ASSET PURCHASE AGREEMENT
between
NEWCARE HEALTH CORPORATION
and
MEADOWBROOK NEUROCARE-KANSAS CITY, INC.
Dated as of June 18, 1997
TABLE OF CONTENTS
Page
1. Sale and Transfer of Assets; Closing 1
1.1 Assets 1
1.2 Excluded Assets 2
1.3 Assumed Liabilities 3
1.4 Excluded Liabilities 3
1.5 Purchase Price 4
1.6 Closing 4
1.7 Closing Obligations 4
1.8 Proration 5
1.9 Allocation of Purchase Price 5
2. Representations and Warranties of Seller 6
2.1 Organization and Good Standing 6
2.2 Authority; No Conflict 6
2.3 Financial Statements 7
2.4 Taxes 7
2.5 Employee Benefits 7
2.6 Compliance With Legal Requirements; Governmental
Authorizations 8
2.7 Legal Proceedings; Orders 8
2.8 Absence of Certain Changes and Events 9
2.9 Contracts; No Defaults 10
2.10 Insurance 11
2.11 Employees 11
2.12 Brokers or Finders 11
2.13 Regulatory Compliance 12
2.14 Title and Encumbrances 12
3. Representations and Warranties of Buyer 12
3.1 Organization and Good Standing 12
3.2 Authority; No Conflict 12
3.3 Certain Proceedings 13
3.4 Brokers or Finders 13
3.5 "AS IS" Purchase 13
4. Covenants of Seller 13
4.1 Access and Investigation 13
4.2 Operation of the Businesses of Seller 14
4.3 Negative Covenant 14
4.4 Required Approvals 14
4.5 Notification 14
4.6 Press Releases 15
4.7 Reasonable Best Efforts 15
5. Covenants of Buyer 15
5.1 Approvals of Governmental Bodies 15
5.2 Reasonable Best Efforts 15
5.3 Press Releases 15
5.4 Employee Matters 15
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6. Conditions Precedent to Buyer's Obligation to Close 17
6.1 Accuracy of Representations 17
6.2 Seller's Performance 17
6.3 Consents 17
6.4 Sale of Real Property 17
6.5 No Injunction 17
7. Conditions Precedent to Seller's Obligation to Close 17
7.1 Accuracy of Representations 18
7.2 Buyer's Performance 18
7.3 No Injunction 18
8. Termination 18
8.1 Termination Events 18
8.2 Effect of Termination 19
9. Indemnification 19
9.1 Survival 19
9.2 Indemnification and Payment of Damages by Seller 19
9.3 Indemnification and Payment of Damages by Buyer 20
9.4 Limitations on Amount -- Seller 20
9.5 Limitations on Amount -- Buyer 20
9.6 Procedure for Indemnification -- Third Party Claims 20
9.7 Procedure for Indemnification -- Other Claims 21
10. Medicare, Medicaid and Insurance Reporting. 21
10.1 Notice of Transaction 21
10.2 Cost Reports 21
10.3 Access 22
10.4 Notice 22
11. Definitions 22
12. General Provisions 25
12.1 Expenses 25
12.2 Confidentiality 26
12.3 Notices 26
12.4 Further Assurances 27
12.5 Waiver 27
12.6 Entire Agreement and Modification 28
12.7 Assignments, Successors and no Third-Party Rights 28
12.8 Severability 28
12.9 Section Headings, Construction 28
12.10 Time of Essence 28
12.11 Governing Law 28
12.12 Counterparts 29
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of June
18, 1997 by and between NEWCARE HEALTH CORPORATION, a Nevada corporation
("Buyer"), and MEADOWBROOK NEUROCARE-KANSAS CITY, INC., a Kansas
corporation ("Seller").
RECITALS
WHEREAS, Seller operates Meadowbrook Hospital of Kansas, a 84-bed
specialty hospital located at ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (the
"Hospital");
WHEREAS, Seller desires to sell, and Buyer desires to purchase, the
assets used by Seller in the operation of the Hospital; and
WHEREAS, concurrently with the execution of this Agreement by the
parties hereto, Buyer is entering into an agreement to purchase the real
estate on which the Hospital facility is located and the buildings and
improvements thereon from the owner thereof.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. Sale and Transfer of Assets; Closing.
1.1 Assets. Subject to the terms and conditions of this Agreement,
at the Closing, Seller will sell, convey and transfer to Buyer, and Buyer
will purchase from Seller, the following assets (the "Assets"):
(a) All of Seller's right, title and interest in and to the
equipment, furniture, machinery, vehicles, tools and similar items of
tangible personal property owned by Seller as of the Closing;
(b) All of Seller's right, title and interest in and to the
Contracts listed in Schedule 2.9(a) hereto, to the extent the same are
transferable to Buyer;
(c) All of Seller's medical and financial records for patients
treated at the Hospital prior to the Closing, provided that Buyer agrees to
retain such records for the period required by law and to make them
available to Seller and its representatives as requested;
(d) All of Seller's right, title and interest in and to the
inventories of supplies, drugs, disposable goods, and other similar items
of tangible personal property owned by the Seller as of the Closing and
intended to be consumed, disposed of or sold in the ordinary course of
business of the Hospital;
(e) All of Seller's right, title and interest in and to the
Governmental Authorizations listed in Schedule 2.6; provided that such
Governmental Authorizations shall be included in the Assets only to the
extent that they are lawfully transferable;
(f) All of Seller's right, title and interest in and to the business
names set forth in Schedule 1.1(f);
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(g) All of Seller's right, title and interest in and to unexpired
warranties as of the Closing that are transferable to Buyer which the
Seller has received from third parties with respect to the Assets,
including, but not limited to, such warranties as are set forth in any
construction agreement, lease agreement, equipment purchase agreement,
consulting agreement or agreement for architectural and engineering
services;
(h) All of Seller's right, title and interest in and to advance
payments, prepayments, prepaid expenses, deposits and the like (other than
pre-paid insurance) made by Seller with respect to which Buyer will receive
the benefit after the Closing, and other items recorded as prepaid expenses
by Seller;
(i) All of Seller's right, title and interest in and to the books,
records, files and papers as of the Closing, whether in tangible or
intangible form, used in, or relating in any way to, the Hospital or the
Assets, including sales and promotional literature, sales and purchase
correspondence, lists of present and former suppliers, lists of present and
former patients, and personnel and employment records; and
(j) All of Seller's right, title and interest in and to the goodwill
of the business evidenced by the Assets, and except for Excluded Assets,
any and all other assets of Seller utilized solely in the operations of the
Hospital as conducted prior to the Closing Date, whether or not such assets
have any value for accounting purposes.
