SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported ) February 8, 1998
NEW YORK HEALTH CARE, INC.
(Exact Name of Registrant as Specified in its Charter)
New York 1-12451 11-2636089
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
1850 McDonald Avenue, Brooklyn, N.Y. 11223
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number,
including area code, (718) 375-6700
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Item 5: ACQUISITION OR DISPOSITION OF ASSETS
On February 8, 1998, a recently-formed wholly-owned subsidiary of the
Company, named "NYHC Newco Paxxon, Inc.", a New York corporation ("NYHC Newco"),
purchased from Metro Healthcare Services, Inc., a New Jersey corporation
("Metro"), the home care business assets (other than accounts receivable) which
Metro operated in Edison, Shrewsbury and Toms River, New Jersey for a purchase
price consisting of $500,000 paid at closing and a promissory note in the
principal sum of $580,000 payable in twelve equal quarterly installments
commencing May 5, 1998 together with accrued interest at a rate equal to 1% per
annum over the prime interest rate published by the Wall Street Journal on
February 8, 1998, adjusted quarterly. The promissory note is subordinated to all
obligations due to the Company's banks or other institutional lenders. The
promissory note and the covenants of NYHC Newco are guaranteed by the Company.
As part of the acquisition transaction, NYHC Newco assumed a leasehold
obligation for the one office located in Toms River, New Jersey (expiring May
31, 1998) in the aggregate sum of $2,400 per month, together with various
equipment leases for items of business equipment. It also entered into two
leases for additional office space; one in Shrewsbury, New Jersey (expiring
February 28, 2001) at a rent of $700 per month and the other in Edison, New
Jersey (expiring May 31, 1999) at a rent of $1,140 per month.
On March 26, 1998, NYHC Newco purchased from Heart to Heart Healthcare
Services, Inc., a New Jersey corporation ("Heart to Heart"), the home care
business assets (other than accounts receivable) which Heart to Heart operated
in East Orange and Hackensack, New Jersey for a purchase price consisting of a
promissory note in the principal sum of $1,150,000 payable in 24 equal quarterly
installments commencing June 26, 1998 together with accrued interest at a rate
equal to 1% per annum over the prime interest rate published by the Wall Street
Journal on March 26, 1998, adjusted quarterly. The promissory note is
subordinated to all obligations due to the Company's banks or other
institutional lenders. The promissory note and the covenants of NYHC Newco are
guaranteed by the Company.
As part of the acquisition transaction, NYHC Newco assumed leasehold
obligations for the two offices located in East Orange (expiring August 31,
2002) and Hackensack, New Jersey (expiring May 31, 1998) in the aggregate sum of
$1,815 per month, together with various equipment leases for items of business
equipment.
As noted in the Company's December 20, 1996 prospectus and Form 10-KSB
annual report for the year ended December 31, 1996, its directors are the sole
stockholders of Heart to Heart. The Company therefore obtained an independent
opinion that the terms and conditions of the acquisition are, under all
circumstances, fair to the Company.
The Company expects to account for each of these acquisitions as a
"purchase" in accordance with Generally Accepted Accounting Principles.
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Item 7: FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired:
(i) The Company does not believe that financial statements relating
to the home care business assets acquired from Metro Healthcare Services,
Inc. are required to be filed pursuant to Item 310 of Regulation SB.
(ii) Financial statements required by Item 310 of Regulation SB
relating to the home care business assets acquired from Heart to Heart
Healthcare Services, Inc. will be filed by amendment within 60 days after
the filing of this report.
(b) Pro Forma Financial Information.
(i) The Company does not believe that pro forma financial
information relating to the home care business assets acquired from Metro
Healthcare Services, Inc. is required to be filed pursuant to Item 310 of
Regulation SB.
(ii) Pro forma financial information required by Item 310 of
Regulation SB relating to the home care business assets acquired from
Heart to Heart Healthcare Services, Inc. will be filed by amendment within
60 days after the filing of this report.
(c) Exhibits.
2.2 Purchase and Sale Agreement dated February 8, 1998 among NYHC Newco
Paxxon, Inc. and Metro Healthcare Services, Inc.
2.3 Purchase and Sale Agreement dated February 25, 1998 among NYHC Newco
Paxxon, Inc. and Heart to Heart Healthcare Services, Inc.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
March 30, 1998 NEW YORK HEALTH CARE, INC.
By: /s/ Jerry Braun
---------------------------------------
Jerry Braun
President and Chief Executive Officer
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into effective this January 30, 1998,
among NYHC NEWCO PAXXON, INC., a New York corporation ("Purchaser"), and METRO
HEALTHCARE SERVICES, INC., a New Jersey corporation ("Seller").
RECITALS
Seller conducts the business of home care under the name Metro in Toms
River, NJ, Edison, NJ, and Shrewsbury, NJ, (the "Business"). Purchaser is a
wholly-owned subsidiary of New York Health Care, Inc., a New York corporation
("NYHC") which has been established to purchase the assets of the Business as
described in the Disclosure Schedule. Purchaser also desires to assume certain
liabilities of the Business described in the Disclosure Schedule. Seller desires
to enter into these transactions with Purchaser.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and in reliance upon the representations and warranties
contained herein, the parties agree as follows:
1. DEFINITIONS
The following terms used in this Agreement shall, unless the context requires
otherwise, have the meanings designated below:
1.1 Assets means all of the assets and properties of Seller used by it in
connection with the Business other than its cash, security deposits and accounts
receivable, including, without limitation, the following:
(a) goodwill and all slogans or trade names, including the name "Metro"
and the other names listed in the Disclosure Schedule, and all
customer lists relating to its customers , excluding the names as
follows Metro Staffing ,Metro Plus , Metro Temp ,and Metro Care New
York. Seller's policy and procedure manuals with respect to the
Business;
(b) all of Seller's contracts and other arrangements with its customers
in respect of the Business;
(c) client lists, client records, client files and other client related
materials and property;
(d) machinery, equipment, racking, supplies, leasehold improvements,
furniture and fixtures;
(e) employee lists, files, papers, books, records, sales and advertising
materials and records, sales and purchase correspondence;
(f) rights and interest in and to any licenses and commercially
practiced patents, copyrights, trademarks, trademark registration
applications (including all reissues, divisions, continuations and
extensions thereof), patent applications and patent disclosures
docketed, rights and interests in and to all intellectual property
rights and proprietary expertise, including, without limitation,
proprietary information, technical and technological data, know-how,
processes, invention, conception, memoranda, manufacturing and
engineering data, computer programs (including the licenses thereto)
and sales and advertising information,
(g) permits, authorizations, approvals or indicia of authority;
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(h) right, title and interest of Seller in and to (A) the lease for the
premises at ____________________, Toms River, New Jersey,
________________, Shrewsbury, New Jersey and any leases for personal
property which are listed in the Disclosure Schedule; (B) all
purchase orders given by Seller for the purchase of products,
materials, supplies, parts and other items used in the ordinary
course of business; and (C) all purchase orders submitted to Seller
by customers of Seller in the ordinary course of business with
respect to which services remain to be rendered on or after the
Closing Date;
(i) prepaid expenses (it being understood, however, that no insurance
policies are being assigned to Purchaser); and
(j) Seller's rights under the Agreements whereunder Seller purchased the
Business from The Caring Touch Group, Inc., Caring Touch of Monmouth
County, Inc. and Helping Hand Healthcare, Inc.
1.2 Closing Date has the meaning given to it in Section 13.1
1.3 Code means the Internal Revenue Code of 1986, as amended.
1.4 Disclosure Schedule means the schedule which was delivered by Seller
to Purchaser on the date hereof, and which was initialed by Seller and
Purchaser.
1.5 blank.
1.6 blank.
1.7 Intellectual Property means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements and all
patents, patent applications and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions and
reexaminations thereof, (b) all trademarks, services marks, trade dress, logos,
trade names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connections
therewith, (c) all copyrightable works, all copyrights and copyright
applications, registrations and renewals in connection therewith, (d) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (e) all computer software (including data and
related documentation), (f) all other proprietary rights, and (g) all copies and
tangible embodiments thereof (in whatever form or medium). This paragraph and
excludes any proprietary information and intellectual properties belonging to
Seller that pertain to Seller's operations other than Business.
1.8 Purchaser means NYHC Newco Paxxon, Inc., a New York corporation, or
its designee.
1.9 Tax or Taxes means any federal, state, local or foreign income, gross
receipt, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), custom duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition, whether disputed or not.
1.10 Tax Return means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment, and including any amendment thereof.
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1.11 Uniform Commercial Code means the Uniform Commercial Code applicable
in the State of New York and New Jersey.
1.12 Other terms are as defined herein.
2. ACQUISITION OF THE ASSETS
2.1 Purchase of Assets. Subject to the terms and conditions set forth in
this Agreement, at the Closing, Purchaser shall purchase from Seller, and Seller
shall sell to Purchaser, the Assets, free and clear of all encumbrances, liens,
security interests or other claims.
2.2 Purchase Price for Assets; Allocation of Purchase Price.
(a) The aggregate purchase price for the Assets (the "Purchase Price"),
is:
(i) $500,000 payable at the Closing to Seller; plus
(ii) one promissory note of Purchaser in the principal amount of
$580,000 and in the form of Exhibit 1 (the " Note") . The Note shall
be issued at the Closing, and is referred to herein as the "Note."
(iii) blank. (b) Any transfer or assignment to Purchaser by Seller
of any contract which requires the consent or approval of any third
party shall be made subject to such consent or approval being
obtained and Seller shall be responsible for obtaining such consents
or approvals.
(c) The Purchase Price shall be allocated to the Assets as set forth in
the Disclosure Schedule. The parties agree that they will not take a
position on any income tax return or before any governmental agency
or in any judicial proceeding that is inconsistent in any way with
this allocation and shall cooperate to complete IRS Form 8594 as
soon as practical following the Closing Date.
(d) blank
2.3 Liabilities.
(a) As part of the consideration for the Assets, Purchaser shall assume
and pay, perform and discharge those liabilities and obligations
which accrue after the Closing and are described as "Assumed
Liabilities" in the Disclosure Schedule with a reference to this
Section (the "Assumed Liabilities"), as they become due. Purchaser
shall not be obligated to pay, perform or discharge any such
obligation owed to a third party except to the extent that such
obligation or liability constitutes a valid and legally enforceable
claim by such third party, and Purchaser may contest in good faith
any such obligation or liability. The Assumed Liabilities include,
to the extent disclosed in the Seller's Disclosure Schedule,
obligations of the Business to perform home care services after the
Closing.
(b) With the exception of the Assumed Liabilities, all obligations of
Seller, whether known or unknown, liquidated or unliquidated,
absolute or contingent and whether arising out of a contract or
agreement or tort shall remain the sole liability of Seller, and
neither Purchaser nor NYHC shall have any liability of any kind or
nature with respect thereto.
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Without limiting the generality of the foregoing, neither the NYHC
nor Purchaser shall assume any liability or obligation for:
(i) any foreign, federal, state, country or local income, franchise,
gross receipts or value added taxes, or any interest, additions to
tax or penalties thereon, accrued for, applicable to or arising from
any period through the Closing; or
(ii) legal, accounting or other professional fees of Seller.
