EXHIBIT 10.151
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of March 12, 2003, is entered
into by and among OPTIMUMCARE STAFFING, INC., a Florida corporation ("Buyer");
OPTIMUMCARE CORPORATION, a Delaware corporation which is the parent corporation
of Buyer ("Buyer Parent"), CHICAGO CARE NURSE STAFFING, L.L.C., a Florida
limited liability company ("Seller") and XXXX X. XXXXXXXX, XXXXXX X. XXXXX and
XXXXX XXXXXXXX, the members of Seller (individually, "Member" and collectively,
"Members"). Certain capitalized terms used herein are defined in Section 10.14
hereof.
A. Seller wishes to sell to Buyer, and Buyer wishes to purchase from
Seller, all of the Assets (as defined in Section 1.1 below) of Seller used in
the Seller's temporary healthcare staffing business (the "Business").
B. The parties hereto wish to make certain representations, warranties,
covenants and agreements in connection with the purchase of the Assets and also
to prescribe various conditions to such transaction.
Accordingly, and in consideration of the representations, warranties,
covenants, agreements and conditions herein contained, the parties hereto agree
as follows:
1. PURCHASE AND SALE OF ASSETS
1.1 Assets to be Acquired. Upon the terms and subject to the
conditions of this Agreement, Seller will sell, transfer, convey, assign and
deliver to Buyer, and Buyer will purchase and assume from Seller, at the
Closing, the assets of Seller ("Assets"), wherever located and whether or not
carried or reflected on the books and records of Seller, including, without
limitation the following assets but not including the excluded assets as set
forth in Section 1.2 of this Agreement:
(a) all prepayments, prepaid expenses and all interests in
insurance policies (including, without limitation, life insurance policies but
specifically excluding any employee benefit plans maintained pursuant to
insurance policies);
(b) all equipment, furniture, fixtures, leasehold
improvements, trade fixtures, computers and related software and documentation,
and other tangible personal property;
(c) all office and production supplies, spare parts, other
miscellaneous supplies and other tangible property of any kind wherever located;
(d) all of the proprietary and intellectual rights
(including, without limitation, the Proprietary Rights) and all of Seller's
other intangible property, except the trade name and logo "Chicago Care Nurse
Staffing";
(e) all rights under contracts, agreements, licenses,
leases (for both real and personal property), and other legally binding
arrangements, whether oral or written, and
all rights under commitments and orders for services (including professionals,
advertising, maintenance and other incidental services) relating to the Business
listed or described on Exhibit 1.1(e) of this Agreement (collectively, the
"Contracts");
(f) all lists and records pertaining to customers,
employees, suppliers, distributors, personnel and agents and all other books,
ledgers, files, documents, pricing schedules, employee and contractor lists,
manuals, correspondence, drawings and specifications, computer programs,
software; telephone numbers; and business records of every kind and nature;
(g) all creative materials (including, without limitation,
photographs, films, art work, color separations and the like), recruiting
processes, advertising and promotional materials and all other printed or
written materials, not otherwise set forth as an excluded asset in Exhibit 1.2;
(h) the licensed right to use the "Chicago Care Nurse
Staffing" name and the associated logo currently used by Seller for the longer
of (i) two (2) years or (ii) the termination of all of the Members' employment
with Buyer; and
(i) all goodwill as a going concern of Seller, all
goodwill associated with the items in clauses (d) and (h) above and all other
intangible property of Seller, free and clear of all Liens.
1.2 Excluded Assets. Buyer has not agreed to purchase and will
not acquire the assets of Seller listed on Exhibit 1.2 to this Agreement which
shall be referred to as the "Excluded Assets".
1.3 No Liabilities Assumed. Except for the Contracts, Buyer has
not agreed to pay, will not be required to assume and will have no liability or
obligation, direct or indirect, absolute or contingent, for the liabilities of
Seller or any respective affiliates or associates, which liabilities will, as
between Seller, on the one hand, and Buyer, on the other hand, remain the sole
responsibility of, and will be satisfied by, Seller, including without
limitation:
(a) any debt, liability or obligation of Seller or any
affiliates or associates, direct or indirect, known or unknown, fixed,
contingent or otherwise, that (i) is unrelated to the Assets; or (ii) relates to
the Assets and is based upon or arises from any act, omission, transaction,
circumstance, sale of goods or services, state of facts or other condition
occurring or existing on or before the Closing Date (as defined below), whether
or not then known, due or payable;
(b) any obligation for Taxes related to any of the Assets
for any tax period or portion thereof ending on or before the Effective Date
(including the sales tax liability relating to or arising from the transfer of
Assets) and any obligation for other Taxes of Seller; and
(c) any debt, liability or obligation, direct or
indirect, known or unknown, fixed, contingent or otherwise, based upon or
arising from any act, omission, transaction, circumstance, state of facts or
other condition occurring or existing on or before the
2
Closing Date and relating to any employee benefit plan, policy, practice or
agreement to which Seller is a party or under which Seller's employees or former
employees is covered.
1.4 Purchase Price; Payment. The total consideration to be paid
by Buyer to Seller for the Assets (the "Purchase Price") will be:
(a) Cash Consideration. One Hundred Seventy-Nine Thousand
Eighty-Three and no/100 Dollars ($179,083.00) payable by check on the Closing
Date, which amount is equal to One Hundred Fifty Percent (150%) of the Adjusted
EBITDA for the twelve (12) month period ending December 31, 2002. For purposes
of Section 1.4, "Adjusted EBITDA" means the reported net income, plus the
corresponding interest expense, taxes, depreciation expense, amortization
expense, bad debt expense (after offsets), finance company fees, less the
incremental costs of the workers' compensation insurance, professional and
general liability insurance, other insurance company charges, allocated
additional management compensation and related taxes, monthly accounting fees
and payroll company fees, as detailed on Exhibit 1.4.
(b) First Additional Purchase Price Payment. The First
Net Sales Ratio multiplied by the Gross Margin Multiplier, as further described
below, payable by check sixty (60) days following the six (6) month anniversary
of the Closing Date:
(i) First Net Sales Ratio. The average monthly Net
Sales of Buyer for the six (6) full months following the Closing Date, divided
by the average monthly Net Sales of Seller for the six (6) full months preceding
the Closing Date, which amount is set forth on Exhibit 1.4, but not in excess of
1.0.
(ii) Gross Margin Multiplier.
Gross Margin Multiplier
------------ ----------
26% or Greater 59,694
25 - 25.9% 53,725
24 - 24.9% 47,755
Less than 24% 0
(c) Second Additional Purchase Price Payment. The Second
Net Sales Ratio multiplied by the above Gross Margin Multiplier, payable by
check sixty (60) days following the eighteen (18) month anniversary of the
Closing Date.
(i) Second Net Sales Ratio. The average monthly Net
Sales of Buyer for the twelve (12) full months following the First Additional
Purchase Price Payment, divided by the average monthly Net Sales of Seller for
the six (6) full months preceding the Closing Date but not in excess of 1.0.
(d) Orlando Office Earn Out. Thirty percent (30%) of the
Adjusted EBITDA for the existing Orlando office for the first twelve (12)
consecutive months following
3
the Closing Date ("Year One"), paid sixty (60) days following the end of Year
One. Thirty percent (30%) of the Adjusted EBITDA for the existing Orlando office
for the second twelve (12) consecutive months following the Closing Date ("Year
Two"), paid sixty (60) days following the end of Year Two. Each Orlando Office
Earn Out payment will be contingent on the continued employment of all of the
Members by Buyer, except in the event of death or disability, as defined in the
Employment Agreements.
(e) Additional Office Earn Out. Buyer will use
commercially reasonable efforts to open no less than two (2) additional offices,
divisions or branches ("Locations") during the twenty-four (24) months following
the Closing Date. The Additional Office Earn Out will be (i) fifty percent (50%)
of the cumulative Adjusted EBITDA for each new Location opened and managed or
overseen by the Members for the first twelve (12) consecutive months, beginning
with the first month of positive Adjusted EBITDA , after deducting for up front
and capital costs and any cumulative Adjusted EBITDA losses ("First Payment for
a Location"); and (ii) fifty percent (50%) of the cumulative Adjusted EBITDA for
the second twelve (12) consecutive months ("Second Payment for a Location". All
payments will be paid sixty (60) days following the end of each twelve (12)
month period.
(i) Conditions for First Payment. The First Payment
for a Location is contingent on the continued employment of all of the Members
by Buyer during the first twelve (12) consecutive month period, except in the
event of death or disability, as defined in the Employment Agreements. In the
event all of the Members are employed by Buyer during only a portion of the
first twelve (12) consecutive month period, Buyer shall pay Seller a pro rated
portion of the First Payment for a Location based on the number of full months
during the first twelve (12) consecutive month period during which all of the
Members are employed by Buyer except that (i) termination as a result of death
or disability shall not constitute termination of employment for purposes of
this Section and (ii) in the event of the termination for cause of the
employment of any of the Members during the first twelve (12) consecutive month
period, no portion of the First Payment for a Location will be made. For
purposes of this Section, notice that the Employment Agreement will not be
automatically extended does not constitute termination of employment.