1.2 Excluded Assets. The parties hereto agree that the following
assets of Seller are excluded from the purchase and sale contemplated
hereby (the "Excluded Assets"):
(a) All of Seller's right, title and interest in and to the cash and
cash equivalents of Seller as of the Closing;
(b) All of Seller's right, title and interest in and to assets
resulting from the finalization with cost-based payors of amounts due with
respect to cost reports to the extent that such cost reports cover any
period prior to the Closing Date;
(c) All Accounts Receivable (as defined in Section 11); and
(d) All of Seller's right, title and interest in and to any asset
resulting from Seller's request for an exception from the routine cost
limitation under the Medicare Program with respect to the operations of the
Hospital during any period prior to the Closing Date.
1.3 Assumed Liabilities. Subject to the terms and conditions set
forth in this Agreement, Buyer shall assume at the Closing and pay,
discharge and perform as and when due all liabilities and obligations
incurred by Buyer in the operation of the Hospital after the Closing and
the following obligations and liabilities, but excluding all Excluded
Liabilities as defined in Section 1.4 (collectively, the "Assumed
Liabilities"):
(a) All liabilities and obligations of the Seller which pertain to
or are to be performed during the period following the Closing and which
arise under any agreement specified in Schedule 2.9(a) (the "Assumed
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Contracts") or any Governmental Authorization specified in Schedule 2.6
(the "Assumed Permits") included in the Assets; and
(b) Seller's liabilities to employees of Seller as of the Closing
Date for accrued sick leave and accrued vacation time.
1.4 Excluded Liabilities. The parties hereto agree that liabilities
and obligations of Seller not expressly described in Section 1.3 are not
intended to be part of the Assumed Liabilities, and Buyer shall not assume
or become obligated with respect to any other obligation or liability of
Seller (collectively, "Excluded Liabilities"), including, but not limited
to, the liabilities and obligations described in this Section, all of which
shall remain the sole responsibility of Seller. Without limiting the
generality of the foregoing, Buyer shall not assume and shall have no
liability or obligation of any kind for or with respect to any of the
following:
(a) Any of Seller's liabilities or obligations with respect to
Taxes.
(b) Liabilities or obligations of Seller arising from the breach by
Seller on or prior to the Closing Date of any term, covenant, or provision
of any of the Assumed Contracts or Assumed Permits;
(c) Liabilities or obligations of Seller now existing or which may
hereafter exist by reason of any alleged violation of any Legal Requirement
by Seller on or prior to the Closing Date; or
(d) Liabilities or obligations of Seller now existing or which may
hereafter exist by reason of any liability to refund any payment or
reimbursement received by Seller from any payor which is attributable to
any period of time ending on or prior to the Closing Date; or
(e) Accounts Payable (as defined in Section 11).
1.5 Purchase Price. (a) The purchase price (the "Purchase Price")
for the Assets will be one million five hundred thousand dollars
($1,500,000) less an amount equal to the sum of (i) Seller's estimate of
the aggregate dollar amount of accrued vacation time and (ii) Seller's
estimate of one-half of the aggregate dollar amount of accrued sick leave,
in each case of all employees of Seller as of the Closing Date.
(b) As soon as reasonably practicable after the Closing, Seller and
Buyer shall determine the actual sum of (i) the aggregate dollar amount of
accrued vacation time and (ii) one-half of the aggregate dollar amount of
accrued sick leave, in each case of all employees of the Company as of the
Closing Date. If such amount is greater than the estimate used in
determining the Purchase Price pursuant to Section 1.5(a), then Seller
shall promptly deliver a check for the amount of such difference to Buyer.
If such amount is less than the estimate used in determining the Purchase
Price pursuant to Section 1.5(a), then Buyer shall promptly deliver a check
for the amount of such difference to Seller.
1.6 Closing. The purchase and sale (the "Closing") provided for in
this Agreement will take place (a) at the offices of Seller, ▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, at 10:00 a.m. (local time) on the third business
day after which the last to be fulfilled or waived of the
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conditions set forth in Sections 6 and 7 (other than those conditions that
by their nature are to be satisfied at Closing, but subject to the
fulfillment or waiver of those conditions) shall be satisfied or waived in
accordance with this Agreement or (b) at such other time and place as the
parties may agree (the "Closing Date").
1.7 Closing Obligations. At the Closing:
(a) Seller will deliver to Buyer:
(i) instruments of conveyance and assignment with respect to
the transfer of the Assets to Buyer;
(ii) a certificate executed by Seller representing and
warranting to Buyer that each of Seller's representations and warranties in
this Agreement was accurate in all material respects as of the date of this
Agreement and is accurate in all material respects as of the Closing Date
as if made on the Closing Date (giving full effect to any supplements to
the Schedules hereto that were delivered by Seller to Buyer prior to the
Closing Date in accordance with Section 4.5); and
(b) Buyer will deliver to Seller:
(i) the Purchase Price by wire transfer of immediately
available funds to an account identified by Seller;
(ii) instruments of assumption with respect to the assumption
of the Assumed Liabilities by Buyer; and
(iii) a certificate executed by Buyer to the effect that,
except as otherwise stated in such certificate, each of Buyer's
representations and warranties in this Agreement was accurate in all
material respects as of the date of this Agreement and is accurate in all
material respects as of the Closing Date as if made on the Closing Date.
1.8 Proration.
(a) Seller shall pay and perform all Excluded Liabilities (including
Accounts Payable) and Buyer shall pay and perform all Assumed Liabilities.
Buyer and Seller shall cooperate after the Closing to effect the allocation
of liabilities and obligations referred to in the preceding sentence. In
the event of liabilities or obligations that include Excluded Liabilities
and Assumed Liabilities (such as utility bills and property taxes that
cover periods before and after the Closing), such liabilities or
obligations shall be paid by Buyer and Buyer shall be reimbursed by Seller
within 30 days thereafter (on a prorated basis) with respect to that
portion of the liability or obligation that is an Excluded Liability.