2.4 Collection of Receivables. The accounts receivable of the Business are
not included in the Assets and shall be retained by Seller. Any payments by
customers received by Purchaser, subsequent to Closing, that belong to Seller,
will be immediately forwarded to Seller. Seller shall not engage in any
collection activity other than the sending of routine invoices and statements
during the 30 day period following Closing. During the period following thirty
one (31) days after closing, should Seller encounter difficulty collecting
accounts receivable from a customer, which was recorded prior to closing, Seller
will discuss with, and notify, in writing, the Purchaser, at least one week
prior to any communication with the customer. Accounts Receivable of Seller
shall not be collected by Purchaser.
(a) blank
(b) blank
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser and NYHC that the statements
contained in this Section are true, correct and complete as of the date of this
Agreement as follows:
3.1 Organization and Qualification. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey. Seller has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
The copies of the Certificate of Incorporation and the bylaws of Seller as
amended to date, which have been delivered to Purchaser, are complete and
correct, and Seller is not in default under or in violation of any provision of
its Certificate of Incorporation or bylaws.
3.2 Authorization. This Agreement has been approved by all necessary
shareholder and corporate action on behalf of Seller, has been duly and validly
executed by Seller, and the agreements, representations and warranties contained
herein constitute valid and binding obligations, representations and warranties
of Seller, enforceable in accordance with their terms.
3.3 Bulk Sale Law. Seller is not required to comply with the bulk sale
provisions of the Uniform Commercial Code in connection with the transactions
contemplated hereby.
3.4 No Conflicting Agreements. The execution and delivery of this
Agreement by Seller does not, and consummation by Seller of the transactions
contemplated hereby will not: (i) violate any existing term or provision of any
law, regulation, order, writ, judgment, injunction or decree applicable to
Seller or the Assets, (ii) conflict with or result in a breach of any of the
terms, conditions or provisions of the Certificate of Incorporation or bylaws of
Seller or of any agreement or instrument to which Seller is a party, or (iii)
result in the creation or imposition of any lien, charge, security interest,
encumbrance, restriction or claim upon the Assets.
3.5 Compliance with Applicable Law. Since the Business was acquired by
Seller, the Business has at all times been conducted by Metro, and Seller has at
all times been in full compliance with each legal requirement that is or was
applicable to the Business it or to the conduct of its operations or the
ownership or
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use of any of its assets. No event has occurred or circumstance exists that
(with or without notice or lapse of time) (A) may constitute or result in a
violation by Seller of, or a failure on the part of Seller to comply with, any
legal requirement, or (B) may give rise to any obligation on the part of Seller
to undertake, or to bear all or any portion of the cost of, any remedial action
of any nature.
3.6 Consents and Approvals. The execution and delivery by Seller of this
Agreement, and the performance by Seller of its obligations hereunder, does not
require Seller to obtain any consent, approval, agreement, or action of, or make
any filing with or give any notice to, any corporation, person, entity, or firm
or any public, governmental or judicial authority, including, without
limitation, any landlord, other than such approvals as shall have been obtained
prior to the Closing.
3.7 Litigation. Except as described in the Disclosure Schedule with a
reference to this Section, there are no actions, proceedings or investigations
pending or, to Seller's knowledge, threatened, against or affecting the Assets
or the Business before any court or administrative agency which could result in
any adverse change in the operations or financial condition of the Business.
3.8 Schedules.
(a) Seller's Disclosure Schedule includes a separate schedule relating
to Business containing an accurate and complete list and description
of:
(i) All real property owned by Seller in respect of the Business
or in which Seller has a leasehold or other interest or which
is used by Seller in connection with the Business, together
with a description of each lease, sublease, license, or any
other instrument under which Seller claims or holds such
leasehold or other interest or right to the use thereof or
pursuant to which Seller has assigned, sublet or granted any
rights therein, identifying the parties thereto, the rental or
other payment terms, expiration date and cancellation and
renewal terms thereof.
(ii) As of a date no earlier than January 16, 1998, all of Seller's
receivables in respect of the Business (which shall include
accounts receivable, loans receivable and any advances),
together with detailed information as to each such listed
receivable which has been outstanding for more than 30 days.
(iii) All machinery, tools, equipment, motor vehicles, rolling stock
and other tangible personal property (other than inventory and
supplies), owned, leased or used by Seller in respect of the
Business except for items having a value of less than $500
which do not, in the aggregate, have a total value of more
than $1,000, setting forth with respect to all such listed
property a summary description of all leases, liens, claims,
encumbrances, charges, restrictions, covenants and conditions
relating thereto, identifying the parties thereto, the rental
or other payment terms, expiration date and cancellation and
renewal terms thereof.
(iv) All patents, patent applications, patent licenses, trademarks,
trademark registrations, and applications therefor, service
marks, service names, trade names, copyrights and copyright
registrations, and applications therefor, wholly or partially
owned or held by Seller in respect of the Business or used in
the operation of the Business.
(v) All fire, theft, casualty, liability and other insurance
policies insuring Seller in respect of the Business,
specifying with respect to each such policy the name of the
insurer, the risk insured against, the limits of coverage, the
deductible amount (if any), the premium rate and the date
through which coverage will continue by virtue
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of premiums already paid. Except as disclosed in Seller's
Disclosure Schedule, such policies are with reputable
insurers, provide adequate coverage for all normal risks
incident to Seller's assets, properties and business
operations and are in character and amount at least equivalent
to that carried by persons engaged in a business subject to
the same or similar perils or hazards.
(vi) All contracts, agreements, commitments or licenses relating to
computer software, patents, trademarks, trade names,
copyrights, inventions, processes, know-how, formulae or trade
secrets to which Seller is a party or by which it is bound.
(vii) All procedure and policy manuals.
(viii)All Governmental Approvals which have been issued to Seller in
respect of the Business during the three year period prior to
the Closing (collectively, the "Seller Licenses").
(ix) All institutional customers with which Seller has done
business in connection with the Business since January 1,
1996.
(x) All loan agreements, indentures, mortgages, pledges,
conditional sale or title retention agreements, security
agreements, equipment obligations, guaranties, leases or lease
purchase agreements to which Seller is a party in respect of
the Business or by which it is bound in respect of the
Business or in any way affecting the Business or the Assets.
(xi) All contracts, agreements, commitments or other understandings
or arrangements to which Seller is a party in respect of the
Business or by which it or any of its property is bound or
affected in respect of the Business but excluding
(A) purchase and sales orders and commitments made in the
ordinary course of business involving payments or
receipts by Seller of less than $500 in any single case
but not more than $1,000 in the aggregate,
(B) contracts entered into in the ordinary course of
business and involving payments or receipts by Seller of
less than $500 in the case of any single contract but
not more than $1,000 in the aggregate, and
(C) contracts entered into in the ordinary course of
business which are terminable by Seller on less than 30
days' notice without any penalty or consideration and
involving payments or receipts by Seller of less than
$500 in the case of any single contract but not more
than $1,000 in the aggregate.
(xii) All collective bargaining agreements, employment and
consulting agreements, executive compensation plans, bonus
plans, deferred compensation agreements, employee pension
plans or retirement plans, employee stock options or stock
purchase plans and group life, health and accident insurance
and other employee benefit plans, agreements, arrangements or
commitments, whether or not legally binding, including,
without limitation, holiday, vacation, Christmas and other
bonus practices, to which Seller is a party or is bound which
relate to the Business.
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(xiii)All current full time employees of Seller with respect to the
Business and their current annual salaries or other methods of
direct or indirect compensation, as well as a list of all
temporary or part time employees who Seller placed as
supplemental staff with respect to the Business as of January
12, 1998.
(xiv) As of a date no earlier than January 12, 1998, a list of the
rate or rates at which each of the customers of Seller is
billed.
(xv) As of January 12, 1998, a list of all current patients being
serviced by Seller.
(b) All of the contracts, agreements, leases, licenses and commitments
required to be listed on Seller's Disclosure Schedule (other than
those which have been fully performed) are valid and binding,
enforceable in accordance with their respective terms, in full force
and effect and, except as otherwise specified in the Disclosure
Schedule, the enforceability thereof will not be affected by the
sale of Assets contemplated hereby, so that, after the Closing
Purchaser will continue to be entitled to the full benefits thereof.
(c) Except as disclosed in Seller's Disclosure Schedule, there is not
under any such contract, agreement, lease, license or commitment any
existing default, or event which, after notice or lapse of time, or
both, would constitute a default or result in a right to accelerate
or loss of rights, and none of such contracts, agreements, leases,
licenses or commitments is, either when considered singly or in the
aggregate with others, unduly burdensome, onerous or materially
adverse to the Business, or its properties, assets, earnings or
prospects, or likely, either before or after the Closing, to result
in any material loss or liability. None of Seller's existing or
completed contracts in respect of the Business is subject to
renegotiating with any governmental body.
(d) True and complete copies of all such contracts, agreements, leases,
licenses and other documents listed on Seller's Disclosure Schedule
(together with any and all amendments thereto) have been delivered
to Purchaser and initialed by Seller's Secretary or Seller's counsel
and identified with a reference to this Section of this Agreement.
3.9 Brokers. The only person that the parties to this Agreement have
dealt with in connection with this Agreement is Gene Berger of Jay
Isle Associates. Purchaser has dealt with Gene Berger with respect
to any compensation payable to Gene Berger and Purchaser shall not
look to Seller for the payment of any portion of the fee that it
owes to Gene Berger. Purchaser agrees to indemnify Seller against
any claim raised by Gene Berger in connection with nonpayment of his
fee by Purchaser. Seller agrees to indemnify Purchaser against any
claims asserted by brokers claiming through Seller.
3.10 Taxes. Seller shall be responsible for all personal property taxes
for the business of Seller through the date of the Closing.
3.11 Ownership; Sufficiency.
(a) Except as otherwise described in the disclosure Schedule with a
reference to this Section, Seller is the owner, beneficially and of
record, of all of the Assets, free and clear of all liens,
encumbrances, security agreements, equities, options, claims,
charges and restrictions, and Seller will transfer the Assets to
Purchaser at the Closing, free and clear of all liens, encumbrances,
security agreements, equities, options, claims, charges and
restrictions.
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(b) Except for insubstantial assets which can be replaced for not more
than an aggregate of $1,000, the Assets include absolutely all
fixed, non-fixed, tangible and intangible assets which were used by
Seller in connection with the Business on the date hereof. All such
assets are accepted as is , dependent upon inspection of Purchaser
prior to Closing.
(c) There are no defects in any fixed assets or other conditions
relating thereto which, in the aggregate, materially adversely
affect the operation or value of such fixed assets.
3.12 Intellectual Property. Seller's use of the name Metro and each other
trade name, servicemark or logo currently used by Seller in the conduct of the
Business does not conflict with the rights of any third party. Seller has filed
all such instruments and documents as are required for it duly to do business in
the State of New Jersey under the name Metro.
3.13 JCAHO and CAHC Accreditation. The Toms River, NJ and Edison, NJ, and
Shrewsbury, NJ offices are accredited by JCAHO and CAHC.
3.14 No Change in Relations with Customers. Neither Seller nor any of
Seller's officers or directors, has knowledge that any customers of the Business
intend to cease doing business with the Business, or materially to alter the
amount of the business that they are presently doing with Seller, whether as a
result of the transactions contemplated hereby or otherwise.
