<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MARCH 28, 1996
---------------------
UNISON HEALTHCARE CORPORATION
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
----------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-27374 86-0684011
------------------------ ------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
7272 EAST INDIAN SCHOOL ROAD, SUITE 214, SCOTTSDALE, ARIZONA 85251
- ------------------------------------------------------------ ----------
(Address of Principal Executive Offices) (Zip Code)
(602) 423-1954
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
<PAGE> 2
Unison HealthCare Corporation, a Delaware corporation ("Unison"), hereby
amends Item 7 of its Report on From 8-K dated March 28, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
Report of Independent Auditors
Board of Directors
Henderson & Associates Rehabilitation and
Sunbelt Therapy Management Services, Inc.
We have audited the accompanying combined balance sheets of Henderson &
Associates Rehabilitation and Sunbelt Therapy Management Services, Inc. as of
December 31, 1995 and 1994, and the related combined statements of operations
and stockholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Henderson &
Associates Rehabilitation and Sunbelt Therapy Management Services, Inc. at
December 31, 1995 and 1994, and the combined results of their operations and
their cash flows for the years then ended in conformity with generally accepted
accounting principles.
May 16, 1996
Ernst & Young LLP
Phoenix, Arizona
2
<PAGE> 3
HENDERSON & ASSOCIATES REHABILITATION
AND
SUNBELT THERAPY MANAGEMENT SERVICES, INC.
COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
-------------------------------
ASSETS
<S> <C> <C>
Current assets:
Cash $ 69,779 $ 61,858
Accounts receivable, less allowance
for doubtful accounts of $95,000 in
1995 and $91,600 in 1994 485,843 371,260
Other receivables 50,507 14,503
Due from affiliates 38,893 60,567
Other 24,590 18,958
-------------------------------
Total current assets 669,612 527,146
Property and equipment, less accumulated
depreciation of $144,158 in 1995 and
$125,054 in 1994 90,205 141,132
-------------------------------
Total assets $ 759,817 $ 668,278
===============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 33,549 $ 23,956
Accrued payroll and related expenses 250,672 174,441
Accrued vacation payable 149,042 87,183
Due to affiliates 39,330 -
Customer deposits 27,336 28,067
Current portion of long-term debt and
capital lease obligation 139,580 65,996
-------------------------------
Total current liabilities 639,509 379,643
Long-term debt and capital lease obligation,
less current portion 47,618 51,057
Stockholders' equity:
Common stock, $1 par value; 3000 shares
authorized, issued and outstanding 3,000 3,000
Retained earnings 69,690 234,578
-------------------------------
Total stockholders' equity 72,690 237,578
-------------------------------
Total liabilities and stockholders' equity $ 759,817 $ 668,278
===============================
</TABLE>
See accompanying notes.
3
<PAGE> 4
HENDERSON & ASSOCIATES REHABILITATION
AND
SUNBELT THERAPY MANAGEMENT SERVICES, INC.
Combined Statements of Operations and
Stockholders' Equity
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994
-------------------------------
<S> <C> <C>
Net patient service revenue $ 4,803,845 $ 3,965,529
Operating expenses:
Salaries and related expenses 3,710,351 2,840,249
Contract labor 382,612 345,843
Insurance 202,814 230,980
Office supplies and expenses 127,262 88,902
Rent 59,497 57,130
Travel 156,166 100,015
Other 92,892 82,754
Depreciation 34,741 17,387
Interest 12,335 6,651
--------------------------------
Total operating expenses 4,778,670 3,769,911
--------------------------------
Income from operations 25,175 195,618
Nonoperating losses (39,744) (46,626)
--------------------------------
Net (loss) income (14,569) 148,992
Distributions to stockholders (150,319) (83,541)
Retained earnings at beginning of period 234,578 169,127
--------------------------------
Retained earnings at end of period $ 69,690 $ 234,578
================================
</TABLE>
See accompanying notes.
4
<PAGE> 5
HENDERSON & ASSOCIATES REHABILITATION
AND
SUNBELT THERAPY MANAGEMENT SERVICES, INC.
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994
----------------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net (loss) income $ (14,569) $ 148,992
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation 34,741 17,387
Loss on partnership investment 16,278 22,457
Loss on disposal of assets 23,466 24,167
Changes in operating assets and liabilities:
Accounts receivable, net (128,913) 9,967
Accounts payable 9,593 14,730
Other accrued expenses and liabilities 177,420 66,649
Customer deposits (731) 28,067
--------------------------------
Net cash provided by operating activities 117,285 332,416
INVESTING ACTIVITIES
Purchases of property and equipment (7,280) (144,915)
Changes in other assets (21,910) (28,969)
--------------------------------
Net cash used in investing activities (29,190) (173,884)
FINANCING ACTIVITIES
Proceeds from long-term debt 201,460 99,497
Payments of long-term debt and capital
lease obligation
(131,315) (92,327)
Distributions to stockholders (150,319) (83,541)
--------------------------------
Net cash used in financing activities (80,174) (76,371)
--------------------------------
Increase in cash 7,921 82,161
Cash at beginning of period 61,858 (20,303)
--------------------------------
Cash at end of period $ 69,779 $ 61,858
================================
</TABLE>
See accompanying notes.
5
<PAGE> 6
HENDERSON & ASSOCIATES REHABILITATION
AND
SUNBELT THERAPY MANAGEMENT SERVICES, INC.
Notes to Financial Statements
Years ended December 31, 1995 and 1994
1. ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
Henderson & Associates Rehabilitation (HAR) and Sunbelt Therapy Management
Services, Inc. (Sunbelt) provide a variety of therapy services to patients, and
contract their services to hospitals, home health agencies and other
third-parties.
PRINCIPLES OF COMBINATION
The combined financial statements include the accounts of Henderson & Associates
Rehabilitation and Sunbelt Therapy Management Services, Inc. All significant
intercompany accounts and transactions have been eliminated.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the combined financial statements and
accompanying notes. Actual results could differ from those estimates.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation of property and
equipment is calculated using the straight-line method over the estimated useful
lives of the assets. Routine maintenance and repairs are charged to expenses as
incurred.
INCOME TAXES
HAR and Sunbelt are S corporations, and taxable income or loss flows through to
the individual stockholders for income tax purposes. Accordingly, no provision
for income taxes or income tax liabilities has been included in the accompanying
combined financial statements.
NET PATIENT SERVICE REVENUE
Net patient service revenue is reported at the estimated realizable amounts from
patients, third-party payors and others for services rendered. HAR and Sunbelt
have negotiated agreements with several organizations to provide therapy
services based on fee schedules.
6
<PAGE> 7
2. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATION
Long-term debt and capital lease obligation consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
-----------------------------
<S> <C> <C>
Lines of credit $ 65,050 $ 18,000
Note payable to a bank, due in monthly installments of
$1,421, interest at 1% above prime through November
1996 - 30,003
Note payable to a bank in monthly installments of
$1,282, interest at 1% above prime through October
1997 - 31,510
Note payable to a credit union in monthly installments
of $680, interest at 7.11% through December 1997
- 22,000
Note payable to a bank, due in monthly installments of
$2,245, interest at 8.25% through November 1998
69,638 -
Note payable to a bank, due in monthly installments
of $3,100, interest at .5% above the average yield
of U.S. Treasury Bills through May 1996, at which
time a final installment in the amount of the unpaid
balance is due
46,785 -
Capital lease obligation in monthly installments of $818 5,725 15,540
----------------------------
187,198 117,053
Less current portion (139,580) (65,996)
----------------------------
$ 47,618 $ 51,057
============================
</TABLE>
HAR has negotiated a $35,000 line of credit with a bank at an interest rate of
1% over the prime rate.
Sunbelt has negotiated a $50,050 line of credit with a bank at an interest rate
of .5% over the bank's Base Lending Rate (8.5% at December 31, 1995).
Both lines of credit are secured by personal guarantees of the stockholders.
7
<PAGE> 8
Sunbelt has a capital lease for physical therapy equipment with a bargain
purchase option upon completion of the lease. At December 31, 1995, the leased
equipment, which is included in property and equipment in the accompanying
combined balance sheet, is carried at a cost of $21,310 less accumulated
depreciation of $6,038 .
The lease expires in June 1996.
The following is a schedule of principal maturities of long-term debt and
capital lease obligation at December 31, 1995:
<TABLE>
<S> <C>
1996 $ 139,580
1997 23,907
1998 23,711
-----------
$ 187,198
===========
</TABLE>
3. RELATED PARTIES
HAR and Sunbelt share employees and expenses with several organizations of which
the stockholders are owners. However, HAR and Sunbelt have not billed these
organizations for shared activities and have not identified the related costs,
and the accompanying combined financial statements do not include revenue from
these shared activities.
4. EMPLOYEE BENEFIT PLAN
Sunbelt has a qualified defined contribution plan covering all eligible
employees. Contributions are determined based upon a percentage of each eligible
employee's compensation, as defined by management. Contributions to the plan
were approximately $3,809 in 1995 and $3,458 in 1994.
HAR has a profit sharing plan covering all eligible employees. Contributions are
at the discretion of management. No contributions were made to the plan in 1995
or 1994.
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by HAR and Sunbelt in estimating
the fair value of their financial instruments:
Cash, Accounts Payable and Accrued Liabilities: The carrying amounts reported in
the combined balance sheets approximate their fair values.
Long-Term Debt: The fair values of fixed rate issues are estimated using
discounted cash flow analyses based on the current incremental borrowing rates
for similar types of borrowing arrangements. The carrying amounts of all fixed
and variable rate issues approximate their fair values.
6. SUBSEQUENT EVENT
Unison HealthCare Corporation purchased 90% of the common stock of HAR and
Sunbelt effective February 1, 1996.
8
<PAGE> 9
(b) PRO FORMA FINANCIAL INFORMATION.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
On March 28, 1996, Unison HealthCare Corporation ("Unison" or the
"Company") acquired, effective as of February 1, 1996, 90% of the outstanding
common stock of four rehabilitation therapy centers (collectively, "Sunbelt
Therapy") (the "Sunbelt Acquisition"). The following Unaudited Pro Forma
Condensed Combined Statements of Operations have been prepared as if the Sunbelt
Acquisition and the acquisition of BritWill HealthCare Company ("BritWill") (the
"BritWill Acquisition") had been consummated at the beginning of the periods
presented.
The pro forma information is based on the historical statements of
operations of the acquired businesses giving effect to the transactions under
the purchase method of accounting and the assumptions and adjustments described
in the accompanying Notes to Unaudited Pro Forma Condensed Combined Statements
of Operations.
The Unaudited Pro Forma Condensed Combined Statements of Operations do
not purport to present the results of operations of Unison had the business
combinations taken place on the dates specified, nor are they necessarily
indicative of the results of operations that may be achieved in the future.
The Unaudited Pro Forma Condensed Combined Statements of Operations
should be read in conjunction with the separate historical financial statements
and notes thereto of Unison included in its Quarterly Report on Form 10-Q for
the quarter ended March 31, 1996 and the separate historical financial
statements and notes thereto of Unison and BritWill included in Unison's Annual
Report on Form 10-K for the year ended December 31, 1995.
