EXHIBIT 2.1
Asset Purchase Agreement
dated as of January 31, 1997
but effective for all purposes as of December 31, 1996
by and among
COLORADO THERAPISTS ON CALL, INC.,
a Colorado corporation
PROFESSIONAL HEALTHCARE PROVIDERS, INC.,
a California corporation,
CORESTAFF, INC.,
a Delaware corporation
and
INTERNATIONAL NURSING SERVICES, INC.,
a Colorado corporation
Covering the Purchase of certain
of the Assets of
COLORADO THERAPISTS ON CALL, INC.
and
PROFESSIONAL HEALTHCARE PROVIDERS, INC.
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into this
31st day of January 1997, but effective for all purposes December 31, 1996, by
and among COLORADO THERAPISTS ON CALL, INC. ("CTOC"), a Colorado corporation,
and PROFESSIONAL HEALTHCARE PROVIDERS, INC. ("PHP"), a California corporation
(collectively referred to herein as the "Seller"), CORESTAFF, INC., a Delaware
corporation ("COREStaff") and INTERNATIONAL NURSING SERVICES, INC., a Colorado
corporation (the "Purchaser").
W I T N E S S E T H
WHEREAS, Seller is the owner of all right, title and interest in and to the
assets described on Schedule 2.1 hereto (the "Assets"), with such assets being
substantially all of the assets currently used in the physical therapy and other
related service businesses operated by the Seller (the "Business") on the date
hereof;
WHEREAS, Seller desires to sell the Assets to Purchaser and Purchaser
desires to acquire the Assets from Seller, all pursuant to this Agreement as
hereinafter provided; and
WHEREAS, the parties hereto desire to set forth certain representations,
warranties and covenants made by each to the other as an inducement to the
execution and delivery of this Agreement, and to set forth certain additional
agreements related to the transactions contemplated hereby;
NOW, THEREFORE, for and in consideration of the premises, the mutual
representations, warranties and covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. GENERAL DEFINITIONS. For purposes of this Agreement, the following terms
shall have the respective meanings set forth below:
1.1 Affiliate of any Person shall mean any Person Controlling, Controlled
by or under common Control with such Person.
1.2 Best Knowledge of Seller means the actual knowledge of COREStaff and
after reasonable investigation of any matter disclosed to COREStaff by ▇▇▇▇▇
▇▇▇▇▇▇▇▇.
1.3 Control and all derivations thereof shall mean the possession, direct
or indirect, of either (i) the ownership of or ability to direct the voting of,
as the case may be, fifty percent (50%) or more of the equity interests, value
or voting power in any Person or (ii) the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
1.4 Governmental Authority shall mean any and all federal, state or local
governments.
1.5 Governmental Requirement shall mean any and all laws, statutes,
ordinances, codes, rules, regulations, orders, judgments, writs, injunctions,
decrees, or decisions, promulgated, issued, passed or set forth by any
Governmental Authority.
1.6 Person shall mean any natural person, any Governmental Authority and
any entity the separate existence of which is recognized by any Governmental
Authority or Governmental Requirement, including, but not limited to,
corporations, partnerships, joint ventures, joint stock companies, trusts,
estates, companies and associations, whether organized for profit or otherwise.
1.7 Taxes. "Tax" and "Taxes" shall mean any and all income, excise,
franchise or other taxes and all other charges or fees imposed or collected by
any Governmental Authority or pursuant to any Governmental Requirement, and
shall also include any and all penalties, interest, deficiencies, assessments
and other charges with respect thereto.
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE.
2.1 Purchase and Sale. Seller hereby sells, assigns, transfers and delivers
to Purchaser all right, title and interest in and to the Assets (as more fully
described on Schedule 2.1 hereto), free and clear of any liens or encumbrances
of any nature whatsoever (except for any liens, encumbrances or obligations, if
any, expressly assumed by Purchaser hereunder). Purchaser hereby purchases from
Seller the Assets in consideration for the Purchase Price (as hereinafter
defined) payable as set forth in Section 3 below. The Assets shall not include
any of the assets listed on Exhibit A-1 to Schedule 2.1 hereto (collectively,
the "Excluded Assets").
2.2 Delivery of Assets and Transfer Documents. At the Closing (hereinafter
defined in Section 2.3), Seller shall have taken all steps necessary to put
Purchaser in possession of the Assets, free and clear of any liens or
encumbrances of any nature whatsoever (except for liens, encumbrances or
obligations, if any, expressly assumed by Purchaser hereunder), and have
delivered to Purchaser (i) a duly executed general warranty ▇▇▇▇ of sale
covering the Assets, in the form of and containing the same terms and provisions
as the General Warranty ▇▇▇▇ of Sale attached hereto as Attachment 2.2, (ii)
duly executed assignments for all confidentiality and/or non-solicitation
agreements, patents, trademarks, trade names and similar intangible property
included in the Assets, in form and substance acceptable to Purchaser and in
recordable form as appropriate, and (iii) such other duly executed transfer and
release documents which Purchaser has reasonably requested to evidence the
transfer of the Assets to Purchaser free and clear of any liens or encumbrances
of any nature whatsoever (except for liens, encumbrances or obligations, if any,
expressly assumed by Purchaser hereunder).
2.3 Closing; Closing Date. Subject to the terms and conditions herein
contained, the consummation of the transactions referred to above shall take
place (the "Closing") at the offices of Purchaser's counsel, LeBouef, Lamb,
▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, commencing
at 9:00 a.m. local time on January 31, 1997 (the "Closing Date").
