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Exhibit 2.4
STOCK PURCHASE AGREEMENT
by and between
AMN HEALTHCARE, INC.
▇▇▇▇▇▇ ▇'▇▇▇▇▇
and
▇▇▇▇▇▇ ▇'▇▇▇▇▇-▇▇▇▇▇▇
-------------------------
for all of the outstanding stock of
▇'▇▇▇▇▇-▇▇▇▇▇▇ INTERNATIONAL (USA), INC.
-------------------------
April 3, 2001
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TABLE OF CONTENTS
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1. Sale and Purchase of Shares..................................... 1
1.1 Sale and Purchase of Shares............................... 1
1.2 Payment of Purchase Price................................. 1
1.3 Earn Out Payment.......................................... 2
1.4 Phoenix Receivable. ..................................... 3
1.5 Right to Offset........................................... 4
1.6 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......................... 5
3.3 Qualification............................................. 5
3.4 Outstanding Capital Stock................................. 5
3.5 Options or Other Rights................................... 5
3.6 Charter Documents and Corporate Records................... 5
3.7 Financial Statements...................................... 6
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..................................... 12
3.19 Title to Properties....................................... 13
3.20 Liabilities............................................... 13
3.21 Customers................................................. 13
3.22 Employee Benefit Plans.................................... 14
3.23 Employee Relations........................................ 16
3.24 Insurance................................................. 17
3.25 Officers, Directors and Employees......................... 17
3.26 Operations of the Company................................. 18
3.27 Potential Conflicts of Interest........................... 19
3.28 Full Disclosure........................................... 19
3.29 Existing Indebtedness..................................... 19
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Page
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4. Representations and Warranties of The Sellers................... 20
4.1 Title to the Shares....................................... 20
4.2 Authority to Execute and Perform Agreement................ 20
5. Representations and Warranties of The Buyer..................... 21
5.1 Due Incorporation and Authority........................... 21
5.2 Authority to Execute and Perform Agreement................ 21
5.3 Purchase for Investment................................... 22
5.4 Claims and Proceedings.................................... 22
6. Covenants and Agreements........................................ 22
6.1 Conduct of Business; Notices.............................. 22
6.2 Corporate Examinations and Investigations................. 23
6.3 Publicity................................................. 23
6.4 Expenses.................................................. 23
6.5 Indemnification of Brokerage.............................. 23
6.6 Related Parties........................................... 24
6.7 Required Consents......................................... 24
6.8 Permit Transfers.......................................... 24
6.9 Further Assurances........................................ 24
6.10 Taxes..................................................... 24
6.11 Tax Return Filing......................................... 24
6.12 Financial Statements and Other Information................ 25
6.13 Tax Audits and Other Proceedings.......................... 25
6.14 Existing Indebtedness..................................... 25
6.15 No Solicitation........................................... 26
6.16 Confidentiality........................................... 26
6.17 Conduct of the Company After Closing...................... 26
6.18 Payments to Employees..................................... 26
7. Conditions Precedent to the Obligation of the Buyer to Close.... 26
7.1 Representations and Covenants............................. 26
7.2 Consents and Approvals.................................... 26
7.3 Opinion of Counsel to the Sellers......................... 27
7.4 Resignations.............................................. 27
7.5 No Claims................................................. 27
7.6 Termination of Agreements................................. 27
7.7 Tax Representation........................................ 27
7.8 Audited Financial Statements.............................. 27
7.9 Escrow Agreement.......................................... 27
7.10 Employment Agreements..................................... 27
7.11 Intellectual Property..................................... 27
7.12 Insurance................................................. 28
7.13 South Africa.............................................. 28
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Page
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8. Conditions Precedent to the Obligation of the Sellers to Close.. 28
8.1 Representations and Covenants............................. 28
8.2 No Claims................................................. 28
8.3 Opinion of Counsel to the Buyer........................... 28
9. Non-Competition................................................. 28
9.1 Covenants Against Competition............................. 28
9.2 Rights and Remedies Upon Breach........................... 30
9.3 Severability of Covenants................................. 31
9.4 Blue-Pencilling........................................... 31
9.5 Enforceability in Jurisdictions........................... 31
10. Survival of Representations and Warranties of the Sellers After
Closing......................................................... 31
11. General Indemnification......................................... 32
11.1 Obligation of the Sellers to Indemnify.................... 32
11.2 Supplemental Tax Indemnification.......................... 32
11.3 Supplemental Intellectual Property Indemnification........ 32