9
<PAGE> 10
UNISON HEALTHCARE CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
OTHER ----------------------- PRO FORMA
UNISON SUNBELT (b) ACQUISITIONS(c) ACQUISITIONS LEASES (d) COMBINED
------ ----------- --------------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Net Patient $ 29,852 $ - $1,411 $ - $ - $ 31,263
Other 3,138 544 1 - (71) 3,612
---------- ---- ------- ------ ---- ---------
Total revenues 32,990 544 1,412 - (71) 34,875
Expenses:
Wages and related 15,959 426 983 17,368
Other operating 11,800 103 516 (71) 12,348
Rent 3,415 21 - 127 3,563
Interest 610 2 62 70(g) (62) 682
Depreciation and
amortization 470 16 3 21(i) (3) 507
---------- ---- ------- ------ ---- ---------
Total expenses 32,254 568 1,564 91 (9) 34,468
---------- ---- ------- ------ ---- ---------
Income (loss) before income 736 (24) (152) (91) (62) 407
taxes
Income tax expense (benefit) 300 - - (137) 163
---------- ---- ------- ------ ---- ---------
Net income (loss) $ 436 $(24) $ (152) $ 46 $(62) $ 244
========== ==== ======= ====== ==== =========
Net income per share $ .011 $ 0.06
Weighted average shares 4,056 4,056
used in per share
calculation (k)
</TABLE>
SEE NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF OPERATIONS
10
<PAGE> 11
UNISON HEALTHCARE CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION> PRO FORMA ADJUSTMENTS
OTHER ------------------------ PRO FORMA
UNISON BRITWILL(a) SUNBELT(b) ACQUISITIONS ACQUISITIONS LEASES (d) COMBINED
------ ------------ --------- ------------ ------------ ---------- --------
Revenues:
<S> <C> <C> <C> <C> <C> <C> <C>
Net patient $ 57,743 $ 38,378 $ -- 10,441 $ -- $ -- $ 106,562
Other 3,542 589 5,942 43 -- (307) 9,809
-------- -------- ------ -------- -------- ----- ---------
Total revenues 61,285 38,967 5,942 10,484 -- (307) 116,371
Expenses:
Wages and related 31,811 23,280 4,301 8,122 67,514
Other operating 20,777 8,923 1,174 2,271 (875)(e) (307) 31,963
Rent 6,565 5,223 164 200 (110)(f) 991 13,033
Interest 1,058 906 18 492 280 (g)
226 (h) (500) 2,480
Depreciation and
amortization 1,050 592 68 152 86 (i)
687 (j) (152) 2,483
-------- --------- ------ -------- -------- ----- ---------
Total expenses 61,261 38,924 5,725 11,237 294 32 117,473
-------- -------- ------ -------- -------- ----- ---------
Income (loss) before income 24 43 217 (753) (294) (339) (1,102)
taxes
Income tax expense (benefit) 50 30 -- -- (521) -- (441)
-------- -------- ------ -------- -------- ----- ---------
Net income (loss) $ (26) $ 13 $ 217 $ (753) $ 227 $(339) $ (661)
======== ======== ====== ======== ======== ===== =========
Net loss per share $ (0.02) $ (0.49)
Weighted average shares 1,349 1,349
used in per share
calculation (k)
</TABLE>
SEE NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF OPERATIONS
11
<PAGE> 12
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
NOTE 1. PRO FORMA ADJUSTMENTS
The pro forma results do not purport to present the results of operations
of Unison had the business combinations taken place on the dates specified, nor
are they necessarily indicative of the financial position or results of
operations that may be achieved in the future. The Unaudited Pro Forma
Condensed Combined Statements of Operations have been prepared under the
assumptions set forth in the following notes.
The adjustments to the pro forma statements of operations are discussed
below:
(a) On August 10, 1995, Unison purchased all of the outstanding common
stock of BritWill, a long-term care company operating approximately 28
facilities located in Texas and Indiana.
(b) Effective as of February 1, 1996, Unison acquired 90% of the
outstanding common stock of Sunbelt Therapy.
(c) Other Acquisitions: The following table summarizes the operating
results for the following leases entered into from January 1, 1995 through the
later of the date of lease inception or the period of the statement of
operations.
<TABLE>
<CAPTION>
Acquisition Acquisition Three Months Ended Year Ended
Date March 31, 1996 December 31, 1996
------------------------ -----------------------
Revenues Expenses Revenues Expenses
----------- ----------- -------- -------- -------- --------
(In thousands) (In thousands)
<S> <C> <C> <C> <C> <C>
Nightingale October 1995 $ - $ - $ 4,438 $4,506
The Oaks of Boise July 1995 - - 815 911
Franciscan Enumclaw Estimated 1996 897 1,009 3,860 4,313
Franciscan Walla Walla Estimated 1996 515 555 1,371 1,507
------ ------ ------- -------
$1,412 $1,564 $10,484 $11,237
====== ====== ======= =======
</TABLE>
(d) Operating lease pro forma adjustments represent adjustments to the
pre-lease operating results of the facilities identified in note (c). The
historical results have been adjusted to include the lease expense incurred by
Unison and elimination of the lessor's depreciation, interest expense and
management fees.
(e) In connection with the BritWill Acquisition, general and
administrative expenses have been reduced to give effect to the following
estimated annual cost savings to be realized:
<TABLE>
<S> <C>
Elimination of duplicate corporate compensation and benefits $ 710,000
Reduction of insurance costs 300,000
Reduction of corporate office rent and operating costs 468,000
Other 22,000
----------
$1,500,000
==========
</TABLE>
(f) To record amortization of a lease liability incurred in connection
with the BritWill Acquisition. The lease liability represents the excess of the
value of BritWill's lease obligations over market lease rates, based on
independent appraisals. Amortization expense related to the lease liability
amounts to approximately $188,000 annually.
12
<PAGE> 13
(g) To record interest on the debt incurred to acquire Sunbelt. Unison
paid cash in the amount of $800,000, issued promissory notes in the aggregate
amount of $1,000,000 (the "Notes") and issued subordinated convertible
debentures in the aggregate amount of $1,800,000 (the "Debentures"). The Notes
and Debentures bear interest at 10.0%. The Notes and Debentures are convertible
at the option of the holder into shares of Unison common stock based on the
average market price (85% of the average market price with respect to the Notes)
of Unison's stock for the 20 trading days prior to the date of conversion.
(h) To record interest on debt incurred to acquire BritWill. In
connection with the BritWill Acquisition, Unison issued an $8,000,000 senior
subordinated note bearing interest initially at 8.0%, or $640,000 annually.
Interest expense related to other debt obligations was reduced by $147,000 based
on the anticipated replacement of the accounts receivable sales program with
BritWill's receivables financing program.
(i) To record amortization of goodwill related to the Sunbelt
Acquisition. Under the purchase method of accounting, assets acquired and
liabilities assumed were recorded at the estimated fair value. The excess of the
$3,600,000 purchase price over the net assets acquired was recorded as goodwill
in the amount of $3,433,000 and is being amortized over 40 years. Such
amortization amounts to approximately $86,000 annually and $21,000 for the
three-month period.
(j) Under the purchase method of accounting, the BritWill assets
acquired and liabilities assumed were recorded at the estimated fair value as
determined by an independent appraisal. The excess of the purchase price over
the fair value of net assets acquired is being amortized over 40 years, the
noncompete agreement and assembled work force intangible assets are being
amortized over five years, and the lease operating rights intangible assets are
being amortized over the respective lease terms, not to exceed 25 years. Such
amortization is approximately $2,007,000 annually. Amortization expense was
reduced by $829,999 annually to eliminate BritWill's historical amortization of
intangible assets.
(k) Conversion of the Notes and Debentures was not assumed in the
earnings per share calculation because the effect is antidilutive.
NOTE 2. INCOME TAXES
Estimated provisions for income taxes related to pro forma adjustments are based
on an assumed combined federal and state income tax rate of 40%.
(c) EXHIBITS.
See Exhibit Index.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
UNISON HEALTHCARE CORPORATION
June 5, 1996 By /s/ Jerry M. Walker
-----------------------------------
Jerry M. Walker
President and Chief Executive Officer
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<S> <C>
2.1 Purchase and Sale Agreement by and among Unison HealthCare
Corporation, a Delaware corporation, Sunbelt Therapy
Management Services, Inc., an Arizona corporation, Paul G.
Henderson and Paige B. Plash effective as of February 1,
1996 (incorporated herein by reference to Unison's Report
on Form 8-K, filed with the Securities and Exchange
Commission on April 12, 1996)
2.2 Amended and Restated Purchase and Sale Agreement by and among Unison
HealthCare Corporation, a Delaware corporation, Sunbelt Therapy
Management Services, Inc., an Arizona corporation, Paul G. Henderson
and Paige B. Plash effective as of February 1, 1996*
4.1 Form of Note (and related schedule of omitted documents)
(incorporated herein by reference to Unison's Report on
Form 8-K, filed with the Securities and Exchange
Commission on April 12, 1996)
4.2 Form of Debenture (and related schedule of omitted
documents) (incorporated herein by reference to Unison's
Report on Form 8-K, filed with the Securities and Exchange
Commission on April 12, 1996)
10.1 Security Agreement (incorporated herein by reference to
Unison's Report on Form 8-K, filed with the Securities and
Exchange Commission on April 12, 1996)
</TABLE>
* Filed herewith.