3. PURCHASE PRICE.
3.1 Price and Payment. (a) The aggregate consideration for the Assets and
the Non- Competition Agreements (set forth in Section 13 below) shall be an
amount equal to the sum of (i) $2,000,000 payable by wire transfer or delivery
of other immediately available funds (the "Cash Portion of the Purchase Price"),
(ii) the value of the Discharged Liabilities (as hereinafter defined), and (iii)
the value of the Assumed Liabilities and Obligations (as hereinafter defined).
The Cash Portion of the Purchase Price, the Discharged Liabilities and the
Assumed Liabilities and Obligations are collectively referred to herein as the
"Purchase Price."
(b) At the Closing, the Purchaser shall cause the Purchase Price to be paid
as follows:
(1) Payment of the Cash Portion of the Purchase Price;
(2) Payment of the Discharged Liabilities; and,
(3) Assumption of the Assumed Liabilities and Obligations.
3.2 Discharged Liabilities. Purchaser hereby agrees to discharge at the
Closing all liabilities of Seller listed on Schedule 3.2 (the "Discharged
Liabilities").
3.3 Assumed Obligations. Purchaser hereby assumes the obligations of Seller
under all contracts and agreements transferred by Seller to Purchaser under this
Agreement that are listed and described on Schedule 3.3 hereto and the 1996
expenses paid or to be paid in 1997 related to the operations of Seller on or
before December 31, 1996 listed on Schedule 3.3 up to a maximum of $175,000 (the
"Assumed Liabilities and Obligations"); provided that Purchaser specifically
does not assume any liabilities of Seller under such contracts or agreements
with respect to any breaches of such contracts or agreements occurring on or
before the Closing Date or any damages to third parties resulting from acts,
events or omissions occurring on or before the Closing Date.
3.4 Excluded Liabilities and Obligations. (a) Except as expressly set forth
in Sections 3.2 and 3.3 above, the Purchaser shall not assume and shall not be
liable or responsible for any debt, obligation or liability of the Business, the
Seller, or any Affiliate of the Seller, or any claim against any of the
foregoing parties, of any kind, whether known or unknown, contingent, absolute
or otherwise.
(b) Except for the Discharged Liabilities and the Assumed Liabilities and
Obligations expressly provided for in Sections 3.2 and 3.3 hereof, COREStaff and
the Seller shall promptly pay and discharge when due all liabilities and
obligations related to or arising from the Business prior to the Closing Date
and shall jointly and severally forever defend, indemnify and hold harmless the
Purchaser from and against any and all liabilities, obligations, losses, claims,
damages (including incidentals and consequential damages), costs and expenses
(including court costs and reasonable attorney's fees) related to or arising
from the Business prior to the Closing Date.
3.5 Transfer Taxes. Purchaser and Seller acknowledge and agree that the
Purchase Price and any adjustments thereto, includes and is inclusive of any and
all sales, use, transfer or other similar tax imposed as a result of the
consummation of the transactions contemplated by this Agreement, and COREStaff
and the Seller hereby jointly and severally agree to pay and discharge, and to
indemnify Purchaser against, and protect, save and hold Purchaser harmless from,
any liability, obligation, claim, assessment or deficiency (whether or not
ultimately successful) for any and all sales, use, transfer or other similar
taxes (and any and all interest, penalties, additions to tax and fines thereon
or related thereto) resulting or arising from or incurred in connection with the
consummation of the transactions contemplated by this Agreement.
3.6 Allocation of Purchase Price. The Purchase Price shall be allocated as
set forth in Schedule 3.6 attached hereto, and made a part hereof.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller, and with respect to
Section 4.9 only, COREStaff, hereby represents and warrants to Purchaser as
follows:
4.1 Incorporation. Each of the Seller is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
respective incorporation, and is duly authorized, qualified and licensed under
all applicable Governmental Requirements to carry on its business in the places
and in the manner as now conducted, except when the failure to be licensed under
all applicable Governmental Requirements does not have a material adverse effect
on the Business of Seller. The Seller is qualified to do business in every
jurisdiction in which the failure to so qualify might reasonably be expected to
have a material adverse effect on the financial condition, operating results,
assets, or business prospects of Seller.
4.2 Share Capital. COREStaff owns, in the aggregate, all of the outstanding
capital stock of the Seller, and except as listed on Schedule 4.2 hereto, there
are no options, rights or other grants currently outstanding for the acquisition
or purchase of any shares of the capital stock of Seller.
4.3 Employee Matters. Schedule 4.3(A) hereto, sets forth a complete list of
the names of and current annual compensation paid by Seller to each corporate
(non-temporary) employee of Seller utilized in connection with the operation of
the Business.
4.4 Contracts and Agreements. Schedule 4.4 hereto, sets forth a complete
list of and briefly describes all of the following contracts, agreements,
leases, licenses, plans, arrangements or commitments, written or oral, that
relate to the Assets or the Business (including all amendments, supplements and
modifications thereto):
(a) all contracts, agreements, or commitments in respect of the sale of
services in excess of $300,000;
(b) all sales or agency agreements or franchises or legally enforceable
commitments or obligations with respect thereto;
(c) all collective bargaining agreements, union agreements, employment
agreements, non-solicitation agreements, confidentiality agreements, consulting
agreements or agreements providing for the services of an independent
contractor;
(d) all leases related to the Assets or the Business, and all other
contracts, agreements or legally enforceable commitments relating to or
affecting the Assets or the Business;
(e) all consent decrees and other judgments, decrees or orders, settlement
agreements and agreements relating to competitive activities, requiring or
prohibiting any future action; and
(f) all contracts, commitment and agreements entered into outside the
ordinary course of the operation of the Business.