(ii) Conditions for Second Payment. The Second
Payment for a Location is contingent on the continued employment of all of the
Members by Buyer during the first and second twelve (12) consecutive month
periods. In the event all of the Members are employed by Buyer during all of the
first twelve (12) consecutive month period but during only a portion of the
second twelve (12) consecutive month period, Buyer shall pay Seller a pro rated
portion of the Second Payment for a Location based on the number of full months
during the second twelve (12) consecutive month period during which all of the
Members are employed by Buyer except that (i) termination as a result of death
or disability shall not constitute termination of employment for purposes of
this Section and (ii) in the event of the termination for cause of the
employment of any of the Members during the first or second twelve (12)
consecutive month periods, no portion of the Second Payment for a Location will
be made. For purposes of this Section, notice that the Employment Agreement will
not be automatically extended does not constitute termination of employment.
4
1.5 Buyer Parent Guaranty. Buyer Parent hereby guarantees the
payment of the Purchase Price to Seller.
1.6 Allocation of Purchase Price. The Purchase Price will be
allocated among the Assets in the manner required by Section 1060 of the
Internal Revenue Code. In making such allocation, the allocations set forth in
Exhibit 1.6 attached hereto will apply. In preparing Exhibit 1.6, Buyer and
Seller have negotiated in good faith the values of the Assets and the resulting
allocation of the Purchase Price among the various Assets; it being understood
that such determination will be binding on Buyer only for the purposes of U.S.
Federal, state and local taxation. Buyer will file all Tax Returns and tax
reports (including IRS Form 8594) in accordance with and based upon such
allocation and will take no position in any Tax Return, tax proceeding or tax
audit which is inconsistent with such allocation.
1.7 Closing. A closing (the "Closing") will be held on March ___,
2003 or at such other time as the parties may agree upon (the "Closing Date");
provided, in no event will the Closing occur later than March 31, 2003 (the
"Termination Date"). The Closing will be held at Seller's counsel's offices in
Winter Park, Florida or such other place as the parties may agree, at such time
as the parties may agree, at which time and place the documents and instruments
necessary or appropriate to effect the transactions contemplated herein will be
exchanged by the parties.
1.8 Instruments of Transfer to Buyer.
(a) At the Closing, Seller will deliver to Buyer such
bills of sale, endorsements, assignments, and other good and sufficient
instruments of conveyance and transfer, in form and substance reasonably
satisfactory to Buyer and its counsel, as will be required to vest in Buyer
title to the Assets, including without limitation:
(i) bills of sale executed by Seller vesting in
Buyer good and marketable title to all of the Assets as of the Closing Date;
(ii) appropriate endorsements and assignments of
the contracts, licenses, agreements, permits, plans, commitments and other
binding arrangements included in the Assets, if any, as of the Closing Date; and
(iii) all data maintained by Seller relating to the
Assets.
(b) Seller will take all other actions necessary to put
Buyer in actual possession and operating control of the Assets as of the Closing
Date.
2. REPRESENTATIONS AND WARRANTIES OF SELLER AND MEMBERS
Seller and Members hereby, jointly and severally, represent and warrant
to the Buyer as follows:
2.1 Disclosure Schedule. The disclosure schedule attached as
Exhibit 2 hereto (the "Disclosure Schedule" ) is divided into sections which
correspond to the sections of this Article 2. The Disclosure Schedule is
accurate and complete. Nothing in the Disclosure
5
Schedule shall be deemed adequate to disclose an exception to a representation
or warranty made herein, unless the Disclosure Schedule identifies the exception
with reasonable particularity and describes the relevant facts in reasonable
detail. Without limiting the generality of the foregoing, the mere listing (or
inclusion of a copy) of a document or other item shall not be deemed adequate to
disclose an exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document or other
item itself). Disclosures in any subsection of the Disclosure Schedule shall not
constitute disclosure for purposes of any other subsection and other section of
this Agreement or any exhibit to or other writing which is designated herein as
being part of this Agreement.
2.2 Organization, etc. Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Florida with requisite power and authority to carry on its business as it is now
being conducted and to own, operate and lease its properties and assets. Seller
is duly qualified or licensed to do business as a limited liability company in
good standing in every other jurisdiction in which the character or location of
the properties and assets owned, leased or operated by it or the conduct of its
business requires such qualification or licensing, except in such jurisdictions
in which the failure to be so qualified or licensed and in good standing would
not have a Material Adverse Effect on Seller. The Disclosure Schedule contains a
list of all jurisdictions in which Seller is qualified or licensed to do
business and includes complete and correct copies of Seller's articles of
organization and operating agreement. Seller does not own or control any capital
stock of any corporation or any interest in any partnership, limited liability
company, joint venture or other entity.
2.3 Seller Authorization. Seller has all necessary power and
authority to enter into this Agreement and all other documents executed and
delivered in connection herewith, including but not limited to those instruments
of transfer described in Section 1.7 (collectively, "Documents") and to carry
out the transactions contemplated hereby (including, without limitation, the
power to sell, transfer and convey the Assets). All action on the part of Seller
and its manager and the Members necessary for the authorization, execution,
delivery and performance of the each of the Documents has been taken and no
further action or other authorization is required to consummate the transactions
provided for in the Documents. When executed and delivered by Seller, the
Documents shall constitute the valid and binding legal obligation of Seller
enforceable in accordance with their respective terms subject to the laws on
insolvency and equitable remedies.
2.4 Member and Manager Authorization. The Members have all
requisite power and authority to enter into this Agreement and the other
documents contemplated hereby to which the Members are parties, and to perform
the Members' obligations hereunder and thereunder. This Agreement and the other
documents contemplated hereby to which the Members are parties have been duly
executed and delivered by the Member party and constitute the valid and binding
agreements of the Member party, enforceable in accordance with their terms.
2.5 Capitalization. The Disclosure Schedule accurately sets forth
the outstanding membership interests of Seller and the name and number and
percentage of membership interests held by each member of Seller. All of the
issued and outstanding membership interests of Seller have been duly authorized,
are validly issued, fully paid and
6
nonassessable, are not subject to, nor were they issued in violation of, any
preemptive rights, and are owned of record by a member. There are no outstanding
or authorized options, warrants, rights, contracts, calls, puts, rights to
subscribe, conversion rights or other agreements or commitments to which Seller
or any member of Seller is a party or which are binding upon Seller or any
member of Seller providing for the issuance, disposition or acquisition of any
of Seller's membership interests. There are no voting trusts, proxies or any
other agreements or understandings with respect to the voting of the membership
interests of Seller. Seller is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of its membership
interests.
2.6 Non-Contravention. Except as set forth in the Disclosure
Schedule, neither the execution, delivery and performance of this Agreement nor
the consummation of the transactions contemplated herein will: (i) violate or be
in conflict with any provision of the certificate or articles of organization or
operating agreement of Seller; (ii) be in conflict with, or constitute a
default, however defined (or an event which, with the giving of due notice or
lapse of time, or both, would constitute such a default), under, or cause or
permit the acceleration of the maturity of, or give rise to any right of
termination, cancellation, imposition of fees or penalties under any debt, note,
bond, lease, mortgage, indenture, license, obligation, contract, commitment,
franchise, permit, instrument or other agreement or obligation to which Seller
is a party or by which Seller or any of Seller's properties or assets is or may
be bound or result in the creation or imposition of any pledges, liens, security
interests, restrictions, claims or charges of any kind upon any property or
assets of Seller under any debt, obligation, contract, agreement or commitment
to which Seller is a party or by which Seller or any of Sellers' assets or
properties are bound; or (iii) violate any Law of any Authority.
2.7 Consents and Approvals. Except as set forth in the Disclosure
Schedule, no Consent from any individual or entity, including without limitation
any Authority, is required in connection with the execution, delivery or
performance of this Agreement by Seller or the consummation by Seller of the
transactions contemplated herein except for Consents that shall be obtained by
Seller on or prior to Closing.
2.8 Assets. Except as set forth in the Disclosure Schedule,
(a) Seller has good and marketable title to all of the
Assets, free and clear of any Lien, other than Liens for current taxes not yet
due and payable and Liens that Seller shall obtain the release of on or prior to
Closing.
(b) Seller has full right and power to, and at the Closing
will, deliver to Buyer good title to all of the Assets, free and clear of any
Lien, other than Permitted Liens.
(c) The machinery, equipment, furniture and other personal
property used by Seller in the Business are sold in "as is" condition.
(d) The Assets constitute all of the property and assets,
real, personal and mixed, tangible and intangible, presently used to carry on
the Business, and the Assets are adequate to carry on the Business as presently
conducted.
(e) Seller owns no real properties.