3.15 Compliance With Environmental Laws. Seller does not own any real
property with respect to or in connection with the Business and has been at all
times prior, and presently is, in compliance with all federal and state
environmental statutes or laws concerning environmental protection and the use
or disposal of hazardous substances at or in respect of its leased real
property. Neither Purchaser nor NYHC will incur any environmental liability as a
result of actions or omissions by Seller or any of their predecessors and Seller
agrees to indemnify Purchaser and NYHC against any liability that may be
asserted.
3.16 Financial Statements.
(a) Seller has delivered to Purchaser copies of Seller's financial
statements with respect to the Business for the fiscal years ended
December 31, 1994, 1995 ,1996, and 6/30/97 (the "Financial
Statements"). The Financial Statements are based upon the
information contained in the books and records of Seller and fairly
and accurately present the financial condition of the Business as of
the dates thereof and results of operations for the periods referred
to therein. The balance sheet of the Business as of December 31,
1997 is referred to herein as the "Balance Sheet," and December
31,1997 is referred to herein as the "Balance Sheet Date."
(b) The books and records of the Business are adequate to permit the
completion within 30 days of an independent audit of the Business
for such fiscal year.
3.17 Absence of Undisclosed or Contingent Liabilities. Except as and to
the extent reflected or reserved against on the face of the Balance Sheet
(excluding the notes thereto), or as otherwise set forth in the Disclosure
Schedule, as of the Balance Sheet Date Seller, in respect of the Business had no
debts, liabilities or obligations (whether absolute, accrued, contingent or
otherwise) of any nature whatsoever, including, without limitation, any foreign
or domestic tax liabilities or deferred tax liabilities for any period prior to
the close of business on the Balance Sheet Date or any other debts, liabilities
or obligations in respect of the Business relating to or arising out of any act,
transaction, circumstance or state of facts which occurred or existed on or
before the Balance Sheet Date, whether or not then known, due or payable. Except
as set forth in the Disclosure Schedule, none of Seller's employees, in respect
of the Business, is now or, will by the passage of time hereafter become,
entitled to receive any vacation time, vacation pay or severance pay
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attributable to services rendered prior to the Balance Sheet Date except as
disclosed on the face of the Balance Sheet (excluding the notes thereto) or as
otherwise set forth in the Disclosure Schedule.
3.18 No Material Adverse Changes. Since the Balance Sheet Date, there has
been no change materially adverse in the Business, or in its assets, financial
condition, gross profit, operating results, customer, employee or supplier
relations, condition or prospects.
3.19 Absence of Developments. Since Seller's acquisition and/or
development of the Business, Seller has conducted the Business only through
Seller and only through employees and other staffing persons which were hired
and retained by Seller. Since the date of such acquisition, Seller in respect of
the Business has:
(a) conducted operations only in the regular and ordinary course and in
compliance with all applicable laws and regulations;
(b) maintained reasonable business insurance;
(c) committed no waste of assets;
(d) not disposed or otherwise changed the nature of any asset other than
in the ordinary course of business,
(e) not created or suffered to exist any lien, charge or encumbrance on
any Asset or incurred any indebtedness for borrowed money other than
in the ordinary course which is secured by one or more of assets;
(f) used its best efforts to maintain and preserve its business
organization intact and maintain its relationships with suppliers,
employees, customers and others;
(g) refrained from making any material capital expenditures or
commitments for additions to the property, plant or equipment or
entering into transactions which could materially alter or affect
operations;
(h) not experienced any changes in reimbursement or reimbursement
policies from third-party payers as a result of changes in third
party payer policies, practices, procedures or schedules;
(i) not engaged in any unusual or novel methods of billing and
collection, purchase, sale, lease, management, equipment servicing
or repair, accounting or operation that vary from Seller's usual and
customary past practice; and
(j) not changed any aspect of its procedure for maintaining its books of
account and records.
3.20 Tax Matters.
(a) Seller has filed all Tax Returns that it was required to file in
connection with the Business. All such Tax Returns were correct and complete in
all material respects. All Taxes owed by Seller with respect to the Business
(whether or not shown on any Tax Return) have been paid. Seller is not currently
the beneficiary of any extension of time within which to file any such Tax
Return. No claim has ever been made by an authority in a jurisdiction where
Seller does not file Tax Returns that it is or may be subject to taxation by
that jurisdiction.
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There are no encumbrances on any of the Assets that arose in connection with any
failure (or alleged failure) to pay any Taxes.
(b) Seller has withheld and paid all Taxes required to have been withheld
and paid by it in connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder or other third party.
(c) There is no dispute or claim concerning any liability for Taxes of
Seller in connection with the Business (i) claimed or raised by any authority in
writing or orally with any directors or officers of Seller, or (ii) as to which
any such person has knowledge based upon personal contact with any agent of such
authority. The Disclosure Schedule lists all federal, state, local and foreign
income Tax Returns filed by Seller or its predecessor with respect to the
Business for taxable periods ended on or after December 31, 1995, indicates
those Tax Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit. Seller has delivered to the Purchaser
correct and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies filed, assessed against or agreed with
respect to the Business by Seller or its predecessor since December 31, 1995.
3.21 Employees.
(a) Except as disclosed in the Disclosure Schedule, no employee of
Seller in respect of the Business has notified Seller, and Seller
does not have any knowledge, that any such employee will not, accept
employment with Purchaser following the Closing;
(b) Seller, to the best of his/her knowledge, has in respect of the
Business complied in all material respects with all employment
contracts and all laws relating to the employment of labor,
including provisions thereof relating to wages, hours, equal
opportunity, collective bargaining and the payment of social
security and other taxes;
(c) Seller, to the best of his/her knowledge, does not have any material
labor relations problem pending and its labor relations are
satisfactory;
(d) To the best of Sellers' knowledge there has been no union organizing
activity in respect of the Business;
(e) there are no worker's compensation, sexual harassment,
discrimination or other claims pending against Seller in respect of
the Business nor is Seller aware of any facts that would give rise
to such claims, except as set forth in the Disclosure schedule;
(f) except as disclosed in the Disclosure Schedule with a reference to
this Section, no employee of Seller is subject to any secrecy or
non-competition agreement or any other agreement or restriction of
any kind that would impede in any way the ability of such employee
to carry out fully all activities of such employee in furtherance of
the business of Purchaser following the Closing; and
(g) To the best of Seller's knowledge no employee or former employee of
Seller has any claim with respect to any intellectual property
rights of Seller.
3.22 Gifts.
(a) Except as described in the Disclosure Schedule with a reference to
this Section, neither Seller, nor any of its officers, directors or
shareholders has made or agreed to make gifts of money, other
property or similar benefits (other than incidental gifts of
articles of
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nominal value) to any actual or potential customer, supplier,
governmental employee, political party, candidate for office,
governmental agency or instrumentality or any other person in a
position to assist or hinder Seller in connection with any actual or
proposed business transaction.
(b) Neither Seller nor any of their officers, directors, employees or
agents has directly or indirectly paid or delivered any fee,
occasion, or other money or property, however characterized, to any
physician or any other party that is in any manner remuneration for
the referral of patients to or that is in any manner remuneration
for purchasing any item or service from Seller.
3.23 [omitted]
3.24 Medicaid, Etc.
(a) Seller in respect of the Business is a participating provider, in
good standing, in the Medicaid program and in federal, state and
local Department of Health, Department of Education, Department of
Consumer Affairs ,workers compensation and Blue Cross Blue Shield
programs and in the health maintenance organizations, preferred
provider organizations, health benefit plans, health insurance
plans, and other third party reimbursement and payment programs
listed in the Disclosure Schedule (the "Payment Programs").
(b) There is no investigation or civil, administrative, or criminal
proceeding, threatened or pending, relating to Seller's
participation in any of the Payment Programs in respect of the
Business. Seller is not in respect of the Business subject to
utilization review by any Payment Program other than the ordinary
and customary utilization review of all providers participating in
such Payment Program.
(c) No Payment Program has requested or threatened any recoupment,
refund, adjustment or set-off from Seller in respect of the
Business.
(d) No Payment Program has imposed any fine, penalty or other sanction
on Seller in respect of the Business, nor has Seller in respect of
the Business been excluded from participation in any Payment Program
nor is Seller now threatened with such exclusion.
(e) Seller has not submitted to any Payment Program any false or
fraudulent claim for payment, nor has Seller at any time violated
any condition for participation, or any rule, regulation, policy or
standard of any Payment Program. Seller has not at any time violated
any law prohibiting Payment Program fraud or abuse.
(f) Seller will in a timely manner, after consultation with and approval
by Purchaser, give notice of the transactions contemplated by this
Agreement to Payment Programs to the extent required by law or the
rules, regulations or policies of the Payment Programs and in
accordance with Seller's provider agreements with the Payment
Programs.
3.25 Seller Licenses. Each of Seller Licenses is valid and in full force
and effect as of the date hereof, and except as expressly set forth in the
Disclosure Schedule, no Seller's License is subject to any limitation,
restriction, probation or other qualification. Seller has operated within the
scope of the provisions of all Seller Licenses. There is not pending, or
threatened, any investigation or proceeding which could result in the
termination, revocation, limitation, suspension, restriction or impairment of
any of Seller Licenses or the imposition of any fine, penalty or other sanctions
for violation of any requirements of any of Seller Licenses. Seller
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now has and has had at all relevant times all Governmental Approvals as are
necessary in respect of the Business in order to enable Seller to own and
conduct the Business and to occupy and lease its real property, each such
currently effective item being listed in the Disclosure Schedule.
3.26 Material Misstatements or Omissions. Neither this Agreement nor any
other document, certificate or statement furnished to Purchaser by or on behalf
of Seller in connection with this Agreement or the transactions contemplated
hereby contains any untrue statement of a material fact, or omits any material
fact necessary to make the statements contained herein or therein not misleading
in light of the context in which they were made.
3.27 No Known Adverse Effects. Except for general economic conditions and
public information concerning health care regulatory and funding matters and the
health care industry generally, there are no facts known to Seller or to their
officers, directors or employees which have not been set forth in writing in
this Agreement or disclosed in the other documents, certificates or written
statements furnished to Purchaser by or on behalf of Seller in connection
herewith or the transactions contemplated hereby, and which materially and
adversely affect or may in the future materially and adversely affect, the
Assets in the hands of Purchaser or which would or may in the future materially
and adversely affect the Purchaser's ability to operate the Business.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND NYHC
NYHC and Purchaser jointly and severally represent and warrant to Seller
that the statements contained in this Section are true, correct and complete as
of the date of this Agreement and, except as otherwise expressly provided in
this Agreement, shall be true, correct and complete on the Closing Date as
though made on the Closing Date as follows:
4.1 Organization and Qualification of Purchaser. Purchaser and NYHC are
corporations duly organized, validly existing and in good standing under the
laws of the State of New York, and have the full corporate power and authority
to own and operate their respective properties and to carry on their respective
businesses. The nature of the business conducted by Purchaser and the properties
currently owned, leased or operated by Purchaser do not currently require
Purchaser to qualify as a foreign corporation in any jurisdiction.
4.2 Authorization. This Agreement has been approved by all necessary
corporate action on behalf of Purchaser and NYHC, has been duly and validly
executed by Purchaser and NYHC, and the agreements, representations, and
warranties contained herein constitute valid and binding obligations,
representations, and warranties of Purchaser and NYHC, enforceable against each
in accordance with their terms.