11.4 Obligation of the Buyer to Indemnify...................... 32
11.5 Notice and Opportunity to Defend.......................... 32
11.6 Scope of Indemnification.................................. 34
11.7 Exclusivity............................................... 34
12. Termination of Agreement........................................ 35
12.1 Termination............................................... 35
12.2 Survival After Termination................................ 35
13. Miscellaneous................................................... 36
13.1 Certain Definitions....................................... 36
13.2 Consent to Jurisdiction and Service of Process............ 41
13.3 Notices................................................... 41
13.4 Entire Agreement.......................................... 42
13.5 Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies.................................. 42
13.6 Governing Law............................................. 43
13.7 Binding Effect; Assignment................................ 43
13.8 Usage..................................................... 43
13.9 Counterparts.............................................. 43
13.10 Exhibits and Schedules.................................... 43
13.11 Headings.................................................. 43
13.12 Severability of Provisions................................ 43
13.13 No Third Party Beneficiaries.............................. 44
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SCHEDULES
3.2 Subsidiaries and Other Affiliates
3.3 Qualification
3.4 Outstanding Capital Stock
3.7(a) Financial Statements
3.7(a)(i) Exceptions to Financial Statements
3.7(b) Uncollectable Accounts Receivable
3.9(a) Exceptions to Tax Payments
3.9(b) Exceptions to Tax Returns
3.9(c) Exceptions to Tax Deficiencies
3.9(d) Tax -- Statutes of Limitations/Audits/Unassessed Deficiencies
3.9(e) Tax -- Status of Federal Audits
3.9(f) Tax -- Status of State, County, Local and Foreign Audits
3.9(g) 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
6.7 Unobtained Required Consents
6.18 Payments to Employees
Exhibits
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A - Form of Escrow Agreement
B - Form of Employment Agreements
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of April 3,
2001 by and among AMN HEALTHCARE, INC., a Nevada corporation (the "Buyer"),
▇▇▇▇▇▇ ▇'▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇'▇▇▇▇▇-▇▇▇▇▇▇ (each a "Seller" and collectively the
"Sellers") for the purchase and sale of all of the issued and outstanding shares
of capital stock of ▇'▇▇▇▇▇-▇▇▇▇▇▇ INTERNATIONAL (USA), INC., a Massachusetts
corporation ("OGP" and together with its Subsidiaries, the "Company").
The Sellers are the beneficial and record owners of all of the
issued and outstanding shares of common stock, no par value per share (the
"Shares"), of OGP. 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, the Buyer shall deliver to an
account designated in writing by the Sellers, cash by wire transfer of
immediately available funds the following amount: (i) $16,647,300, decreased by
the amount of Existing Indebtedness (as defined in Section 3.29) of the Company
and any Cash Shortfall, and increased by the amount of any Cash Excess (as such
terms are defined in Section 6.1(a)), in each case as of the close of business
on the day immediately prior to the Closing Date, if any, (ii) increased by the
extent that Net Working Capital Assets exceed $4,625,000 as of the Closing and
(iii) decreased to the extent that Net Working Capital Assets is less than
$4,625,000 as of the Closing (the "Purchase Price"), less (iv) the amount paid
by Buyer into the Escrow Account pursuant to Section 1.2(b).
(b) At the Closing, the Buyer shall deliver to ▇▇▇▇▇
Fargo Bank, N.A. (the "Escrow Agent") cash by wire transfer of immediately
available funds in the amount of $800,000, such amount to be held in an Escrow
Account (the "Escrow Account") in accordance with the terms of the Escrow
Agreement in the form of Exhibit A among the Buyer, the Escrow Agent and the
Sellers (the "Escrow Agreement").
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1.3 Earn Out Payment.
(a) Subject to approval of the Company's shareholders in
accordance with the shareholder approval requirements of Section 280G of the
Code and the regulations promulgated thereunder, the Buyer will pay to the
Sellers, not later than the date provided by Section 1.3(g) or Section 1.3(h),
the aggregate amount, if any, indicated below for the range of Revenue set forth
below if, subject to the provisions of Sections 1.3(b) and 1.3(c), at all times
during the period from the Closing Date until the first anniversary of the
Closing Date, each of the Sellers has complied with and performed the terms of
an Employment Agreement in the form of Exhibit B between such Seller and the
Subsidiary of the Company specified therein (an "Employment Agreement"), and the
terms of this Agreement:
Revenue Payment
Less than $33,222,450 $ 0
Equal to or greater than $33,222,450 $1,570,500
but less than $34,971,000
Equal to or greater than $34,971,000 $3,141,000
but less than $38,468,100
Equal to or greater than $38,468,100 $4,711,500
but less than $41,965,200
Equal to or greater than $41,965,200 $5,339,700
(b) In the event either of the Sellers fails, at any
time during the period from the Closing Date until 360 days after the Closing
Date, to comply with or perform the terms of the Employment Agreement to which
such Seller is a party, or the Subsidiary of the Company that is a party thereto
terminates either such Employment Agreement with cause (as such term is defined
in such Employment Agreement), no amounts shall be payable to the Sellers
pursuant to Section 1.3(a), notwithstanding the Revenue of the Company.
(c) In the event either of the Sellers dies at any time
during the period from the Closing Date until 360 days after the Closing Date,
the Buyer will pay to the Sellers the amount, if any, that would otherwise be
payable to the Sellers pursuant to Section 1.3(a).