7
(f) Seller is not a foreign person and is not controlled
by a foreign person, as the term foreign person is defined in Section 1445(f)(3)
of the Code.
2.9 Receivables and Payables.
(a) The Disclosure Schedule contains a listing of all of
the account receivables and note receivables, if any, of the Seller (the
"Receivables"). Although Buyer is not acquiring the Receivables, Buyer may
collect the Receivables for the benefit of Seller.
(b) The Disclosure Schedule contains a listing of all
trade accounts payable and notes payable of Seller. Except as set forth in the
Disclosure Schedule, no such account payable or note payable is delinquent by
more than 30 days in its payment. Seller will retain the obligation to pay all
trade accounts payable and notes payable and shall pay them in the ordinary
course.
2.10 Contracts and Commitments; No Default.
(a) Exhibit 1.1(e) and the Disclosure Schedule together
contain an accurate and complete list and brief description of:
(i) All real property owned by Seller included in
the Assets or in which Seller has a leasehold or other interest and which is
included in the Assets or which is used by Seller in connection with the
operation of its business, together with a description of each lease, sublease,
license, or any other instrument under which Seller claims or holds such
leasehold or other interest or right to the use thereof or pursuant to which
Seller has assigned, sublet or granted any rights therein, identifying the
parties thereto, the rental or other payment terms, expiration date and
cancellation and renewal terms thereof.
(ii) All machinery, tools, equipment, furniture and
other tangible personal property (other than inventory and supplies), owned,
leased or used by Seller and included in the Assets. Seller has provided Buyer
with either a copy of or a summary description of all leases and Liens relating
thereto, identifying the parties thereto, the rental or other payment terms,
expiration date and cancellation and renewal terms thereof.
(iii) All contracts, agreements and commitments,
whether or not fully performed, in respect of the issuance, sale or transfer of
capital stock of Seller or pursuant to which Seller has acquired any substantial
portion of its business or assets.
(iv) All contracts, agreements, commitments or
understandings that restrict Seller from carrying on its businesses or any part
thereof anywhere in the world or from competing in any line of business with any
person or entity.
(v) All purchase or sale contracts or agreements
that call for aggregate purchases or sales in excess over the course of such
contract or agreement of $2,500 or which continues for a period of more than
twelve months (including without limitation periods covered by any option to
renew or extend by either party) which is not terminable on 60 days' or less
notice without cost or other liability at or any time after the Closing.
8
(vi) The names and current annual salary rates of
all employees of and consultants to Seller, showing separately for each such
person the amounts paid or payable as salary, bonus payments and any indirect
compensation for the year ended December 31, 2002.
(vii) All employment and consulting agreements,
executive compensation plans, bonus plans, deferred compensation agreements,
employee option or purchase plans, other employee arrangements or commitments,
whether or not legally binding, including without limitation, holiday, vacation
and other bonus practices, to which Seller is a party or is bound or which
relates to the operation of the Business.
(b) The Contracts (other than those which have been fully
performed), are valid and binding, enforceable in accordance with their
respective terms in all material respects, except as enforcement might be
limited by bankruptcy and other laws related to creditors' rights and principles
of equity, and are in full force and effect. In the event assignment of the
Contracts requires the consent of the other parties to the Contracts, Buyer will
assist Seller in obtaining the required consent or obtaining a replacement
contract in a manner in which Buyer will be entitled to the full benefits
thereof. Except as disclosed in the Disclosure Schedule, none of the payments
required to be made under any Contract has been prepaid more than 30 days prior
to the due date of such payment thereunder. Except as set forth in the
Disclosure Schedule, Seller is not in material breach, violation or default,
however defined, in the performance of any of its obligations under any of the
Contracts or any other contract, agreement, lease, license or commitment
required to be listed on the Disclosure Schedule, and no facts and circumstances
exist which, whether with the giving of due notice, lapse of time, or both,
would constitute such a material breach, violation or default thereunder or
thereof. Except as set forth in the Disclosure Schedule, none of the Contracts
is subject to renegotiation with any government body. True and complete copies
of all of the Contracts (together with any and all amendments thereto) have been
delivered to Buyer and identified with a reference to this Section of this
Agreement.
2.11 Proprietary Rights. All patented and registered Proprietary
Rights owned by Seller and all pending patent applications and applications for
the registration of other Proprietary Rights owned by Seller are listed in the
Disclosure Schedule. The Disclosure Schedule also contains a complete and
accurate list of all trade names and unregistered trademarks and service marks
owned by Seller; all computer software owned and/or used by Seller and all
licenses granted by Seller to any third party with respect to Proprietary Rights
and all such licenses granted by any third party to Seller. Seller has delivered
to Buyer correct and complete copies of all documents embodying such licenses.
Except as set forth in the Disclosure Schedule, (A) Seller owns and possess all
rights, title and interest in and to, or has a valid and enforceable written
license to use, all of the Proprietary Rights necessary for the operation of the
Business as presently conducted; (B) Seller is not in breach of any license or
other grant of rights with respect to Proprietary Rights; (C) Seller has
received no written notice of any claim by any third party contesting the
validity, enforceability, use or ownership of any Proprietary Rights owned or
used by Seller; (D) Seller has not received any information as to any
infringement or misappropriation by, or conflict with, any third party with
respect to the Proprietary Rights of Seller, nor has Seller received any claims
alleging infringement or misappropriation, or other conflict with, any
Proprietary Rights of any third party; (E) Seller has not infringed,
misappropriated or otherwise conflicted with any Proprietary Rights of any third
party, nor will
9
continued conduct of the Business as currently conducted or as proposed to be
conducted infringe, misappropriate or otherwise conflict with the Proprietary
Rights of any third party; and (F) all Proprietary Rights owned or used by
Seller immediately prior to the Closing will be owned or available for use by
Buyer on identical terms and conditions immediately subsequent to the Closing.
The Proprietary Rights comprise all of the proprietary or intellectual property
rights used in the operation of the Business as currently conducted and as
proposed to be conducted. The Proprietary Rights owned or used by Seller
immediately prior to the Closing hereunder will be transferred to Buyer for use
on identical terms and conditions immediately subsequent to the Closing
hereunder.
2.12 Financial Statements. Except as set forth in the Disclosure
Schedules, Seller's balance sheets as of December 31, 2001 and 2002 and February
28, 2003 and statements of income for the years ended December 31, 2001 and 2002
and the two (2) months ended February 28, 2003 (collectively the "Financial
Statements") (i) are in accordance with the books and records of Seller; and
(ii) are true, complete and accurate in all material respects and fairly present
the financial position of Seller as of the respective dates thereof, and the
income or loss for the periods then ended. The balance sheet as of February 28,
2003 is hereinafter referred to as the "Most Recent Balance Sheet" and the
statement of income for the period ending February 28, 2003 is hereinafter
referred to as the "Most Recent Income Statement".
2.13 Absence of Undisclosed Liabilities. Except as and to the
extent (i) reflected and reserved against in the Most Recent Balance Sheet, (ii)
set forth on the Disclosure Schedule or (iii) incurred in the ordinary course of
business after the date of the Most Recent Balance Sheet and not material in
amount, either individually or in the aggregate, Seller does not have any debt,
liability or obligation, known or unknown, secured or unsecured, whether
accrued, absolute, contingent, unasserted or otherwise, of any nature
whatsoever, including without limitation any foreign or domestic tax liabilities
or deferred tax liabilities incurred in respect of or measured by Seller's
income, or any other debts, liabilities or obligations relating to or arising
out of any act, omission, transaction, circumstance, sale of goods or services,
state of facts or other condition which occurred or existed on or before the
date hereof, whether or not known, due or payable. Seller is not subject to any
obligation or requirement to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any person or entity.
2.14 Absence of Certain Changes. Except as set forth in the
Disclosure Schedule, since the date of the Most Recent Balance Sheet, Seller has
owned and operated its assets, properties and business in the ordinary course of
business and consistent with past practice. Without limiting the generality of
the foregoing, except as set forth in the Disclosure Schedule, as of the Closing
Date:
(a) Seller has not experienced any change which has had a
Material Adverse Effect or experienced any event or failed to take any action
which reasonably could be expected to result in a Material Adverse Effect;
(b) Seller has not suffered any loss, damage, destruction
of property or assets or other casualty to property or assets (whether or not
covered by insurance) which reasonably could be expected to result in a Material
Adverse Effect; and
10
(c) Seller has not suffered any loss of employees,
independent contractors or customers which reasonably could be expected to
result in a Material Adverse Effect on Seller, except for the loss of revenues
with the customer Westminster Care of Orlando.
2.15 Litigation. Except as set forth in the Disclosure Schedule,
there is no legal, administrative, arbitration, or other proceeding, suit, claim
or action of any nature or investigation, review or audit of any kind, judgment,
decree, decision, injunction, writ or order pending, noticed, scheduled or
threatened by or against or involving Assets, whether at law or in equity,
before or by any person or entity or Authority, or which questions or challenges
the validity of this Agreement or any action taken or to be taken by the parties
hereto pursuant to this Agreement or in connection with the transactions
contemplated herein.