4.3 No Conflicting Agreements. Except as set forth in the Disclosure
Schedule with a reference to this Section, the execution and delivery of this
Agreement by Purchaser and NYHC does not, and consummation by Purchaser and NYHC
of the transactions contemplated hereby will not: (i) violate any existing term
or provision of any law, regulation, order, writ, judgment, injunction or decree
applicable to Purchaser or NYHC, (ii) conflict with or result in a breach of any
of the terms, conditions or provisions of the Certificate of Incorporation or
bylaws of Purchaser or of any agreement or instrument to which Purchaser or NYHC
is a party, or (iii) result in the creation or imposition of any lien, charge,
security interest, encumbrance, restriction or claim upon Purchaser or NYHC or
any of their assets.
4.4 Compliance with Applicable Law. None of Purchaser, NYHC or any of
their respective officers, directors or employees knows of any facts which would
result in, nor has any of them received any notice or information of, any
violation, probable violation or default by Purchaser or NYHC under any
applicable law, regulation or order of any governmental department, commission,
board or agency or instrumentality, domestic or foreign, having jurisdiction
over Purchaser's operations which could materially adversely affect the
business,
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operations, financial condition, properties or assets of Purchaser or its
ability to consummate the transaction contemplated hereby.
4.5 Litigation. There are no actions, proceedings or investigations
pending, or to the knowledge of Purchaser, threatened, against Purchaser or NYHC
or any of their officers or directors, before any court or administrative agency
or administrative officer.
4.6 Material Misstatements or Omissions. Neither this Agreement nor any
other document, certificate or statement furnished to Seller by or on behalf of
Purchaser in connection with this Agreement contains any untrue statement of a
material fact, or omits to state any material fact necessary to make the
statements contained herein and therein not misleading in light of the context
in which they were made.
4.7 Consents and Approvals. The execution and delivery by Purchaser and
NYHC of this Agreement, and the performance by Purchaser and NYHC of their
respective obligations hereunder, do not require Purchaser or NYHC to obtain any
consent, approval or action of, or make any filing with or give any notice to,
any corporation, person or firm or any public, governmental or judicial
authority except (i) such as have been duly obtained or made, as the case may
be, (ii) those consents and approvals described in the Disclosure Schedule with
a reference to this Section and for which application has been made, and (iii)
those which the failure to obtain would not have a material adverse effect on
the transactions contemplated hereby.
4.8 Brokers. Except as set forth in Section 3.9, all negotiations relative
to this Agreement and the transactions contemplated hereby have been carried out
by representatives of Purchaser and NYHC directly with Seller, without the
intervention of any person on behalf of Purchaser or NYHC in such manner as to
give rise to any valid claim by any person retained by Purchaser or NYHC against
Seller for a finder's fee, brokerage commission or similar payment.
4.9 SEC Filings. Purchaser has delivered to Seller copies of NYHC's Form
10K for its fiscal year ended December 31, 1996, and its Form 10Q for the
periods ending March 31, 1997 and June 30, 1997. The financial information
contained in such Forms 10K and 10Q of NYHC is based upon the information
contained in the books and records of NYHC and fairly and accurately presents
the financial condition of NYHC as of the dates thereof and the results of the
operations of NYHC for the periods referred to therein.
5. PRE-CLOSING COVENANTS OF SELLER. Seller hereby covenants and agrees that,
between the date hereof and the Closing, it will comply with the provisions of
this Section, except to the extent Purchaser may otherwise consent in writing.
5.1 Inspection of Properties and Books.
(a) Seller shall, at reasonable times acceptable to both parties, assist
any individual or individuals designated by Purchaser with
reasonable prior notice to visit or inspect any property of Seller
with respect to the Business, including books of accounts and
records with respect to the Business, to make extracts or copies of
such books and records and to discuss the affairs, finances and
accounts of Seller with its officers, and shall use its best efforts
to obtain access for Purchaser to accountants' work papers.
Purchaser agrees to treat all such material (the "Evaluation
Material") confidentially, and shall not disclose any Evaluation
Material or any information contained therein to any party, except
as otherwise set forth herein; provided, however, that Purchaser is
authorized to disclose the Evaluation Material to its investment
bankers, financial advisors and legal counsel. Purchaser shall
instruct its investment bankers, financial advisors, legal counsel,
officers, directors, employees, agents or representatives of the
confidential nature of the
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Evaluation Material and shall be responsible for insuring that the
Evaluation Material is kept confidential by such persons.
(b) In the event the Closing is not consummated, all Evaluation Material
shall be returned to Seller within ten days of a request therefor,
with the understanding that Purchaser shall retain no copies of the
Evaluation Material and shall not disclose to any other party the
Evaluation Material or information contained therein, with the
exception of (i) information which becomes generally available to
the public other than as a result of disclosure by Purchaser, (ii)
information included in the Evaluation Material which is first
disclosed by a third party not bound by a confidentiality agreement
with Seller or (iii) information required to be disclosed in any
registration statement or periodic report under the disclosure
requirements of applicable federal and state securities laws, it
being agreed that prior to making any disclosure pursuant to this
clause (iii), Purchaser shall first provide Seller with reasonable
(under the circumstances) advance notice of the disclosure, and if
Seller does not consent to the disclosure, Purchaser may make the
disclosure only after providing Seller with an opinion of counsel
explaining the basis for the disclosure and the legal requirements
therefor.
5.2 Other Contracts. Except in the ordinary course of business, Seller
shall not enter into or become subject to any agreement, transaction, or
commitment which would restrict or impair the obligation or ability of Seller to
comply with all of the terms of this Agreement.
5.3 Ongoing Operation. Seller shall carry on its business diligently and
substantially in the same manner as heretofore conducted. The Business shall be
conducted only in the ordinary course and Seller shall not take any action
except in the ordinary course of the Business, on an arm-length basis and in
accordance in all material respects with all applicable laws, rules and
regulations and Seller's past custom and industry practice.
5.4 Indebtedness. Seller will not create, incur, assume, guarantee or
otherwise become liable with respect to any indebtedness related or connected
with, or secured by, the Assets or the Business, except in the ordinary course
of its business.
5.5 Records; Monthly Financial Statements. Seller shall maintain its
books, accounts and records in the usual, regular and ordinary manner, and
shall, upon Purchaser's request, promptly provide Purchaser with monthly
financial statements for such month prepared on a basis consistent with the
Financial Statements.
5.6 Notice of Breach. Promptly after becoming aware of the occurrence or
threatened occurrence of any event which would cause or constitute a breach of
any warranty, representation, covenant or agreement of Seller contained herein,
Seller shall give notice in writing of such event or threatened event to
Purchaser and use all reasonable efforts to prevent or promptly remedy such
breach or threatened breach.
5.7 Employment Matters. With respect to the Business, Seller shall not,
directly or indirectly, (i) enter into or modify any employment, severance or
similar agreements or arrangements with, or grant any bonuses, salary increases,
severance or termination paid to, any officers or directors or executive
employees who are not shareholders or (ii) except in the ordinary course of
business, take any action with respect to the grant of any bonuses, salary
increases, severance or termination pay or with respect to any increase of
benefits payable in effect on the date hereof for any of its employees who are
not officers, directors or executive employees. With respect to the Business,
Seller shall not adopt or amend any bonus, profit sharing, compensation, stock
option, pension, retirement, deferred compensation, employment or other employee
benefit plan, trust, fund or group arrangement for, the benefit or welfare of
any employees.
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5.8 Insurance. Prior to Closing, Seller shall not cancel or terminate its
current insurance policies or cause any of the coverage thereunder to lapse,
unless simultaneously with such termination, cancellation or lapse, replacement
policies providing coverage equal to or greater than the coverage under the
canceled, terminated or lapsed policies for substantially similar premiums are
in full force and effect.
5.9 Preservation of Business. Seller shall with respect to the Business
(i) use its best efforts to preserve intact the business organization and
goodwill, keep available the services of Seller's officers and employees as a
group and maintain satisfactory relationships with suppliers, distributors,
customers and others having business relationships with Seller, (ii) upon
request, confer on a regular basis with representatives of Purchaser to report
operational matters and the general status of ongoing operations, (iii) not
intentionally take any action which would render, or which reasonably may be
expected to render, any representation or warranty made by Seller in the
Agreement untrue at the Closing, (iv) notify Purchaser of any emergency or other
change in the normal course of Seller's business or in the operation of Seller's
properties and of any governmental or third party complaints, investigations or
hearings (or communications indicating that the same may be contemplated) if
such emergency, change, complaint, investigation or hearing would be material,
individually or in the aggregate, to the business, operations or financial
condition of Seller or the ability of Seller to consummate the transactions
contemplated by this Agreement, and (v) promptly notify Purchaser in writing if
Seller or its representatives shall discover that any representation or warranty
made by Seller in this Agreement was when made, or has subsequently become,
untrue in any respect.
5.10 Brokers. Except as set forth in Section 3.9, all negotiations
relative to this Agreement and the transactions contemplated hereby have been
carried out by representatives of Seller directly with Purchaser and NYHC,
without the intervention of any person on behalf of Seller in such manner as to
give rise to any valid claim by any person retained by Seller against Purchaser
or NYHC for a finder's fee, brokerage commission or similar payment.
5.11 Best Efforts. Seller agrees to use its best efforts in good faith to
satisfy the various conditions to Closing and to consummate the transactions
provided for herein as expeditiously as possible. Seller will not take or
knowingly permit to be taken any action that would be in breach of the terms or
provisions of this Agreement or that would cause any of its representations and
warranties contained herein to be or become untrue.
5.12 Additional Disclosure. From the date of this Agreement to and
including the Closing Date, Seller will advise Purchaser of each event
subsequent to the date hereof which would have had to be disclosed on any
schedule or exhibit to this Agreement had it occurred prior to the date hereof.
6. PRE-CLOSING COVENANTS OF PURCHASER AND NYHC
NYHC and Purchaser hereby jointly and severally covenant and agree that,
between the date hereof and the Closing, each of them will comply with the
provisions of this Section, except to the extent Seller may otherwise consent in
writing.
6.1 Other Contracts. Except in the ordinary course of business, neither
Purchaser nor NYHC shall enter into or become subject to any agreement,
transaction or commitment which would restrict or impair the obligation or
ability of Purchaser or NYHC to comply with all of the terms of this Agreement.
6.2 Best Efforts. Purchaser and NYHC agree to use their respective best
efforts in good faith to satisfy the various conditions to Closing and to
consummate the transactions provided for herein as expeditiously as possible.
Neither Purchaser nor NYHC will take or knowingly permit to be taken any action
that would be in breach of the terms or provisions of this Agreement or that
would cause any of its representation and warranties contained herein to be or
become untrue.
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6.3 Additional Disclosure. From the date of this Agreement to and
including the Closing Date, Purchaser and NYHC will advise Seller of each event
subsequent to the date hereof which would have had to be disclosed on any
schedule or exhibit to this Agreement had it occurred prior to the date hereof.
7. POST-CLOSING COVENANTS
The parties agree as follows with respect to the period following the
Closing:
7.1 Further Assurances. If at any time after the Closing, any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other party
reasonably may request, all at the sole cost and expense of the requesting party
unless the requesting party is entitled to indemnification therefor under this
Agreement.