(d) "Revenue" shall mean the revenue of the Company (of
a similar type generated by the Company for the 12 months ended December 31,
2000 with respect to the nature and profitability of such revenues) for the 12
months ended December 31, 2001, as adjusted for customer discounts and
allowances and reserves for bad debts calculated in accordance with GAAP;
provided, that, with respect to revenue of
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the Company for the 12 months ended December 31, 2001 that is of a type that is
not similar to the nature and profitability of revenues for the 12 months ended
December 31, 2000, such revenues will be deemed "Revenue" for purposes hereof
but will be adjusted to account for such dissimilarities in proportion to their
relative profitability.
(e) On May 15, 2001, November 15, 2001 and April 15,
2002, the Buyer will furnish the Sellers with quarterly statements that reflect
the Revenue of the Company for the immediately preceding calendar quarter. On
April 15, 2002, the Buyer will furnish the Sellers with a statement that
reflects the Revenue of the Company for the 12 months ended December 31, 2001
(the "2001 Revenue Statement"), together with a calculation of the payment due
pursuant to Section 1.3(a), if any. The 2001 Revenue Statement shall be based
upon the books and records of the Company and shall be prepared in accordance
with similar accounting principles used to prepare the Financial Statements.
(f) Upon receipt of the 2001 Revenue Statement, the
Sellers shall have 10 business days to dispute or disagree with the 2001 Revenue
Statement. The 2001 Revenue Statement shall become final and binding for
purposes of this Agreement unless, within 10 business days after the Sellers'
receipt of the 2001 Revenue Statement, the Sellers furnish written notice to the
Buyer of any such dispute or disagreement. Such written notice shall specify, in
reasonable detail, the nature and extent of such dispute or disagreement. If the
Sellers timely notify the Buyer of any dispute or disagreement with respect to
the 2001 Revenue Statement, the Sellers and the Buyer shall promptly attempt to
resolve such dispute or disagreement in good faith.
(g) If the Sellers and the Buyer are unable to resolve
such dispute or disagreement within 15 days after receipt by the Buyer of the
Sellers' written notice of dispute or disagreement pursuant to Section 1.3(f),
either the Sellers or the Buyer may submit such dispute or disagreement for
final determination to Delloitte & Touche LLC (unless another accounting firm is
mutually agreed upon by the Sellers and Buyer). Such accounting firm (the
"Independent Accountant") shall act as an arbitrator to determine and resolve
such dispute or disagreement based on the presentations by the Sellers, the
Buyer and their respective representatives and in accordance with the accounting
principles used to prepare the Financial Statements. The Independent Accountant
shall make its determination regarding such dispute or disagreement within 30
days after the date upon which the Sellers or the Buyer submits the dispute or
disagreement, and in that undertaking shall not be required to follow any
particular procedure but shall proceed in a manner designed to achieve a speedy
and economic resolution of the dispute. The Independent Accountant shall set
forth its determination, which shall be final, binding and conclusive, absent a
showing of fraud, in a written statement delivered to the Buyer and the Sellers,
stating its reasons therefor. The costs and expenses of the Independent
Accountant shall be borne equally by the Buyer and the Sellers.
1.4 Phoenix Receivable. The Sellers represent and warrant
that, at the date hereof, the Company is owed $446,847 by Phoenix Memorial
Hospital in respect of services rendered during 2000 (the "Phoenix Receivable").
The Buyer will pay to the
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Sellers in the aggregate, not later than the tenth day after the first
anniversary of the Closing Date, an amount equal to the product of (i) the
amount received by the Company prior to the first anniversary of the Closing
Date in payment of the Phoenix Receivable , which amount is not subject to any
offset, recoupment or other contractual, judicial or legal limitation,
restraint, claim or restriction of any kind imposed by Phoenix Memorial Hospital
or any court having jurisdiction over it, and (ii) 5.30, up to a maximum amount
of $2,369,000. Upon request of the Sellers received by the Buyer not later than
the fifth day after the first anniversary of the Closing Date, the Buyer will
furnish the Sellers with copies of all checks, bank records and other documents
or instruments evidencing any payment (and any offset, recoupment or other
contractual, judicial or legal limitation, restraint, claim or restriction of
any kind imposed on any such payment by Phoenix Memorial Hospital or any court
having jurisdiction over it) of the Phoenix Receivable made prior to the first
anniversary of the Closing Date. The Sellers shall have the right to pursue
collection of the Phoenix Receivable at the sole cost and expense of the
Sellers. On the first anniversary of the Closing, the Buyer shall cause the
Company to assign to the Sellers the Company's right, title and interest in and
to the portion, if any, of the Phoenix Receivable that remains uncollected as of
such date.
1.5 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, including,
without limitation, any amounts owing with respect to Claims for indemnification
under Sections 11.1, 11.2 and 11.3.