15
<PAGE> 1
EXHIBIT 2.2
AMENDED AND RESTATED
PURCHASE AND SALE AGREEMENT
Among
UNISON HEALTHCARE CORPORATION,
a Delaware corporation
SUNBELT THERAPY MANAGEMENT SERVICES, INC.,
an Arizona corporation
PAUL G. HENDERSON
And
PAIGE B. PLASH
Dated as of February 1, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS..................................................................... 1
ARTICLE I. DEFINITIONS..................................................... 1
1.1. "Affiliate"................................................ 1
1.2. "Agreement"................................................ 2
1.3. "Bank Accounts"............................................ 2
1.4. "Buyer's Closing Certificate".............................. 2
1.6. "Buyout"................................................... 2
1.7. "Cash Consideration"....................................... 2
1.8. "Closing".................................................. 2
1.9. "Closing Date"............................................. 2
1.10. "Code"..................................................... 2
1.11. "Contingent Payments"...................................... 2
1.12. "Contracts"................................................ 2
1.13. "Convertible Debentures"................................... 3
1.14. "Effective Time of Closing"................................ 3
1.15. "Employees"................................................ 3
1.16. "Employee Benefit Plans"................................... 3
1.17. "Environmental Law(s)"..................................... 3
1.18. "ERISA".................................................... 3
1.19. "GAAP"..................................................... 3
1.20. "Governmental Authority"................................... 3
1.22. "Incorporated Centers Financial Statements"................ 4
1.23. "Indebtedness"............................................. 4
1.24. "Intellectual Property".................................... 4
1.25. "Knowledge"................................................ 4
1.26. "Law"...................................................... 5
1.27. "Leases"................................................... 5
1.28. "Licenses"................................................. 5
1.29. "Lien"..................................................... 5
1.30. "Material Adverse Effect".................................. 5
1.31. "1933 Act"................................................. 5
1.32. "Opinion of Buyer's Counsel"............................... 5
1.33. "Opinion of Seller's Counsel".............................. 5
1.34. "Person"................................................... 5
1.35. "Purchase Price"........................................... 5
1.36. "Purchased Stock".......................................... 5
1.37. "Records".................................................. 5
1.37.1 "Registration Rights Agreement"............................ 6
1.38. "Relation"................................................. 6
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
1.39. "Retained Stock"........................................................ 6
1.40. "SEC"................................................................... 6
1.41. "Security Agreement".................................................... 6
1.42. "Seller's Closing Certificate".......................................... 6
1.43. "Subsidiary"............................................................ 6
1.44. "Tax Return(s)"......................................................... 6
1.45. "Tax(es)"............................................................... 6
1.46. "Term Note/1997"........................................................ 7
1.47. "Term Note/1998"........................................................ 7
1.48. "Unison Common Stock"................................................... 7
1.49. "Unison Financial Statements"........................................... 7
ARTICLE II. PURCHASE AND SALE; OTHER AGREEMENTS..................................... 7
2.1. Purchase and Sale....................................................... 7
2.2. Payment of Purchase Price............................................... 7
2.3. Management of Buyer After Closing....................................... 7
2.4. Employment Agreements................................................... 8
2.5. Noncompetition.......................................................... 8
2.6. Contingent Payments..................................................... 8
2.7. Buyout.................................................................. 9
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER............................... 9
3.1. Consents; Authority..................................................... 9
3.2. Enforceability.......................................................... 9
3.3. No Violation, Conflict.................................................. 10
3.4. No Broker............................................................... 10
3.5. Investment Intent....................................................... 10
3.6. Suitability and Sophistication.......................................... 11
3.7. Receipt of Information.................................................. 11
ARTICLE IV. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF
SELLER................................................................................ 11
4.1. Organization............................................................ 12
4.2. Charter................................................................. 12
4.3. Qualification........................................................... 12
4.4. Capitalization of the Incorporated Centers; Stockholders................ 12
4.5. Authority; Enforceability; No Violation, Conflict or Required Filing.... 12
4.6. Incorporated Centers Financial Statements............................... 13
4.7. Absence of Certain Changes.............................................. 13
4.8. Assets.................................................................. 14
4.9. Intellectual Property................................................... 14
4.10. Tax Matters............................................................. 14
4.11. Legal and Regulatory Matters............................................ 15
4.12. Employees............................................................... 15
</TABLE>
(ii)
<PAGE> 4
<TABLE>
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4.13. Insurance Coverage............................................ 15
4.14. Employee Benefit Plan(s)...................................... 15
4.15. Compliance with Environmental Law............................. 16
4.16. Bank and Brokerage Accounts................................... 17
4.17. Material Misstatements or Omissions........................... 17
4.18. Broker's Fees................................................. 17
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER............................ 17
5.1. Organization.................................................. 17
5.2. Qualification................................................. 18
5.3. Authority Enforceability; No Violation, Conflict or
Required Filing............................................ 18
5.4. Unison Financial Statements................................... 18
5.5. Tax Matters................................................... 19
5.6. Legal and Regulatory Matters.................................. 19
5.7. Material Misstatements or Omissions........................... 19
5.8. Broker's Fees................................................. 19
5.9. Investment Intent............................................. 19
5.10. Suitability and Sophistication................................ 20
5.11. Receipt of Information........................................ 20
ARTICLE VI. INDEMNIFICATION................................................... 20
6.1. Indemnification by Seller..................................... 20
6.2. Indemnification by Buyer and Unison........................... 21
6.3. Indemnification Limits........................................ 21
6.4. Indemnification Notice........................................ 21
ARTICLE VII. CERTAIN MATTERS PENDING CLOSING.................................. 22
7.1. Access........................................................ 22
7.2. Carry on in Regular Course.................................... 22
7.3. Use of Assets................................................. 22
7.4. Preservation of Relationships................................. 23
7.5. No Default.................................................... 23
7.6. Publicity..................................................... 23
7.7. Insurance Policies............................................ 23
7.8. Cooperation................................................... 23
7.9. Compensation.................................................. 23
7.10. Indebtedness.................................................. 23
7.11. Dividends; Redemptions; Issuance of Stock..................... 23
7.12. Compliance with Laws.......................................... 24
7.13. Taxes......................................................... 24
7.14. Amendment of Articles or Certificate and Bylaws............... 24
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE VIII. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER......... 24
8.1. Compliance with Agreement.............................. 24
8.2. Proceedings and Instruments Satisfactory............... 24
8.3. No Litigation.......................................... 24
8.4. Representations and Warranties......................... 24
8.5. Material Damage to Assets.............................. 24
8.6. Deliveries at Closing.................................. 25
8.7. Other Documents........................................ 25
8.8. Stock Certificates..................................... 25
8.9. Regulatory Approvals................................... 25
ARTICLE IX. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER........... 25
9.1. Compliance with Agreement.............................. 25
9.2. Proceedings and Instruments Satisfactory............... 25
9.3. No Litigation.......................................... 26
9.4. Representations and Warranties......................... 26
9.5. Payment of Purchase Price.............................. 26
9.6. Deliveries at Closing.................................. 26
9.7. Other Documents........................................ 26
ARTICLE X. TERMINATION.................................................. 26
10.1. Termination............................................ 26
10.2. Time to Review Schedules............................... 26
ARTICLE XI. MISCELLANEOUS.............................................. 27
11.1. Further Assurances..................................... 27
11.2. Survival of Representations and Warranties............. 27
11.3. Entire Agreement; Amendment............................ 27
11.4. Payment of Expenses and Fees........................... 28
11.5. Governing Law.......................................... 28
11.6. Assignment............................................. 28
11.7. Notices................................................ 28
11.8. Counterparts; Headings................................. 29
11.9. Interpretation......................................... 30
11.10. Severability........................................... 30
11.11. Specific Performance................................... 30
11.12. No Reliance............................................ 30
11.13. Cooperation............................................ 30
11.14. Records................................................ 30
11.15. Exhibits............................................... 31
11.16. Income Tax Position.................................... 31
</TABLE>
(iv)
<PAGE> 6
AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT
This Amended and Restated Purchase and Sale Agreement (the "Agreement")
is made as of the 1st day of February, 1996 by and among Unison HealthCare
Corporation, a Delaware corporation ("Unison"), Sunbelt Therapy Management
Services, Inc., an Arizona corporation (the "Buyer"), Paul G. Henderson
("Henderson") and Paige B. Plash ("Plash"). Henderson and Plash are sometimes
referred to herein collectively as "Seller".
RECITALS
A. The parties to this Agreement are the parties to a Purchase and Sale
Agreement dated as of February 1, 1996 (the "Original Agreement") dealing with
the same subject matter as this Agreement. The parties now wish to amend the
Original Agreement to reflect the original intent of the parties. This Agreement
includes all such amendments desired by the parties and completely restates and
replaces the Original Agreement for all purposes.
B. Unison is engaged in the business of owning, leasing and managing
nursing homes and other types of care facilities;
C. Buyer is a wholly-owned subsidiary of Unison;
D. Seller owns all of the issued and outstanding stock of Henderson &
Associates Rehabilitation, Inc. ("HAR"), Decatur SportsFit & Wellness Center,
Inc. ("DSW"), Therapy Health Systems, Inc. ("THS") and Sunbelt Therapy
Management Services, Inc. ("STMS" and collectively with HAR, DSW and THS, the
"Incorporated Centers"); and
E. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, 90% of all right, title and interest in and to the issued and
outstanding stock of the Incorporated Centers on the terms and conditions set
forth in this Agreement.
AGREEMENTS
IN CONSIDERATION of the Recitals and of the mutual covenants,
conditions and agreements set forth in this Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed that:
ARTICLE I. DEFINITIONS
When used in this Agreement, the following terms shall have the
meanings specified:
1.1. "Affiliate" shall mean with respect to any Person, any (i)
officer, director, or holder of more than 10% of the outstanding shares or
equity interests of such Person, (ii) any Relation of such Person or any
Affiliate of such Relation, or (iii) any other Person which directly or
indirectly controls, is controlled by, or is under common control with such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or
<PAGE> 7
indirectly, the power to direct or cause the direction of the management and
policies of the "controlled" Person, whether through ownership of voting
securities, by contract, or otherwise.
1.2. "Agreement" shall mean this Purchase and Sale Agreement, together
with the Exhibits and Schedules attached hereto, as the same shall be amended
from time to time in accordance with the terms hereof.
1.3. "Bank Accounts" shall mean the checking accounts, savings
accounts, custodial accounts, certificates of deposit, safe deposit boxes and
other bank accounts maintained by a Person.
1.4. "Buyer's Closing Certificate" shall mean the Closing Certificate
of Buyer in the form of Exhibit 1.4 to this Agreement.
1.5. Intentionally Omitted.
1.6. "Buyout" shall mean the purchase of the Retained Stock pursuant to
and subject to the conditions in Section 2.6.
1.7. "Cash Consideration" shall mean a payment, which may be made by
wire transfer or certified or cashier's check, from Buyer or Unison to Seller,
as a portion of the Purchase Price, in the amount of $800,000.
1.8. "Closing" shall mean the conference to be held at 10:00 a.m. local
time on the Closing Date at the offices of Quarles & Brady, Phoenix, Arizona, or
such other time and place as the parties may agree, at which the transactions
contemplated by this Agreement shall be consummated.
1.9. "Closing Date" shall mean April 3, 1996, or such other date as the
parties may determine.
1.10. "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.11. "Contingent Payments" shall mean the payments by Buyer to Seller
in addition to the Purchase Price pursuant to and subject to the conditions in
Section 2.6.
1.12. "Contracts" shall mean all Leases and all other contracts,
agreements, leases, relationships and commitments, written or oral, to which a
Person is a party or by which it is bound.
2
<PAGE> 8
1.13. "Convertible Debentures" shall mean collectively the three
convertible debentures given by Unison to Seller, as a portion of the Purchase
Price, which shall be due on February 1, 1997, February 1, 1998 and February 1,
1999, respectively, and each of which shall be in the amount of $600,000. The
Convertible Debentures will be secured by the Purchased Stock, and each shall be
in the form of Exhibit 1.13 to this Agreement.
1.14. "Effective Time of Closing" shall mean 5:00 p.m., Phoenix,
Arizona time on the Closing Date.
1.15. "Employees" shall mean all employees of a Person as of the
Effective Time of Closing.
1.16. "Employee Benefit Plans" shall mean any employee benefit plan as
defined in Section 3(3) of ERISA and any other plan, policy, program, practice
or arrangement providing compensation or other benefits to any current or former
officer or employee of a Person or its Subsidiaries or any beneficiary or
dependent thereof that is or was maintained by such Person or its Subsidiaries.
1.17. "Environmental Law(s)" shall mean all federal, state, and local
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directives, requests, licenses,
authorizations, permits, and agreements issued or signed by any federal, state,
or local government authority, relating to environmental, health, medical waste
or safety matters, including but not limited to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980; Clean Water Act of 1977;
Clean Air Act; Resource Conservation and Recovery Act of 1976; Federal
Insecticide, Fungicide, and Rodenticide Act; Toxic Substances Control Act;
Emergency Planning and Community Right-to-Know Act of 1986; Occupational Safety
and Health Act of 1970; and Safe Drinking Water Act, and state and local
counterparts to these acts.
1.18. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.19. "GAAP" shall mean generally accepted accounting principles as in
effect on the date hereof. Whenever any accounting term is used herein which is
not otherwise defined, it shall have the meaning ascribed thereto under GAAP.
1.20. "Governmental Authority" shall mean the United States, any state
or municipality, the government of any foreign country, any subdivision of any
of the foregoing, or any authority, department, commission, board, bureau,
agency, court, or instrumentality of any of the foregoing.
3
<PAGE> 9
1.21. "Hazardous Substance(s)" shall mean (a) any substance, the
presence of which requires investigation or remediation under any Environmental
law or under common law; (b) any dangerous, toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise
hazardous substance which is regulated by any Environmental Law; (c) any
substance, the presence of which causes or threatens to cause a nuisance upon
property presently and/or previously owned, leased or otherwise used by an
Incorporated Center (or poses or threatens to pose a hazard to the health or
safety of persons on or about the property or adjacent properties); and (d)
radon, ureaformaldehyde, polychlorinated biphenyls, asbestos or
asbestos-containing materials, petroleum and petroleum products.
1.22. "Incorporated Centers Financial Statements" shall mean the
balance sheets of each of the Incorporated Centers, and the related statements
of operations, stockholders equity and cash flows for the twelve month period
ended December 31, 1995 and the one month period ended January 31, 1996, which,
with respect to HAR and STMS, have been audited by Ernst & Young LLP.
1.23. "Indebtedness" shall mean all liabilities or obligations of a
Person, whether primary or secondary and whether absolute or contingent: (a) for
borrowed money; or (b) evidenced by notes, bonds, debentures, guarantees, or
similar obligations; or (c) secured by Liens on any assets of such Person.
1.24. "Intellectual Property" shall mean all of the following which is
owned by, issued to or licensed to a Person or any Subsidiary of such Person,
and any and all corresponding rights that, now or hereafter, may be secured
throughout the world: patents, patent applications, patent disclosures and
inventions (whether or not patentable and whether or not reduced to practice)
and any reissue, continuation, continuation-in-part, revision, extension or
reexamination thereof; trademarks, service marks, trade dress, logos, trade
names and corporate names together with all goodwill associated therewith and
all translations, adaptations, derivations and combinations of the foregoing;
copyrights and copyrightable works; mask works; and all registrations,
applications and renewals for any of the foregoing; trade secrets as defined
under the Uniform Trade Secrets Act and confidential information (including,
without limitation, ideas, formulae, compositions, know-how, manufacturing and
production processes and techniques, research and development information,
drawings, specifications, designs, plans, proposals, technical data, financial,
business and marketing plans, sales and promotional literature, and customer and
supplier lists and related information); computer software (including, without
limitation, data and related documentation); other intellectual property rights;
and all copies and tangible embodiments of the foregoing (in whatever form or
medium), in each cash including, without limitation, the items set forth on
Schedule 4.9 attached hereto.