Except as set forth on Schedule 4.4 hereto, to the Best Knowledge of the
Seller, all of such contracts, agreements, leases, licenses, plans,
arrangements, and commitments (collectively, the "Contracts") are valid, binding
and in full force and effect in accordance with their terms and conditions and
there is no existing default thereunder or breach thereof by Seller, or, to the
Best Knowledge of Seller, by any other party to the Contracts, or any conditions
which, with the passage of time or the giving of notice or both, might
constitute such a default by Seller, or, to the Best Knowledge of Seller, by any
other party to the Contracts, and the Contracts will not be breached by or give
any other party a right of termination as a result of the transactions
contemplated by this Agreement. Copies of all of the documents (or in the case
of oral commitments, descriptions of the material terms thereof) relevant to the
Contracts listed in Schedule 4.4 hereto, have been delivered by Seller to
Purchaser. Except as set forth on Schedule 4.4A hereto, the Assets may be
assigned to Purchaser without the approval or consent of any Person.
4.5 Effect of Agreement. Except as set forth on Schedule 4.5 hereto, the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not (i) result in any breach of any of the
terms or conditions of, or constitute a default under, the Certificate of
Incorporation or other charter documents or bylaws of Seller, or any commitment,
mortgage, note, bond, debenture, deed of trust, contract, agreement, license or
other instrument or obligation to which Seller is now a party or by which Seller
or any of its properties or assets may be bound or affected; (ii) cause
Purchaser to lose the benefit of any material right or privilege included in the
Assets; (iii) relieve any Person of any material obligation (whether contractual
or otherwise) or enable any Person to terminate any such obligation or any right
or benefit enjoyed by Seller or to exercise any right under any agreement in
respect of the Assets or the Business; or (iv) require notice to or the consent,
authorization, approval or order of any Person (except as may be contemplated by
the last sentence of Section 4.4 hereof).
4.6 Properties, Assets and Leasehold Estates. Except as set forth in
Schedule 4.6 hereto, Seller has good and marketable title to all the Assets,
free and clear of all mortgages, liens, pledges, conditional sales agreements,
charges, easements, covenants, assessments, options, restrictions and
encumbrances of any nature whatsoever. All leases to which real property is
leased in connection with the Business are in good standing, valid and
enforceable with respect to their terms.
4.7 Intangible Property. Except as set forth on Schedule 4.7 hereto, the
operation of the Business as now conducted by Seller does not require the use of
or consist of any rights under any patents, inventions, trademarks, trade names,
brand names or copyrights. Seller owns and has the full and exclusive right to
use in connection with the Business all of the items listed on Schedule 4.7
hereto, which items are in full force and effect. Seller has not transferred,
encumbered or licensed to any Person any rights to own or use any portion of the
items listed on Schedule 4.7 hereto or any other intangible property included in
the Assets. None of the items listed on Schedule 4.7 violates or infringes upon
any patents, inventions, trademarks, trade names, brand names or copyrights
owned by others.
4.8 Suits, Actions and Claims. Except as set forth in Schedule 4.8 hereto,
(i) there are no suits, actions, claims, inquiries or investigations by any
Person, or any legal, administrative or arbitration proceedings in which Seller
is engaged or which are pending or, to the Best Knowledge of Seller, threatened
against or affecting Seller or any of its properties, assets or business, or to
which Seller is or might become a party, or which question the validity or
legality of the transactions contemplated hereby, (ii) no basis or grounds for
any such suit, action, claim, inquiry, investigation or proceeding exists, and
(iii) there is no outstanding order, writ, injunction or decree of any
Governmental Authority against or affecting Seller or any of its properties,
assets or business.
4.9 Authorization. COREStaff and Seller have full legal right, power and
authority to enter into and deliver this Agreement and to consummate the
transactions set forth herein and to perform all the terms and conditions hereto
to be performed by it. The execution and delivery of this Agreement by COREStaff
and Seller and the performance by them of the transactions contemplated herein
have been duly and validly authorized by all requisite action of COREStaff and
Seller, and this Agreement has been duly and validly executed and delivered by
COREStaff and Seller and is the legal, valid and binding obligation of COREStaff
and Seller, enforceable against them in accordance with its terms, except as
limited by applicable bankruptcy, moratorium, insolvency or other similar laws
affecting generally the rights of creditors or by principles of equity.
4.10 Work-In-Progress. Except as set forth on Schedule 4.10 hereto, Seller
has not received any payments with respect to any work-in-progress.
4.11 Brokers and Finders. No broker or finder has acted for Seller in
connection with this Agreement or the transactions contemplated by this
Agreement and no broker or finder is entitled to any brokerage or finder's fee
or to any commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Seller.
4.12 Deposits. Seller does not now hold, nor does Seller expect to receive
between the date hereof and the Closing Date, any deposits or prepayments by
third parties with respect to any of the Assets or the Business.
4.13 Telephone Numbers. Schedule 4.13 sets forth all telephone numbers used
by Seller in connection with the Business that are included in the Assets.