2.16 Benefit Plans. Except as set forth in the Disclosure
Schedule, neither Seller nor any affiliate of Seller sponsors, maintains,
contributes to or is required to contribute to any pension, welfare, incentive,
perquisite, paid time off, severance or other benefit plan, policy, practice or
agreement subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). There are no facts or circumstances which could, directly or
indirectly, subject Buyer or any of its affiliates to any Liability of any
nature with respect to any pension, welfare, incentive, perquisite, paid time
off, severance or other benefit plan, policy, practice or agreement sponsored,
maintained or contributed to by Seller or any affiliate, to which Seller or any
affiliate is a party or with respect to which Seller or any affiliate could have
any liability.
2.17 Labor Matters. Except as set forth in the Disclosure
Schedule:
(a) Seller is and has been in compliance in all material
respects with all applicable Laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, including
without limitation any such Laws respecting employment discrimination and
occupational safety and health requirements, and has not and is not engaged in
any unfair labor practice;
(b) there is no unfair labor practice complaint against
Seller pending or threatened before the National Labor Relations Board or any
other comparable Authority;
(c) Seller is not delinquent in payments to any persons
for any wages, salaries, commissions, bonuses or other direct or indirect
compensation for any services performed by them or amounts required to be
reimbursed to such persons, including without limitation any amounts due under
any pension plan, welfare plan or compensation plan; and
(d) Neither Buyer nor any subsidiary or affiliate of Buyer
will, by reason of the termination of the employment of any person by Seller
prior to or as of the Closing Date, on or after the Closing Date be liable to
any of such persons for so-called "severance pay" or any other payments.
2.18 Tax Matters. Except as set forth in the Disclosure Schedule,
(a) Seller shall be responsible for and shall pay all
Taxes attributable to or arising from the business and operations of Seller and
shall be responsible for its own
11
income and franchise Taxes, if any, arising from the transactions contemplated
by this Agreement.
(b) There have been properly completed and duly filed on a
timely basis (subject to any valid extensions filed by Seller) and in form that
is, in all material respects, correct, all Tax Returns required to be filed on
or prior to the date hereof by Seller with respect to Taxes of Seller (or
relating to the business and operation of Seller). As of the time of filing, the
foregoing Tax Returns correctly reflected, in all material respects, the facts
regarding the income, business, assets, operations, activities, status or other
matters of Seller or any other information required to be shown thereon. There
is no material omission, deficiency, error, misstatement or misrepresentation,
whether innocent, intentional or fraudulent, in any Tax Return filed by Seller
for any period. Any Tax Returns filed after the date hereof, but including
periods through the Closing Date, will conform with the provisions of this
subsection 2.18(b).
(c) With respect to all amounts of Taxes imposed upon
Seller, or for which Seller is or could be liable with respect to all taxable
periods or portions of periods ending on or before or including the Closing
Date, all applicable Tax Laws have been or will be complied with, in all
material respects and all such amounts of Taxes required to be paid by Seller on
or before the date hereof have been duly paid or will be paid on or before the
Closing Date. There are no Liens for such Taxes upon any property or assets of
Seller. Seller has withheld and remitted all amounts required to be withheld and
remitted by it in respect of Taxes.
(d) For purposes of computing Taxes and the filing of Tax
Returns, Seller has not failed to treat as "employees" any individual providing
services to Seller who would be classified as an "employee" under the applicable
rules or regulations of any Authority with respect to such classification.
2.19 Compliance with Law. Except as set forth in the Disclosure
Schedule, Seller is not currently failing to materially comply with any
applicable Laws relating to the Assets or the operation of the Assets, including
without limitation, any import, export and immigration laws. There are no
proceedings and no proceedings are pending or to Seller's knowledge threatened,
nor has Seller received any written notice regarding any violation of any Law by
Seller, including, without limitation, any requirement of any Authority,
relating to the Assets.
2.20 Environmental and Safety Matters. Neither Seller, any
subsidiary or former subsidiary of Seller, nor, to the best of Seller's
knowledge, any previous owner, tenant, occupant or user of any property owned or
leased by or to Seller or by or to any subsidiary or former subsidiary (the
"Properties") contain any: (i) asbestos (other than asbestos contained in floor
tile) or (ii) equipment using PCBs. No claims or settlements relating to or
arising out of Environmental and Occupational Safety and Health Laws or
Environmentally Regulated Materials, have been made or, to the knowledge of
Seller, been threatened by any third party, including any Authority, nor, to the
knowledge of Seller, does there exist any basis for any such claim (any such
enforcement, investigation, cleanup, removal, remediation or response, other
governmental or regulatory action, claim or settlement is herein referred to as
an "Environmental Claim") against Company or any subsidiary or former
subsidiaries with respect to the Properties or operations conducted thereon.
12
2.21 Insurance. The Disclosure Schedule contains a listing of all
policies of fire and other casualty, general liability, theft, life, workers'
compensation, health, directors and officers, business interruption and other
forms of insurance owned or held by Seller, specifying the insurer, the policy
number, the risk insured against, the term of the coverage, the limits of
coverage, the deductible amount (if any), the premium rate, the date through
which coverage will continue by virtue of premiums already paid and, in the case
of any "claims made" coverage, the same information as to predecessor policies
for the previous five years. All present policies are in full force and effect
and all premiums with respect thereto have been paid. Seller has not been denied
any form of insurance and no policy of insurance has been revoked or rescinded
during the past five years, except as described on the Disclosure Schedule.
2.22 Affiliate Transactions. Except as set forth in the
Disclosure Schedule, no officer, director, stockholder or employee of Seller or
any person related by blood or marriage to any such person in which any such
person owns any beneficial interest (collectively, "Insiders"), is a party to
any agreement, contract, commitment or transaction with Seller or which pertains
to Seller or has any interest in any property, whether real, personal or mixed,
or tangible or intangible, relating to Seller or the Business.
2.23 Business Generally. Except as set forth in the Disclosure
Schedule, there has been no event, transaction or information which has come to
the attention of Seller which, as it relates directly to the business of Seller,
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
2.24 Brokers. Neither Seller nor any of its directors, officers
or employees has employed any other broker, finder, or financial advisor or
incurred any liability for any other brokerage fee or commission, finder's fee
or financial advisory fee, in connection with the transactions contemplated
hereby, nor is there any basis known to Seller for any such fee or commission to
be claimed by any other person or entity.
2.25 Accuracy of Information. No representation or warranty made
by Seller in this Agreement or in any of the Documents contains any untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements herein or therein not misleading in light of the
circumstances in which they are made. The representations and warranties
contained in this Article 2 or elsewhere in this Agreement or any other Document
delivered pursuant hereto shall not be affected or deemed waived by reason of
the fact that Buyer or its representatives knew or should have known that any
such representation or warranty is or might be inaccurate in any respect.
3. Representations and Warranties of Buyer and Buyer Parent
Buyer and Buyer Parent represents and warrants to Seller as follows:
3.1 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida.
3.2 Authorization. Buyer and Buyer Parent have all necessary
power and authority to enter into this Agreement and to carry out the
transactions contemplated herein. Buyer and Buyer Parent have taken all action
required by Law, its article of incorporation or
13
otherwise to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and no action of
the shareholders of Buyer or Buyer Parent is required. This Agreement is the
valid and binding legal obligation of Buyer and Buyer Parent enforceable against
Buyer and Buyer Parent in accordance with its terms subject to the laws on
insolvency and equitable remedies.
3.3 Non-Contravention. Neither the execution, delivery and
performance of this Agreement nor the consummation of the transactions
contemplated herein will: (i) violate any provision of the articles of
incorporation or bylaws of Buyer or Buyer Parent; or (ii) except for such
violations, conflicts, defaults, accelerations, terminations, cancellations,
impositions of fees or penalties, mortgages, pledges, and Liens which would not,
individually or in the aggregate, have a Material Adverse Effect on Buyer or
Buyer Parent, (A) violate, be in conflict with, or constitute a default, however
defined (or an event which, with the giving of due notice or lapse of time, or
both, would constitute such a default), under, or cause or permit the
acceleration of the maturity of, or give rise to, any right of termination,
cancellation, imposition of fees or penalties under, any debt, note, bond,
lease, mortgage, indenture, license, obligation, contract, commitment,
franchise, permit, instrument or other agreement or obligation to which Buyer or
Buyer Parent is a party or by which Buyer or Buyer Parent or any of their
respective properties or assets is or may be bound (unless with respect to which
defaults or other rights, requisite waivers or consents shall have been obtained
at or prior to the Closing) or (B) result in the creation or imposition of any
Lien, except Permitted Liens, upon any property or assets of Buyer or Buyer
Parent under any debt, obligation, contract, agreement or commitment to which
Buyer or Buyer Parent is a party or by which the Buyer or Buyer Parent or any of
their respective assets or properties is or may be bound; or (iii) violate any
Law.