1.6 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.
2. Closing; Closing Date. The Closing of the sale and purchase of
the Shares contemplated hereby shall take place at the offices of ▇▇▇▇, Weiss,
Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
at 10:00 a.m. on April 12, 2001, 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. Either the Sellers or the Buyer may, upon written
notice to the other, defer the Closing for a period not exceeding 20 days. 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. OGP is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Massachusetts 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.
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3.2 Subsidiaries and Other Affiliates. Schedule 3.2 sets forth
the name and jurisdiction of organization of each corporation or other entity
(collectively, with the corporation referred to in Section 7.13, "Subsidiaries")
in which OGP directly or indirectly owns or has the power to vote shares of any
capital stock or other ownership interests having voting power to elect a
majority of the directors of such corporation, or other persons performing
similar functions for such entity, as the case may be. Except for the
Subsidiaries and as set forth on Schedule 3.2, OGP does not directly or
indirectly own any interest in any other person and no affiliate of OGP is
engaged in the Company Business. Each of the Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has the corporate power and lawful authority to
own, lease and operate its properties and to carry on its business as now being
and heretofore conducted.
3.3 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. OGP is authorized to issue
12,500 shares of common stock, no par value per share (the "Common Stock"), of
which 5,000 shares are issued and 5,000 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 OGP 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.
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 OGP's secretary
or an assistant secretary), or comparable instruments, of OGP as in effect on
the date hereof. The minute books, or comparable records, of OGP 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 OGP since the time of
OGP's organization and accurately reflect all transactions referred to in such
minutes and consents in lieu of meeting. The stock
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books, or comparable records, of OGP heretofore have been made available to the
Buyer for its inspection and are true and complete.
3.7 Financial Statements.
(a) The Sellers have furnished to the Buyer the balance
sheets of the Company as of (i) December 31, 1999, (ii) December 31, 2000, (iii)
January 27, 2001 and (iv) February 24, 2001, and the related statements of
income, shareholders' equity and changes in financial position for the years
then ended, including the footnotes thereto, audited by ▇▇▇▇ ▇'▇▇▇▇▇▇ &
Associates, independent certified public accountants, in the case of clause (i),
and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. LLP, independent certified public accountants, in the
case of clause (ii). Except as set forth on Schedule 3.7(a)(i), the foregoing
financial statements fairly present the financial position of the Company as of
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,
2000 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, 2000 is sometimes herein
called the "Balance Sheet Date.") The financial statements referred to in
clauses (i), (ii), (iii) and (iv) above 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, except as set forth on
Schedule 3.7(b), 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 have or has had a material adverse effect on the Condition of the
Company, whether or not covered by insurance.
3.9 Taxes.
(a) Except as set forth on Schedule 3.9(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
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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) 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, other than any such Tax Return as
to which the Company has duly obtained an extension of time to file which
extension has not expired, and all such Tax Returns are correct and complete in
all material respects, except as provided in Schedule 3.9(b). 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. Except as set forth on Schedule 3.9(b), no taxing authority has asserted
any Tax deficiency, lien, or other assessment against the Company which has not
been paid.
(c) 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 of the Company required to be filed or paid on or before the Closing
Date, except as provided in Schedule 3.9(c).
(d) With respect to all Tax Returns of the Company and
except as set forth on Schedule 3.9(d), (i) the statute of limitations for the
assessment of Federal and Georgia income and franchise Taxes has expired with
respect to all periods ending on or before December 31, 1997; (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 with respect to such Tax Returns
proposed or threatened against the Company.
(e) Schedule 3.9(e) sets forth the status of Federal Tax
audits of the Tax Returns of the Company for each 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.
(f) Schedule 3.9(f) sets forth the status of state,
county, local and foreign Tax audits of the Tax Returns of the Company for each
year for which
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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.
(g) Except as set forth on Schedule 3.9(g), 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.
(h) 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.
(i) 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.
(j) 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 has not increased since the Balance Sheet Date.
(k) The Company is not a party to, is not bound by, and
has no obligation under any Tax sharing or similar agreement.
(l) There are no Liens for Taxes on the assets of the
Company except for Liens for current Taxes not yet due.
(m) 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.
(n) No closing agreement that could affect the Taxes of
the Company has been entered into by or with respect to the Company.
(o) 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.
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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, including,
without limitation, the Illegal Immigration Reform and Immigrant Responsibility
Act of 1996, as amended, and the regulations promulgated thereunder
(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 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. Each Employee has all Permits required for the conduct of the business
conducted by such Employee for the Company. 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 reasonably
necessary to cause the Permits listed on Schedule 3.11 to remain in full force
and effect immediately following the consummation of the Contemplated
Transactions provided that the Company and the Buyer cooperate with the Sellers
to the extent reasonably necessary to cause the Permits to remain in full force
and effect.