4.14 Customer List. Schedule 4.14 hereto sets forth a true, correct and
complete list of all customers of the Business to which Seller has sold or
provided services in excess of $100,000 during the calendar years 1995 and/or
1996.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
warrants to Seller as follows:
5.1 Incorporation. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado.
5.2 Authorization. Purchaser has full legal right and corporate power to
enter into and deliver this Agreement and to consummate the transactions set
forth herein and to perform all the terms and conditions hereof to be performed
by it. This Agreement has been duly executed and delivered by Purchaser and is a
legal, valid and binding obligation of Purchaser enforceable in accordance with
its terms, except as limited by applicable bankruptcy, moratorium, insolvency,
or other laws affecting generally the rights of the creditors or by principals
of equity. The execution and delivery of this Agreement by Purchaser and the
performance by Purchaser of the transactions contemplated herein have been duly
and validly authorized by all requisite corporate action of Purchaser.
5.3 Brokers and Finders. No broker or finder has acted for Purchaser or any
Affiliate in connection with this Agreement or the transactions contemplated by
this Agreement and no broker or finder is entitled to any brokerage or finder's
fee or to any commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Purchaser or any
Affiliate.
5.4 Sophistication. The Purchaser is sophisticated in financial matters and
is able to evaluate the risks and benefits of the investment in the Assets.
5.5 Information. The Purchaser confirms that the Seller has made available
to the Purchaser and its representatives and agents the opportunity to ask
questions of the officers of COREStaff and the Seller and to acquire such
additional information about the Business and the financial condition of the
Seller as the Purchaser has requested. 6. PRE-CLOSING COVENANTS. The parties
agree as follows with respect to the period between the execution of this
Agreement and the Closing.
6.1 General. Each of the parties will use its best efforts to take all
action and to do all things necessary, proper, or advisable to consummate and
make effective the transactions contemplated by this Agreement (including
satisfying the closing conditions set forth in Section 7 below).
6.2 Notices and Consents. The Seller will give any notices to third
parties, and the Seller will use its best efforts to obtain any third party
consents as set forth in Schedule 6.2 in connection with the matters pertaining
to the Seller disclosed or required to be disclosed by this Agreement. Each of
the parties will take any additional action that may be necessary, proper or
advisable in connection with any other notices to, filings with, and
authorizations, consents, and approvals of governments, governmental agencies,
and third parties that it may be required to give, make or obtain.
6.3 Operation of Business. The Seller will not engage in any practice, take
any action, embark on any course of inaction, or enter into any transaction
outside the ordinary course of business.
6.4 Preservation of Business. The Seller will keep the business and
properties substantially intact, including its present operations, physical
facilities, working conditions, and relationships with lessors, licensors,
suppliers and customers.
6.5 Full Access. The Seller will permit representatives of the Purchaser to
have full access at all reasonable times, and in a manner so as not to interfere
with the normal business operations of the Seller, to all premises, properties,
books, records, contracts, tax records, and documents of or pertaining to the
Seller.
7. CONDITIONS TO OBLIGATION TO CLOSE.
7.1 Conditions to Obligation of the Purchaser. The obligations of the
Purchaser to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(a) the representations and warranties set forth in Section 4 hereof shall
be true and correct in all material respects at and as of the Closing Date;
(b) the Seller shall have performed and complied with all of its covenants
hereunder in all material respects through the Closing;
(c) the Seller shall have procured all of the third party consents
specified in Section 6.2 above.
(d) no action, suit, or proceeding shall be pending or threatened before
any court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction wherein an unfavorable judgment, order, decree,
stipulation, injunction, or charge would (i) prevent consummation of any of the
transactions contemplated by this Agreement, (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or (iii)
affect adversely the right of the Purchaser to own, operate, or control the
Assets (and no such judgment, order decree, stipulation, injunction, or charge
shall be in effect);
(e) the Seller shall have delivered to the Purchaser a certificate (without
qualification as to knowledge or materiality or otherwise) to the effect that
each of the conditions specified above in Section 7.1(a)-(d) is satisfied in all
respects and certified resolutions of the respective Boards of Directors of
Seller and COREStaff, and, if deemed necessary by Seller, its shareholder, to
the effect of Section 4.9;
(f) the Purchaser shall have received all other authorizations, consents,
and approvals of governments and governmental agencies set forth in this
Agreement;
(g) all actions to be taken by the Seller in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be in the form and substance as required by this
Agreement; and
(h) The Purchaser shall have received from Seller documents necessary to
change Seller's name to "TAI Co." and to terminate Seller's filings in
California, Colorado and Arizona regarding the use of assumed, fictitious or
tradenames relating to the Business, and a check to cover the filing fees for
the same.
The Purchaser may waive any condition specified in this Section 7 if it
executes a writing so stating at or prior to the Closing.
7.2 Conditions to Obligation of the Seller. The obligation of the Seller to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) the representations and warranties set forth in Section 5 above shall
be true and correct in all material respects at and as of the Closing Date;
(b) the Purchaser shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(c) no action, suit, or proceeding shall be pending before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable judgment, order, decree, stipulation,
injunction, or charge would (i) prevent consummation of any of the transactions
contemplated by this Agreement or (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation (and no
such judgment, order, decree, stipulation, injunction, or charge shall be in
effect); and
(d) the Purchaser shall have delivered to Seller a certificate (without
qualification as to knowledge or materiality or otherwise) to the effect that
each of the conditions specified above in Section 7.2(a)-(c) is satisfied in all
respects.
The Seller may waive any condition specified in this Section 7 if it
executes a writing so stating at or prior to the Closing.