1.25. "Knowledge" shall mean knowledge attributable to an individual
Person or a corporate officer of a corporate Person.
4
<PAGE> 10
1.26. "Law" shall mean any law, rule, regulation or requirement of any
kind, issued by any Governmental Authority.
1.27. "Leases" shall mean those real and personal property leases to
which a Person is a party.
1.28. "Licenses" shall mean all licenses, permits, approvals and
registrations required or issued by any Governmental Authority.
1.29. "Lien" shall mean, with respect to any asset: (a) any mortgage,
pledge, lien, charge, claim, restriction, reservation, condition, easement,
covenant, lease, encroachment, title defect, imposition, security interest or
other encumbrance of any kind; and (b) the interest of a vendor or lessor under
any conditional sale agreement, financing lease or other title retention
agreement relating to such asset.
1.30. "Material Adverse Effect" shall mean any material adverse effect
on the business, financial condition, results of operations, assets or prospects
of a Person or any Subsidiaries of a Person.
1.31. "1933 Act" shall mean the Securities Act of 1933, as amended.
1.32. "Opinion of Buyer's Counsel" shall mean the opinion of Quarles &
Brady in the form of Exhibit 1.32 to this Agreement.
1.33. "Opinion of Seller's Counsel" shall mean the opinion of Hand
Arendall, L.L.C. in the form of Exhibit 1.33 to this Agreement.
1.34. "Person" shall mean a natural person, corporation, limited
liability company, limited liability partnership, trust, partnership,
governmental entity, agency or branch or department thereof, or any other legal
entity.
1.35. "Purchase Price" shall mean the amount of $3,600,000.
1.36. "Purchased Stock" shall mean 90% of all issued and outstanding
common stock of the Incorporated Centers as of the Closing Date to be purchased
by Buyer from Seller pursuant to the terms of this Agreement.
1.37. "Records" shall mean all books, documents and records owned by a
corporation, including minute books, stock transfer records, accounting records,
employee records, correspondence, manuals, lists, computer media, software and
software documentation, sales
5
<PAGE> 11
literature, catalogs, promotional items, advertising materials, customer lists
and other written materials.
1.37.1 "Registration Rights Agreement" shall mean the agreement in the
form of Exhibit 1.37.1 to this Agreement pursuant to which Unison will give to
Seller, subject to certain conditions, the right to demand registration under
the 1933 Act for shares acquired upon conversion of the Notes or the Convertible
Debentures or both.
1.38. "Relation" shall mean with respect to any Person, such Person's
spouse and the parents, grandparents, brothers and sisters, children, and
grandchildren of such Person or of such Person's spouse.
1.39. "Retained Stock" shall mean the 10% of the issued and outstanding
common stock of each of the Incorporated Centers as of the Closing Date which is
not purchased hereunder.
1.40. "SEC" shall mean the Securities and Exchange Commission.
1.41. "Security Agreement" shall mean the agreement in the form of
Exhibit 1.41 to this Agreement securing Unison's obligations to Seller under the
Convertible Debentures, the Term Note/1997 and the Term Note/1998.
1.42. "Seller's Closing Certificate" shall mean the Closing Certificate
of Seller in the form of Exhibit 1.42 to this Agreement.
1.43. "Subsidiary" shall mean any Person or business in which another
Person owns, directly or indirectly, an equity interest representing at least
twenty-five percent of the voting stock or voting interests of such Person or
business.
1.44. "Tax Return(s)" shall mean all federal, state, foreign, local and
other tax returns, reports and statements heretofore required to be filed by a
Person to which reference is being made or by any consolidated, combined or
unitary group of which such Person is or was a member.
1.45. "Tax(es)" shall mean all taxes, charges, fees, levies or other
assessments of any nature whatsoever, including, without limitation, all net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
estimated, severance, stamp, occupation, property or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (domestic or foreign) upon a Person to which reference is
being made or any affiliate thereof or upon any consolidated, combined or
unitary group of which any such Person is or was a member.
6
<PAGE> 12
1.46. "Term Note/1997" shall mean the note given by Unison to Seller,
as a portion of the Purchase Price, which note shall be in an original principal
amount of $500,000 and shall be due on February 1, 1997. The Term Note/1997 will
be secured by the Purchased Assets and Purchased Stock and shall be in the form
of Exhibit 1.46 to this Agreement.
1.47. "Term Note/1998" shall mean the note given by Unison to Seller,
as a portion of the Purchase Price, which note shall be in an original principal
amount of $500,000 and shall be due on January 1, 1998. The Term Note/1998 will
be secured by the Purchased Assets and Purchased Stock and shall be in the form
of Exhibit 1.47 to this Agreement. The Term Note/1997 and the Term Note/1998 are
sometimes collectively referred to herein as the "Notes."
1.48. "Unison Common Stock" shall mean Unison's common stock, par value
$.001 per share.
1.49. "Unison Financial Statements" shall mean the consolidated balance
sheet of Unison as of December 31, 1994, and the related statements of
operations, stockholders equity and cash flows for the year then ended, which
have been audited by Ernst & Young LLP.
ARTICLE II. PURCHASE AND SALE; OTHER AGREEMENTS
2.1. Purchase and Sale. At the Closing, and upon all of the terms and
subject to all of the conditions of this Agreement, Seller agrees to sell,
assign, convey and deliver to Buyer, and Buyer agrees to purchase and accept
from Seller, the Purchased Stock.
2.2. Payment of Purchase Price. At the Closing, Buyer shall pay the
Purchase Price to Seller as follows: (a) Buyer or Unison shall deliver to Seller
the Cash Consideration; (b) Unison shall deliver to Seller the Term Note/1997;
(c) Unison shall deliver to Seller the Term Note/1998; and (d) Unison shall
deliver to Seller the Convertible Debentures.
2.3. Management of Buyer After Closing.
(a) All directors and officers of the Incorporated Centers
shall submit written resignations which shall be effective as of the Closing
Date.
(b) Unison shall appoint new directors and elect new officers
for each of the Incorporated Centers.
(c) The Board of Directors of Buyer following the Closing
shall consist of five members, three of whom will be designated by Buyer and two
of whom will be designated by Seller. So long as any portion of either of the
Term Note/1997 or the Term Note/1998 remains
7
<PAGE> 13
unpaid, Unison shall cause the Board of Directors of Buyer to remain as set
forth in the preceding sentence.
(d) Meetings of Buyer's Board of Directors following the
Closing shall occur at least quarterly at the corporate headquarters of Buyer in
Scottsdale, Arizona, or at such other times and places as may be determined by
the Board.
(e) Members of Buyer's Board of Directors who are employees of
Buyer, or a subsidiary of Unison or Buyer, will not receive additional
compensation for such service.
2.4. Employment Agreements. At the Closing, Buyer will enter into
employment agreements with each of Henderson and Plash (the "Employment
Agreements") pursuant to which such persons will agree to continue to provide
full time and attention to the executive leadership and operational oversight to
Buyer, subject to the oversight of its Chairman and Board of Directors. Such
Employment Agreements will have initial terms of three years and shall renew
automatically for additional one-year terms, subject to the rights of either
party to terminate upon reasonable notice.
2.5. Noncompetition. Each of Henderson and Plash agrees that the
Employment Agreements shall contain noncompetition terms with a period for such
terms during employment by Buyer and for one year after the termination of such
employment. This Section 2.5, however, shall be subject to the limitations on
noncompetition in the Employment Agreements. In the event of any inconsistency
between the terms of this Section 2.5 and the noncompetition terms of the
Employment Agreements, the noncompetition terms of the Employment Agreements
shall prevail.
2.6. Contingent Payments. After Closing, Buyer will make additional
payments to Seller based on the pre-tax income of Buyer (the "Target Income"),
as determined in connection with the preparation of consolidated audited
financial statements of Unison, as follows:
(a) $750,000, if the Target Income is not less than
$2,980,000 (the "1996 Target") for the twelve months
ending December 31, 1996; and
(b) $1,250,000, if the Target Income is not less than
$5,400,000 (the "1997 Target") for the twelve months
ending December 31, 1997.
For each of the 1996 Target and the 1997 Target, if actual pre-tax income of
Buyer is less than such target for the respective financial reporting period,
Buyer will make pro rata Contingent Payments as follows: 50% of the Contingent
Payment for 75% of actual pre-tax income plus an incremental 2% of the
Contingent Payment for every 1% increase in actual pre-tax income of Buyer for
such period. Buyer shall not be obligated to make any Contingent Payment if the
8
<PAGE> 14
actual pre-tax income of Buyer does not equal at least 75% of the Target Income
for the period in question. A Contingent Payment based on the 1996 Target and
Target Income for that period shall be determined without reference to the 1997
Target. A Contingent Payment based on the 1997 Target and Target Income for that
period shall be determined without reference to the 1996 Target.
2.7. Buyout. Buyer will buy the Retained Stock from Seller for 10% of
seven times the after-tax audited net income of Buyer, as determined in
connection with the preparation of consolidated audited financial statements of
Unison, for the twelve months ending December 31, 1997 (the "Retained Stock
Purchase Price"). Buyer will have the option, exercisable by Buyer on its sole
discretion, to pay the Retained Stock Purchase Price: (i) in cash or (ii)
one-half in cash and one-half in (A) Unison Common Stock or (B) a twelve month
promissory note by Unison, as maker, to Seller bearing interest at an annual
rate of 10%. The closing for the purchase of the Retained Stock shall be at a
time mutually agreeable to Buyer and Seller and shall be held at the offices of
Quarles & Brady, Phoenix, Arizona within 45 days of the availability of the
financial statements of Unison referred to in the first sentence of this
Section. The number of shares of Unison Common Stock used in payment of the
Retained Stock Purchase Price shall be determined by dividing the dollar amount
for which the shares are being issued by the average closing price for Unison
Common Stock for the 20-day trading period immediately preceding the closing for
the purchase and sale of the Retained Stock.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER
Each Seller hereby jointly and severally represents and warrants to
Buyer and Unison that:
3.1. Consents; Authority. Seller owns good and marketable title to all
shares of the Purchased Stock registered in its name free and clear of all Liens
and has full right, and all necessary power and authority, to enter into this
Agreement, to sell assign, transfer and deliver the Purchased Stock to Buyer as
contemplated herein and to enter into all documents contemplated hereby, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. Seller is not party to any voting
trust agreement or similar arrangement restricting voting rights or
transferability of any of the shares of Purchased Stock.
3.2. Enforceability. To Seller's knowledge, this Agreement and all
documents contemplated hereby have each been duly and validly executed and
delivered by Seller and constitute the legal, valid and binding obligation of
Seller enforceable in accordance with their respective terms (except as such
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or
similar laws affecting the rights of creditors generally or by the general
principles of equity).
9
<PAGE> 15
3.3. No Violation, Conflict. Neither the execution, delivery or
performance of this Agreement nor any document contemplated hereby, nor the
consummation of the transactions contemplated hereby or thereby, will result in
a violation or breach of any statute, rule or regulation applicable to Seller,
the violation of which would have a Material Adverse Effect on the value of the
Purchased Stock, nor conflict with or constitute a violation or breach of, or a
default under (or an event which, with the passage of time or the giving of
notice, or both, would constitute a default under), or give any party a right to
accelerate the due date of any Indebtedness or obligation under, any indenture,
mortgage, deed of trust, or Contract to which Seller is a party or to which its
properties or assets are subject, or any instrument, judgment, decree, writ, or
other restriction to which Seller is a party or by which Seller or its
businesses, properties or assets are bound, nor require any consent or approval
of any Person.