7.2 Litigation Support. If and for so long as any party is actively
contesting or defending against any action, suit, proceedings, hearing,
investigation, charge, complaint, claim or demand in connection with (a) any
transaction contemplated by this Agreement, or (b) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction on or prior to the Closing Date
involving the Seller, the other party will cooperate with it and its counsel in
the contest or defense, make available their personnel, and provide such
testimony and access to their books and records as shall be necessary in
connection with the contest or defense, all at the sole cost and expense of the
contesting or defending party unless the contesting or defending party is
entitled to indemnification therefor under Section XI; provided, however, that
neither party shall charge the other for its internal personnel costs.
7.3 Non-Competition. During the five-year period beginning with the
Closing, Seller shall not, directly or indirectly:
(a) engage in any aspect of any home care related business within the
State of New Jersey.
(i) In the event Seller obtains a patient referral assignment in
the State of New Jersey, Seller agrees to refer such
assignments/referrals to Purchaser,
(ii) In the event Seller obtains a patient referral assignment in
the State of New Jersey through "statewide" contracts obtained
by Seller subsequent to Closing, then Seller agrees to
subcontract such assignments/referrals to Purchaser at an
agreed upon rate.
7.4 For a period of one year following the Closing, neither Purchaser or
Seller will hire or otherwise retain any person who was an office staff employee
or consultant to the other party at any time during the one-year period
immediately prior to such hiring or other retainer, without the prior written
consent of the other party except as per attached schedule 7.4.
7.5 Access to Records. During a period after the Closing consistent with
regulatory requirements, Purchaser will, on reasonable notice, give to Seller
access to the books and records of the Business for periods prior to the
Closing. Seller will have the right to copy such records, as needed.
8. CONDITIONS PRECEDENT TO CLOSING
8.1 Conditions Precedent to Obligation of Seller. The obligation of Seller
to consummate and effect this Agreement are subject to the satisfaction in all
material respects, on or before the Closing Date, of the following conditions
(unless waived by Seller in writing in the manner provided in this Agreement):
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(a) The representations and warranties of Purchaser set forth in this
Agreement shall be accurate in all material respects on and as of
the Closing as though made on and as of the Closing (except where
stated to be as of an earlier date), except for any changes
resulting from activities or transactions which may have taken place
after the date hereof which are expressly permitted by this
Agreement or which have been entered into in the ordinary course of
business and are not expressly prohibited by this Agreement;
(b) Purchaser and NYHC shall have performed all obligations and complied
with all covenants required to be performed or to be complied with
by Purchaser under this Agreement prior to or at the Closing Date
including payment of the Purchase Price and the delivery of all
documents required at the Closing; and
(c) Seller shall have received a certificate dated the Closing Date and
signed by the President of Purchaser and NYHC to the effect that the
representations and warranties made by Purchaser in this Agreement
are true and accurate in all material respects as of the Closing
(or, where applicable, as of the earlier specified date), which
certificate shall be in the form of an Exhibit to this Agreement.
(d) All action necessary to authorize the execution, delivery and
performance of this Agreement by Purchaser and NYHC and the
consummation of the transactions contemplated hereby shall have been
duly and validly taken by Purchaser or NYHC, as the case may be.
(e) Purchaser and NYHC shall have furnished Seller with copies of all
consents or resolutions adopted or executed by Purchaser or NYHC, as
the case may be, in connection with such actions, certified by the
Secretary of Purchaser or NYHC, as the case may be.
(f) All material governmental filings, authorizations and approvals that
are required for the consummation of the transactions contemplated
hereby shall have been duly made and obtained by Purchaser
(excepting filings required by Purchaser or NYHC pursuant to
applicable securities laws).
(g) Seller shall have received from counsel to Purchaser and NYHC an
opinion dated the Closing, to the following effect:
(i) Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of New York.
(ii) Execution and delivery of this Agreement and the Note, and the
consummation of the transactions contemplated hereby have and
thereby, been duly and validly authorized by all necessary corporate
action by Purchaser and this Agreement and the Note are the valid
and binding obligations of Purchaser, enforceable against Purchaser
in accordance with their respective terms except as enforcement can
be limited by general equitable principles or bankruptcy, insolvency
or similar laws affecting creditor's rights generally.
(iii) The execution and delivery of this Agreement and the Note will
not violate or conflict with the Certificate of Incorporation or
bylaws of Purchaser and NYHC or any agreement known to such counsel
to which Purchaser or NYHC is a party or by which Purchaser or NYHC
or its assets are bound.
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(iv) No consent, approval, authorization or order of, and no notice
to or filing with, any governmental agency or body or any court is
required to be obtained or made by Purchaser pursuant to this
Agreement except such as has been obtained or made.
(v) NYHC is a corporation duly organized, validly existing and in
good standing in the State of New York.
(vi) Execution and delivery of this Agreement by NYHC and the
consummation of the transactions contemplated hereby and thereby,
have been duly and validly authorized by all necessary corporate
acts by NYHC and is the valid and binding obligation of NYHC,
enforceable against NYHC in accordance with its terms except as
enforcement can be limited by general equitable principles or
bankruptcy, insolvency or similar laws affecting creditor's rights
generally.
(vii) The execution and delivery of this Agreement by NYHC will not
violate or conflict with the Certificate of Incorporation or bylaws
of NYHC or any agreement known to such counsel to which NYHC is a
party or by which NYHC or its assets are bound.
(viii) No consent, approval, authorization or order of, and no
notice to or filing with, any governmental agency or body or any
court is required to be obtained or made by NYHC in connection with
the execution or delivery of this Agreement and the Note, except
such as has been obtained or made.
(ix) After due inquiry, such counsel is not aware of any pending or
threatened action, proceeding or investigation against Purchaser or
NYHC before any court or administrative agency which would result in
any materially adverse change in the operations or financial
condition of Purchaser.
8.2 Waiver of Conditions Precedent. Seller may waive any or all of the
conditions precedent set forth in this Section, either prospectively or
retroactively, by giving written notice of such waiver to Purchaser. No waiver
of any condition precedent pursuant to this Section shall, unless otherwise
expressly stated in such written notice of waiver, extend to any covenant or
agreement contained herein or to any other condition precedent.
9. Conditions Precedent to Obligation of Purchaser. The obligation of Purchaser
to consummate and effect this Agreement are subject to the satisfaction in all
material respects, on or before the Closing Date, of the following conditions
(unless waived by Purchaser in writing in the manner provided in this
Agreement):
9.1 Representations and Warranties of Seller Performance by Seller .
(a) The representations and warranties of Seller set forth in this
Agreement shall be accurate in all material respects on and as of
the Closing as though made on and as of the Closing (except where
stated to be as of an earlier date), except for any changes
resulting from activities or transactions which may have taken place
after the date hereof which are expressly permitted by this
Agreement;
(b) Seller shall have performed all obligations and complied with all
covenants required to be performed or to be complied with by it
under this Agreement prior to the Closing;
(c) Purchaser shall have received a certificate dated as of the Closing
and signed by the President of Seller to the effect that the
representations and warranties made by Seller
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in this Agreement are true and accurate in all material respects as
of the Closing (or, where applicable, as of the earlier specified
date) in the form attached as an Exhibit;
(d) All action necessary to authorize the execution, delivery and
performance of this Agreement by Seller and the consummation of the
transactions contemplated hereby shall have been duly and validly
taken by Seller.
(e) Seller shall have furnished Purchaser with copies of all consents or
resolutions adopted or executed by Seller in connection with such
actions, certified by the Secretary of Seller.
(f) There shall have been no event or change occurring between the
execution of this Agreement and the Closing which in the aggregate
may be deemed to have an adverse effect on the business, operations,
financial condition or properties of the Business which is material
to Purchaser as purchaser of the Assets.
(g) Except as described in the Disclosure Schedule with a reference to
this Section, there shall be no actions, proceedings or
investigations pending, or threatened against Seller or its officers
or directors before any court, any administrative agency or
administrative officer or executive, which could result in any
adverse change in the business, operations, financial condition or
properties of the Business which is material to the Purchaser as
purchaser of the Assets.
(h) Except as set forth in this Agreement, Seller shall have obtained,
or caused to be obtained, each consent and approval necessary in
order that the transactions contemplated herein not constitute a
breach or violation of, or result in a right of termination or
acceleration of, or creation of any encumbrance on any of the
Assets, pursuant to the provisions of any agreement, arrangement or
undertaking of or affecting Seller or any license, franchise or
permit of or affecting Seller .
(i) All material governmental filings, authorizations and approvals that
are required for the consummation of the transactions contemplated
hereby shall have been duly made and obtained by Seller (excepting
filings required by Purchaser pursuant to applicable securities
laws).
(j) Purchaser shall not have discovered any fact or circumstance
existing as of the date of this Agreement which has not been
disclosed to Purchaser as of the date of this Agreement regarding
the business, assets, liabilities, properties, condition (financial
or otherwise), results of operations or prospects of Seller which
is, individually or in the aggregate with other such facts and
circumstances, materially adverse to Seller or the value of the
Assets.
(k) There shall have been no damage, destruction or loss of or to any of
the Assets, whether or not covered by insurance which, in the
aggregate, has or would be reasonably likely to have, a material
adverse effect on Seller.
(l) Purchaser shall have received from counsel to Seller, an opinion
dated the Closing, to the following effect:
(i) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of New Jersey;
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(ii) Execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action, corporate or otherwise, by
Seller and this Agreement is a valid and binding obligation of
Seller , enforceable against Seller in accordance with its terms
except as enforcement can be limited by general equitable principles
or bankruptcy, insolvency or similar laws affecting creditor's
rights generally;
(iii) The execution and delivery of this Agreement and the sale of
the Assets by Seller will not violate or conflict with the
Certificate of Incorporation or bylaws of Seller or any agreement
known to such counsel to which Seller is a party or by which Seller
or its assets are bound (except that no opinion need be given as to
the assignability of any contract or agreement included in the
Assets);
(iv) No consent, approval, authorization or order of, and no notice
to or filing with, any governmental agency or body or any court is
required to be obtained or made by Seller for the sale of the Assets
pursuant to this Agreement, except such as have been obtained or
made;
(v) Except as disclosed in this Agreement or the Exhibits or
Schedules, after due inquiry such counsel is not aware of any
pending or threatened action, proceeding or investigation before any
court or administrative agency which could result in any material
adverse change in the operation or financial condition of Seller or
have a materially adverse effect on the Assets in the hands of
Purchaser.
9.2 Waiver of Conditions Precedent. Purchaser may waive any or all of the
conditions precedent set forth in this Section, either prospectively or
retroactively, by giving written notice of such waiver to Seller. No waiver of
any condition precedent pursuant to this Section shall, unless otherwise
expressly stated in such written notice of waiver, extend to any other covenant
or agreement contained herein or to any other condition precedent.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
10.1 The representations, warranties, covenants and agreements made by the
respective parties in this Agreement or in any certificate executed and
delivered in connection with the transactions contemplated hereby shall survive
the Closing for a period of two (2) years following the Closing, except that
representations as to Taxes shall survive without limit as to time. All
covenants, agreements, representations and warranties made herein or pursuant
shall be deemed to be material and to have been relied upon by the parties,
notwithstanding any investigation heretofore or hereafter made by or on behalf
of the parties prior to the Closing or any knowledge of any breach or other
event which is obtained or learned prior to the Closing.