8. TERMINATION.
8.1 Termination of Agreement. Certain of the parties may terminate this
Agreement as provided below:
(a) the Purchaser and the Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(b) the Purchaser may terminate this Agreement by giving written notice to
the Seller at any time prior to the Closing in the event the Seller is in
breach;
(c) the Purchaser may terminate this Agreement by giving written notice to
the Seller at any time prior to the Closing if the Closing shall not have
occurred on or before January 29, 1997 by reason of the failure of any condition
precedent under Section 7 hereof (unless the failure results primarily from the
Purchaser itself breaching any representation, warranty, or covenant contained
in this Agreement); or
(d) the Seller may terminate this Agreement by giving written notice to the
Purchaser at any time prior to the Closing if the Closing shall not have
occurred on or before January 29, 1997 by reason of the failure of any condition
precedent under Section 7 hereof (unless the failure results primarily from the
Seller itself breaching any representation, warranty, or covenant contained in
this Agreement).
8.2 Effect of Termination. If any party terminates this Agreement pursuant
to Section 8.1 above, all obligations other than obligations regarding
confidentiality of the parties hereunder shall terminate without any liability
of any party to any other party (except for any liability of any party then in
breach of this Agreement).
9. SURVIVAL OF INDEMNIFICATIONS, GUARANTEES, REPRESENTATIONS AND WARRANTIES
OF SELLER. Except as otherwise provided in Sections 3.4(b), 3.5, 11, 13, 14.1
and 15, all indemnifications, guarantees, covenants, agreements, representations
and warranties made by Seller hereunder or pursuant hereto or in connection with
the transactions contemplated hereby shall survive the Closing for a period of
one (1) year from the Closing Date.
10. SPECIAL CLOSING AND POST-CLOSING COVENANTS AND ADJUSTMENTS.
At Closing, in addition to the Purchase Price, the Purchaser shall remit to
Seller by wire transfer the amount of $500,000.00. One business day following
the Closing, the Purchaser shall also remit to Seller by wire transfer
$16,995.58, which represents the difference between (A) the sum of $816,606.99,
which represents the combined cash balance of CTOC and PHP as of December 31,
1996, (ii) cash collections received through January 30, 1997 on the accounts
receivable and work-in-progress of CTOC and PHP as of December 31, 1996, as set
forth on Schedule 10(a), which accounts receivable and work-in-progress were
excluded from the Assets sold to Purchaser and were retained by the Seller, and
(iii) $30,073.44 representing the prepaid expenses of CTOC and PHP that are
being sold to the Purchaser as set forth on Schedule 10(b) and (B) the sum of
$500,000.00, and the book cash balance of Seller's bank accounts at Closing.
To the extent Purchaser receives any funds or other assets in payment of
receivables or work-in-progress, or in connection with any other Assets not
being sold to Purchaser hereto, Purchaser shall immediately deliver such funds
and assets to Seller, or in any event within five (5) days after collection of
such funds or assets, and take all steps necessary to vest title to such funds
and assets in Seller. Purchaser agrees to use all commercially reasonable
practices to collect the accounts receivable and work-in-progress which are
Excluded Assets (the "Seller's Accounts"); provided, however, that Purchaser
shall not be obligated to hire or engage attorneys, collection agencies or other
third parties unless specifically requested by Seller in writing and provided
that Seller agrees to pay the costs and expenses of such third parties.
Purchaser shall provide Seller with a weekly accounting of Seller's Accounts
until Seller has been paid in full. At any time after Closing and from time to
time, Seller shall have the right to audit any activity relative to Seller's
Accounts. At any time the Seller may assume the collection responsibility of any
of Seller's Accounts.
11. INDEMNITIES BY SELLER
11.1 Indemnities by Seller. COREStaff and the Seller (collectively, the
"Indemnifying Parties") shall, and hereby do jointly and severally indemnify,
hold harmless and defend Purchaser, its Affiliates and their officers,
directors, shareholders, employees, agents, representatives and consultants
(collectively, the "Indemnified Parties") at all times from and after the date
of this Agreement, from and against any and all penalties, demands, damages,
punitive damages, losses, loss of profits, liabilities, suits, costs, costs of
any settlement or judgment, claims of any and every kind whatsoever, refund
obligations (including, without limitation, interest and penalties thereon),
remediation costs and expenses (including, without limitation, reasonable
attorneys' fees), of or to any of the Indemnified Parties ("Damages"), which may
now or in the future be paid, incurred or suffered by or asserted against the
Indemnified Parties by any Person resulting or arising from or incurred in
connection with any one or more of the following (provided that this Section 11
shall not apply to any items that have been expressly assumed by Purchaser under
this Agreement):
(a) any liability or claim for liability (whether in contract, in tort or
otherwise, and whether or not successful) related in any way to the Assets or
the Business to the extent such liability arises in connection with any action,
omission or event occurring on or prior to the Closing Date;
(b) any liability or claim for liability (whether in contract, in tort or
otherwise, and whether or not successful) related to the Taxes of Seller;
(c) any misrepresentation, breach of warranty or nonfulfillment of any
covenant or agreement on the part of the Seller under this Agreement or from any
misrepresentation in or omission from any list, schedule, certificate or other
instrument furnished or to be furnished to Purchaser pursuant to the terms of
this Agreement;
(d) any liability or claim for liability against Purchaser or any of the
Assets to the extent such liability or claim for liability arises in connection
with the failure of Purchaser and Seller to comply with any applicable bulk
transfer law; and
(e) all actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses (including costs of court and reasonable attorneys' fees)
incident to any of the foregoing.