3.12 No Breach. The execution and delivery by the Sellers of
this Agreement and each and every other agreement and instrument contemplated
hereby (including, without limitation, the Escrow Agreement and the Consulting
Agreements), 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
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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. 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, to the knowledge of the
Company, 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, to the knowledge of the Company, 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.
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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 with which the Company has a Contract.
(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). 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, 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 300 and which, in the
aggregate, do not require monthly rental payments in excess of $200,000
(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
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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.
(f) Condemnation. The Company has 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, 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, other than Trade Secrets, 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. To the knowledge of the Company, the Company has not infringed upon
or
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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. All material
Software is held by the Company legitimately, is free from any significant
software defect, performs in all material respects in conformance with its
documentation, and does not contain, to the knowledge of the Company, 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 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. Except as set forth on Schedule 3.20, 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 ordinary course commercial working relationships and, except as set forth on
Schedule 3.21(b), (i) within the last twelve months, no Material Customer has
threatened
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the Company 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 the Company 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 an
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 an adverse effect on the Condition of the
Company and (vi) to the knowledge of the Company, the acquisition of the Shares
by the Buyer and the consummation of the Contemplated Transactions will not
affect the relationships of the Company with any customers to the extent of
having an 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 in compliance with, its terms and
all applicable Laws. Each Benefit Plan intended to comply with section
401(a) of the Code is the subject of a favorable notification letter from
the IRS as to the plan's
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qualification and the qualification of the trust of each such plan under
Section 501 of the Code and, to the knowledge of the Sellers, no events,
circumstances or conditions exist which would jeopardize such plans' and
trusts' 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.
(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.
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(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.
(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.
(xvi) The Company has not had and is not
reasonably expected to have any Liability, either direct or indirect,
absolute or contingent, as a result of any misclassification of a person
(A) as an independent contractor rather than as an Employee, or (B) or as
an exempt or non-exempt employee.
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, to the knowledge
of the Company, 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. The Company is not party to nor
has ever been party to any collective bargaining agreements, and the Company has
no knowledge of any organizing activities currently occurring or being planned.
All persons employed by the Company are properly classified by the Company as
either an independent contractor or an employee for payroll, Tax and accounting
purposes.
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(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 employment 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 immigration, discrimination, fair labor standards and
occupational health and safety, wrongful discharge or violation of the personal
rights of Employees, former Employees or prospective Employees. There is no
dispute, Claim or proceeding pending with, or to the knowledge of the Company,
threatened by, the Immigration and Naturalization Service with respect to the
Company or any Employee.
3.24 Insurance. Schedule 3.24 sets forth a list (specifying
the insurer, describing each pending claim thereunder of more than $25,000 and
setting forth the aggregate amounts paid out under each such policy from January
1, 2000 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.
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 2000 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 $50,000; (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, the Company has not received notice from any such person whether
orally
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or in writing that he or she intends to 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;
(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 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
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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, to the knowledge of the Company,
or spouse (or, to the knowledge of the Company, 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:
(a) 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;
(b) own(s), directly or indirectly, in whole or in part,
or use(s) (other than the Sellers and officers and directors of the Company) any
property that the Company uses in the conduct of its business; or
(c) 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
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 (whether as obligor or as
guarantor) for borrowed money, whether current, short-term, or long-term,
secured or unsecured, (ii) all indebtedness of the Company (whether as obligor
or as guarantor) 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 (whether as obligor or as guarantor) under
leases which are capital leases in accordance with GAAP, (iv) all off-balance
sheet financings of the Company (whether as obligor or as guarantor)
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including, without limitation, synthetic leases and project financing, (v) any
payment obligations of the Company (whether as obligor or as guarantor) 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 (whether as obligor or as guarantor) 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, (ix)
any accrued Taxes other than payroll Taxes accrued in the ordinary course of
business, (x) any accrued and unpaid interest or any contractual prepayment
premiums, penalties or similar contractual charges resulting from the
Contemplated Transactions or the discharge of such obligations with respect to
any of the foregoing, (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"). 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.
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 (including, without limitation, the Escrow
Agreement and the Employment Agreement to which such Seller is or will be a
party) 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 (including, without
limitation, the Escrow Agreement and the Employment Agreement to which such
Seller is or will be a party) 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
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instrument (including, without limitation, the Escrow Agreement and the
Employment Agreement to which such Seller is or will be a party) 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 (including, without limitation, the Escrow Agreement and the
Employment Agreement to which such Seller is or will be a party) 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 (including, without limitation, the Escrow Agreement
and the Employment Agreement to which such Seller is or will be a party) 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.
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 (including, without limitation, the Escrow Agreement) 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 (including, without limitation, the Escrow Agreement) 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 (including, without limitation, the Escrow Agreement) 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
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(including, without limitation, the Escrow Agreement) 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 (including, without limitation, the Escrow
Agreement) 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; (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 on and as of the Closing Date as if made
on and as of the Closing Date; (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; and (iv) shall cause the Company to manage its cash
balance only in the ordinary course of business including causing the payment of
accounts payable and other liabilities and the collection of accounts receivable
and other amounts due to the Company to be only in the ordinary course,
consistent with past practice. Any deficiency in the cash balance as of the
Closing Date below $75,000 shall be deemed the "Cash Shortfall" and any excess
in the cash balance as of the Closing Date above $75,000 shall be deemed the
"Cash Excess."