11. INDEMNIFICATION
11.1 Indemnification.
(a) Seller agrees to indemnify in respect of, and hold Purchaser and
NYHC harmless against, any and all damages, claims, deficiencies,
losses, and expenses (including, without limitation, legal and
investigatory and other fees in attempting to avoid the same or
defending against the same) (collectively "Damages") resulting from:
(i) any misrepresentation, breach of warranty, or non-fulfillment or
failure to perform any covenant or agreement on the part of Seller
made as a part of or contained
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in this Agreement or in any certificate executed and delivered
pursuant to this Agreement or in connection with the transactions
contemplated hereby,
(ii) any liabilities not expressly assumed by Purchaser hereunder;
and (iii) Seller's operation of the Business prior to the Closing.
(b) Purchaser and NYHC jointly and severally agree to indemnify in
respect of, and hold Seller harmless against, any and all Damages
resulting from:
(i) any misrepresentation, breach of warranty, or non-fulfillment or
failure to perform any covenant or agreement on the part of
Purchaser or NYHC made as a part of or contained in this Agreement
or in any certificate executed and delivered pursuant to this
Agreement or in connection with the transactions contemplated
hereby,
(ii) for periods after the Closing, the Assumed Liabilities, and
(iii) Purchaser's operation of the Assets after the Closing.
(c) The party claiming indemnification hereunder is hereinafter referred
to as the "Indemnified Party" and the party against whom such claims
are asserted hereunder is hereinafter referred to as the
"Indemnifying Party."
11.2 Limitation of Liability. Neither party shall be liable to the other
party to this Agreement except to the extent that the aggregate amount of
Damages for which they would otherwise (but for this provision) be liable under
this Section, net of any insurance payments, exceeds in the aggregate the sum of
five thousand dollars ($5000) and then only to the extent of such excess.
11.3 Other Rights and Remedies Not Affected. The indemnification rights of
the parties under this Section are independent of and in addition to such rights
and remedies as the parties may have at law or in equity or otherwise for any
misrepresentation, breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any party including without limitation the
right to seek specific performance, rescission or restitution, none of which
rights or remedies shall be affected or diminished hereby.
12. RIGHT OF FIRST REFUSAL
(a) Purchaser may desire to purchase the remaining staffing operations
of Seller not included in the Business ( the Remainder). Seller has
not determined whether or not it is prepared to sell Remainder at
this time and is willing to grant Purchaser certain preferential
rights with respect to any eventual sale of the Remainder.
(b) For a period of three years from the date of closing;
(i) Seller agrees to notify Purchaser, in writing, within ten (10)
days of Seller's receipt of an acceptable bona fide written offer of
purchase of the Remainder or any portion of the Remainder. The
notice will contain, at a minimum, the name and address of the buyer
and a copy of the offer to purchase or a detailed description of the
material terms of the proposed transaction.
(ii) Purchaser shall have the right and option to purchase the
Remainder or the portion of the Remainder which is subject of the
notice referred to in 12(b)(i) at the identical offer. This right
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and option may be exercised by the Purchaser at any time within
fifteen (15) business days after the receipt of the notice referred
to in 12 (b)(i) by providing written notice to the Seller.
(c) As of this date no other asset is being offered for sale.
13. CLOSING
13.1 The closing is contingent upon the following:
(a) CAHC accreditation in good standing
(b) Unrestricted due diligence
(c) Visiting the 3 offices and meeting its staff
13.2 Closing. The closing of this Agreement (the "Closing") shall take
place at the New York offices of Purchaser during the week of February 9,1998,
unless a later time and date is mutually agreed upon by the parties (the
"Closing Date").It is agreed between the parties that the effective date of the
sale shall be February 8,1998.
13.3 Seller's Deliveries at Closing. At the Closing Seller will deliver
the following documents to the Purchaser all of which shall be reasonably
satisfactory in form and substance to the Purchaser and its counsel:
(a) Bill of Sale for the Assets in the form attached as Exhibit 3.
(b) An opinion from counsel to Seller, dated the Closing Date, in the
form described elsewhere in this Agreement.
(c) All consents, approvals and authorizations, all notices and all
registrations and filings required to be obtained, given or made
under any law, statute, rule, regulation, judgment, order,
injunction, contract, agreement or other instrument to which Seller
is subject, bound or a party, or by which Seller or any of its
properties is bound or subject, in each case which is required to
permit the consummation of the transactions contemplated by the
Agreement without contravention, violation or breach by Seller of
any of the terms thereof.
(d) Certificate of good standing for Seller from the Secretary of the
State of New Jersey dated as of a date reasonably prior to the
Closing Date.
(e) Certified copy of resolutions of the Board of Directors and the
shareholders of Seller authorizing, inter alia, the execution and
delivery of this Agreement, the sale of the Assets and the other
transactions contemplated under this Agreement.
(f) At Seller's office, such business records related to the Assets as
may be reasonably requested by the Purchaser, including, without
limitation, employee and personnel folders and applications,
payroll, tax related records and financial data.
(g) Officer's Certificate in the form described elsewhere in this
Agreement.
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(h) Such other documents, instruments, certificates and agreements,
including assignment of space lease to Purchaser, as Purchaser and
its counsel may reasonably request.
13.4 Purchaser's Deliveries at Closing. At the Closing, Purchaser and NYHC
shall deliver the following documents to Seller all of which shall be in a form
reasonably acceptable to Seller and its counsel:
(a) Satisfaction of Purchaser's purchase price obligations by payment of
the cash portion of the Purchase Price, and the issuance of the
Note.
(b) All consents, approvals and authorizations, all notices and all
registrations and filings required to be obtained, given or made
under any law, statute, rule, regulation, judgment, order,
injunction, contract, agreement or other instrument to which the
Purchaser or NYHC is a party, or by which either of them or any of
their respective properties is bound or subject, in each case which
is required to permit the consummation of the transactions
contemplated by this Agreement without contravention, violation or
breach by the Purchaser or NYHC of any of the terms thereof.
(c) An opinion from counsel to the Purchaser and NYHC, dated the Closing
Date, in the form described elsewhere in this Agreement.
(d) Certificates of good standing, dated as of a date reasonably prior
to the date of Closing, from the Secretary of State of the State of
New York as to the good standing of the Purchaser and NYHC.
(e) An assumption agreement pursuant to what the Purchaser assumes the
Assumed Liabilities.
(f) Certified copy of resolutions of the Board of Directors of Purchaser
and NYHC authorizing, inter alia, the execution and delivery of this
Agreement and in the case of Purchaser, the Note, and in both cases,
the purchase of the Assets, and the other transactions contemplated
hereby.
(g) Officer's Certificate in the form described elsewhere in this
Agreement.
(h) Such other documents, instruments, certificates and agreements
including without limitation, if assumed, the assumption of the
lease, as Seller and its counsel may reasonably request.
14. MISCELLANEOUS
14.1 Notice. All notices and communications required or permitted to be
given hereunder shall be in writing, signed by the sender, and delivered by
personal delivery overnight courier service or by registered mail to:
If to Seller :
c/o Metro Health Care services, Inc.
85 Route 27
Edison, New Jersey
With a copy to:
Richard M. Thuring, Esq.
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1253 Springfield Avenue
New Providence, New Jersey 07974
If to Purchaser :
c/o New York Health Care, Inc.
1850 McDonald Avenue
Brooklyn New York 11223
With a copy to:
Avrohom P. Dubin, Esq.
1140 East 19th Street
Brooklyn New York 11230
or such other address as shall have been furnished in writing. Receipt by,
or filing with, the respective parties of any communications shall be deemed to
have occurred for the purpose of this Agreement, when personally delivered, or
next business day if sent by overnight courier, or two days after deposit
thereof, postage prepaid, properly addressed, in the United States mail.
14.2 Entire and Sole Agreement. This Agreement, including all Exhibits and
Schedules (which by this reference shall incorporate herein all such Exhibits
and Schedules as if more fully set forth herein), constitutes the entire
agreement between the parties and as of Closing supersedes all agreements,
representations, warranties, statements, promises and understandings, whether
oral or written, with respect to the subject matter hereof. After Closing
neither party shall be bound by or charged with any oral or written agreements,
representations, warranties, statements, promises or understandings not
specifically set forth in this Agreement or in the certificates or documents
delivered in connection herewith.
14.3 Successors and Assigns. Except as otherwise provided in this
Agreement, all covenants and agreements of the parties contained in this
Agreement shall be binding upon and inure to the benefit of the respective
successors and permitted assigns of the parties and the heirs, personal
representatives, executors and assigns of Seller and Purchaser. This Agreement
may not be assigned by any party without the prior express written consent of
the other parties.
14.4 Expenses. Whether or not the transactions contemplated hereby shall
be consummated, each party shall be solely responsible for payment of all
expenses incurred by it in connection with the consummation of this Agreement
and the transactions contemplated hereunder, except as otherwise provided
herein. None of Seller's expenses with respect to this transaction shall be
charged to the Business or shall otherwise reduce the Assets.
14.5 Sales Taxes. Seller shall collect from Purchaser all New York, New
Jersey and any other state or local sales or use taxes, if any, payable by
Purchaser in connection with this transaction.
14.6 Severability. Should any one or more of the provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions of
this Agreement shall be given effect separately, from the provision or
provisions determined to be illegal or unenforceable and shall not be affected
thereby.
14.7 Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York without regard
to conflicts of laws principles.
14.8 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be an original, but all of which together
shall constitute one and the same Agreement.
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14.9 Amendments. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing.
14.10 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of the parties , and it is not the
intention of the parties to confer third-party beneficiary rights upon any other
person or entity.
14.11 Headings. The headings in this Agreement are for purposes of
convenience and easy reference only and shall not limit or otherwise affect the
meaning hereof.
14.12 Disputes. In the event of any dispute which arises between the
parties and which relates to the subject matter of this Agreement, the parties
acknowledge and agree that any such dispute shall be submitted for binding
arbitration in New York, New York in accordance with the Arbitration Commercial
Rules procedures established by the American Arbitration Association or, if such
association is not then in existence, an independent association of arbitrators
which may be designated by, agreement of the parties. In the event the parties
are unable to agree on an independent association of arbitrators from which
arbitrators may be drawn, either party may apply to a court of competent
jurisdiction for appointment of arbitrators, however, such application will only
be made in the event the American Arbitration Association is not then in
existence. The arbitrator(s) shall make detailed written findings to support
their award. The prevailing party in any such arbitration proceeding shall be
awarded such costs and expenses (including reasonable attorney's fees and expert
witness fees) as were incurred by the prevailing party as a result of the
institution and prosecution of the arbitration proceeding including all costs
and expenses (including reasonable attorney's fees and expert witness fees) to
enter judgment upon or enforce any such award including all appellate
proceedings.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
NYHC NEWCO PAXXON, INC.
By:________________________________
Its:_________________________________
NEW YORK HEALTH CARE, INC.
By:________________________________
Its:_________________________________
METRO HEALTHCARE SERVICES, INC.
By:________________________________
Its: ________________________________
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into effective this February 25, 1998
among NYHC NEWCO PAXXON, INC., a New York corporation ("Purchaser"), and HEART
TO HEART HEALTHCARE SERVICES, INC., a New Jersey corporation ("Seller").