11.2 Limitation of Certain Liability. To the extent the Indemnified Parties
incur or suffer Damages for any matter for which COREStaff and/or the Seller are
obligated to indemnify, hold harmless and defend Purchaser under Section 11.1(c)
above, Seller and/or COREStaff shall not be liable for any such Damages (i)
until Purchaser has suffered aggregate losses by reason of all such
misrepresentations, breaches of warranty and/or non-fulfillments of covenants or
agreements on the part of Seller and/or COREStaff in excess of a $40,000
deductible (at which point Seller and/or COREStaff will be obligated to
indemnify Purchaser from and against all such aggregate losses in excess of such
$40,000 deductible), and (ii) in excess of $1,000,000; provided, however, that
the limitations set forth in (i) and (ii) above specifically shall not apply to
Damages resulting from or attributable to intentional fraud by Seller or
COREStaff. Purchaser shall not be entitled to any indemnity hereunder to the
extent Purchaser has actual knowledge prior to the Closing of a material fact
which would permit indemnification under this Agreement.
11.3 Notice. Each party exercising its right to be indemnified under this
Agreement, shall give the other party or parties notice in writing as soon as
practicable of any claim made for which indemnity will or could be sought under
this Agreement; provided, however, that no delay on the part of a party entitled
to indemnification hereunder in notifying the party responsible for
indemnification shall relieve such party from any obligation hereunder unless
and to the extent such party is prejudiced thereby.
11.4 Costs. No material costs, charges or expenses for which indemnity
shall be sought hereunder shall be incurred without Seller's consent, which
consent shall not be unreasonably withheld.
11.5 Subrogation. In the event of payment under this Agreement, Seller
shall be subrogated to the extent of such payment to all of Purchaser's rights
of recovery, shall execute all papers required and shall do everything that may
be necessary or appropriate to enable Seller effectively to bring suit to
enforce such rights.
11.6 Enforcement. If a claim under this Agreement is not paid by Seller
within ninety (90) days after a written claim has been received by Seller,
Purchaser may at any time thereafter proceed against Seller to recover the
unpaid amount of the claim, and if successful in whole or in part, Purchaser
also shall be entitled to be paid the expense of prosecuting such claim.
11.7 Liabilities and Obligations. Except as set forth in Section 3.2 of
this Agreement, Purchaser shall and hereby does indemnify and hold harmless
COREStaff and the Seller from and against any and all liabilities, obligations,
losses, claims, damages, costs and expenses (including court costs and
reasonable attorneys' fees) related to or arising from (i) the Assumed
Liabilities and Obligations, (ii) the operation of the Business and/or ownership
of the Assets after the Closing Date, and/or (iii) a breach of its
representations and warranties contained in Section 5 of this Agreement.
12. LEASE AGREEMENT. Purchaser and Seller shall use commercially reasonable
efforts to negotiate, execute and deliver assignment agreements containing
commercially reasonable terms and provisions with third-party lessors for the
office space currently used by Seller in connection with the operation of the
Business. In the event assignments of leases cannot be obtained from Seller's
third party lessors, Purchaser shall guarantee the timely performance under any
sublease agreements entered into between Seller and Purchaser.
13. NON-COMPETITION AGREEMENT. As an inducement for Purchaser to enter into
this Agreement and in return for the payment of $50,000 as provided by Section
3.1(a), Seller and COREStaff hereby agree to the provisions of this Section 13.
For a period commencing on the date hereof through January 1, 1999 (the
"Non-Compete Period"), neither Seller, COREStaff nor any Affiliate of COREStaff,
shall (i) within a seventy-five (75) mile radius of any existing office of
Seller as of the Closing, compete directly or indirectly with any business
engaged in by Purchaser in the States of California and/or Colorado to the
extent it is similar to any business engaged in by the Seller as of the date
hereof, (ii) solicit directly or indirectly any of the Accounts (as hereinafter
defined) of Seller or of Purchaser in the States of California and/or Colorado,
or (iii) be employed by or otherwise render services to, or own any interest in,
any Person that directly or indirectly (a) competes with any business engaged in
by Purchaser in the States of California and/or Colorado within a seventy-five
(75) mile radius of any existing office of Seller as of the Closing, to the
extent it is similar to any business engaged in by Seller as of the date hereof,
or (b) solicits directly or indirectly any of the Accounts of Seller or of
Purchaser in the States of California and/or Colorado. For purposes of this
Section 13, the term "Accounts" shall mean any Person located in the States of
California and/or Colorado for which Seller has performed services or Purchaser
in the States of California and/or Colorado does perform services during the
period beginning two (2) years prior to the date hereof and ending on the first
anniversary of the Closing Date. Each of COREStaff and Seller agrees that the
limitations set forth herein on the rights of it to compete with Purchaser are
reasonable and necessary for the protection of the Purchaser. In this regard,
Seller specifically agrees that the limitations as to period of time and
geographic area, as well as all other restrictions on its activities specified
herein, are reasonable and necessary for the protection of the Purchaser. Each
of COREStaff and Seller further recognizes and agrees that violation of any of
the agreements contained in this Section 13 will cause irreparable damage or
injury to Purchaser, the exact amount of which may be impossible to ascertain,
and that, for such reason, among others, Purchaser and its Affiliates shall be
entitled to an injunction, without the necessity of posting a bond, restraining
any further violation of such agreements. Such rights to any injunction shall be
in addition to, and not in limitation of, any other rights and remedies
Purchaser and its Affiliates may have against Seller, including, but not limited
to, the recovery of damages. Further, it is agreed by COREStaff and Seller that
in the event the provisions of this Agreement should ever be deemed to exceed
the time or geographic limitations permitted by applicable law, then such
provisions shall be reformed to the maximum time or geographic limitations
permitted. Notwithstanding anything contained in this Section 13, in the event
COREStaff is acquired by an independent party, or merged into or with an entity
not previously owned by COREStaff, the Non-Compete Period shall expire on
January 1, 1998 and the provisions contained in this Section 13 shall be of no
further force or effect after such date.