(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
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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 foreign or domestic
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, consultants, other employees 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.
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 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
Seller, 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.
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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, use their best efforts to obtain or make, at their sole expense, all
Required Consents and undertake all reasonable actions, incur all expenses,
costs and obligations required to obtain the Required Consents; provided that
the Sellers shall not be obligated to provide bonds, guarantees or other
financial instruments to obtain such Required Consents. Not less than five days
prior to the Closing Date, the Sellers shall deliver to the Buyer Schedule 6.7
setting forth, as of that date, all Required Consents which have not been
obtained.
6.8 Permit Transfers. The Sellers shall, 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.
6.10 Taxes. The Sellers will pay and discharge and be
responsible for any and all Taxes due or payable by the Company for any taxable
year or taxable period (or portion thereof) ending on or before the Closing
Date. If the liability of the Company for Taxes payable after the Closing Date
for periods ending on or before the Closing Date exceeds the accrual therefore
as reflected in Section 3.29(ix), the Sellers shall be responsible for the
payment of such amount to the Company. If the accrual reflected in Section
3.29(ix) for Taxes payable after the Closing Date for periods ending on or
before the Closing Date exceeds the liability therefore, the Company shall pay
the difference to the Sellers.
6.11 Tax Return Filing.
(a) On or prior to the relevant date, 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
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Closing Date. If the Company has not filed all such Tax Returns prior to
Closing, the Company will complete the preparation of such Tax Returns, at the
expense of the Sellers. The Company shall pay any Taxes due with respect to such
Tax Returns to the extent such liabilities were a reduction to the Purchase
Price in accordance with Sections 1.2(a) and 3.29(ix).
(b) The Sellers will not cause the Company to make any
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 thirty (30) 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 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, except as set forth
on Schedule 3.7(a)(i).
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
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. The Buyer shall not, without providing at least five days'
prior notice to the Sellers, amend or modify, in whole or in part, any Tax
Return filed by or on behalf of the Company for any period ending on or prior to
the Closing Date.
6.14 Existing Indebtedness. As of the close of business on the
day prior to the Closing Date, the Buyer shall have received from the Sellers
(i) a letter from the Sellers dated that same day detailing each item of
Existing Indebtedness and (ii) a letter from each bank or other lending
institution from whom the Company has, at that date, Existing Indebtedness of
the type referred to in Section 3.29(i), stating that once such Existing
Indebtedness is paid in the amounts indicated, such Existing Indebtedness
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and the commitments thereunder shall terminate and that any guarantees in
respect of, and all Liens securing, any such Existing Indebtedness shall be
released.
6.15 No Solicitation. Sellers agree that from the date hereof
until termination of this Agreement, neither Sellers, the Company nor any of
their respective affiliates, officers, directors, advisors or representatives
shall: (i) solicit or entertain, directly or indirectly, any interest by any
other party in any transaction which would involve the Company in any manner
inconsistent with the purchase of the Shares by the Buyer; (ii) engage in any
discussions with or provide any information to any other party related, directly
or indirectly, to any possible transaction which would involve the Company in
any manner inconsistent with the purchase of the Shares by the Buyer; or (iii)
enter into any transaction or arrangements with any party inconsistent with the
purchase of the Shares by the Buyer.
6.16 Confidentiality. Buyer and Sellers agree that from the
date hereof until the Closing Date, they will continue to be bound by the terms
of that certain confidentiality agreement, dated January 8, 2001, by and between
Buyer and Sellers.
6.17 Conduct of the Company After Closing. The Buyer shall not
permit the Company to take any action after the Closing that is intended to
diminish, reduce or obviate the amount that may be payable to the Sellers
pursuant to Section 1.3(a).
6.18 Payments to Employees. The Sellers shall not, whether
before, at or after the Closing, make any payments to any Employee or former
Employee unless any such payment is (i) made only to the persons identified on
Schedule 6.18 (to be completed prior to the Closing Date), on dates not earlier
than the dates set forth therein and in amounts not exceeding the amounts set
forth therein or (ii) approved in writing in all respects by the Buyer, which
approval shall not be unreasonably withheld.
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
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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 Hunter, Maclean, ▇▇▇▇▇ & ▇▇▇▇, counsel to the Sellers,
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 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 Tax Representation. The Company shall have furnished Buyer
with a statement meeting the requirements of Treasury Regulation Section
1.1445-2(c)(3).
7.8 Audited Financial Statements. The Buyer shall have
received the Financial Statements, audited by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. LLP,
independent certified public accountants.