(b) If after the Closing, Buyer or Seller receives any payment that
includes Assets and Excluded Assets such party shall promptly notify the
other. Such payment shall be allocated to Buyer to the extent that it is
an Asset and to Seller to the extent that it is an Excluded Asset and
reimbursement in accordance with such allocation shall be made by the
appropriate party no later than 30 days after he first party's receipt of
such payment.
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1.9 Allocation of Purchase Price. The Purchase Price of the Assets
shall be allocated in the manner set forth in Schedule 1.9 hereto. Each of
the parties agrees to report this transaction for Tax purposes in
accordance with such allocation.
2. Representations and Warranties of Seller.
Seller represents and warrants to Buyer as follows:
2.1 Organization and Good Standing. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of Kansas,
with full corporate power and authority to conduct its business as it is
now being conducted.
2.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its
terms. Seller has the absolute and unrestricted right, power, authority,
and capacity to execute and deliver this Agreement and to perform its
obligations hereunder.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby
will, directly or indirectly (with or without notice or lapse of time)
contravene, conflict with, or result in a violation of:
(i) any provision of the Articles of Incorporation Bylaws of
Seller, or any resolution adopted by the board of directors or the
stockholders of Seller;
(ii) any Legal Requirement or any Order to which the Seller,
or any of the assets owned or used by Seller, may be subject;
(iii) any Governmental Authorization that is held by Seller or
that otherwise relates to the business of, or any of the assets owned or
used by, Seller;
(iv) any material Contract of Seller.
(c) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby
will, directly or indirectly (with or without notice or lapse of time)
result in the imposition or creation of any Encumbrance upon or with
respect to any of the assets owned or used by Seller.
(d) Except as set forth in Schedule 2.2(d), Seller is not and will
not be required to give any notice to or obtain any consent from any Person
in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the transactions contemplated hereby.
2.3 Financial Statements.
(a) Schedule 2.3(a) sets forth the balance sheet of Seller as of
June 30, 1996, and the related statement of income and retained earnings
for the 12-month period ended June 30, 1996 (the "June 30, 1996 Financial
Statements"). The June 30, 1996 Financial Statements have been prepared
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in accordance with generally accepted accounting principles consistently
applied by Seller through the period indicated, and fairly present the
financial position of Seller as of June 30, 1996 and the results of its
operations for the 12-month period then ended.
(b) Schedule 2.3(b) sets forth the balance sheet of Seller as of
March 31, 1997, and the related statement of income and retained earnings
for the 9-month period ended March 31, 1997 (the "March 31, 1997 Financial
Statements" and together with the June 30, 1996 Financial Statements, the
"Seller Financial Statements"). The March 31, 1997 Financial Statements
have been prepared in accordance with generally accepted accounting
principles consistently applied, subject to normal recurring year end
adjustments, and fairly present the financial position of Seller as of
March 31, 1997, and the results of its operations for the 9-month period
then ended.
2.4 Taxes.
(a) Seller has filed or caused to be filed all Tax returns that it
is or was required to file pursuant to applicable Legal Requirements.
Seller has made available to Buyer copies of all such Tax returns. Seller
has paid, or made provision for the payment of, all Taxes that have or may
have become due pursuant to those Tax returns or otherwise, or pursuant to
any assessment received by Seller.
(b) There exists no proposed tax assessment against Seller. All
Taxes that Seller is or was required by Legal Requirements to withhold or
collect have been duly withheld or collected and, to the extent required,
have been paid to the proper Governmental Body or other Person.
2.5 Employee Benefits. Schedule 2.5 lists each pension benefit,
welfare benefit, stock option, stock purchase, disability, vacation pay,
incentive bonus, severance pay, deferred compensation, supplemental income
or other employee benefit plan, policy or arrangement or agreement,
including each "employee benefit plan" within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained by or contributed to by the Seller and its ERISA
Affiliates (collectively referred to as "Employee Plans") covering current
or former employees of Seller or their dependents or survivors. Seller has
provided or, upon Buyer's reasonable request, will provide or make
available to Buyer prior to the Closing Date complete, accurate and current
copies of the plan document(s) of each Employee Plan, summary plan
descriptions and other descriptive materials provided to employees and, in
the case of an Employee Plan intended to qualify under section 401(a) of
the Code, a copy of the most recent Internal Revenue Service determination
letter of such Employee Plan's qualified status.
2.6 Compliance With Legal Requirements; Governmental Authorizations.
(a) Seller is, and at all times since June 30, 1995 has been, in full
compliance with each Legal Requirement that is or was applicable to it or
to the conduct or operation of its business or the ownership or use of any
of its assets, other than those Legal Requirements the failure with which
to comply would not have a material adverse effect on Seller.
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(b) Schedule 2.6 contains a complete and accurate list of each
Governmental Authorization that is held by Seller or that otherwise relates
to the business of, or to any of the assets owned or used by, Seller. Each
Governmental Authorization listed or required to be listed in Schedule 2.6
is valid and in full force and effect. Except as set forth in Schedule
2.6:
(i) Seller is, and at all times since June 30, 1995 has been, in
full compliance with all of the terms and requirements of each Governmental
Authorization identified or required to be identified in Schedule 2.6 other
than those terms and conditions the failure with which to comply would not
have a material adverse effect on Seller; and
(ii) all applications required to have been filed for the
renewal of the Governmental Authorizations listed or required to be listed
in Schedule 2.6 have been duly filed on a timely basis with the appropriate
Governmental Bodies, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.
The Governmental Authorizations listed in Schedule 2.6 constitute all of
the Governmental Authorizations necessary to permit Seller to lawfully
conduct its business in the manner currently conducted and to permit Seller
to own and use its assets in the manner in which they are currently owned
and used.
2.7 Legal Proceedings; Orders.
(a) Except as set forth in Schedule 2.7, there is no pending
Proceeding:
(i) that has been commenced by or against Seller or that
otherwise relates to or may affect the business of, or any of the assets
owned or used by, Seller; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of
the transactions contemplated hereby.