3.4. No Broker. Except as set forth on Schedule 3.4 there are no
broker's or finder's fees or obligations due to any persons engaged by Seller
or any of the Affiliates, employees, representatives or agents of any of such
Persons in connection with the transactions contemplated by this Agreement,
except for the fees and expenses of Seller's counsel and accountants.
3.5. Investment Intent. The Convertible Debentures and the Notes to be
acquired by Seller hereunder and any of Unison Common Stock issuable upon
conversion of the Convertible Debentures or the Notes are being acquired by
Seller for its own account and not with the view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the 1933
Act. Seller understands that neither the Convertible Debentures nor the Notes
nor the shares of Unison Common Stock issuable upon conversion of the
Convertible Debentures or the Notes have been registered under the 1933 Act by
reason of their issuance in transactions exempt from the registration and
prospectus delivery requirements of the 1933 Act pursuant to Section 4(2)
thereof and agrees to deliver to the Buyer, if requested by the Buyer an
investment letter in customary form. Seller understands that neither the
Convertible Debentures nor the Notes, nor any interest therein, nor the Unison
Common Stock may be sold, transferred or otherwise disposed of without
registration under the 1933 Act or an exemption therefrom, and that in the
absence of an effective registration statement covering the Unison Common Stock,
or an available exemption from registration under the 1933 Act, the Unison
Common Stock must be held indefinitely. In particular, Seller is aware that no
interest in the Convertible Debentures or the Notes, or Unison Common Stock may
be sold pursuant to Rule 144 promulgated under the Securities Act unless all of
the conditions of that Rule are met. Among the conditions for use of Rule 144 is
the availability of current information to the public about Unison. Such
information is not now available. Seller further understands that the
certificates representing the Convertible Debentures, the Notes and the Unison
Common Stock will bear the a legend substantially in the following form and
agrees that it will hold such Convertible Debentures, Notes and such shares
subject thereto:
10
<PAGE> 16
THE SHARES REPRESENTED BY THIS CERTIFICATE AND ANY SHARES THAT
MAY BE ISSUED UPON THE CONVERSION OF SUCH SHARES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
PORTION HEREOF OR INTEREST HEREIN MAY BE SOLD, ASSIGNED,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS THE SAME
IS REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES
LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE AND THE COMPANY SHALL HAVE RECEIVED, AT THE EXPENSE
OF THE HOLDER HEREOF, EVIDENCE OF SUCH EXEMPTION REASONABLY
SATISFACTORY TO THE COMPANY (WHICH MAY INCLUDE, AMONG OTHER
THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY).
3.6. Suitability and Sophistication. (i) Seller has such knowledge and
experience in financial and business matters that Seller is capable of
evaluating independently the risks and merits of purchasing Unison's Convertible
Debentures, Notes and Common Stock; (ii) Seller has independently evaluated the
risks and merits of purchasing Unison's Convertible Debentures, Notes and Common
Stock and has independently determined that Unison's Convertible Debentures,
Notes and Common Stock are suitable investments for such Seller; and (iii)
Seller has sufficient financial resources to bear the loss of its entire
investment in Unison's Convertible Debentures, Notes and Common Stock.
3.7. Receipt of Information. Seller further represents that it has had
an opportunity to ask questions and receive answers from the officers and
directors of Buyer and Unison regarding the business, properties, prospects and
financial condition of Buyer and Unison and to obtain additional information (to
the extent Buyer or Unison possessed such information or could acquire it
without unreasonable effort or expense) necessary to verify the accuracy of any
information furnished to Seller or to which Seller had access. The foregoing,
does not however limit or modify the representations and warranties of Buyer in
Article 5 of this Agreement or the right of Seller to rely thereon.
ARTICLE IV. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF SELLER
In addition to the Representations and Warranties in Article III, each
Seller hereby jointly and severally represents and warrants to Buyer and Unison
with respect to the Incorporated Centers that:
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4.1. Organization. Each of the Incorporated Centers is a corporation
duly organized, validly existing and in good standing under the laws of their
respective states of incorporation and has full corporate power and authority to
own its properties and carry on its business and to enter into and perform its
obligations under this Agreement.
4.2. Charter. Each of the Incorporated Centers has delivered to Buyer
true, correct and complete copies of its Articles or Certificate of
Incorporation and Bylaws, together with all amendments to each through the date
hereof. Each of the Incorporated Centers has made available to Buyer true,
correct and complete copies of its minute books, stock certificate books and
corporate records; such books and records contain true and complete records of
all meetings and consents in lieu of meetings of each of the Incorporated
Center's Boards of Directors (and any committees thereof) and stockholders.
4.3. Qualification. Each of the Incorporated Centers is qualified to do
business and is in good standing in each jurisdiction (listed on Schedule 4.3 to
this Agreement) where the character or location of property owned and leased,
the employment of personnel or the nature of the business and activities
conducted by it, as the case may be, requires such qualification, licensing or
domestication, except in such jurisdictions where the failure to be so
qualified, licensed or domesticated and to be in good standing, individually or
in the aggregate, would not have a Material Adverse Effect.
4.4. Capitalization of the Incorporated Centers; Stockholders.
Immediately prior to the Closing, the authorized and issued capital stock of
each of the Incorporated Centers, including ownership thereof, will be as set
forth on Schedule 4.4. All issued and outstanding shares of capital stock of
the Incorporated Centers have been duly authorized and are validly issued,
fully paid and nonassessable and are not subject to, nor were any issued in
violation of, any preemptive rights. Except as set forth on Schedule 4.4, there
are not any outstanding options, warrants, subscriptions, convertible
debentures or other rights, commitments or any other similar agreements for the
purchase of any shares of capital stock or other equity securities of the
Incorporated Centers. All shares of capital stock of the Incorporated Centers
outstanding were issued in full compliance with all federal and state
securities or "blue sky" laws.
4.5. Authority; Enforceability; No Violation, Conflict or Required
Filing.
(a) Each of the Incorporated Centers has the necessary
corporate power and authority to enter into and deliver this Agreement and all
documents contemplated hereby, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and all documents contemplated
hereby and the consummation of the transactions contemplated hereby and thereby
by each of the Incorporated Centers have been duly authorized by the Board of
Directors and the stockholders of such Incorporated Center in accordance with
such Incorporated
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Center's governing corporate documents and applicable laws and, to Seller's
knowledge, constitute the legal, valid and binding obligation of such
Incorporated Center, enforceable in accordance with their respective terms
(except as such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting the rights of creditors generally or by the
general principles of equity). Except as set forth on Schedule 4.5, neither the
execution, delivery or performance of this Agreement nor any document
contemplated hereby, nor the consummation of the transactions contemplated
hereby or thereby, nor compliance by the Incorporated Centers with the terms and
provisions of this Agreement or any document contemplated hereby, will conflict
with or constitute a violation or breach of, or a default under (or an event
which, with the passage of time or the giving of notice, or both, would
constitute a default under), or give any party a right to accelerate the due
date of any indebtedness or obligation under, any indenture, mortgage, deed of
trust, or Contract to which any of the Incorporated Centers is a party or to
which its properties or assets are subject, or any instrument, judgment, decree,
writ, or other restriction to which any of the Incorporated Centers is a party
or by which any of the Incorporated Centers or its businesses, properties,
assets or personnel are bound, nor require any consent or approval of any
Person.
(b) To Seller's knowledge, none of the Incorporated Centers is
required to submit any notice, report or other filing with any federal, state or
local Governmental Authority in connection with the execution or delivery or
performance by the Incorporated Centers of this Agreement or the consummation of
the transactions contemplated hereby, except such as already have been submitted
or filed or will be submitted or obtained in a timely manner.
4.6. Incorporated Centers Financial Statements. Each of the
Incorporated Centers has delivered to Buyer true, complete and correct copies
of the Incorporated Centers Financial Statements. Except as set forth on
Schedule 4.6, the Incorporated Centers Financial Statements (a) present fairly
the financial condition of the Incorporated Centers at said dates and the
results of operations, changes in shareholders' equity and cash flows for the
periods therein specified and (b) have been prepared from the books and records
of the Incorporated Centers and in accordance with GAAP, consistently applied
and maintained throughout the periods indicated, except as otherwise stated or
referred to in such Incorporated Centers Financial Statements. Schedule 4.6
presents all liabilities (whether or not of a kind required by GAAP to be set
forth on a balance sheet) incurred in the ordinary course of business
consistent with past practice since January 31, 1996.
4.7. Absence of Certain Changes. Except as set forth on Schedule 4.7,
since January 31, 1996, each of the Incorporated Centers has conducted its
business only in the ordinary course and consistent with prior practice, and
none of the Incorporated Centers has experienced any Material Adverse Effect, or
any events or circumstances that might reasonably be expected to result in a
Material Adverse Effect.
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4.8. Assets. Schedule 4.8 contains, in part, a list of each material
property owned, subject to Lease or managed by the Incorporated Centers with a
book or fair market value of at least $1,000. Except as set forth on Schedule
4.8, each of the Incorporated Centers has good and marketable title to, or a
valid leasehold interest in, all of the properties and assets it owns or uses
in its business or purports to own or lease. Except as set forth on Schedule
4.8, none of such assets or properties are subject to any Liens, except (i)
Liens incurred or made in the ordinary course of business which are not
substantial in character, amount or extent and do not materially impair the
usefulness of such properties and assets in the conduct of the business of the
Incorporated Centers, (ii) Liens for taxes, assessments or other governmental
charges or levies which are either not yet delinquent or are being contested in
good faith and by appropriate proceedings, can be paid without penalty and
which do not materially impair the usefulness of such properties and assets in
the conduct of the business of the Incorporated Centers, and (iii) as reflected
on the Incorporated Centers Financial Statements.
4.9. Intellectual Property. Schedule 4.9 sets forth all permits,
grants and licenses or other rights running to or from the Incorporated Centers
relating to Intellectual Property that are necessary to the business of the
Incorporated Centers as currently conducted. Except as provided in Schedule
4.9, the Incorporated Centers own all right, title and interest in and to such
Intellectual Property, or have a valid and enforceable license from third
parties, and have the unfettered right to use all such Intellectual Property in
order to conduct their businesses in all material respects as currently
conducted and have used reasonable efforts to protect their rights in the
Intellectual Property and to protect an maintain the secrecy of their trade
secrets and other proprietary rights and confidential information. Except as
set forth on Schedule 4.9, none of the Incorporated Centers is in violation of,
or infringing upon or misappropriating, any Intellectual Property of any third
party, and no claims have been asserted, nor is there any litigation pending or
threatened claiming such infringement or misappropriation.
4.10. Tax Matters. The Incorporated Centers and each other corporation
(or predecessor) that have at any time been a member of a consolidated,
combined or unitary group of which the Incorporated Centers are or were a
member (the "Tax Affiliates") have timely and correctly filed or caused to be
filed all Tax Returns. All Taxes due and payable in respect of such Tax Returns
have been or will by Closing be paid in full. Except as set forth on Schedule
4.10, the Incorporated Centers and the Tax Affiliates have no current
extensions for the filing of any Tax Returns. Except as set forth on Schedule
4.10, adequate provisions have been made for the payment of all accrued and
unpaid Taxes as of the date of the Incorporated Centers Financial Statements,
whether or not then due and payable and whether or not disputed, except as may
be set forth in explanatory notes thereto. Except as set forth on Schedule
4.10, the Tax Returns of or relating to the Incorporated Centers and the Tax
Affiliates have not been examined (nor are they currently in the process of
being examined) by the Internal Revenue Service or any other tax authority for
any of the past six years, and such Tax Returns constitute a complete and
accurate representation of the Tax liabilities of the Incorporated Centers and
the Tax Affiliates.
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4.11. Legal and Regulatory Matters. Except as set forth on Schedule
4.11: (a) there are no judgments, decrees or orders enjoining any of the
Incorporated Centers in respect of, or the effect of which is to prohibit any
business practice or the acquisition of any property or the conduct of any
aspect of the business of such Incorporated Center; (b) the Incorporated
Centers have complied and are complying with all laws, ordinances, treaties and
governmental rules, orders and regulations applicable to it or its properties,
assets, personnel or business, non-compliance with which could have a Material
Adverse Effect; and (c) each of the Incorporated Centers has obtained all
Licenses necessary for the ownership of its properties and the conduct of its
business as currently conducted, and all such Licenses are currently in full
force and effect.