3.4 Consents and Approvals. No Consent is required by any person
or entity, including without limitation any Authority, in connection with the
execution, delivery and performance by Buyer or Buyer Parent of this Agreement,
or the consummation of the transactions contemplated herein, other than any
Consent which, if not made or obtained, will not, individually or in the
aggregate, have a Material Adverse Effect on the business of Buyer or Buyer
Parent taken as a whole.
3.5 Guaranty of Buyer Parent. Buyer Parent hereby assumes and
guarantees all representations, warranties and obligations of Buyer to Seller.
4. COVENANTS OF THE PARTIES
4.1 Conduct of Business. Prior to the Closing, except as
otherwise expressly provided herein, Seller will:
(a) conduct the Business (including, without limitation,
its cash management practices, the collection of receivables, payment of
payables and commitment to capital expenditures) only in the usual and ordinary
course of business in accordance with past custom and practice and keep its
organization and properties intact, including its present business operations,
physical facilities, working conditions and employees and its present contracts
and relationships with lessors, licensors and customers;
14
(b) use commercially reasonable efforts to preserve
present business relationships with all material customers of Seller, to the
extent such relationships are beneficial to the Business;
(c) maintain its books, accounts and records in accordance
with past custom and practice as used in the preparation of the Financial
Statements;
(d) maintain in full force and effect the existence of all
Proprietary Rights;
(e) encourage Seller's professionals and other employees
to continue their employment with Seller before the Closing and with Buyer after
the Closing;
(f) comply with all legal requirements and contractual
obligations applicable to the operations of the Business and pay all applicable
Taxes;
(g) promptly inform Buyer in writing of any variances from
the representations and warranties contained anywhere in this Agreement or any
breach of any covenant hereunder by any of Seller of Shareholder;
(h) cooperate with Buyer and use best efforts to cause the
conditions to Buyer's obligation to close to be satisfied and execute and
deliver such further instruments of conveyance and transfer and take such
additional action as Buyer may reasonably request to effect, consummate, confirm
or evidence the transactions contemplated by this Agreement;
(i) use commercially reasonable efforts to support Buyer's
efforts to retain the Business' professionals and customers including, without
limitation, requiring its directors, officers and key employees to attend
meetings and participate in discussions with Buyer and the Business' customers
to retain such customers and professionals.
4.2 Negative Covenants of Seller and Members. Prior to the
Closing, without Buyer's prior written consent, the Members will not permit
Seller to, and Seller will not:
(a) sell, lease, license or otherwise dispose of any
interest in any of the Assets, other than in the ordinary course of business
consistent with past practice, or permit, allow or suffer any of the Assets to
be subjected to any Lien;
(b) terminate or modify any of the Contracts or any other
material contract or any government license, permit or other authorization,
outside the ordinary course of business;
(c) enter into any new, or amend any existing, material
contracts, agreements or commitments, outside the ordinary course of business;
(d) institute any material change in the conduct of its
business, or any change in its methods of purchase, sale, lease, management,
marketing, operation or accounting; or
15
(e) take or omit to take any action, outside the ordinary
course of business, which could be reasonably anticipated to cause a material
adverse change prior to Closing in the Business, Assets or financial condition
of Seller.
4.3 Full Access to Assets. Throughout the period prior to the
Closing, Seller will afford to Buyer and officers, employees, counsel,
accountants, investment advisors and other authorized representatives and
agents, access to the Assets and the books and records of Seller pertaining to
the Assets in order that Buyer may have full opportunity to make such
investigations as it desires to make. Any investigation by Buyer shall not
affect or otherwise diminish or obviate in any respect any of the
representations and warranties of Seller herein.
4.4 No Solicitation of Alternate Transaction. Prior to the
Closing or termination of this Agreement, Seller, its directors, officers and
employees, independent contractors, consultants, counsel, accountants,
investment advisors and other representatives and agents will not, directly or
indirectly, solicit or entertain offers from, negotiate with, provide any
information to, enter into any agreement with, or in any manner encourage,
discuss, accept or consider any proposal of, any third party relating to the
acquisition of Seller, its assets or business, in whole or in part.
4.5 Filings; Consents; Removal of Objections. Subject to the
terms and conditions herein provided, the parties hereto will use commercially
reasonable efforts to take or cause to be taken all actions and do or cause to
be done all things necessary, proper or advisable under applicable Laws to
consummate and make effective, as soon as reasonably practicable, the
transactions contemplated hereby, including without limitation obtaining all
Consents of any person or entity, whether private or governmental, required in
connection with the consummation of the transactions contemplated herein. In
furtherance, and not in limitation of the foregoing, it is the intent of the
parties to consummate the transactions contemplated herein at the earliest
practicable time and they respectively agree to exert commercially reasonable
efforts to that end, including without limitation: (i) the removal or
satisfaction, if possible, of any objections to the validity or legality of the
transactions contemplated herein; and (ii) the satisfaction of the conditions to
consummation of the transactions contemplated hereby.
4.6 Payment of Sales Tax. Seller shall be responsible for payment
of all sales Taxes due with respect to the sale of the Assets pursuant to this
Agreement.
4.7 Further Assurances; Cooperation; Notification.
(a) Each party hereto will, before, at and after Closing,
execute and deliver such instruments and take such other actions as the other
party or parties, as the case may be, may reasonably require in order to carry
out the intent of this Agreement. Without limiting the generality of the
foregoing, at any time after the Closing, at the request of Buyer and without
further consideration, Seller will execute and deliver such instruments of sale,
transfer, conveyance, assignment and confirmation and take such action as Buyer
may reasonably deem necessary or desirable in order to more effectively
consummate the transactions contemplated hereby and to vest in the Buyer good
and marketable title to the Assets without further cost or expense to the
Seller.
16
(b) At all times from the date hereof until the Closing,
each party will promptly notify the other in writing of the occurrence of any
event which it reasonably believes will or may result in a failure by such party
to satisfy the conditions specified in this Article 4.
4.8 Disclosure of Developments. During the period prior to
Closing, Seller will promptly notify the Buyer of any event or development
which, if existing or occurring at or prior to the date of this Agreement, which
is necessary to correct any representation and warranty of Seller which has been
rendered inaccurate by reason of such event or development.
4.9 Press Releases and Announcements. None of the parties hereto
shall make any public announcement with respect to the transactions contemplated
herein without the prior written consent of the other party, which consent shall
not be unreasonably withheld or delayed; provided, however, that any of the
parties hereto may at any time make any announcements which are required by
applicable Law so long as the party so required to make an announcement promptly
upon learning of such requirement notifies the other party of such requirement
and discusses with the other party in good faith the exact proposed wording of
any such announcement.
4.10 Employee and Related Matters.
(a) Buyer will not have any liability or obligation to
employ or offer employment to any employee of Seller, except for the Members and
the Director of Nursing, in connection with the transactions contemplated
hereby. Seller hereby authorizes Buyer to enter into discussions with any of its
employees concerning the future employment of such individual by Buyer;
provided, however, that (i) such discussions will not be commenced prior to the
giving of notice by Seller to the employees of Seller of the transactions
contemplated by this Agreement; and (ii) all such discussions will be conducted
in such a manner as not to interfere unreasonably with the business operations
of Seller. The terms and conditions of such employment will be established by
Buyer in its sole discretion.
(b) Buyer will not be obligated under, and hereby
specifically disclaims any assumption or liability with respect to, any pension
plan, welfare plan or compensation plan. Seller will indemnify, defend and hold
harmless Buyer and its affiliates from and against any liability, expense, cost,
tax or obligation of any nature with respect to such current or former employee
or other individual arising in connection with group health plan coverage.
(c) Buyer and Buyer Parent shall have no liability
whatsoever and Seller shall retain, bear and discharge all liabilities and
obligations (whether absolute, contingent or otherwise) relating to workers'
compensation claims made by (i) any employee filed or presented before the
Closing Date, (ii) any employee filed or presented after the Closing Date but
relating to claims and/or injuries first arising before the Closing Date and
(iii) any employee or former employee of Seller who does not become an employee
of Buyer.
4.11 Seller's Name. Seller agrees that after the Closing Date and
until expiration or termination of Seller's license to Buyer to use the name
"Chicago Care Nurse
17
Staffing", Seller will not use that name "Chicago Care Nurse Staffing" other
than as its corporate name and not with respect to any offering of products or
services.
5. CONDITIONS TO THE BUYER'S AND BUYER PARENT'S OBLIGATIONS
Notwithstanding any other provision of this Agreement to the contrary,
the obligation of Buyer to effectuate the transactions contemplated herein will
be subject to the satisfaction at or prior to the Closing of each of the
following conditions:
5.1 Representations and Warranties True. The representations and
warranties of Seller contained in this Agreement will be in all material
respects true, complete and accurate as of the date when made and at and as of
the Closing Date (unless specifically made as of the Effective Date) as though
such representations and warranties were made at and as of such time, except
insofar as the representations and warranties relate expressly and solely to a
particular date or period, in which case they shall be true and correct in all
material respects at the Closing with respect to such date or period.