RECITALS
Seller conducts the business of home care under the name Heart to Heart
Health Care Services, Inc. in East Orange, NJ, (the "Business"). Purchaser is a
wholly owned subsidiary of New York Health Care, Inc., a New York corporation
("NYHC") which desires to purchase the assets of the Business as described in
the Disclosure Schedule. Purchaser also desires to assume certain liabilities of
the Business described in the Disclosure Schedule. Seller desires to enter into
these transactions with Purchaser.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and in reliance upon the representations and warranties
contained herein, the parties agree as follows:
1. DEFINITIONS
The following terms used in this Agreement shall, unless the context requires
otherwise, have the meanings designated below:
1.1 Assets means all of the assets and properties of Seller used by it in
connection with the Business other than its cash, security deposits and accounts
receivable, including, without limitation, the following:
(a) goodwill and all slogans or trade names, including the name "Heart
to Heart" and the other names listed in the Disclosure Schedule, and
all customer lists relating to its customers ,
(b) all of Seller's contracts and other arrangements with its customers
in respect of the Business;
(c) client lists, client records, client files and other client related
materials and property;
(d) machinery, equipment, racking, supplies, leasehold improvements,
furniture and fixtures;
(e) employee lists, files, papers, books, records, sales and advertising
materials and records, sales and purchase correspondence;
(f) rights and interest in and to any licenses and commercially
practiced patents, copyrights, trademarks, trademark registration
applications (including all reissues, divisions, continuations and
extensions thereof), patent applications and patent disclosures
docketed, rights and interests in and to all intellectual property
rights and proprietary expertise, including, without limitation,
proprietary information, technical and technological data, know-how,
processes, invention, conception, memoranda, manufacturing and
engineering data, computer programs (including the licenses thereto)
and sales and advertising information,
(g) permits, authorizations, approvals or indicia of authority;
(h) right, title and interest of Seller in and to (A) the lease for the
premises at 60 Evergreen Place, East Orange, New Jersey, 144 Main
Street, Hackensack, New Jersey and any leases for personal property
which are listed in the Disclosure Schedule; (B) all purchase orders
given by Seller for the purchase of products, materials, supplies,
parts and other items used in the
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ordinary course of business; and (C) all purchase orders submitted
to Seller by customers of Seller in the ordinary course of business
with respect to which services remain to be rendered on or after the
Closing Date;
(i) prepaid expenses (it being understood, however, that no insurance
policies are being assigned to Purchaser); and
1.2 Closing Date has the meaning given to it in Section 12.1
1.3 Code means the Internal Revenue Code of 1986, as amended.
1.4 Disclosure Schedule means the schedule which will be delivered by
Seller to Purchaser prior to the closing date , and which will be initialed by
Seller and Purchaser
1.5 Intellectual Property means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements and all
patents, patent applications and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions and
reexaminations thereof, (b) all trademarks, services marks, trade dress, logos,
trade names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connections
therewith, (c) all copyrightable works, all copyrights and copyright
applications, registrations and renewals in connection therewith, (d) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (e) all computer software (including data and
related documentation), (f) all other proprietary rights, and (g) all copies and
tangible embodiments thereof (in whatever form or medium). This paragraph and
excludes any proprietary information and intellectual properties belonging to
Seller that pertain to Seller's operations other than the Business.
1.6 Purchaser means NYHC Newco Paxxon, Inc., a New York corporation, or
its designee.
1.7 Tax or Taxes means any federal, state, local or foreign income, gross
receipt, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), custom duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition, whether disputed or not.
1.8 Tax Return means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment, and including any amendment thereof.
1.9 Uniform Commercial Code means the Uniform Commercial Code applicable
in the State of New York and New Jersey.
1.10 Other terms are as defined herein.
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2. ACQUISITION OF THE ASSETS
2.1 Purchase of Assets. Subject to the terms and conditions set forth in
this Agreement, at the Closing, Purchaser shall purchase from Seller, and Seller
shall sell to Purchaser, the Assets, free and clear of all encumbrances, liens,
security interests or other claims.
2.2 Purchase Price for Assets; Allocation of Purchase Price.
(a) The aggregate purchase price for the Assets (the "Purchase Price"),
is: $1,150,000
(i) one promissory note of Purchaser in the principal amount of
$1,150,000 and in the form of Exhibit 1 (the "Note") . The Note
shall be issued at the Closing, and is referred to herein as the
"Note."
(b) Any transfer or assignment to Purchaser by Seller of any contract
which requires the consent or approval of any third party shall be
made subject to such consent or approval being obtained and Seller
shall be responsible for obtaining such consents or approvals.
(c) The Purchase Price shall be allocated to the Assets as set forth in
the Disclosure Schedule. The parties agree that they will not take a
position on any income tax return or before any governmental agency
or in any judicial proceeding that is inconsistent in any way with
this allocation and shall cooperate to complete IRS Form 8594 as
soon as practical following the Closing Date.
2.3 Liabilities.
(a) As part of the consideration for the Assets, Purchaser shall assume
and pay, perform and discharge those liabilities and obligations
which accrue after the Closing and are described as "Assumed
Liabilities" in the Disclosure Schedule with a reference to this
Section (the "Assumed Liabilities"), as they become due. Purchaser
shall not be obligated to pay, perform or discharge any such
obligation owed to a third party except to the extent that such
obligation or liability constitutes a valid and legally enforceable
claim by such third party, and Purchaser may contest in good faith
any such obligation or liability. The Assumed Liabilities include,
to the extent disclosed in the Seller's Disclosure Schedule,
obligations of the Business to perform home care services after the
Closing.
(b) With the exception of the Assumed Liabilities, all obligations of
Seller, whether known or unknown, liquidated or unliquidated,
absolute or contingent and whether arising out of a contract or
agreement or tort shall remain the sole liability of Seller, and
neither Purchaser nor NYHC shall have any liability of any kind or
nature with respect thereto. Without limiting the generality of the
foregoing, neither the NYHC nor Purchaser shall assume any liability
or obligation for:
(i) any foreign, federal, state, country or local income, franchise,
gross receipts or value added taxes, or any interest, additions to
tax or penalties thereon, accrued for, applicable to or arising from
any period through the Closing; or
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(ii) legal, accounting or other professional fees of Seller.
2.4 Collection of Receivables. The accounts receivable of the Business are
not included in the Assets and shall be retained by Seller. Any payments by
customers received by Purchaser, subsequent to Closing, which belong to Seller,
will be immediately forwarded to Seller. Seller shall not engage in any
collection activity other than the sending of routine invoices and statements
during the 30 day period following Closing. During the period following thirty
one (31) days after closing, should Seller encounter difficulty collecting
accounts receivable from a customer, which was recorded prior to closing, Seller
will discuss with, and notify, in writing, the Purchaser, at least one week
prior to any communication with the customer. Accounts Receivable of Seller
shall not be collected by Purchaser.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser and NYHC that the statements
contained in this Section are true, correct and complete as of the date of this
Agreement as follows:
3.1 Organization and Qualification. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey. Seller has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
The copies of the Certificate of Incorporation and the bylaws of Seller as
amended to date, which have been delivered to Purchaser, are complete and
correct, and Seller is not in default under or in violation of any provision of
its Certificate of Incorporation or bylaws.
3.2 Authorization. This Agreement has been approved by all necessary
shareholder and corporate action on behalf of Seller, has been duly and validly
executed by Seller, and the agreements, representations and warranties contained
herein constitute valid and binding obligations, representations and warranties
of Seller, enforceable in accordance with their terms.
3.3 Bulk Sale Law. Seller is not required to comply with the bulk sale
provisions of the Uniform Commercial Code in connection with the transactions
contemplated hereby.
3.4 No Conflicting Agreements. The execution and delivery of this
Agreement by Seller does not, and consummation by Seller of the transactions
contemplated hereby will not: (i) violate any existing term or provision of any
law, regulation, order, writ, judgment, injunction or decree applicable to
Seller or the Assets, (ii) conflict with or result in a breach of any of the
terms, conditions or provisions of the Certificate of Incorporation or bylaws of
Seller or of any agreement or instrument to which Seller is a party, or (iii)
result in the creation or imposition of any lien, charge, security interest,
encumbrance, restriction or claim upon the Assets.
3.5 Compliance with Applicable Law. Seller has at all times been in full
compliance with each legal requirement that is or was applicable to the Business
it or to the conduct of its operations or the ownership or use of any of its
assets. No event has occurred or circumstance exists that (with or without
notice or lapse of time) (A) may constitute or result in a violation by Seller
of, or a failure on the part of Seller to comply with, any legal requirement, or
(B) may give rise to any obligation on the part of Seller to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature.
3.6 Consents and Approvals. The execution and delivery by Seller of this
Agreement, and the performance by Seller of its obligations hereunder, does not
require Seller to obtain any consent, approval, agreement, or action of, or make
any filing with or give any notice to, any corporation, person, entity, or firm
or any public, governmental or judicial authority, including, without
limitation, any landlord, other than such approvals as shall have been obtained
prior to the Closing.
3.7 Litigation. Except as described in the Disclosure Schedule with a
reference to this Section, there are no actions, proceedings or investigations
pending or, to Seller's knowledge, threatened, against
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or affecting the Assets or the Business before any court or administrative
agency which could result in any adverse change in the operations or financial
condition of the Business.
3.8 Schedules.
(a) Seller's Disclosure Schedule includes a separate schedule relating
to the Business containing an accurate and complete list and
description of:
(i) All real property owned by Seller in respect of the Business
or in which Seller has a leasehold or other interest or which
is used by Seller in connection with the Business, together
with a description of each lease, sublease, license, or any
other instrument under which Seller claims or holds such
leasehold or other interest or right to the use thereof or
pursuant to which Seller has assigned, sublet or granted any
rights therein, identifying the parties thereto, the rental or
other payment terms, expiration date and cancellation and
renewal terms thereof.
(ii) As of a date no earlier than February 13, 1998 all of Seller's
receivables in respect of the Business (which shall include
accounts receivable, loans receivable and any advances),
together with detailed information as to each such listed
receivable which has been outstanding for more than 30 days.
(iii) All machinery, tools, equipment, motor vehicles, rolling stock
and other tangible personal property (other than inventory and
supplies), owned, leased or used by Seller in respect of the
Business except for items having a value of less than $500
which do not, in the aggregate, have a total value of more
than $1,000, setting forth with respect to all such listed
property a summary description of all leases, liens, claims,
encumbrances, charges, restrictions, covenants and conditions
relating thereto, identifying the parties thereto, the rental
or other payment terms, expiration date and cancellation and
renewal terms thereof.
(iv) All patents, patent applications, patent licenses, trademarks,
trademark registrations, and applications therefor, service
marks, service names, trade names, copyrights and copyright
registrations, and applications therefor, wholly or partially
owned or held by Seller in respect of the Business or used in
the operation of the Business.
(v) All fire, theft, casualty, liability and other insurance
policies insuring Seller in respect of the Business,
specifying with respect to each such policy the name of the
insurer, the risk insured against, the limits of coverage, the
deductible amount (if any), the premium rate and the date
through which coverage will continue by virtue of premiums
already paid. Except as disclosed in Seller's Disclosure
Schedule, such policies are with reputable insurers, provide
adequate coverage for all normal risks , incident to Seller's
assets, properties and business operations and are in
character and amount at least equivalent to that carried by
persons engaged in a business subject to the same or similar
perils or hazards.