4.12. Employees. Except as set forth on Schedule 4.12, none of the
Incorporated Centers has been or is a party to any collective bargaining
agreement with respect to any of its employees or with respect to any contract
or agreement with a labor union or any local or subdivision thereof, nor has it
been charged with any unresolved unfair labor practices, nor is there any
present union organizing activity among any of its employees. There are no
material controversies, claims, suits, actions or proceedings pending or
threatened between any of the Incorporated Centers and any of its respective
employees. Each of the Incorporated Centers has complied in all material
respects with all laws and regulations relating to the employment of labor,
including, without limitation, any provision thereof relating to wages, hours,
employment practices, terms and conditions of employment, collective bargaining,
equal opportunity or similar laws, non-compliance with which could have a
Material Adverse Effect, and the payment of social security and similar taxes,
and is not liable for any arrears of wages or any taxes or penalties for failure
to comply with any of the foregoing.
4.13. Insurance Coverage. Schedule 4.13 to this Agreement lists all
insurance policies of the Incorporated Centers indicating the risks insured
against, carrier, policy number, amount of coverage (including deductible),
premiums and expiration dates. Except as set forth on Schedule 4.13, such
policies are in full force and effect and all premiums now due and owing with
respect to such policies have been paid in full, and none of the Incorporated
Centers has made any borrowings or incurred any indebtedness, the collateral
for which was any of such policies.
4.14. Employee Benefit Plan(s).
(a) Schedule 4.14 lists each Employee Benefit Plan. None of
the Incorporated Centers has any affiliates for purposes or ERISA.
(b) Each Employee Benefit Plan is in substantial compliance
with applicable Law and has been administered and operated in all material
respects in accordance with its terms. Each Employee Benefit Plan which is
intended to be "qualified" within the meaning of Section
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401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service and no event has occurred and no condition exists
which could reasonably be expected to result in the revocation of any such
determination. No event which constitutes a "reportable event" (as defined in
Section 4043(b) of ERISA) for which the 30-day notice requirement has not been
waived by the Pension Benefit Guaranty Corporation (the "PBGC") has occurred
with respect to any Employee Benefit Plan. Except as set forth on Schedule
4.14, no Employee Benefit Plan subject to Title IV or ERISA has been terminated
or is or has been the subject of termination proceedings pursuant to Title IV
or ERISA. Full payment has been made of all amounts which an Incorporated
Center was required under the terms of the Employee Benefit Plan(s) to have
paid as contributions to such Employee Benefit Plan(s) on or prior to the date
hereof (excluding any amounts not yet due) and no Employee Benefit Plan which
is subject to Part 3 of Subtitle B of Title 1 of ERISA has incurred any
"accumulated funding deficiency" (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived. Neither the Incorporated
Center nor any other "disqualified person" or "party in interest" (as defined
in Section 4975(e)(2) of the Code and Section 3(14) of ERISA, respectively) has
engaged in any transactions in connection with any Employee Benefit Plan(s)
that could reasonably be expected to result in the imposition of a material
penalty pursuant to Section 502(i) of ERISA, damages pursuant to Section 409 of
ERISA or a tax pursuant to Section 4975(a) of the Code. No material liability,
claim, action or litigation, has been made, commenced or, to the best of
Seller's knowledge, threatened with respect to any Employee Benefit Plan(s)
(other than for benefits payable in the ordinary course and PBGC insurance
premiums). No Employee Benefit Plan or related trust owns any securities in
violation of Section 407 of ERISA. With respect to all Employee Benefit Plan(s)
which are subject to Title IV of ERISA, as of the most recent actuarial
valuation prepared for each such Employee Benefit Plan, the aggregate present
value of the accrued liabilities thereof did not exceed the aggregate fair
market value of the assets allocable thereto. The Incorporated Centers do not
presently maintain or has at any time in the past maintained a "multiemployer
plan" (as defined in Section 4001(a)(3) of ERISA). There are no actions, suits,
or claims (other than routine claims for benefits) pending or threatened
against any Employee Benefit Plan of any of the Incorporated Centers or their
respective assets, or arising out of such Employee Benefit Plan(s) and no facts
exist which could give rise to any such actions, suits or claims or that might
have a Material Adverse Effect on such Employee Benefit Plan(s). There has been
no act or omission by the Incorporated Centers that has given rise or may give
rise to any fines, penalties, taxes or late charges under Section 502(c), (i)
or (1), Section 407(1) of ERISA or Chapter 43 of the Code.
4.15. Compliance with Environmental Law. Except as set forth in
Schedule 4.15, (i) to Seller's knowledge each of the Incorporated Centers and
all of its operations are and have been at all times in compliance with all
Environmental Laws as currently in effect; (ii) neither the Incorporated Centers
nor any of their respective predecessors used, released or disposed of any
Hazardous Substance in any manner; (iii) none of the property owned, leased or
operated by the Incorporated Centers is contaminated by any Hazardous Substance;
and (iv) to Seller's
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knowledge none of the property owned, leased or operated by the Incorporated
Centers is affected by any condition that could result in liability under any
Environmental Law as currently in effect; and (v) to Seller's knowledge there is
and has been no condition, activity or event respecting the Incorporated Centers
or any of the properties owned, leased or operated by them that could subject
the Incorporated Centers to any liability under any Environmental Law as
currently in effect.
4.16. Bank and Brokerage Accounts. Schedule 4.16 lists (i) the names
and addresses of all banks and brokerage firms in which the Incorporated
Centers has accounts or safe deposit boxes, lock boxes, vaults and the account
numbers relating thereto, (ii) the name of each person authorized to draw on
any such account or have access to any such boxes or vaults and (iii) the names
of all persons, if any, holding tax or other powers of attorney from any of the
Incorporated Centers and a summary of the terms thereof.
4.17. Material Misstatements or Omissions. The statements,
representations and warranties of the Incorporated Centers and Seller contained
in this Agreement (including the schedules hereto) and in each document,
statement, certificate or exhibit furnished or to be furnished by or on behalf
of the Incorporated Centers or Seller pursuant hereto, or in connection with the
transactions contemplated hereby, taken together, do not contain and will not
contain any untrue statement of a material fact and do not or will not omit to
state a material fact necessary to make the statements or facts contained herein
or therein, in light of the circumstances made, not misleading. There is no fact
with respect to the condition and operation of the Incorporated Centers which
has not been disclosed to Buyer which materially and adversely affects, or could
materially and adversely affect, the business, financial condition, results of
operations, assets or prospects of the Incorporated Centers taken as a whole.
4.18. Broker's Fees. There are no broker's or finder's fees or
obligations due to persons engaged by any of the Incorporated Centers or any of
its employees, officers, or directors in connection with the transactions
contemplated by this Agreement, except for the fees and expenses of counsel and
accountants.
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER
As applicable, each of Buyer and Unison hereby represents and warrants
to Seller that:
5.1. Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Arizona and has
full corporate power and authority to own its properties and carry on its
business and to enter into and perform its obligations under this Agreement.
Unison is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full corporate power and
authority to own its
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properties and carry on its business and to enter into and perform its
obligations under this Agreement.
5.2. Qualification. Each of Buyer and Unison is qualified to do
business and in good standing in each jurisdiction where the character or
location of property owned and leased, the employment of personnel or the nature
of the business and activities conducted by it, as the case may be, requires
such qualification, licensing or domestication, except in such jurisdictions
where the failure to be so qualified, licensed or domesticated and to be in good
standing, individually or in the aggregate, would not have a Material Adverse
Effect.
5.3. Authority Enforceability; No Violation, Conflict or Required
Filing. Each of Buyer and Unison has the necessary corporate power and authority
to enter into and deliver this Agreement and all documents contemplated hereby,
to perform their respective obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and all documents contemplated hereby and the
consummation of the transactions contemplated hereby and thereby by Buyer and by
Unison have been duly authorized by the respective Board's of Directors of Buyer
and Unison in accordance with Buyer's and Unison's governing corporate documents
and applicable laws. This Agreement and all documents contemplated hereby have
each been duly and validly authorized, executed and delivered by Buyer and
Unison and constitute the legal, valid and binding obligation of Buyer and
Unison, respectively, enforceable in accordance with their respective terms
(except as such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting the rights of creditors generally or by the
general principles of equity). Except as set forth on Schedule 5.3, neither the
execution, delivery or performance of this Agreement nor any document
contemplated hereby, nor the consummation of the transactions contemplated
hereby or thereby, nor compliance by Buyer or Unison with the terms and
provisions of this Agreement or any document contemplated hereby, will result in
a violation or breach of any term or provision of Buyer's Articles of
Incorporation or Bylaws or Unison's Certificate of Incorporation or Bylaws, or
of any statute, rule or regulation applicable to Buyer or Unison or their
respective businesses, properties, assets or personnel, nor conflict with or
constitute a violation or breach of, or a default under (or an event which, with
the passage of time or the giving of notice, or both, would constitute a default
under), or give any party a right to accelerate the due date of any indebtedness
or obligation under, any indenture, mortgage, deed of trust, or Contract to
which Buyer or Unison is a party or to which their respective properties or
assets are subject, or any instrument, judgment, decree, writ, or other
restriction to which Buyer or Unison is a party or by which Buyer or Unison or
their respective businesses, properties, assets or personnel are bound, nor
require any consent or approval of any Person.
5.4. Unison Financial Statements. Unison has delivered to Seller true,
complete and correct copies of the Unison Financial Statements. Except as set
forth on Schedule 5.4, the Unison Financial Statements (a) present fairly the
financial condition of Unison at said dates and
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the results of operations, changes in shareholders' equity and cash flows for
the periods therein specified, and (b) have been prepared from the books and
records of Unison and in accordance with GAAP, consistently applied and
maintained throughout the periods indicated, except as otherwise stated or
referred to in such Unison Financial Statements.
5.5. Tax Matters. Unison has timely and correctly filed or caused to be
filed all Tax Returns.
5.6. Legal and Regulatory Matters. Except as set forth on Schedule 5.6:
(a) there are no judgments, decrees or orders enjoining Buyer or Unison in
respect of, or the effect of which is to prohibit any business practice or the
acquisition of any property or the conduct of any aspect of the business of
Buyer or Unison; (b) each of Buyer and Unison has complied and is complying with
all laws, ordinances, treaties and governmental rules, orders and regulations
applicable to Buyer or Unison, as applicable, or their respective properties,
assets, personnel or business, non-compliance with which could have a Material
Adverse Effect; and (c) each of Buyer and Unison has obtained all Licenses
necessary for the ownership of their respective properties and the conduct of
their respective businesses as currently conducted, and all such Licenses are
currently in full force and effect.
5.7. Material Misstatements or Omissions. The statements,
representations and warranties of Buyer and Unison contained in this Agreement
(including the schedules hereto) and in each document, statement, certificate or
exhibit furnished or to be furnished by or on behalf of Buyer or Unison, as
applicable, pursuant hereto, or in connection with the transactions contemplated
hereby, taken together, do not contain and will not contain any untrue statement
of a material fact and do not or will not omit to state a material fact
necessary to make the statements or facts contained herein or therein, in light
of the circumstances made, not misleading. There is no fact which has not been
disclosed to Seller which materially and adversely affects, or could materially
and adversely affect, the business, financial condition, results of operations,
assets or prospects, taken as a whole, of Buyer or Unison.
5.8. Broker's Fees. There are no broker's or finder's fees or
obligations due to persons engaged by Buyer or Unison, or any of its employees,
officers, or directors in connection with the transactions contemplated by this
Agreement, except for the fees and expenses of counsel and accountants.