5.2 Performance. Seller will have performed and complied in all
material respects with all agreements, covenants, obligations and conditions
required by this Agreement to be performed or complied with by Seller on or
prior to the Closing.
5.3 Required Approvals and Consents. All action required by Law
and otherwise to be taken by Seller to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will have been duly and validly taken. All Consents of or
from all Authorities required hereunder, if any, to consummate the transactions
contemplated herein, will have been delivered, made or obtained, and the Buyer
will have received copies thereof.
5.4 Adverse Changes. No change shall have occurred in the Assets
or the Business which shall have a Material Adverse Effect on the Assets or the
Business.
5.5 No Proceeding or Litigation. No suit, action, investigation,
inquiry or other proceeding by any Authority or other person or entity will have
been instituted or threatened which delays or questions the validity or legality
of the transactions contemplated hereby or which, if successfully asserted,
would individually or in the aggregate, otherwise have a Material Adverse Effect
on the Assets.
5.6 Legislation. No Law shall have been enacted which prohibits,
restricts or delays the consummation of the transactions contemplated hereby or
any of the conditions to the consummation of such transaction.
5.7 Acceptance by Buyer. The form and substance of all documents
to be delivered at Closing hereunder will be reasonably acceptable to Buyer.
5.8 Certificates. Buyer will have received such certificates of
Seller, in a form and substance reasonably satisfactory to Buyer, dated the
Closing Date, to evidence compliance with the conditions set forth in this
Article 5 and such other matters as may be reasonably requested by Buyer.
18
5.9 Members Resolutions. Buyer will have received certified
copies of the resolutions of Seller's board of directors and shareholders
approving the transactions contemplated by this Agreement.
5.10 Due Diligence. Buyer will have received all information
reasonable requested by it pursuant to Section 4.3 of this Agreement.
5.11 Appropriate Documentation. Buyer shall have received, in a
form and substance reasonably satisfactory to Buyer, dated the Closing Date, all
bills of sale, deeds, assignments and other conveyance and transfer
documentation consistent with the negotiated provisions of this Agreement and
necessary to vest title in the Assets to Buyer.
5.12 Non-Compete Agreement. Buyer and Members shall have entered
into the Non-Compete Agreement in the form of Exhibit 5.12 to this Agreement.
5.13 Employment Agreement.
(a) Buyer and Xxxx X. Xxxxxxxx shall have entered into the
Employment Agreements in the form of Exhibit 5.13(a) to this Agreement.
(b) Buyer and Xxxxxx X. Xxxxx shall have entered into the
Employment Agreements in the form of Exhibit 5.13(b) to this Agreement.
(c) Buyer and Xxxxx Xxxxxxxx shall have entered into the
Employment Agreements in the form of Exhibit 5.13(c) to this Agreement.
(d) Buyer and Xxxxx Xxxxx shall have entered into the
Employment Agreements in the form of Exhibit 5.13(d) to this Agreement.
5.14 License Agreement. Buyer and Seller shall have entered into
a License Agreement in the form of Exhibit 5.14 to this Agreement.
6. CONDITIONS TO OBLIGATIONS OF SELLER
Notwithstanding anything in this Agreement to the contrary, the
obligations of Seller to effect the transactions contemplated herein will be
subject to the satisfaction at or prior to the Closing of each of the following
conditions:
6.1 Representations and Warranties True. The representations and
warranties of Buyer contained in this Agreement will be in all material respects
true, complete and accurate as of the date when made and at and as of the
Closing, as though such representations and warranties were made at and as of
such time, except for changes permitted or contemplated in this Agreement, and
except insofar as the representations and warranties relate expressly and solely
to a particular date or period, in which case they will be true and correct in
all material respects at the Closing with respect to such date or period.
19
6.2 Performance. Buyer will have performed and complied in all
material respects with all agreements, covenants, obligations and conditions
required by this Agreement to be performed or complied with by Buyer at or prior
to the Closing.
6.3 Approvals. All action required to be taken by the Buyer to
authorize the execution, delivery and performance of this Agreement by the Buyer
and the consummation of the transactions contemplated hereby will have been duly
and validly taken.
6.4 No Proceeding or Litigation. No suit, action, investigation,
inquiry or other proceeding by any Authority or other person or entity will have
been instituted or threatened which delays or questions the validity or legality
of the transactions contemplated hereby.
6.5 Acceptance by Seller. The form and substance of all documents
to be delivered to Seller at Closing hereunder will be reasonably acceptable to
Seller and its legal counsel.
6.6 Certificates. Buyer will have furnished to Seller such
certificates and other documents, instruments and writings to evidence the
fulfillment of the conditions set forth in this Article 6 as Seller may
reasonably request.
6.7 Payment of Purchase Price. Buyer shall have delivered the
portion of the Purchase Price to be payable on the Closing Date to Seller.
6.8 Employment Agreement.
(a) Buyer and Xxxx X. Xxxxxxxx shall have entered into the
Employment Agreements in the form of Exhibit 5.13(a) to this Agreement.
(b) Buyer and Xxxxxx X. Xxxxx shall have entered into the
Employment Agreements in the form of Exhibit 5.13(b) to this Agreement.
(c) Buyer and Xxxxx Xxxxxxxx shall have entered into the
Employment Agreements in the form of Exhibit 5.13(c) to this Agreement.
(d) Buyer and Xxxxx Xxxxx shall have entered into the
Employment Agreements in the form of Exhibit 5.13(d) to this Agreement.
7. TERMINATION AND ABANDONMENT
7.1 Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Closing by the written consent of Seller and
Buyer.
7.2 Termination by Either Seller or Buyer. This Agreement may be
terminated by either Seller or Buyer if:
(a) the Closing has not been consummated by 5:00 p.m.
(Pacific Time) on March ___, 2003 (provided that the right to terminate this
Agreement under this Section
20
7.2(a) will not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of or resulted in the failure
of the Closing to occur on or before such date), or
(b) any court of competent jurisdiction in the United
States or some other governmental body or regulatory authority will have issued
an order, decree or ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting the Closing or permitting consummation of the
Closing only subject to a condition or restriction unacceptable to Seller and
Buyer and such order, decree, ruling or other action will have become final and
nonappealable.
7.3 Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions contemplated
hereby by Seller or Buyer pursuant to this Article 7, written notice must be
given to the other party and this Agreement will terminate (other than Sections
4.7, 10.2 and 10.9) and the transactions contemplated hereby will be abandoned,
without further action by any of the parties hereto. If this Agreement is
terminated as provided herein:
(a) Upon request therefor, each of the parties hereto will
redeliver all documents, workpapers and other material of the other parties
relating to the transactions contemplated hereby, whether obtained before or
after the execution hereof, to the party furnishing the same;
(b) No party will have any further obligation to the other
party to this Agreement pursuant to this Agreement except for liability of any
breach of this Agreement; and
(c) All filings, applications and other submissions made
pursuant to the terms of this Agreement will, to the extent practicable, be
withdrawn from the agency or other person to which made.
8. SURVIVAL; INDEMNIFICATION; RELEASE
8.1 Survival of Representations, Warranties and Covenants;
Investigation. The representations, warranties and covenants of the parties
contained in this Agreement will survive the Closing Date for a period of two
(2) years with the exception of Seller's and Members' representations set forth
in Sections 2.2, 2.3 and, 2.8(a) and 2.8(b) which shall survive without limit as
to time and Seller's and Members' representations and warranties set forth in
Sections 2.18 and 2.20 which shall survive for the applicable statute of
limitations. The right to indemnification or any other remedy based on
representations, warranties, covenants and obligations in this Agreement will
not be affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification or any other remedy based on such representations, warranties,
covenants and obligations.
21
8.2 Indemnification by Buyer and Buyer Parent. Buyer and Buyer
Parent agree to indemnify, defend and hold Seller and Members harmless from and
against any and all losses, liabilities, obligations, demands, judgments,
settlements, damages (but excluding claims for consequential damages, lost
profits or punitive damages) or reasonable expense (including but not limited to
interest, penalties, fees and reasonable professional fees and expenses) and
against all claims in respect thereof (including, without limitation, amounts
paid in settlement and reasonable costs of investigation) whether or not
involving a third-party claim (collectively as "Seller's Loss" or "Seller's
Losses") to which Seller may suffer or incur, directly or indirectly, as a
result from or in connection with:
(a) any untrue representation of, or breach of warranty
by, Buyer or Buyer Parent in any part of this Agreement;
(b) the breach of or nonfulfillment of any covenant,
agreement or undertaking of Buyer or Buyer Parent in this Agreement; and
(c) the use of the Assets after the Closing Date.