7.9 Escrow Agreement. The Sellers and the Escrow Agent shall
have executed and delivered the Escrow Agreement.
7.10 Employment Agreements. Each of the Sellers shall have
executed and delivered an Employment Agreement.
7.11 Intellectual Property. The Sellers shall have furnished
to the Buyer evidence that (i) the name of OGP Philippines has been changed to a
name that does not include the terms "OGP", "▇'▇▇▇▇▇-▇▇▇▇▇▇" or any
substantially similar name, (ii) the Sellers have applied for a trademark
registration with the United States Patent and Trademark Office of the trademark
"▇'▇▇▇▇▇-▇▇▇▇▇▇", have assigned such application to the Buyer and have consented
to the Buyer's use of such trademark and (iii) the Deed by and among ▇▇▇▇▇▇
▇'▇▇▇▇▇ & ▇▇▇▇▇▇ ▇'▇▇▇▇▇-▇▇▇▇▇▇, ▇'▇▇▇▇▇-▇▇▇▇▇▇ International (USA), Inc. and
others dated 1999 and the Deed by and among ▇▇▇▇▇▇ ▇'▇▇▇▇▇ & ▇▇▇▇▇▇
▇'▇▇▇▇▇-▇▇▇▇▇▇ and O'▇▇▇▇▇ ▇▇▇▇▇▇ Recruitment Limited, dated 2000, both with
respect to the use of the "▇'▇▇▇▇▇-▇▇▇▇▇▇" name have been terminated.
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7.12 Insurance. The Sellers shall have furnished to the Buyer
evidence that the Sellers have obtained, at their expense, for the Company, its
agents and representatives, errors and omissions insurance, including
professional liability insurance, against any acts or omission that occur at any
time prior to the Closing Date but reported after the Closing Date.
7.13 South Africa. The Sellers shall have furnished to the
Buyer evidence that ▇'▇▇▇▇▇-▇▇▇▇▇▇ International (SA) (Proprietary) Limited is a
wholly-owned Subsidiary of the Company.
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. 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 Sellers 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.
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 in the
United States temporary and permanent nurses, other medical professionals,
medical technicians and teachers from the United States and foreign countries
(the "Company Business"); (ii) 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; (iii) 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 (iv) the Buyer would not purchase the Shares but
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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 Date (the "Restricted Period"), the Sellers shall not through any
means, including through the so-called World-Wide-Web, Internet or any
so-called "on-line" service or other electronic media, directly or
indirectly, (x) engage in the Company Business for the Seller's own
account (including, without limitation, except as provided in Section
9.1(e), use their names or permit any other person to use their names or
"OGP" (or any substantially similar name) in the conduct of the Company
Business); (y) except as agreed to in writing by the Buyer and the Sellers
or as provided by the Employment Agreements, 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, (1) 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 do not, directly or indirectly, own 1% or more of any class of
securities of such person; (2) an interest in, or act as a director of
(but not an officer or consultant to), ▇'▇▇▇▇▇-▇▇▇▇▇▇ International
(Europe) Limited ("OGP-UK"), as long as the business of OGP-UK consists
solely of placing temporary or permanent nurses or other medical
professionals or medical technicians in healthcare facilities located
solely in the United Kingdom; and (3) an interest not exceeding 25% in, or
act as a director of (but not an officer or consultant to), the
Philippines Overseas Employment Administration licensed recruitment agency
named OGP Philippines ("OGP Philippines"), as long as its business
consists solely of placing temporary or permanent nurses or other medical
professionals or medical technicians in healthcare facilities located
solely in the United Kingdom.
(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 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
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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.
(e) Restrictions on OGP-UK. Upon any sale of all or
substantially all of the capital stock or assets of OGP-UK to any other person
or the merger of OGP-UK with or into any other person (or any similar
transaction), the Sellers shall require as conditions to such sale or other
transaction, and shall furnish to the Buyer documents evidencing, that (i) such
other person not be given any right or license to use, and shall be prohibited
from using, the name "▇'▇▇▇▇▇-▇▇▇▇▇▇" or "OGP" (or any substantially similar
name) in connection with the business thereafter conducted by OGP-UK or such
other person after July 31, 2001 and (ii) such other person shall agree to be
bound by the provisions of Section 9.1(d).
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.
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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 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. Except for
those representations and warranties in Sections 3.4, 3.5, 3.29, 4.1, 6.5, 6.10
and 6.11 (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) eighteen (18) 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.
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.
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 and Section 6.11 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 (i) United States federal or foreign
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).
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 representation, warranty, covenant or agreement of the Buyer
contained in this Agreement or in any documents delivered by the Buyer pursuant
to this Agreement, 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
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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 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
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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 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 $125,000 (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. The Sellers' liability for
Losses referred to in Section 11.1, 11.2 or 11.3 shall first be satisfied from
the Escrow Account and any remaining, or unsatisfied, Losses referred to in
Section 11.1, 11.2 or 11.3 shall be the obligation of the Sellers.