To the Knowledge of Seller, after reasonable inquiry, (A) no such
Proceeding has been Threatened, and (B) no event has occurred or
circumstance exists that may give rise to or serve as a basis for the
commencement of any such Proceeding.
(b) There is no Order to which Seller, or any of the assets owned or
used by Seller, is subject.
2.8 Absence of Certain Changes and Events. Except as set forth in
Schedule 2.8, since June 30, 1996, Seller has conducted its business only
in the ordinary course of business and there has not been any:
(a) payment or increase by Seller of any bonuses, salaries, or other
compensation to any stockholder, director, officer, or (except in the
ordinary course of business) employee, or entry into any employment,
severance, or similar Contract with any director, officer, or employee;
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(b) adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any
employees of Seller;
(c) damage to or destruction or loss of any asset or property of
Seller, whether or not covered by insurance, materially and adversely
affecting the properties, assets, business, financial condition, or
prospects of Seller;
(d) sale (other than in the ordinary course of business), lease, or
other disposition of any asset or property of Seller or mortgage, pledge,
or imposition of any lien or other Encumbrance on any material asset or
property of Seller; or
(e) agreement, whether oral or written, by Seller to do any of the
foregoing.
2.9 Contracts; No Defaults.
(a) Schedule 2.9(a) contains a complete and accurate list, and
Seller has delivered to Buyer true and complete copies, of:
(i) each Contract that involves performance of services or
delivery of goods or materials by or to Seller of an amount or value in
excess of $5,000;
(ii) each Contract that was not entered into in the ordinary
course of business and that involves expenditures or receipts by Seller in
excess of $5,000;
(iii) each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other Contract affecting
the ownership of, leasing of, title to, use of, or any leasehold or other
interest in, any real or personal property (except personal property leases
and installment and conditional sales agreements having a value per item or
aggregate payments of less than $5,000 and with terms of less than one
year);
(iv) each joint venture, partnership, and other Contract
(however named) involving a sharing of profits, losses, costs, or
liabilities by Seller with any other Person;
(v) each Contract containing covenants that in any way purport
to restrict the business activity or limit the freedom of Seller to engage
in any line of business or to compete with any Person;
(vi) each Contract providing for payments to or by any Person
based on sales, purchases, or profits, other than direct payments for
goods;
(vii) each Contract for capital expenditures in excess of
$10,000;
(viii) each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended by Seller
other than in the ordinary course of business; and
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(ix) each amendment, supplement, and modification (whether
oral or written) in respect of any of the foregoing.
Schedule 2.9(a) identifies each such Contract, copies of which have been
furnished to Buyer.
(b) Each Contract identified or required to be identified in
Schedule 2.9(a) is in full force and effect and is valid and enforceable in
accordance with its terms.
(c) Seller is, and at all times since June 30, 1995 has been, in
full compliance with all material terms and requirements of each Contract
under which Seller has or had any obligation or liability or by which
Seller or any of the assets owned or used by Seller is or was bound.
(d) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to
Seller under current or completed Contracts with any Person and, to the
Knowledge of Seller, no such Person has made written demand for such
renegotiation.
2.10 Insurance.
(a) Seller has delivered to Buyer true and complete copies of all
policies of insurance and all pending applications for policies of
insurance to which Seller is a party or under which Seller is or has been
covered at any time within the two years preceding the date of this
Agreement.
(b)(i) Seller has not received (A) any refusal of coverage or any
notice that a defense will be afforded with reservation of rights, or (B)
any notice of cancellation or any other indication that any insurance
policy is no longer in full force or effect or will not be renewed or that
the issuer of any policy is not willing or able to perform its obligations
thereunder.
(ii) Seller has paid all premiums due, and has otherwise
performed all of its obligations, under each policy to which Seller is a
party or that provides coverage to Seller or a director thereof.
2.11 Employees. Schedule 2.11 contains a complete and accurate list
of the following information for each employee of Seller, including each
employee on leave of absence or layoff status: name; job title; current
compensation; vacation accrued; and service credited for purposes of
vesting and eligibility to participate under Seller's Employee Plans.
Seller is not a party to or subject to any labor union or collective
bargaining agreement and there are no pending or threatened claims of
unfair labor practices against Seller.
2.12 Brokers or Finders. Seller and its agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with
this Agreement.
2.13 Regulatory Compliance.
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(a) The Hospital is licensed as a Specialty Hospital under the laws
of the State of Kansas. The Hospital is in material compliance with the
terms of such license.
(b) The Hospital is qualified for participation in the Medicare and
Medicaid programs and has a provider contract and a provider number with
each such program. The Hospital is in material compliance with all of the
laws, regulations and conditions of participation applicable to such
programs and has no knowledge of any pending or Threatened investigation
relating to such program by any Governmental Body.
(c) To Seller's Knowledge, neither Seller nor any of its employees
have committed a violation of the Medicare fraud and abuse provisions or
any similar provisions of any Legal Requirement relating to kickbacks,
illegal referrals, illegal ▇▇▇▇▇▇▇▇ or the like.
2.14 Title and Encumbrances. Seller has valid title to and
possession of, or holds a valid leasehold interest in, the Assets free and
clear of all Encumbrances, except for liens for taxes not yet due and
payable.
3. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
3.1 Organization and Good Standing. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Nevada.
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms. Buyer has the absolute and unrestricted right, power, and authority
to execute and deliver this Agreement and to perform its obligations
hereunder.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby
will contravene, conflict with, result in a violation of or give any Person
the right to prevent, delay, or otherwise interfere with any of the
transactions contemplated hereby pursuant to:
(i) any provision of Buyer's Articles of Incorporation or
Bylaws;
(ii) any resolution adopted by the board of directors or the
stockholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer may be
subject; or
(iv) any material Contract to which Buyer is a party or by
which Buyer may be bound.
(c) Buyer is not and will not be required to obtain any
consent from any Person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the
transactions contemplated hereby.
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3.3 Certain Proceedings. There is no pending Proceeding that has
been commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of
the transactions contemplated hereby. To Buyer's Knowledge, no such
Proceeding has been Threatened.
3.4 Brokers or Finders. Buyer and its officers and agents have
incurred no obligation or liability, contingent or otherwise, for brokerage
or finders' fees or agents' commissions or other similar payment in
connection with this Agreement.