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
14.1 Each of COREStaff and Seller recognizes and acknowledges that it has
and will have access to certain confidential information that is included in the
Assets (including, but not limited to, list of customers, and costs and
financial information) that after the consummation of the transactions
contemplated hereby will be valuable, special and unique property of Purchaser.
Each of COREStaff and Seller agrees that it will not disclose, and it will use
its best efforts to prevent disclosure by any other Person of, any such
confidential information to any Person, except to authorized representatives of
Purchaser. Each of COREStaff and Seller recognizes and agrees that violation of
any of the agreements contained in this Section 14 will cause irreparable damage
or injury to Purchaser, the exact amount of which may be impossible to
ascertain, and that, for such reason, among others, Purchaser shall be entitled
to an injunction, without the necessity of posting bond therefor, restraining
any further violation of such agreements. Such rights to any injunction shall be
in addition to, and not in limitation of, any other rights and remedies
Purchaser may have against COREStaff and Seller.
14.2 Records. The Purchaser recognizes and agrees that the Seller will need
access, from time to time, after the Closing Date, to certain accounting and tax
records and information held by the Purchaser to the extent such records and
information pertain to events occurring on or prior to the Closing Date;
therefore, Purchaser agrees to properly retain and maintain such records for a
period of six (6) years following the Closing and to allow the Seller and its
agents and representatives at times and dates mutually acceptable to the
Purchaser and the Seller, to inspect, review and make copies of such records as
the other party may deem necessary or appropriate from time to time, such
activities to be conducted during normal business hours and at the Seller's
expense.
15. ASSIGNMENT OF CONTRACTS. Notwithstanding any other provision of this
Agreement, nothing in this Agreement or any related document shall be construed
as an attempt to assign (i) any contract which, as a matter of law or by its
terms, is nonassignable without the consent of the other parties thereto unless
such consent has been given, or (ii) any contract or claims as to which all of
the remedies for the enforcement thereof enjoyed by Seller would not, as a
matter of law or by its terms, pass to Purchaser as an incident of the transfers
and assignments to be made under this Agreement. In order, however, that the
full value of every contract and claim of the character described in clauses (i)
and (ii) above and all claims and demands on such contracts may be realized for
the benefit of Purchaser, Seller or COREStaff, at the request and expense and
under the direction of Purchaser, shall take all such action and do or cause to
be done all such things as will, in the opinion of Purchaser, be necessary or
proper in order that the obligations of Seller under such contracts may be
performed in such manner that the value of such contract will be preserved and
will inure to the benefit of Purchaser, and for, and to facilitate, the
collection of the monies due and payable and to become due and payable
thereunder to Purchaser in and under every such contract and claim. Seller and
COREStaff shall promptly pay over to Purchaser all moneys collected by or paid
to it in respect of every such contract, claim or demand. Nothing in this
Section 15 shall relieve Seller and COREStaff of its obligations to obtain any
consents required for the transfer of the Assets and all rights thereunder to
Purchaser, or shall relieve Seller and COREStaff from any liability to Purchaser
for failure to obtain such consents.
16. EXPENSES. Whether or not the transactions contemplated hereby are
consummated, Seller will pay all of its costs and expenses and Purchaser will
pay all of its costs and expenses, incurred in connection with the preparation
of and execution of this Agreement and the consummation of the transactions
contemplated hereby.
17. FURTHER ACTIONS. From time to time, at the request of any party hereto,
the other parties hereto shall execute and deliver such instruments and take
such action as may be reasonably requested to evidence the transactions
contemplated hereby.
18. NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, given by prepaid telex
or telegram or by facsimile or other similar instantaneous electronic
transmission device or mailing first class, postage prepaid, certified United
States mail, return receipt requested, as follows:
(a) If to Purchaser, at:
International Nursing Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: 303/▇▇▇-▇▇▇▇
Facsimile:
With a copy to:
LeBouef, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: 303/▇▇▇-▇▇▇▇
Facsimile: 303/297-0422
(b) If to Seller, at:
Colorado Therapists On Call, Inc.
Professional HealthCare Providers, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: 713/▇▇▇-▇▇▇▇
Facsimile: 713/627-1059
(c) If to COREStaff, at:
COREStaff, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: 713/▇▇▇-▇▇▇▇
Facsimile: 713/627-1059
provided that any party may change its address for notice by giving to the other
party written notice of such change. Any notice given under this Section 18
shall be effective (i) if delivered personally, when delivered, (ii) if sent by
telex or telegram or by facsimile or other similar instantaneous electronic
transmission device, twenty-four (24) hours after sending, and (iii) if mailed,
forty-eight (48) hours after mailing.
19. GENERAL PROVISIONS.
19.1 GOVERNING LAW; INTERPRETATION; SECTION HEADINGS. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF COLORADO, WITHOUT REGARD TO CONFLICT-OF-LAWS RULES AS APPLIED IN
COLORADO. THE SECTION HEADINGS CONTAINED HEREIN ARE FOR PURPOSES OF CONVENIENCE
ONLY, AND SHALL NOT BE DEEMED TO CONSTITUTE A PART OF THIS AGREEMENT OR TO
AFFECT THE MEANING OR INTERPRETATION OF THIS AGREEMENT IN ANY WAY.