5.9. Investment Intent. The Purchased Stock to be purchased by Buyer
hereunder is being purchased for its own account and not with the view to, or
for resale in connection with, any distribution or public offering thereof
within the meaning of the 1933 Act. Buyer understands that the Purchased Stock
has not been registered under the 1933 Act by reason of issuance in transactions
exempt from the registration and prospectus delivery requirements of the 1933
Act pursuant to Section 4(2) thereof and agrees to deliver to Buyer, if
requested by
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Buyer, an investment letter in customary form. Buyer understands that the
Purchased Stock may not be sold, transferred or otherwise disposed of without
registration under the 1933 Act or an exemption therefrom, and that in the
absence of an effective registration statement covering the Purchased Stock or
an available exemption from registration under the 1933 Act, Purchased Stock
must be held indefinitely.
5.10. Suitability and Sophistication. (i) Buyer has such knowledge and
experience in financial and business matters that it is capable of independently
evaluating the risks and merits of purchasing the Purchased Stock; (ii) it has
independently evaluated the risks and merits of purchasing the Purchased Stock
and has independently determined that the Purchased Stock is a suitable
investment for it; and (iii) it has sufficient financial resources to bear the
loss of its entire investment in the Purchased Stock.
5.11. Receipt of Information. Buyer further represents that it and/or
its Affiliates has had an opportunity to ask questions and receive answers from
Buyer regarding the business, properties, prospects and financial condition of
Buyer and to obtain additional information (to the extent Buyer possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to it and/or its
Affiliates or to which it and/or its Affiliates had access. The foregoing, does
not however limit or modify the representations and warranties of Seller in
Article III or Article IV of this Agreement or the right of Buyer to rely
thereon.
ARTICLE VI. INDEMNIFICATION
6.1. Indemnification by Seller. Notwithstanding anything in this
Agreement to the contrary, but subject to the other provisions of this Article
VI, Seller shall jointly and severally indemnify, defend, and hold Buyer, each
of Buyer's directors, officers, and Affiliates, and each of such Affiliates'
officers, directors, partners, employees, representatives and Affiliates, and
each of their respective successors and assigns, (collectively, the
"Indemnitees") harmless from and against, and shall reimburse them for, any and
all demands, claims, losses, liabilities, damages, costs, and expenses
whatsoever (including, without limitation, any fines, penalties, reasonable fees
and disbursements of counsel incurred by the Indemnitees in investigating or
defending any such demands, claims, losses, liabilities, damages, costs, and
expenses, and other reasonable expenses incurred investigating or defending any
of the same or enforcing this Agreement) (individually a "Loss" and collectively
"Losses") sustained or incurred by an Indemnitee resulting from or arising in
connection with any inaccuracy in responding or incomplete response to any
written request from the Buyer for information in connection with this
Agreement, or any inaccuracy in or breach of any representation or warranty of
Seller set forth in this Agreement or the Schedules or Exhibits hereto. Any
amounts payable by Seller pursuant to this Section may be offset by Buyer
against amounts otherwise payable pursuant to the Term Note/1997 or the Term
Note/1998.
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6.2. Indemnification by Buyer and Unison. Notwithstanding anything in
this Agreement to the contrary, but subject to the other provisions of this
Article VI, Buyer and Unison shall indemnify, defend, and hold Seller harmless
from and against, and shall reimburse them for, any and all demands, claims,
losses, liabilities, damages, costs, and expenses whatsoever (including, without
limitation, any fines, penalties, reasonable fees and disbursements of counsel
incurred by Seller in investigating or defending any such demands, claims,
losses, liabilities, damages, costs, and expenses, and other reasonable expenses
incurred investigating or defending any of the same or enforcing this Agreement)
(individually a "Loss" and collectively "Losses") sustained or incurred by
Seller resulting from or arising in connection with any inaccuracy in responding
or incomplete response to any written request from the Seller for information in
connection with this Agreement, or any inaccuracy in or breach of any
representation or warranty of Buyer or Unison set forth in this Agreement or the
Schedules or Exhibits hereto. Seller acknowledges and agrees that no individual
director, stockholder or officer of either Buyer or Unison shall have personal
liability for any indemnity obligation of Buyer or Unison under this Section
6.2.
6.3. Indemnification Limits. Neither Seller, Buyer nor Unison shall be
liable for any amounts for which such other party is entitled to indemnification
under Section 6.1 or Section 6.2, respectively, as a result of a breach of a
representation or warranty in this Agreement unless and until the amount for
which such party is entitled to indemnification therewith exceeds $10,000, at
which time Seller, Buyer or Unison, as the case may be, shall be liable for all
such amounts in excess of $10,000. The maximum liability of Buyer and Unison for
indemnification under Section 6.2 shall be limited to the amount then
outstanding under the Notes and Convertible Debentures. The maximum liability
of Seller for indemnification under Section 6.1 shall be the Purchase Price.
6.4. Indemnification Notice. If any third party claim is asserted
against a Person with respect to which such Person is entitled to
indemnification hereunder, such Person (the "indemnified party") shall, within
30 days of the later of the occurrence of the event giving rise to the claim or
the date that the indemnified party learned of such claim (provided, however,
that if a claim arises by virtue of litigation, then in no event less than 15
days prior to the date in which an appearance or answer is due, whichever is
earlier), notify the Person obligated to indemnify it (the "indemnifying party")
of such claim by delivery of a written notice describing the claim and
indicating the basis for indemnification hereunder; provided that the failure to
so notify the indemnifying party shall not relieve the indemnifying party of its
obligations hereunder except to the extent such failure shall have harmed the
indemnifying party. The indemnifying party shall have the right, upon written
notice to the indemnified party within 20 days after receipt from the
indemnified party of notice of such claim, to conduct at its expense the defense
against such claim, to conduct at its expense the defense against such claim in
its own name, or if necessary in the name of the indemnified party. If the
indemnifying party fails to give such notice, it shall be deemed to have elected
not to conduct the defense or the subject claim, and
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in such event the indemnified party shall have the right to conduct such defense
and, only with the prior consent of the indemnifying party which shall not be
unreasonably withheld, to compromise and settle the claim. If the indemnifying
party does elect to conduct the defense of the subject claim, the indemnified
party shall cooperate with and make available to the indemnifying party such
assistance and materials as may be reasonably requested by it, all at the
expense of the indemnifying party and the indemnified party shall have the right
at its expense to participate in the defense, provided that the indemnified
party will have the right to compromise and settle the claim only with the prior
written consent of the indemnifying party. Any settlement to which the
indemnifying party shall have consented in writing shall conclusively be deemed
to be an obligation with respect to which the indemnified party is entitled to
indemnification hereunder.
ARTICLE VII. CERTAIN MATTERS PENDING CLOSING
7.1. Access. (a) Each of Buyer, Unison and Seller and their authorized
agents, officers and representatives shall have reasonable access to the
properties, books, records, contracts, information and documents of the other to
conduct such examination and investigation of the other as it deems necessary,
provided that such examinations shall: (i) be during normal business hours; (ii)
not unreasonably interfere with the other's operations and activities; and (iii)
be subject to the prior approval of party being examined if the information or
documents requested are, in the reasonable opinion of an officer of such party,
of a nature which may compromise the competitive position of such party. The
party being examined shall cooperate in all reasonable respects with the
examinations and investigations by such other party.
(b) If the transactions provided for herein are not
consummated, the examining party and its respective officers, agents and
representatives will hold in strict confidence, and not utilize in any manner,
all information obtained from the party being examined and its officers, agents
or representatives, excepting however, any such information which: (i) was or is
in the public domain; (ii) was in fact known to the examining party prior to
disclosure to the examining party; (iii) is disclosed to the examining party by
a third party (other than officers, directors, employees and agents of the party
being examined); or (iv) thereafter through an act or failure to act on the part
of the party being examined becomes information generally available to the
public.
7.2. Carry on in Regular Course. The Incorporated Centers shall carry
on its business in the regular course and substantially in the same manner as
heretofore carried on.
7.3. Use of Assets. The Incorporated Centers shall use, operate,
maintain and repair all of its assets and properties in accordance with its
previous practices. Seller shall not sell, encumber or dispose of any assets of
the Incorporated Centers except in the ordinary course of business.
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7.4. Preservation of Relationships. Seller shall use reasonable efforts
to preserve its business organizations intact, to retain the services of its
present employees and to conduct business with suppliers, customers and others
having business relations with such Person in a manner consistent with past
practices.
7.5. No Default. Neither Seller nor the Incorporated Centers shall do
any act or omit to do any act, or permit any act or omission to act, which will
cause a material breach of any of its Contracts.
7.6. Publicity. The initial general notices, releases, statements and
communications to employees, suppliers, distributors and customers of Buyer,
Unison, Seller and the Incorporated Centers and to the general public and the
press relating to the transactions covered by this Agreement shall be made only
at such times and in such manner as may be mutually agreed upon by Buyer, Unison
and Seller.
7.7. Insurance Policies. Each of Seller and the Incorporated Centers
shall maintain all of its insurance policies in full force and effect.
7.8. Cooperation. Buyer, Unison and Seller and the Incorporated Centers
will cooperate in all respects in connection with securing any consents of third
parties necessary for the consummation of the transactions contemplated by this
Agreement, and giving any notices to any governmental authority, or securing the
permission, approval, determination, consent or waiver of any governmental
authority required by Law in connection with the transactions contemplated by
this Agreement.
7.9. Compensation. Without the prior written consent of the Buyer,
Seller and the Incorporated Centers shall not grant any increase in the benefits
or the rate of pay of any of its Employees, except in the ordinary course of
business and consistent with past practices, and the Incorporated Centers shall
not institute any new Employee Benefit Plan.
7.10. Indebtedness. Other than for purposes and in amounts encountered
in the ordinary course of business, the Incorporated Centers shall not create,
incur or assume any Indebtedness.
7.11. Dividends; Redemptions; Issuance of Stock. The Incorporated
Centers shall not: (a) issue any additional shares of stock of any class or
grant any warrants, options or rights to subscribe for any additional shares of
stock of any class; (b) declare or pay any dividend or make any surplus
distribution of any nature; (c) make any capital distribution of any kind; (d)
directly or indirectly redeem, purchase or otherwise acquire or recapitalize or
reclassify any of its capital stock or liquidate in whole or in part; or (e)
make any advances.
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7.12. Compliance with Laws. Buyer, Unison, Seller and the Incorporated
Centers shall comply with all applicable Laws and orders of any court or
federal, state, municipal or other governmental department.
7.13. Taxes. Buyer, Unison, Seller and the Incorporated Centers shall
timely and properly file all federal and state tax returns which are required to
be filed, and shall pay or make provision for the payment of all taxes owed by
it.
7.14. Amendment of Articles or Certificate and Bylaws. None of the
Incorporated Centers shall amend its Articles or Certificate of Incorporation or
Bylaws.
ARTICLE VIII. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
express conditions precedent:
8.1. Compliance with Agreement. Seller shall have performed and
complied in all material respects with all of their obligations under this
Agreement which are to be performed or complied with by them prior to or on the
Closing Date.
8.2. Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incident thereto, shall be reasonably
satisfactory in form and substance to Buyer and Buyer's counsel, and Seller, the
Incorporated Centers shall have made available to Buyer for examination the
originals or true and correct copies of all documents which Buyer may reasonably
request in connection with the transactions contemplated by this Agreement.
8.3. No Litigation. No suit, action or other proceeding shall be
pending before any court in which the consummation of the transactions
contemplated by this Agreement is restrained or enjoined.
8.4. Representations and Warranties. The representations and warranties
made by Seller and the Incorporated Centers in this Agreement shall be true and
correct in all material respects as of the Closing Date with the same force and
effect as though said representations and warranties had been made on the
Closing Date.
8.5. Material Damage to Assets. Between the date of this Agreement and
the Closing Date, no assets or properties of the Incorporated Centers shall have
been materially and adversely affected by reason of any loss, taking,
condemnation, destruction or physical damage, whether or not insured against.