3.5 "AS IS" Purchase. Buyer acknowledges and agrees that Seller
makes no representation or warranty, either express or implied, with
respect to the physical condition of the Assets, their fitness or
suitability for any particular purpose. In this respect, Buyer confirms
that it is relying upon its investigation of the Assets to purchase the
same on an "AS IS" basis and in "WITH ALL FAULTS" condition. Without
limiting the generality of the foregoing, Buyer hereby acknowledges that,
except as otherwise specifically provided in this Agreement, neither
Seller, nor any of its officers, employees or agents, has made any warranty
regarding the physical condition of the Assets, including, but not limited
to, any warranty of merchantability or warranty of suitability for a
particular purpose, and Buyer hereby expressly disclaims the implied
warranty of merchantability, the implied warranty of fitness for a
particular purpose, and all expressed or implied warranties relating to the
quality of or otherwise relating to the physical condition of the Assets.
4. Covenants of Seller.
4.1 Access and Investigation. Between the date of this Agreement
and the Closing Date, Seller will (a) afford Buyer and its representatives
reasonable access to Seller's personnel, properties, contracts, books and
records, and other documents and data, (b) furnish Buyer and Buyer's
representatives with copies of all such contracts, books and records, and
other existing documents and data regarding Seller as Buyer may reasonably
request, and (c) furnish Buyer and Buyer's representatives with such
additional financial, operating, and other data and information regarding
Seller as Buyer may reasonably request.
4.2 Operation of the Businesses of Seller. Between the date of this
Agreement and the Closing Date, Seller will:
(a) conduct its business only in the ordinary course;
(b) use its best efforts to preserve intact the current business
organization of Seller, keep available the services of the current
officers, employees, and agents of Seller, and maintain the relations and
goodwill with suppliers, customers, landlords, creditors, employees,
agents, and others having business relationships with Seller; and
(c) confer with Buyer governing operational matters of a material
nature.
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4.3 Negative Covenant. Except as otherwise expressly permitted by
this Agreement, between the date of this Agreement and the Closing Date,
Seller will not without the prior consent of Buyer, take any affirmative
action, or fail to take any reasonable action within their or its control,
as a result of which any of the changes or events listed in Section 2.8 is
likely to occur.
4.4 Required Approvals. As promptly as practicable after the date
of this Agreement, Seller will make all filings required by Legal
Requirements to be made by them in order to consummate the transactions
contemplated hereby. Between the date of this Agreement and the Closing
Date, Seller will (a) cooperate with Buyer with respect to all filings that
Buyer elects to make or is required by Legal Requirements to make in
connection with the transactions contemplated hereby, and (b) cooperate
with Buyer in obtaining all consents identified in Schedule 2.2(d).
4.5 Notification. Between the date of this Agreement and the
Closing Date, Seller will promptly notify Buyer in writing if Seller
becomes aware of any fact or condition that causes or constitutes a breach
of any of Seller's representations and warranties as of the date of this
Agreement, or if Seller becomes aware of the occurrence after the date of
this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a breach of any such
representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. Should
any such fact or condition require any change to any Schedule if the
Schedule were dated the date of the occurrence or discovery of any such
fact or condition, Seller will promptly deliver to Buyer a supplement to
the Schedule specifying such change. During the same period, Seller will
promptly notify Buyer of the occurrence of any breach of any covenant of
Seller in this Section 4 or of the occurrence of any event that may make
the satisfaction of the conditions in Section 6 impossible or unlikely.
4.6 Press Releases. Seller will not make any public statement or
issue any press release without first providing a copy of such statement or
release to Buyer for Buyer's review and approval, which approval shall not
be unreasonably withheld.
4.7 Reasonable Best Efforts. Between the date of this Agreement and
the Closing Date, Seller will use its reasonable best efforts to cause the
conditions in Sections 6 and 7 to be satisfied.
5. Covenants of Buyer.
5.1 Approvals of Governmental Bodies. As promptly as practicable
after the date of this Agreement, Buyer will make all filings required by
Legal Requirements to be made by it to consummate the transactions
contemplated hereby. Between the date of this Agreement and the Closing
Date, Buyer will cooperate with Seller with respect to all filings that
Seller is required by Legal Requirements to make in connection with the
transactions contemplated hereby.
5.2 Reasonable Best Efforts. Between the date of this Agreement and
the Closing Date, Buyer will use its reasonable best efforts to cause the
conditions in Sections 6 and 7 to be satisfied.
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5.3 Press Releases. Buyer will not make any public statement or
issue any press release without first providing a copy of such statement or
release to Seller for Seller's review and approval, which approval shall
not be unreasonably withheld.
5.4 Employee Matters.
(a) Employment Terms. Buyer shall offer to employ, effective as of
the Closing Date, those persons who were the employees of the Seller
immediately prior to the Closing ("Employees") and shall continue to employ
such Employees (to the extent that they accept such offer of employment)
for so long as Buyer deems appropriate in the operation of the Hospital's
business. Buyer shall not reduce, at least until the 90th day following
the Closing Date, the compensation applicable to such Employees on the day
immediately prior to the Closing Date. Buyer shall be liable for all
salary and benefit continuation and any severance payments payable on
account of the termination of employment of any Employee on or after the
Closing Date. Buyer shall also be liable for all notices, payments, fines
or assessments due to any Government Body with respect to the employment,
discharge or layoff of Employees on or after the Closing Date, including
such liability as arises under the Worker Adjustment and Retraining
Notification Act.
(b) 401(k) Plan. Effective as of the Closing Date, the Employees
shall cease to be eligible to participate in the Meadowbrook Rehabilitation
Group, Inc. 401(k) Plan (the "Seller's Plan") for periods after the Closing
Date. The Buyer will use reasonable best efforts to establish, on or
before December 31, 1997, a 401(k) plan, qualified under Code sections
401(a) and 401(k), offering participation to Employees (the "Buyer's
Plan"). In the event that Buyer's Plan is established, Seller and Buyer
shall arrange for the transfer of the Seller's Plan accounts for the
active, inactive and former employees of Seller (the "Accounts"), such
Accounts to be valued as of the last business day before the transfer is
effected from the Seller's Plan to the Buyer's Plan and Buyer agrees to
cooperate with Seller in directing the trustee of any trust in which the
assets of the Seller's Plan are invested to transfer the Accounts to the
new trustee or other funding agent appointed under the Buyer's Plan. In
the event that Buyer's Plan is established, Buyer's Plan will preserve Code
section 411(d)(6) protected benefits with respect to Seller's Employees and
former employees. The transfer of the Accounts shall occur as soon as
practicable after the receipt by Seller of Buyer's certification that Buyer
has received or requested a favorable determination letter for the Buyer's
Plan from the Internal Revenue Service.