8.3 Indemnification by Seller and Members. Seller and Members,
jointly and severally, agree to indemnify Buyer and Buyer Parent ("Buyer
Indemnified Parties") against all losses, liabilities, obligations, demands,
judgments, settlements, damages (but excluding any claims for consequential
damages, lost profits or punitive damages suffered directly by Buyer as opposed
to consequential damages, lost profits or punitive damages paid by Buyer to a
third party), or reasonable expenses (including, but not limited to, interest,
penalties, fees, and reasonable professional fees and expenses) and against all
claims in respect thereof (including, without limitation, amounts paid in
settlement and reasonable costs of investigation), whether or not involving a
third-party claim (herein referred to collectively as "Buyer's Losses" or
individually as a "Buyer's Loss") to which the Buyer Indemnified Parties may
suffer or incur, directly or indirectly, as a result from or in connection with:
(a) any untrue representation of or breach of warranty, by
Seller or Members in any part of this Agreement;
(b) the breach of or nonfulfillment of any covenant,
agreement or undertaking of Seller or Members in this Agreement; and
(c) the use of the Assets on or before the Closing Date.
8.4 Right of Set-Off. Upon at least ten (10) business days prior
written notice to the Seller, specifying in reasonable detail the basis
therefor, Buyer and Buyer Parent may set-off any amount to which they may be
entitled under this Article 8 against the payments to be made by Buyer or Buyer
Parent of the Purchase Price. The exercise of such right of set-off by Buyer or
Buyer Parent shall not constitute an event of default or a breach under this
Agreement. Neither the exercise of, nor the failure to exercise, such right of
set-off shall constitute an election of remedies nor limit Buyer or Buyer Parent
in any manner in the enforcement of any other remedies that may be available to
it. If Seller objects to the set off by written notice to Buyer or Buyer Parent,
Buyer or Buyer Parent shall place the amount in dispute in escrow with a
mutually acceptable escrow agent. Such amount may be withdrawn only upon mutual
written
22
agreement of the parties, delivered to escrow agent with disbursement
instructions, or pursuant to an award of the arbitral tribunal in accordance
with Section 10.8.
8.5 Claims for Indemnification.
(a) General. The parties intend that all indemnification
claims be made as promptly as practicable by the party seeking indemnification
(the "Indemnified Party") and prior to the expiration of the applicable
representation, warranty or covenant. Whenever any claim shall arise for
indemnification hereunder the Indemnified Party shall promptly notify the party
from whom indemnification is sought (the "Indemnifying Party") of the claim and,
when known, the facts constituting the basis for such claim (the "Notice"). The
failure to notify the Indemnifying Party shall not relieve the Indemnifying
Party of any liability that it may have to the Indemnified Party except to the
extent the Indemnifying Party is prejudiced thereby, such delay shall not modify
the time requirements for the filing of a claim as set forth in Section 9.1. For
purposes of this Agreement, the date which is three business days after the
Notice is first mailed or otherwise released for dispatch to the Indemnifying
Party is hereinafter referred to as the "Notice Delivery Date".
(b) Claims by Third Parties. With respect to claims made
by third parties, the Indemnifying Party shall be entitled to assume control of
the defense of such action or claim with counsel reasonably satisfactory to the
Indemnified Party; provided, however, that:
(i) the Indemnified Party shall be entitled to
participate in the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim;
(ii) no Indemnifying Party shall consent to (A) the
entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by each claimant or plaintiff to each
Indemnified Party of a release from all liability in respect of such claim or
(B) if, pursuant to or as a result of such consent or settlement, injunctive or
other equitable relief would be imposed against the Indemnified Party or such
judgment or settlement could materially interfere with the business, operations
or assets of the Indemnified Party; and,
(iii) if the Indemnifying Party does not assume
control of the defense of such claim in accordance with the foregoing provisions
within ten (10) business days after the Notice Delivery Date, the Indemnified
Party shall have the right to defend such claim in such manner as it may deem
appropriate at the cost and expense of the Indemnifying Party, and the
Indemnifying Party will promptly reimburse the Indemnified Party therefore in
accordance with this Article 9; provided that the Indemnified Party shall not be
entitled to consent to the entry of any judgment or enter into any settlement of
such claim that does not include as an unconditional term thereof the giving by
each claimant or plaintiff to each Indemnifying Party of a release from all
liability in respect of such claim and provided that Indemnified Party shall not
be entitled without the prior written consent of the Indemnifying Party to enter
into a consent or settlement if injunctive or other equitable relief would be
imposed against the Indemnifying Party or such judgment or settlement could
materially interfere with the business, operations or assets of the Indemnifying
Party.
23
(c) Remedies Cumulative. The remedies provided herein
shall be cumulative and shall not preclude assertion by any party of any rights
or the seeking of any other remedies against any other party.
(d) Payment of Buyer's Losses. All Buyer's Losses
hereunder shall be paid on a dollar for dollar basis meaning that each dollar of
Buyer's Losses shall be paid to Buyer by means of cash payment or offset of
amounts due from Buyer or Buyer Parent to Seller or the Members.
9. SELLER'S ACCOUNT RECEIVABLES
Seller shall notify Buyer of all payments received by Seller
after the Closing Date from any third party in connection with or arising out of
any of the Receivables. All payments received by Buyer after the Closing Date
from any third party in connection with or arising out of any of the Receivables
shall be held by Buyer in trust for the benefit of Seller and delivered to
Seller with in thirty (30) days. Promptly following receipt by Buyer of such a
payment, Buyer shall deposit said payment and shall pay, or cause to be paid,
over to Seller, the amount of such payment or reimbursement without right of
setoff. In the event a payment is received which does not specify whether it is
applicable to a specific invoice for Receivables or for receivables generated by
Buyer following the Closing Date, Buyer shall first apply the payment to any
unpaid Receivables of the payor.
10. MISCELLANEOUS PROVISIONS
10.1 Expenses. Buyer and Seller will each bear their own costs
and expenses relating to the transactions contemplated hereby, including without
limitation, fees and expenses of legal counsel, accountants, investment bankers,
brokers or finders, printers, copiers, consultants or other representatives for
the services used, hired or connected with the transactions contemplated hereby.
10.2 Amendment and Modification. Subject to applicable Law, this
Agreement may be amended or modified by the parties hereto at any time prior to
the Closing with respect to any of the terms contained herein; provided,
however, that all such amendments and modifications must be in writing duly
executed by all of the parties hereto.
10.3 Waiver of Compliance; Consents. Any failure of a party to
comply with any obligation, covenant, agreement or condition herein may be
expressly waived in writing by the party entitled hereby to such compliance, but
such waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. No single or partial exercise
of a right or remedy will preclude any other or further exercise thereof or of
any other right or remedy hereunder. Whenever this Agreement requires or permits
the consent by or on behalf of a party, such consent will be given in writing in
the same manner as for waivers of compliance.
10.4 No Third Party Beneficiaries. Nothing in this Agreement will
entitle any person or entity (other than a party hereto and his, her or its
respective successors and assigns permitted hereby) to any claim, cause of
action, remedy or right of any kind.
24
10.5 Notices. All notices, requests, demands and other
communications required or permitted hereunder must be made in writing and will
be deemed to have been duly given and effective: (i) on the date of delivery, if
delivered personally; (ii)on the date of delivery, if delivered by overnight
courier; or (iii) on the date of transmission, if sent by facsimile, telecopy,
telegraph, telex or other similar telegraphic communications equipment:
if to Seller:
Xxxx X. Xxxxxxxx
00000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxxx Xxxxxxxx
000 Xxxxxxx Xxxx Xxxxx, Xxx. 000
Xxxxxxxxx Xxxxxxx, XX 00000
with copy to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Xxxxxx, South & Xxxxxxxxx
0000 Xxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
or to such other person or address as Seller furnishes to the Buyer in writing
in accordance with this subsection.
if to Buyer or Buyer Parent:
OptimumCare Staffing, Inc.
c/o OptimumCare Corporation
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attn: Chief Executive Officer
Facsimile: (000) 000-0000
or to such other person or address as Buyer or Buyer Parent furnishes to the
other parties hereto in writing in accordance with this subsection.
10.6 Assignment. This Agreement and all of the provisions hereof
will be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder will be assigned (whether
voluntarily, involuntarily, by operation of law or otherwise) by any of the
parties hereto without the prior written consent of the other parties, provided,
25
however, that the Buyer may assign its rights (but not its obligations) under
this Agreement, in whole or in any part, and from time to time, to a wholly
owned, direct or indirect, subsidiary of Buyer. All representations and
warranties of Seller shall not run to any assignee or successor of Buyer or
Buyer Parent.
10.7 Governing Law. This Agreement and the legal relations among
the parties hereto will be governed by and construed in accordance with the
internal substantive laws of the State of Florida (without regard to the laws of
conflict that might otherwise apply) as to all matters, including without
limitation matters of validity, construction, effect, performance and remedies.