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8.6. Deliveries at Closing. Seller shall have delivered to Buyer the
following documents, each properly executed by Seller, and dated as of the
Closing Date, or such other date as indicated below: (a) the Opinion of the
Seller's Counsel; (b) a copy of the Articles or Certificate of Incorporation of
the each of the Incorporated Centers, as amended to date, certified as of a
recent date by appropriate official in its state of incorporation; (c) a
Certificate of such state official as to the existence and good standing of the
each of the Incorporated Centers, dated as of a recent date; (d) certificates,
as of a recent date, of the appropriate government official of each state in
which each of the Incorporated Centers is authorized to transact business,
indicating that such Incorporated Center is so qualified and is in good
standing; (e) resignations of directors and officers of each of the Incorporated
Centers as contemplated by this Agreement; (f) Seller's Closing Certificate; and
(g) all Records of each of the Incorporated Centers.
8.7. Other Documents. Seller shall have delivered to Buyer such
certificates and documents of Seller, officers of each of the Incorporated
Centers and public officials as shall be reasonably requested by Buyer's counsel
to establish the capacity and authority of Seller and each of the Incorporated
Centers to enter into this Agreement and complete the transactions contemplated
by this Agreement.
8.8. Stock Certificates. Seller shall have delivered to Buyer at the
Closing stock certificates representing 100% of the shares of the Purchased
Stock. Such certificates shall be duly endorsed in blank or have duly executed
stock powers attached thereto and shall otherwise be in proper form for
transfer.
8.9. Regulatory Approvals. This Agreement and the transactions
contemplated hereby shall have received all approvals, if any, required from any
Governmental Authority.
ARTICLE IX. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
Each and every obligation of Seller to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
express conditions precedent:
9.1. Compliance with Agreement. Buyer and Unison shall have performed
and complied with all of its obligations under this Agreement which are to be
performed or complied with by it prior to or on the Closing Date.
9.2. Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incident thereto, shall be reasonably
satisfactory in form and substance to Seller and Seller's counsel, and Buyer or
Unison, as applicable, shall have made available to Seller for
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examination the originals or true and correct copies of all documents which
Seller may reasonably request in connection with the transactions contemplated
by this Agreement.
9.3. No Litigation. No suit, action or other proceeding shall be
pending before any court in which the consummation of the transactions
contemplated by this Agreement is restrained or enjoined.
9.4. Representations and Warranties. The representations and warranties
made by each of Buyer and Unison in this Agreement shall be true and correct as
of the Closing Date with the same force and effect as though such
representations and warranties had been made on the Closing Date.
9.5. Payment of Purchase Price. Buyer shall have delivered to Seller
the Purchase Price in the form and in the manner described in Section 2.2 of
this Agreement.
9.6. Deliveries at Closing. Buyer and Unison shall have delivered to
Seller the following documents, each properly executed by Buyer and dated as of
the Closing Date, or such other date as indicated below: (a) the Opinion of
Buyer's Counsel; (b) Buyer's Closing Certificate; (c) the Registration Rights
Agreement; and (d) the Security Agreement.
9.7. Other Documents. Buyer and Unison shall have delivered to Seller
such certificates and documents of officers of Buyer and Unison and of public
officials as shall be reasonably requested by Seller's counsel to establish the
existence and good standing of Buyer and Unison and the due authorization of
this Agreement and the transactions contemplated by this Agreement by Buyer and
Unison.
ARTICLE X. TERMINATION
10.1. Termination. Time is of the essence hereof. This Agreement may be
terminated and the transactions contemplated by this Agreement may be abandoned
at any time, as follows: (a) by mutual written agreement of Seller and Buyer;
(b) by Buyer if any of the conditions set forth in Article VIII of this
Agreement shall not have been fulfilled by April 3, 1996; (c) by Seller if any
of the conditions set forth in Article IX of this Agreement shall not have been
fulfilled by April 3, 1996; or (d) by either Buyer or Seller, as appropriate, if
the various scheduled required or contemplated by Articles IV and V are not
delivered by the other party(s) in a timely manner, or after receipt of such
Schedules, as provided in Section 10.2 of this Agreement.
10.2. Time to Review Schedules. The parties have executed this
Agreement prior to the completion and exchange of the Schedules required or
contemplated by Articles IV and V hereof. Seller agrees to complete all
Schedules required or contemplated by Article IV and to
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deliver them to Buyer, together with a written statement that all such Schedules
have been delivered, as soon as possible, but in no event later than April 2,
1996. Buyer shall have the right to terminate this Agreement if all such
Schedules have not been delivered by that date and on the following day, on the
basis of information contained in such Schedules. Buyer agrees to complete all
Schedules required or contemplated by Article V and to deliver them to Seller,
together with a written statement that all such Schedules have been delivered,
as soon as possible, but in no event later than April 2, 1996. Seller shall have
the right to terminate this Agreement if all such Schedules have not been
delivered by that date and on the following day, on the basis of information
contained in such Schedules.
ARTICLE XI. MISCELLANEOUS
11.1. Further Assurances. From time to time after the Closing Date,
upon the reasonable request and at the expense of Buyer, Seller shall execute
and deliver or cause to be executed and delivered such further instruments of
conveyance, assignment and transfer and take such further action as Buyer may
reasonably request in order more effectively to sell, assign, convey, transfer,
reduce to possession and record title to the Purchased Stock. Seller agrees to
cooperate with Buyer in all reasonable respects to assure to Buyer the continued
title to and possession of the Purchased Stock in the condition and manner
contemplated by this Agreement.
11.2. Survival of Representations and Warranties. All representations
and warranties of Buyer, Unison and Seller contained in this Agreement or made
pursuant to this Agreement shall survive the Closing Date and the consummation
of the transactions contemplated by this Agreement. The representations and
warranties made by Seller in Sections 4.10 and 4.15 shall survive and be
enforceable until the expiration of all applicable civil, criminal and
regulatory statutes of limitation relating to the subject matter of such
Sections. All other representations and warranties shall expire at 5:00 p.m.,
Mountain Standard Time on the date two years following the Closing Date.
11.3. Entire Agreement; Amendment. This Agreement, together with the
Schedules, Exhibits and other documents contemplated hereby, constitutes the
final written expression of all of the agreements between the parties,
pertaining to the subject matter of this Agreement, and is a complete and
exclusive statement of those terms. It supersedes all understandings and
negotiations concerning the matters specified herein. Any representations,
promises, warranties or statements made by either party that differ in any way
from the terms of this written Agreement and the Schedules and other documents
contemplated hereby, shall be given no force or effect. The parties specifically
represent, each to the other, that there are no additional or supplemental
agreements between them related in any way to the matters herein contained
unless specifically included or referred to herein. No addition to or
modification of any provision of this Agreement shall be binding upon any party
unless made in writing and signed by all parties. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a
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waiver of any other provision of this Agreement, whether or not similar, nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
11.4. Payment of Expenses and Fees. Each of Buyer and Seller shall pay
all fees and expenses incurred by it in connection with the transactions
contemplated.
11.5. Governing Law. This Agreement shall be construed, interpreted and
enforced according to the Laws of the State of Delaware without regard to
conflicts of law principles.
11.6. Assignment. Prior to the Closing, this Agreement shall not be
assigned by any party without the prior written consent of all other parties.
11.7. Notices. All communications or notices required or permitted by
this Agreement shall be in writing and shall be deemed to have been given upon
the earliest to occur of the following (i) actual delivery, (ii) one business
day after delivery, prepaid, to a commercial overnight delivery service for
delivery the next business day, or (iii) production of hard-copy confirmation of
delivery via electronic facsimile machine, and addressed as follows, unless and
until any of such parties notifies the other in accordance with this Section of
a change of address:
If to Henderson, to:
Henderson & Associates Rehabilitation
Attention: Paul G. Henderson, PT
1530 6th Avenue S.E.
Decatur, Alabama 35601
Telephone: (205) 350-1764
With a copy to:
Hand Arendall, L.L.C.
Attention: Stephen G. Crawford
3000 First National Bank Building
P.O. Box 123
Mobile, Alabama 36601
Telephone: (334) 432-5511
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If to Plash to:
Plash and Associates Physical Therapy Services
Attention: Paige B. Plash, PT
1242 Anchor Drive
Mobile, Alabama 36693
Telephone: (334) 661-8031
With a copy to:
Hand Arendall, L.L.C.
Attention: Stephen G. Crawford
3000 First National Bank Building
P.O. Box 123
Mobile, Alabama 36601
Telephone: (334) 432-5511
If to Buyer or Unison:
Sunbelt Therapy Management Services, Inc.
or
Unison HealthCare Corporation
Attention: Mr. Jerry M. Walker
7272 East Indian School Road, Suite 214
Scottsdale, Arizona 85251
Telephone: (602) 423-1954
With a copy to:
Quarles & Brady
Attention: P. Robert Moya
One East Camelback Road, Suite 400
Phoenix, Arizona 85012
Telephone: (602) 230-5500
11.8. Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience
of reference only and shall not constitute a part of this Agreement.
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11.9. Interpretation. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular,
and all words in any gender shall extend to and include all genders.
11.10. Severability. If any provision, clause, or part of this
Agreement, or the application thereof under certain circumstances, is held
invalid, the remainder of this Agreement, or the application of such provision,
clause or part under other circumstances, shall not be affected thereby.
11.11. Specific Performance. Buyer and Seller agree that the Purchased
Stock constitutes unique property. There is no adequate remedy at Law for the
damage which either party might sustain for the failure of the other party to
consummate the transactions contemplated by this Agreement for any reason other
than the termination of this Agreement pursuant to Section 10.1 of this
Agreement. Accordingly, each party shall be entitled, at its option, to the
remedy of specific performance to enforce the sale of the Purchased Assets and
the Purchased Stock by Seller to Buyer pursuant to this Agreement.
11.12. No Reliance. No third party is entitled to rely on any of the
representations, warranties and agreements of Buyer or Seller contained in this
Agreement. Neither Buyer nor Seller assumes any liability to any third party
because of any reliance on the representations, warranties and agreements of
Buyer or Seller contained in this Agreement.
11.13. Cooperation. Buyer and Seller will: (a) fully cooperate with
each other and their respective counsel and accountants in connection with any
steps to be taken as part of their obligations under this Agreement; and (b) use
their best efforts to satisfy those conditions set forth in Articles VIII and IX
which are to be satisfied by them; and (c) cooperate in all reasonable respects
with the other party in its efforts to satisfy the conditions to be satisfied by
the other party.
11.14. Records. For at least five years after the Closing Date, Buyer
shall preserve and keep, free of charge, all Records of the physical
rehabilitation centers which were predecessors of Buyer and which records were
delivered by Seller pursuant to this Agreement (the "Predecessor Records").
Buyer agrees to permit Seller, and their attorneys, accountants, agents and
designees, such access to the Predecessor Records from and after the Closing
Date as Seller may deem necessary or desirable. Any such examination shall be at
the expense of Seller, shall be performed at the place where the Predecessor
Records are regularly maintained and shall not unreasonably interfere with
Buyer's normal business activities. Buyer shall notify Seller at any time that
it intends to destroy any or all of the Predecessor Records, and Seller shall
have the right to review and remove any of such Predecessor Records at Seller's
expense.
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11.15. Exhibits. All Exhibits to this Agreement are incorporated herein
by this reference as if fully set forth herein. If a document or matter is
disclosed in any Exhibit to this Agreement, it shall be deemed to be disclosed
for all purposes of this Agreement without the necessity of specific repetition
or cross reference. All capitalized terms used in any Exhibit to this Agreement
shall have the definitions specified in this Agreement.
11.16. Income Tax Position. No party to this Agreement shall take a
position for income tax purposes which is inconsistent with this Agreement.
IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Purchase and Sale Agreement to be duly executed as of February 1, 1996.
UNISON HEALTHCARE CORPORATION,
A DELAWARE CORPORATION
By _________________________________________
Jerry M. Walker, President
SUNBELT THERAPY MANAGEMENT
SERVICES, INC., AN ARIZONA CORPORATION
By _________________________________________
Jerry M. Walker, Chairman
HENDERSON
By _________________________________________
Paul G. Henderson, PT
PLASH
By _________________________________________
Paige B. Plash, PT
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