(c) Health Plan. Effective as of the Closing Date, the Employees
shall cease to be eligible to participate in the Meadowbrook Rehabilitation
Group, Inc. health, dental, vision, pharmacy, short-term disability and
long-term disability plans (the "Seller's Health Plans") for periods after
the Closing Date (except as required by COBRA). Effective as of the
Closing Date, Employees (to the extent that they accept Buyer's offer of
employment pursuant to Section 5.4) shall commence participating in the
health plans of Buyer (the "Buyer's Health Plans"). Buyer shall use its
reasonable best efforts to cause the Buyer's Health Plans to provide
benefits comparable to those provided under Seller's Health Plans. With
respect to the participation of Employees under the Buyer's Health Plans,
Buyer shall (i) waive all pre-existing conditions, limitations and waiting
periods other than
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limitations and waiting periods that were in effect under the Seller's
Health Plans and that were not satisfied as of the Closing Date, and (ii)
provide each Employee with credit for co-payments, deductibles or other
out-of-pocket requirements paid prior to the Closing Date under the
Seller's Health Plans in satisfying the co-payment, deductibles or other
out-of-pocket requirements under the Buyer's Health Plans.
(d) Third Party Beneficiaries. It is understood and agreed between
Buyer and Seller that all provisions contained in this Agreement with
respect to employee benefit plans or employee compensation or employment
are included for the sole benefit of Buyer and Seller and do not and shall
not create any right in any other person, including, but not limited to,
any employee, any participant in any benefit or compensation plan or any
beneficiary thereof.
(e) Action by Buyer's Affiliates. Any action required by Buyer
pursuant to this Section 5.4 shall be deemed satisfied to the extent such
action is taken by an affiliate of Buyer.
6. Conditions Precedent to Buyer's Obligation to Close. Buyer's
obligation to purchase the Assets and to take the other actions required to
be taken by Buyer at the Closing are subject to the satisfaction, at or
prior to the Closing, of each of the following conditions (any of which may
be waived by Buyer, in whole or in part):
6.1 Accuracy of Representations. All of Seller's representations
and warranties in this Agreement (considered collectively), and each of
these representations and warranties (considered individually), must have
been accurate in all material respects as of the date of this Agreement,
and must be accurate in all material respects as of the Closing Date as if
made on the Closing Date, giving effect to any supplement to any Schedule.
6.2 Seller's Performance.
(a) All of the covenants and obligations that Seller is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Seller must have delivered each of the documents required to be
delivered by Seller pursuant to Section 1.7.
6.3 Consents. Each consent listed in Schedule 2.2(d) and marked
with an asterisk, must have been obtained and must be in full force and
effect.
6.4 Sale of Real Property. The closing under that certain Agreement
of Sale, dated the date hereof, between Buyer and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
shall occur simultaneously with the Closing hereunder.
6.5 No Injunction. There must not be in effect any Legal
Requirement or any injunction or other Order that prohibits the sale of the
Assets by Seller to Buyer.
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7. Conditions Precedent to Seller's Obligation to Close. Seller's
obligation to sell the Assets and to take the other actions required to be
taken by Seller at the Closing is subject to the satisfaction, at or prior
to the Closing, of each of the following conditions (any of which may be
waived by Seller, in whole or in part).
7.1 Accuracy of Representations. All of Buyer's representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must
be accurate in all material respects as of the Closing Date as if made on
the Closing Date.
7.2 Buyer's Performance.
(a) All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and
complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 1.7 and must have made the payment
required to be made by Buyer pursuant to Section 1.7.
7.3 No Injunction. There must not be in effect any Legal
Requirement or any injunction or other Order that prohibits the sale of the
Assets by Seller to Buyer.
7.4 Distribution of Information Statement. Seller's parent
corporation, Meadowbrook Rehabilitation Group, Inc. ("Parent"), shall have
complied with its obligations under Regulation 14C under the Securities
Exchange Act of 1934, as amended, with respect to the transaction
contemplated hereby, including its obligation to provide an information
statement to stockholders of Parent at least 20 calendar days prior to the
Closing Date (this Agreement and the transactions contemplated hereby
having been approved prior to the date hereof by the written consent of
Parent's majority stockholder).
8. Termination.
8.1 Termination Events. This Agreement may, by notice given prior
to or at the Closing, be terminated:
(a) by either Buyer or Seller if a material breach of any provision
of this Agreement has been committed by the other party and such breach has
not been waived or cured within fifteen (15) days after the receipt of
notice of such breach;
(b) by mutual consent of Buyer and Seller; or
(c) by either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement
to comply fully with its obligations under this Agreement) on or before
July 31, 1997, or such later date as the parties may agree upon.
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8.2 Effect of Termination. Each party's right of termination under
Section 8.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will not
be an election of remedies. If this Agreement is terminated pursuant to
Section 8.1, all further obligations of the parties under this Agreement
will terminate, except that the obligations in Sections 12.1 and 12.2 will
survive; provided, however, that if this Agreement is terminated by a party
because of the breach of the Agreement by the other party or because one or
more of the conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's failure to
comply with its obligations under this Agreement, the terminating party's
right to pursue all legal remedies will survive such termination
unimpaired.
9. Indemnification.
9.1 Survival. All representations, warranties, covenants, and
obligations in this Agreement, the Schedules hereto, any supplement to a
Schedule, and any certificate or document delivered pursuant to this
Agreement will survive for eighteen (18) months after the Closing.