(b) Notwithstanding anything to the contrary stated
herein, in no event shall the Sellers be collectively obligated to pay for
indemnification under Section 11.1 an aggregate amount in excess of the
aggregate amounts paid to the Sellers pursuant to Section 1.2, 1.3 and 1.4 of
this Agreement.
(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 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, 6.5, 6.10
and 6.11.
(d) Section 11.3 shall terminate and expire thirty (30)
months after the Closing Date.
11.7 Exclusivity. After the Closing, to the extent permitted
by applicable law and except for losses arising from any representations,
warranties, covenants or agreements which are incorrect or breached due to
fraud, the indemnities set forth in this Article 11 shall be the exclusive
remedies of the Buyer and the Sellers and their respective officers, directors,
employees, agents and affiliates for any
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misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement contained in this Agreement (except as otherwise set
forth herein), and the parties shall not be entitled to a recision of this
Agreement or to any further indemnification rights or claims of any nature
whatsoever in respect thereof, all of which the parties hereto hereby waive.
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;
(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
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Agreement to the contrary, the provisions of Sections 6.3, 6.4, 6.5 and 6.16,
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.
"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.
"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 Claim" 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
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implicated in or subject to any Claim, Order, hearing, notice, agreement or
evaluation by any Governmental Body or any other person.
"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 either of the Sellers or any officer, manager or key employee of
the Company, including ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇.
"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, the difference
between (A) all assets of the Company that are classified as current assets
(other than deferred taxes), less all non-operating and non-recurring assets of
the Company (including, without limitation, cash, intercompany accounts and
inventory representing capitalized expenses paid to recruit and screen foreign
nurses for placement in the United States) minus (B) all liabilities of the
Company that are classified as current liabilities, less all non-operating and
non-recurring liabilities of the Company (including, without limitation, Taxes
(other than payroll Taxes), bonus accruals, loans and lines of credit payable
and accruals for management fees), all as calculated in accordance with GAAP.
Any item included as a component of Indebtedness pursuant to Section 3.29 shall
not be included in the computation of Net Working Capital Assets.
"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.
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"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, 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.
"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).
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
Cash Excess 6.1(a)
Cash Shortfall 6.1(a)
Claims 3.14
Claims Notice 11.5(a)
Closing 1.1
Closing Date 2
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Term Section
---- -------
Code 3.9(e)
Common Stock 3.4
Company Preamble
Company Business 9.1
Condition of the Company 3.3
Contemplated Transactions 3.9(o)
Contracts 3.12
Employment Agreement 1.3
Escrow Account 1.2(b)
Escrow Agent 1.2(b)
Escrow Agreement 1.2(b)
Existing Indebtedness 3.29
Financial Statements 3.7
Governmental Bodies 3.10
Indemnifying Party 11.5(a)
Indemnitee 11.5(a)
Independent Accountant 1.3(g)
Intellectual Property 3.18
Internet 9.1(a)
Laws 3.10
Leased Real Property 3.16(b)
Liabilities 3.20
Losses 11.1
Material Customers 3.21(a)
OGP Preamble
OGP-UK 9.1
OGP Philippines 9.1
Orders 3.10
Permits 3.11
Phoenix Receivable 1.4
Purchase Price 1.2(a)
Real Property Leases 3.16(b)
Required Consents 3.12
Restricted Period 9.1(a)
Restrictive Covenants 9.2
Revenue 1.3(d)
Seller Preamble
Sellers Preamble
Shares Preamble
Software 3.18
Subsidiaries 3.2
Tangible Property 3.17
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Term Section
---- -------
Tax Returns 3.9(b)
Taxes 3.9(a)
2001 Revenue Statement 1.3(e)
13.2 Consent to Jurisdiction and Service of Process. Any Claim
arising out of or relating to this Agreement or the Contemplated Transactions
shall be instituted exclusively 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:
▇▇. ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Stewards Cottage
Old Conna Village
Ferndale Broad
Bray
Co Wicklow
Ireland
Facsimile: 011-353-1-204-3019
▇▇. ▇▇▇▇▇▇ ▇'▇▇▇▇▇-▇▇▇▇▇▇
Stewards Cottage
Old Conna Village
Ferndale Broad
Bray
Co Wicklow
Ireland
Facsimile: 011-353-1-204-3019
with a copy to:
Hunter, Maclean, ▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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
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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.
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.
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(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.
13.13 No Third Party Beneficiaries. No provision of this
Agreement is intended to, or shall, confer any third-party beneficiary or other
rights or remedies upon any person other than the parties hereto.
[Remainder of page intentionally left blank]
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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/ ▇▇▇▇▇▇ ▇'▇▇▇▇▇-▇▇▇▇▇▇
_______________________________
▇▇▇▇▇▇ ▇'▇▇▇▇▇-▇▇▇▇▇▇
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