19.2 Dispute Resolution. Mindful of the high cost of litigation, not only
in dollars but in time and energy as well, the parties intend to and do hereby
establish a quick, final and binding out of court dispute resolution procedure
to be followed in the unlikely event any controversy should arise because of
matters relating to the entering into this Agreement, out of or concerning the
performance of this Agreement. Accordingly, the parties do hereby covenant and
agree that any claim or controversy of whatsoever nature, including but not
limited to the issue or arbitability, and matters relating to representations
entering into the Agreement, and arising out of or relating to this Agreement,
or the breach thereof, shall be settled by final and binding arbitration, if
necessary, in accordance with the following dispute resolution mechanism:
(a) Mediating Body. The matter will be first referred to Judicial
Arbitration & Mediation Services, Inc. ("JAMS") for mediation in Denver,
Colorado. If not then resolved by mediation within thirty (30) days of referral,
it shall be resolved by binding arbitration in Denver, Colorado under the rules
and jurisdiction of the American Arbitration Association ("AAA") in Denver,
Colorado. In any such arbitration, the parties shall be entitled to maximum
discovery rights, and the prevailing party in any such arbitration shall be
entitled to recover its actual costs and fees, including reasonable attorneys'
fees, from the losing party. Should AAA no longer be in operation, then such
dispute shall instead be referred to binding arbitration in the Denver, Colorado
office and under the rules of the JAMS.
(b) Dispute Defined. As used herein, "dispute" shall include each and every
controversy, interpretation or question regarding this Agreement including but
not limited to issues of legality, enforceability or recession of this Agreement
and the application of the laws, rules or regulations of any governmental
entities to this Agreement.
(c) Necessity of Mediation/Arbitration. Purchaser acknowledges that it is a
material inducement to Seller to enter into this Agreement that the parties
utilize the mediation/arbitration provisions contained herein for all dispute
resolution.
19.3 Severability. Should any provision of this Agreement be held
unenforceable or invalid under the laws of the United States of America or the
State of Colorado, or under any other applicable laws of any other jurisdiction,
then the parties hereto agree that such provision shall be deemed modified for
purposes of performance of this Agreement in such jurisdiction to the extent
necessary to render it lawful and enforceable, or if such a modification is not
possible without materially altering the intention of the parties hereto, then
such provision shall be severed herefrom for purposes of performance of this
Agreement in such jurisdiction. The validity of the remaining provisions of this
Agreement shall not be affected by any such modification or severance, except
that if any severance materially alters the intentions of the parties hereto as
expressed herein (a modification being permitted only if there is no material
alteration), then the parties hereto shall use their best reasonable effort to
agree to appropriate equitable amendments to this Agreement in light of such
severance, and if no such agreement can be reached within a reasonable time, any
party hereto may initiate arbitration under the then current rules of the
American Arbitration Association to determine and effect such appropriate
equitable amendments.
19.4 Entire Agreement. This Agreement (including the documents referred to
herein) sets forth the entire agreement and understanding of the parties hereto
with respect to the transactions contemplated hereby and supersedes all prior
agreements, arrangements and understandings related to the subject matter
hereof. No representation, promise, inducement or statement of intention has
been made by any party hereto which is not embodied in this Agreement, and no
party hereto shall be bound by or liable for any alleged representation,
promise, inducement or statement of intention not so set forth.
19.5 Binding Effect. All the terms, provisions, covenants and conditions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, executors,
administrators, representatives, successors and assigns.
19.6 Assignment. This Agreement and the rights and obligations of the
parties hereto shall not be assigned or delegated by any party hereto without
the prior written consent of the other parties hereto.
19.7 Amendment; Waiver. This Agreement may be amended, modified, superseded
or canceled, and any of the terms, provisions, representations, warranties,
covenants or conditions hereof may be waived, only by a written instrument
executed by all parties hereto, or, in the case of a waiver, by the party
waiving compliance. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right to
enforce the same. No waiver by any party of any condition contained in this
Agreement, or of the breach of any term, provisions, representation, warranty or
covenant contained in this Agreement, in any one or more instances, shall be
deemed to be or construed as a further or continuing waiver of any such
condition or breach, or as a waiver of any other condition or of the breach of
any other term, provision, representation, warranty or covenant.
19.8 Gender; Numbers. All references in this Agreement to the masculine,
feminine or neuter genders shall, where appropriate, be deemed to include all
other genders. All plurals used in this Agreement shall, where appropriate, be
deemed to be singular, and vice versa.
19.9 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall be
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of the parties reflected hereon as signatories.
19.10 Telecopy Execution and Delivery. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto,
and an executed copy of this Agreement may be delivered by one or more parties
hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for
all purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Agreement as well as any facsimile, telecopy or
other reproduction hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
"PURCHASER"
INTERNATIONAL NURSING SERVICES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
"SELLER"
COLORADO THERAPISTS ON CALL, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Sr. Vice President
PROFESSIONAL HEALTHCARE PROVIDERS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Sr. Vice President
SIGNING SOLELY TO EVIDENCE ITS OBLIGATIONS SET FORTH IN SECTIONS 3.4(b),
3.5, 11.1, 11.2, 13, 14.1, and 15, AND THE REPRESENTATIONS SET FORTH IN SECTION
4.9:
"CORESTAFF"
CORESTAFF, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Sr. Vice President