9.2 Indemnification and Payment of Damages by Seller. Seller will
indemnify and hold harmless Buyer and its representatives, stockholders,
controlling persons, and affiliates (collectively, the "Indemnified
Persons") for, and will pay to the Indemnified Persons the amount of, any
loss, liability, claim, damage, or expense (including costs of
investigation and defense and reasonable attorneys' fees), on an after-tax
basis, whether or not involving a third-party claim (collectively,
"Damages"), arising from or in connection with:
(a) any breach of any representation or warranty made by Seller in
this Agreement, the Schedules hereto, any supplements to a Schedule, or any
other certificate or document delivered by Seller pursuant to this
Agreement;
(b) any breach by Seller of any covenant or obligation of Seller in
this Agreement;
(c) any liabilities or obligations of Seller that are Excluded
Liabilities; or
(d) the failure to comply with any bulk sales law applicable to the
transactions contemplated by this Agreement.
9.3 Indemnification and Payment of Damages by Buyer. Buyer will
indemnify and hold harmless Seller, and will pay to Seller the amount of,
any Damages arising from or in connection with:
(a) any breach of any representation or warranty made by Buyer in
this Agreement, the Schedules hereto or any other certificate or document
delivered by Buyer pursuant to this Agreement;
(b) any breach by Buyer of any covenant or obligation of Buyer in
this Agreement; or
(c) any liabilities or obligations with respect to Assumed
Liabilities and any liabilities or obligations arising from Buyer's
operation of the Hospital after the Closing.
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9.4 Limitations on Amount -- Seller. Seller will have no liability
(for indemnification or otherwise) with respect to the matters described in
Section 9.2 until the total of all Damages with respect to such matters
exceeds $25,000, and then only for the amount by which such Damages exceed
$25,000.
9.5 Limitations on Amount -- Buyer. Buyer will have no liability
(for indemnification or otherwise) with respect to the matters described in
Section 9.3 until the total of all Damages with respect to such matters
exceeds $25,000, and then only for the amount by which such Damages exceed
$25,000.
9.6 Procedure for Indemnification -- Third Party Claims.
(a) Promptly after receipt by an indemnified party under Section 9.2
or 9.3, of notice of the commencement of any Proceeding against it, such
indemnified party will, if a claim is to be made against an indemnifying
party under such Section, give notice to the indemnifying party of the
commencement of such claim, but the failure to notify the indemnifying
party will not relieve the indemnifying party of any liability that it may
have to any indemnified party, except to the extent that the indemnifying
party demonstrates that the defense of such action is prejudiced by the
indemnified party's failure to give such notice.
(b) If any Proceeding referred to in Section 9.6(a) is brought
against an indemnified party and it gives notice to the indemnifying party
of the commencement of such Proceeding, the indemnifying party will be
entitled to participate in such Proceeding and, to the extent that it
wishes (unless (i) the indemnifying party is also a party to such
Proceeding and the indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying party fails
to provide reasonable assurance to the indemnified party of its financial
capacity to defend such Proceeding and provide indemnification with respect
to such Proceeding), to assume the defense of such Proceeding with counsel
reasonably satisfactory to the indemnified party and, after notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such Proceeding, the indemnifying party will not, as long as it
diligently conducts such defense, be liable to the indemnified party under
this Section 9 for any fees of other counsel or any other expenses with
respect to the defense of such Proceeding, in each case subsequently
incurred by the indemnified party in connection with the defense of such
Proceeding. If the indemnifying party assumes the defense of a Proceeding,
(i) no compromise or settlement of such claims may be effected by the
indemnifying party without the indemnified party's consent unless (A) there
is no finding or admission of any violation of Legal Requirements or any
violation of the rights of any Person and no adverse effect on any other
claims that may be made against the indemnified party, and (B) the sole
relief provided is monetary damages that are paid in full by the
indemnifying party; and (ii) the indemnified party will have no liability
with respect to any compromise or settlement of such claims effected
without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within
ten days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding,
the indemnifying party will be bound by any determination made in such
Proceeding or any compromise or settlement effected by the indemnified
party.
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9.7 Procedure for Indemnification -- Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is sought.
10. Medicare, Medicaid and Insurance Reporting.
10.1 Notice of Transaction. In connection with the Closing, Buyer
and Seller shall prepare and file all notices that may be required in
connection with the transactions contemplated by this Agreement pursuant to
the laws, regulations and conditions of the Medicare and Medicaid programs
or any other public or private insurance provider.
10.2 Cost Reports. As soon as practicable after the Closing, Seller
shall prepare and file all cost reports relating to services provided by
Seller prior to the Closing Date that may be required in connection with
the transactions contemplated by this Agreement pursuant to the laws,
regulations and conditions of the Medicare and Medicaid programs or of any
other cost-based payor.
10.3 Access. Buyer shall cooperate with Seller (a) in the
preparation of the cost reports referred to in Section 10.2 hereof, (b) in
any audit or contest of any such cost reports, or (c) in connection with
the applications Seller intends to file after the Closing Date for
exceptions from the routine cost limitation under the Medicare program, in
all such cases with respect to the operation of the Hospital prior to the
Closing. In this regard, Buyer shall maintain, and provide Seller with
reasonable access to, all of Seller's books, records and reports that
relate to the period up to and including the Closing Date, for so long as
Seller may be required or may reasonably desire such information. The
parties agree that the costs and expenses incurred in the preparation of
any such cost reports, audits, contests or applications shall be borne by
Seller to the extent that they relate to Excluded Assets and Excluded
Liabilities.
10.4 Notice. If Buyer receives any notice concerning Seller's
participation in the Medicare or Medicaid programs that relates in whole or
in part to the period prior to the Closing, including, without limitation,
with respect to cost report settlements, notices of program reimbursements
and demand letters for payment, Buyer shall immediately forward a copy of
such notice to Seller.
11. Definitions. For purposes of this Agreement, the following
terms have the meanings specified or referred to in this Section 11:
"Accounts Payable" -- all payables that would be recorded as accounts
payable on a balance sheet of Seller prepared as of the Closing Date in
accordance with GAAP on a basis consistent with the application of such
principles in the preparation of Seller Financial Statements.
"Accounts Receivable" -- all receivables, billed or unbilled, payable
to Seller for services rendered prior to the Closing Date, including,
without limitation, all amounts due from the Medicare or Medicaid programs
(including amounts receivable in the future in settlement with Medicare,
Medicaid or any other cost-based payor with respect to cost reimbursement
and with respect to exceptions from the routine cost limitation under the
Medicare and/or Medicaid program), Blue Cross, Blue Shield or any other
third party payor (including an insurance
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company) or any health care provider (such as a health maintenance
organization, preferred provider organization or other managed care
program).
