in any such Claim. Any and
all service of process and any other notice in any such Claim shall be effective
against any party if given personally or by registered or certified mail, return
receipt requested, or by any other means of mail that requires a signed receipt,
postage prepaid, mailed to such party as herein provided. Nothing herein
contained shall be deemed to affect the right of any party to serve process in
any manner permitted by law or to commence legal proceedings or otherwise
proceed against any other party in any other jurisdiction.
13.3. NOTICES. Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, or sent by facsimile transmission or, if mailed, five days
after the date of deposit in the United States mails, as follows:
(i) if to the Buyer, to:
AMN Healthcare, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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(ii) if to the Sellers, to:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[Address]
Facsimile:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Jr.
[Address]
Facsimile:
with a copy to:
Parker, Poe, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
13.4. ENTIRE AGREEMENT. This Agreement (including
the Exhibits and Schedules) and any collateral agreements executed in connection
with the consummation of the Contemplated Transactions contain the entire
agreement among the parties with respect to the purchase of the Shares and
supersede all prior agreements, written or oral, with respect thereto.
13.5. WAIVERS AND AMENDMENTS; NON-CONTRACTUAL
REMEDIES; PRESERVATION OF REMEDIES. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the Buyer and each of the Sellers or, in the case
of a waiver, by the party waiving compliance. No delay on the part of any party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity. The rights and remedies of any party based
upon, arising out of or otherwise in respect of any inaccuracy in or breach of
any representation, warranty, covenant or agreement contained in this Agreement
or any documents delivered pursuant to this Agreement shall in no way be limited
by the fact that the act, omission, occurrence or other state of facts upon
which any claim of any such inaccuracy or breach is based may also be the
subject matter of any other representation, warranty, covenant or agreement
contained in this Agreement or any documents delivered pursuant to this
Agreement (or in any other agreement between the parties) as to which there is
no inaccuracy or breach.
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13.6. GOVERNING LAW. This Agreement shall be
governed and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
13.7. BINDING EFFECT; ASSIGNMENT. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and legal representatives. This Agreement is not
assignable except by operation of law, except that the Buyer may assign its
rights hereunder to any of its affiliates, to any successor to all or
substantially all of its business or assets, or to any bank or other financial
institution that may provide financing for the Contemplated Transactions.
13.8. USAGE. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
context may require. All terms defined in this Agreement in their singular or
plural forms have correlative meanings when used herein in their plural or
singular forms, respectively. Unless otherwise expressly provided, the words
"include," "includes" and "including" do not limit the preceding words or terms
and shall be deemed to be followed by the words "without limitation."
13.9. COUNTERPARTS. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto.
13.10. EXHIBITS AND SCHEDULES. The Exhibits and
Schedules are a part of this Agreement as if fully set forth herein and all
references to this Agreement shall be deemed to include the Exhibits and
Schedules. All references herein to Sections, Exhibits and Schedules shall be
deemed references to such parts of this Agreement, unless the context shall
otherwise require.
13.11. HEADINGS. The headings in this Agreement are
for reference only, and shall not affect the interpretation of this Agreement.
13.12. SEVERABILITY OF PROVISIONS.
(a) If any provision or any portion of any
provision of this Agreement shall be held invalid or unenforceable, the
remaining portion of such provision and the remaining provisions of this
Agreement shall not be affected thereby.
(b) If the application of any provision or
any portion of any provision of this Agreement to any person or circumstance
shall be held invalid or unenforceable, the application of such provision or
portion of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby.
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IN WITNESS WHEREOF, the parties have executed this Stock
Purchase Agreement as of the date first above written.
AMN HEALTHCARE, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Jr.
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Jr.