10.8 Arbitration.
(a) The parties agree that any dispute arising out of or
relating to this Agreement or the formation, breach, termination or validity
thereof, except for injunctive relief contemplated by Section 10.12 ("Dispute")
will be resolved as follows. If the Dispute cannot be settled through direct
discussions, the parties will first try to settle the Dispute in an amicable
manner by mediation under the Commercial Mediation Rules of the American
Arbitration Association, before resorting to arbitration. Any Dispute that has
not been resolved within sixty (60) days of the initiation of the mediation
procedure (the "Mediation Deadline") will be settled by binding arbitration in
Orange County, Florida by a panel of three (3) arbitrators, selected in
accordance with subsection (b) below, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (the "American
Arbitration Rules"). The arbitrators in any such arbitration will have the
discretion to order a pre-hearing exchange of information by the parties,
including, without limitation, production of requested documents, exchange of
summaries of testimony and proposed witnesses, and examination by deposition of
parties. The arbitrators are not empowered to award damages in excess of
compensatory damages, as limited by this Agreement, and each party hereby
irrevocably waives any damages in excess of compensatory damages. Judgment upon
any arbitration award may be entered in any court having jurisdiction thereof
and the parties consent to the jurisdiction of the courts of the State of
Florida for this purpose. The parties agree that service of process and of any
notices required in connection with any arbitration hereunder or any related
court proceedings may be given in the manner provided for the giving of notices
under this Agreement as set forth in Section 10.5.
(b) Within twenty (20) days of the Mediation Deadline,
Buyer will nominate one arbitrator and Seller will nominate one arbitrator.
Within thirty (30) days of the nomination and appointment of the two
arbitrators, the two arbitrators shall select a third arbitrator, and if they
fail to do so, a neutral arbitrator shall be chosen in accordance with the
American Arbitration Rules.
10.9 Counterparts. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
10.10 Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not constitute a part
hereof.
26
10.11 Entire Agreement. This Agreement and the exhibits and other
writings referred to in this Agreement or any such exhibit or other writing are
part of this Agreement, together they embody the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Agreement and together they are referred to as this "Agreement" or the
"Agreement". There are no restrictions, promises, warranties, agreements,
covenants or undertakings, other than those expressly set forth or referred to
in this Agreement. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the transaction or
transactions contemplated by this Agreement. Provisions of this Agreement will
be interpreted to be valid and enforceable under applicable Law to the extent
that such interpretation does not materially alter this Agreement; provided,
however, that if any such provision shall become invalid or unenforceable under
applicable Law such provision will be stricken to the extent necessary and the
remainder of such provisions and the remainder of this Agreement will continue
in full force and effect.
10.12 Injunctive Relief. It is expressly agreed among the parties
hereto that monetary damages would be inadequate to compensate a party hereto
for any breach by any other party of its covenants and agreements hereof.
Accordingly, the parties agree and acknowledge that any such violation or
threatened violation will cause irreparable injury to the other and that, in
addition to any other remedies which may be available, such party will be
entitled to injunctive relief against the threatened breach hereof or the
continuation of any such breach without the necessity or proving actual damages
and may seek to specifically enforce the terms thereof.
10.13 Confidential Information. Each party recognizes,
acknowledges, and agrees that any property, designs, software programs, software
formats, business information, trade secrets, contracts, documents, lists,
files, records, data, and other information developed and acquired by either
party is considered confidential, and includes, but is not limited to, all
information relating to business operations, property, business ideas, software
formats, trade dress, clients or customers, client or customer lists, agreements
and contracts, proprietary information, trade secrets, licenses, financial
information, operating information, employee information and any or all other
information or documentation which is legally deemed proprietary in nature to
either party (hereinafter collectively referred to as the "Confidential
Information"). Each party understands and agrees that all such Confidential
Information is to be preserved and protected, is not to be used, disclosed or
made available, either in whole or in part, in any manner whatsoever, directly
or indirectly, to third persons or any persons for purposes unrelated to the
objectives of consummating the transaction contemplated between the parties
hereto, without prior written authorization from each party, and is not to be
used, directly or indirectly, for any purpose unrelated to the objectives of
each party without prior written authorization of the other party; provided,
however, that in the event the transactions contemplated by this Agreement are
consummated, then Buyer shall become the owner of Seller's and Members'
Confidential Information and shall have the right to use the information in its
sole discretion. Prior to the Closing, termination or abandonment of the
transactions contemplated by this Agreement, each party shall promptly notify
the other of any Confidential Information that becomes public without the prior
approval or knowledge of a party or any of its representatives. Prior to the
Closing, termination or abandonment of the transactions contemplated by this
Agreement, Buyer shall not use the Confidential Information of Seller or
Members' for any reason whatsoever not incident to the purpose of effectuating
the transaction
27
contemplated hereunder. Seller and Members shall not use the Confidential
Information of Buyer for any reason whatsoever not incident to the purpose of
effectuating the transaction contemplated hereunder
10.14 Certain Definitions. For purposes of this Agreement, the
term:
(a) "Authority" or "Authorities" means any foreign,
federal, state or local governmental or quasi-governmental, administrative,
regulatory or judicial court, department, commission, agency, board, bureau,
instrumentality or other authority.
(b) "Consent" means any consent, approval, order or
authorization of or from, or registration, notification, declaration or filing
with any individual or entity, including without limitation any Authority.
(c) "Environmental and Occupational Safety and Health Law"
means any common law or duty, case law or other law, that (i) regulates, creates
standards for or imposes liability or standards of conduct concerning any
element, compound, pollutant, contaminant, or toxic or hazardous substance,
material or waste, or any mixture thereof, or relates in any way to emissions or
releases into the environment or ambient environmental conditions, or conduct
affecting such matters, or (ii) is designed to provide safe and healthful
working conditions or reduce occupational safety and health hazards.
(d) "Environmentally Regulated Materials" means any
element, compound, pollutant, contaminant, substance, material or waste, or any
mixture thereof, designated, listed, referenced, regulated or identified
pursuant to any Environmental and Occupational Safety and Health Law.
(e) "Gross Margin" means Net Sales less (i) standard,
overtime, bonus and incentive pay to temporary employees, (ii) temporary
employee payroll taxes and withholdings, and (iii) workers' compensation policy
costs.
(f) "Laws" means any statute, treaty, law, judgment, writ,
injunction, decision, decree, order, regulation, ordinance or other similar
authoritative matters.
(g) "Liens" means any mortgage, pledge, lien, security
interest, conditional or installment sales agreement, encumbrance, claim,
easement, right of way, tenancy, covenant, encroachment, restriction or charge
of any kind or nature (whether or not of record).
(h) "Material Adverse Effect" means an individual or
cumulative material adverse change in the Assets or the value of the Assets or
effect on the business, customers, customer relations, operations or properties
of Company which is reasonably expected to be materially adverse to the
business, financial condition or assets of Company or would prevent Company or
Seller from consummating the transactions contemplated hereby.
(i) "Net Sales" means gross sales less returns and
allowances, freight out and cash discounts allowed.
28
(j) "Proprietary Rights" shall mean all patents, patent
applications and patent disclosures; all inventions (whether or not patentable
and whether or not reduced to practice); all trademarks, service marks, trade
dress, trade names and corporate names and all the goodwill associated
therewith; all registered and unregistered statutory and common law copyrights;
all registrations, applications and renewals for any of the foregoing; and all
trade secrets, confidential information, ideas, know-how, technology, research
information, drawings, specifications, designs, improvements, technical and
computer data, documentation and software, financial business and marketing
plans and materials, customer and supplier lists and related information and all
the goodwill associated therewith;, and all other proprietary rights.
(k) "Taxes" means all federal, state, local, foreign and
other net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, real or
personal property, windfall profits, customs, duties or other taxes, fees,
assessments, charges or levies of any kind whatever, together with any interest
and any penalties, additions to tax or additional amounts with respect thereto,
and the term "Tax" means any one of the foregoing Taxes.
(l) "Tax Returns" means all returns, declarations,
reports, statements and other documents required to be filed with any Authority
in respect of Taxes, and the term "Tax Return" means any one of the foregoing
Tax Returns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"Seller"
CHICAGO CARE NURSE STAFFING, L.L.C.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Xxxx X. Xxxxxxxx, Managing Member
"Buyer"
OPTIMUMCARE STAFFING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxx, Chief Executive
Officer
[Signatures continue]
29
"Buyer Parent"
OPTIMUMCARE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxx, Chief Executive
Officer
"Members"
/s/ XXXX X. XXXXXXXX
--------------------------------------------
XXXX X. XXXXXXXX
/s/ XXXXXX X. XXXXX
--------------------------------------------
XXXXXX X. XXXXX
/s/ XXXXX XXXXXXXX
--------------------------------------------
XXXXX XXXXXXXX
30