"Code" -- the Internal Revenue Code of 1986, as amended, or any
successor law, and regulations issued by the Internal Revenue Service
pursuant to the Internal Revenue Code or any successor law.
"Contract" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that
is legally binding.
"Encumbrance"-- any charge, claim, condition, equitable interest,
lien, option, pledge, security interest, right of first refusal, or
restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other attribute of
ownership.
"Environment" -- soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds, drainage
basins, and wetlands), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life, and
any other environmental medium or natural resource.
"Environmental Law" -- any Legal Requirement that requires or relates
to:
(a) advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous substances or
materials, violations of discharge limits, or other prohibitions and of the
commencements of activities, such as resource extraction or construction,
that could have significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or minimizing
the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged, and
used so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in
transportation of hazardous substances, pollutants, oil, or other
potentially harmful substances;
(g) cleaning up pollutants that have been released, preventing the
threat of release, or paying the costs of such cleanup or prevention; or
(h) making responsible parties pay private parties, or groups of
them, for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for
injuries done to public assets.
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"ERISA Affiliate" -- means any entity that, together with Seller, is
treated as a single employer under section 414(b) and 414(c) of the Code.
"GAAP" -- generally accepted United States accounting principles,
applied on a consistent basis.
"Governmental Authorization" -- any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise
made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.
"Governmental Body" -- any:
(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity
and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature.
"Income Tax" -- any federal, state, local or foreign income tax or
franchise tax measured by income or gain, including any interest, penalty
or addition thereto.
"Knowledge" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other matter;
or
(b) a prudent individual could be expected to discover or otherwise
become aware of such fact in the ordinary course of business.
A Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving, or who
has at any time served, as a director, officer, partner, executor, or
trustee of such Person (or in any similar capacity) has, or at any time
had, Knowledge of such fact or other matter.
"Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution,
law, ordinance, principle of common law, regulation, statute, or treaty,
including, without limitation, all Environmental Laws.
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"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Person"-- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization, labor union, or
other entity or Governmental Body.
"Proceeding"-- any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought, conducted,
or heard by or before, or otherwise involving, any Governmental Body or
arbitrator.
"Tax" -- any Income Tax and other taxes of any kind, levy or other
like assessment, custom, duty, impost, charge or fee (including, without
limitation, sales, use, gross receipts, ad valorem, transfer, transfer
gains, value added, real or personal property, stamp, lease, license,
payroll, transaction, utility, severance, production, environmental or
other governmental taxes), imposed or payable to any Governmental Body, and
in each instance such term shall include any interest, penalties or
additions to tax attributable to any such tax.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has
been made (orally or in writing) or any notice has been given (orally or in
writing), or if any other event has occurred or any other circumstances
exists that would lead a prudent Person to conclude that such a claim,
Proceeding, dispute, action, or other matter is likely to be asserted,
commenced, taken, or otherwise pursued in the future.
12. General Provisions.
12.1 Expenses. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of
this Agreement and the transactions contemplated hereby, including all fees
and expenses of agents, representatives, counsel, and accountants. In the
event of termination of this Agreement, the obligation of each party to pay
its own expenses will be subject to any rights of such party arising from a
breach of this Agreement by the other party.
12.2 Confidentiality. Between the date of this Agreement and the
Closing Date, Buyer and Seller will maintain in confidence, and will cause
each of its respective directors, officers, employees, agents, and advisors
to maintain in confidence, any written, oral, or other information obtained
from another party in connection with this Agreement or the transactions
contemplated hereby, unless (a) such information is already known to such
party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such party, (b)
the use of such information is necessary in making any filing or obtaining
any consent or approval required for the consummation of the transactions
contemplated hereby, or (c) the furnishing or use of such information is
required by legal proceedings.
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If the transactions contemplated hereby are not consummated, each
party will return or destroy as much of such written information as the
other party may reasonably request.
12.3 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed
to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written confirmation
of receipt), provided that a copy is mailed by registered mail, return
receipt requested, or (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set forth
below (or to such other addresses and telecopier numbers as a party may
designate by notice to the other party):
Seller:
Meadowbrook Rehabilitation Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇, M.D.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Pillsbury Madison & Sutro LLP
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Buyer:
NewCare Health Corporation
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
12.4 Further Assurances. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver
to each other such other documents, and (c) to do such other acts and
things, all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement and the documents referred to in
this Agreement.
12.5 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any
delay by any party in exercising any right, power, or privilege under this
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or
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partial exercise of any such right, power, or privilege will preclude any
other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim
or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance
for which it is given; and (c) no notice to or demand on one party will be
deemed to be a waiver of any obligation of such party or of the right of
the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred to
in this Agreement.
12.6 Entire Agreement and Modification. This Agreement supersedes
all prior agreements between the parties with respect to its subject matter
and constitutes a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the
party to be charged with the amendment.
12.7 Assignments, Successors and no Third-Party Rights. Neither
party may assign any of its rights under this Agreement without the prior
written consent of the other party, which consent will not be unreasonably
withheld. Notwithstanding the foregoing sentence, Buyer may assign this
Agreement to a subsidiary of Buyer without Seller's consent; provided,
however, that no such assignment shall relieve Buyer of its obligations
under this Agreement. This Agreement will apply to, be binding in all
respects upon, and inure to the benefit of the successors and permitted
assigns of the parties. Nothing expressed or referred to in this Agreement
will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This
Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and
assigns.
12.8 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid
or unenforceable.
12.9 Section Headings, Construction. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this Agreement. All
words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided,
the word "including" does not limit the preceding words or terms.
12.10 Time of Essence. With regard to all dates and time periods
set forth or referred to in this Agreement, time is of the essence.
12.11 Governing Law. This Agreement will be governed by the laws of
the State of Kansas without regard to conflicts of laws principles.
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12.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
MEADOWBROOK NEUROCARE-KANSAS CITY,
INC.
By: /s/ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇, M.C.
Name: ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇, M.D.
Title: CEO and President
NEWCARE HEALTH CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
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