(vi) All contracts, agreements, commitments or licenses relating to
computer software, patents, trademarks, trade names,
copyrights, inventions, processes, know-how, formulae or trade
secrets to which Seller is a party or by which it is bound.
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(vii) All procedure and policy manuals.
(viii)All Governmental Approvals which have been issued to Seller
in respect of the Business during the three year period prior
to the Closing (collectively, the "Seller Licenses").
(ix) All institutional customers with which Seller has done
business in connection with the Business since January 1,
1996.
(x) All loan agreements, indentures, mortgages, pledges,
conditional sale or title retention agreements, security
agreements, equipment obligations, guaranties, leases or lease
purchase agreements to which Seller is a party in respect of
the Business or by which it is bound in respect of the
Business or in any way affecting the Business or the Assets.
(xi) All contracts, agreements, commitments or other understandings
or arrangements to which Seller is a party in respect of the
Business or by which it or any of its property is bound or
affected in respect of the Business but excluding
(A) purchase and sales orders and commitments made in the
ordinary course of business involving payments or
receipts by Seller of less than $500 in any single case
but not more than $1,000 in the aggregate,
(B) contracts entered into in the ordinary course of
business and involving payments or receipts by Seller of
less than $500 in the case of any single contract but
not more than $1,000 in the aggregate, and
(C) contracts entered into in the ordinary course of
business which are terminable by Seller on less than 30
days' notice without any penalty or consideration and
involving payments or receipts by Seller of less than
$500 in the case of any single contract but not more
than $1,000 in the aggregate.
(xii) All collective bargaining agreements, employment and
consulting agreements, executive compensation plans, bonus
plans, deferred compensation agreements, employee pension
plans or retirement plans, employee stock options or stock
purchase plans and group life, health and accident insurance
and other employee benefit plans, agreements, arrangements or
commitments, whether or not legally binding, including,
without limitation, holiday, vacation, Christmas and other
bonus practices, to which Seller is a party or is bound which
relate to the Business.
(xiii)All current full time employees of Seller with respect to the
Business and their current annual salaries or other methods of
direct or indirect compensation.
(xiv) As of a date no earlier than January 1, 1998 a list of the
rate or rates at which each of the customers of Seller is
billed.
(xv) As of February 13, 1998 a list of all current patients being
serviced by Seller.
(b) All of the contracts, agreements, leases, licenses and commitments
required to be listed on Seller's Disclosure Schedule (other than
those which have been fully performed) are valid and binding,
enforceable in accordance with their respective terms, in full force
and effect and, except as otherwise specified in the Disclosure
Schedule, the enforceability thereof will not be
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affected by the sale of Assets contemplated hereby, so that, after
the Closing Purchaser will continue to be entitled to the full
benefits thereof.
(c) Except as disclosed in Seller's Disclosure Schedule, there is not
under any such contract, agreement, lease, license or commitment any
existing default, or event which, after notice or lapse of time, or
both, would constitute a default or result in a right to accelerate
or loss of rights, and none of such contracts, agreements, leases,
licenses or commitments is, either when considered singly or in the
aggregate with others, unduly burdensome, onerous or materially
adverse to the Business, or its properties, assets, earnings or
prospects, or likely, either before or after the Closing, to result
in any material loss or liability. None of Seller's existing or
completed contracts in respect of the Business are subject to
renegotiating with any governmental body.
(d) True and complete copies of all such contracts, agreements, leases,
licenses and other documents listed on Seller's Disclosure Schedule
(together with any and all amendments thereto) have been delivered
to Purchaser and initialed by Seller's Secretary or Seller's counsel
and identified with a reference to this Section of this Agreement.
3.9 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by representatives of
Seller directly with Purchaser and NYHC, without the intervention of any person
on behalf of Seller in such manner as to give rise to any valid claim by any
person retained by Seller against Purchaser or NYHC for a finder's fee,
brokerage commission or similar payment.
3.10 Taxes. Seller shall be responsible for all personal property taxes
for the business of Seller through the date of the Closing.
3.11 Ownership; Sufficiency.
(a) Except as otherwise described in the disclosure Schedule with a
reference to this Section, Seller is the owner, beneficially and of
record, of all of the Assets, free and clear of all liens,
encumbrances, security agreements, equities, options, claims,
charges and restrictions, and Seller will transfer the Assets to
Purchaser at the Closing, free and clear of all liens, encumbrances,
security agreements, equities, options, claims, charges and
restrictions.
(b) Except for insubstantial assets that can be replaced for not more
than an aggregate of $1,000, the Assets include absolutely all
fixed, non-fixed, tangible and intangible assets that were used by
Seller in connection with the Business on the date hereof. All such
assets are accepted as is , dependent upon inspection of Purchaser
prior to Closing.
(c) There are no defects in any fixed assets or other conditions
relating thereto which, in the aggregate, materially adversely
affect the operation or value of such fixed assets. 3.12
Intellectual Property. Seller's use of the name Heart to Heart
Health Care Services. Inc and each other trade name, servicemark or
logo currently used by Seller in the conduct of the Business does
not conflict with the rights of any third party. Seller has filed
all such instruments and documents as are required for it duly to do
business in the State of New Jersey under the name Heart to Heart
Health Care Services. Inc.
3.13 JCAHO and CAHC Accreditation. The East Orange, NJ office is
accredited by JCAHO and CAHC.
3.14 No Change in Relations with Customers. Neither Seller nor any of
Seller's officers or directors, has knowledge that any customers of the Business
intend to cease doing business with the Business, or
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materially to alter the amount of the business that they are presently doing
with Seller, whether as a result of the transactions contemplated hereby or
otherwise.
3.15 Compliance With Environmental Laws. Seller does not own any real
property with respect to or in connection with the Business and has been at all
times prior , and presently is, in compliance with all federal and state
environmental statutes or laws concerning environmental protection and the use
or disposal of hazardous substances at or in respect of its leased real
property. Neither Purchaser nor NYHC will incur any environmental liability as a
result of actions or omissions by Seller or any of their predecessors and Seller
agrees to indemnify Purchaser and NYHC against any liability that may be
asserted.
3.16 Financial Statements.
(a) Seller has delivered to Purchaser copies of Seller's financial
statements with respect to the Business for the fiscal years ended
December 31, 1995, 1996 and 1997 (the "Financial Statements"). The
Financial Statements are based upon the information contained in the
books and records of Seller and fairly and accurately present the
financial condition of the Business as of the dates thereof and
results of operations for the periods referred to therein. The
balance sheet of the Business as of December 31, 1997 is referred to
herein as the "Balance Sheet," and December 31,1997 is referred to
herein as the "Balance Sheet Date."
(b) The books and records of the Business are adequate to permit the
completion within 30 days of an independent audit of the Business
for such fiscal year.
3.17 Absence of Undisclosed or Contingent Liabilities. Except as and to
the extent reflected or reserved against on the face of the Balance Sheet
(excluding the notes thereto), or as otherwise set forth in the Disclosure
Schedule, as of the Balance Sheet Date Seller, in respect of the Business had no
debts, liabilities or obligations (whether absolute, accrued, contingent or
otherwise) of any nature whatsoever, including, without limitation, any foreign
or domestic tax liabilities or deferred tax liabilities for any period prior to
the close of business on the Balance Sheet Date or any other debts, liabilities
or obligations in respect of the Business relating to or arising out of any act,
transaction, circumstance or state of facts which occurred or existed on or
before the Balance Sheet Date, whether or not then known, due or payable. Except
as set forth in the Disclosure Schedule, none of Seller's employees, in respect
of the Business, is now or, will by the passage of time hereafter become,
entitled to receive any vacation time, vacation pay or severance pay
attributable to services rendered prior to the Balance Sheet Date except as
disclosed on the face of the Balance Sheet (excluding the notes thereto) or as
otherwise set forth in the Disclosure Schedule.
3.18 No Material Adverse Changes. Since the Balance Sheet Date, there has
been no change materially adverse in the Business, or in its assets, financial
condition, gross profit, operating results, customer, employee or supplier
relations, condition or prospects.
3.19 Absence of Developments. Seller in respect of the Business has at all
times:
(a) conducted operations only in the regular and ordinary course and in
compliance with all applicable laws and regulations;
(b) maintained reasonable business insurance;
(c) committed no waste of assets;
(d) not disposed or otherwise changed the nature of any asset other than
in the ordinary course of business,
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(e) not created or suffered to exist any lien, charge or encumbrance on
any Asset or incurred any indebtedness for borrowed money other than
in the ordinary course which is secured by one or more of assets;
(f) used its best efforts to maintain and preserve its business
organization intact and maintain its relationships with suppliers,
employees, customers and others;
(g) refrained from making any material capital expenditures or
commitments for additions to the property, plant or equipment or
entering into transactions which could materially alter or affect
operations;
(h) not experienced any changes in reimbursement or reimbursement
policies from third-party payers as a result of changes in third
party payer policies, practices, procedures or schedules;
(i) not engaged in any unusual or novel methods of billing and
collection, purchase, sale, lease, management, equipment servicing
or repair, accounting or operation that vary from Seller's usual and
customary past practice; and
(j) not changed any aspect of its procedure for maintaining its books of
account and records.
3.20 Tax Matters.
(a) Seller has filed all Tax Returns that it was required to file in
connection with the Business. All such Tax Returns were correct and
complete in all material respects. All Taxes owed by Seller with
respect to the Business (whether or not shown on any Tax Return)
have been paid. Seller is not currently the beneficiary of any
extension of time within which to file any such Tax Return. No claim
has ever been made by an authority in a jurisdiction where Seller
does not file Tax Returns that it is or may be subject to taxation
by that jurisdiction. There are no encumbrances on any of the Assets
that arose in connection with any failure (or alleged failure) to
pay any Taxes.
(b) Seller has withheld and paid all Taxes required to have been
withheld and paid by it in connection with amounts paid or owing to
any employee, independent contractor, creditor, shareholder or other
third party.
(c) There is no dispute or claim concerning any liability for Taxes of
Seller in connection with the Business (i) claimed or raised by any
authority in writing or orally with any directors or officers of
Seller, or (ii) as to which any such person has knowledge based upon
personal contact with any agent of such authority. The Disclosure
Schedule lists all federal, state, local and foreign income Tax
Returns filed by Seller with respect to the Business for taxable
periods ended on or after December 31, 1995, indicates those Tax
Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit. Seller has delivered to the
Purchaser correct and complete copies of all federal income Tax
Returns, examination reports, and statements of deficiencies filed,
assessed against or agreed with respect to the Business by Seller
since December 31, 1995.
3.21 Employees.
(a) Except as disclosed in the Disclosure Schedule, no employee of
Seller in respect of the Business has notified Seller, and Seller
does not have any knowledge, that any such employee will not, accept
employment with Purchaser following the Closing;
(b) Seller, to the best of his/her knowledge, has in respect of the
Business complied in all material respects with all employment
contracts and all laws relating to the employment
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of labor, including provisions thereof relating to wages, hours,
equal opportunity, collective bargaining and the payment of social
security and other taxes;
(c) Seller, to the best of his/her knowledge, does not have any material
labor relations problem pending and its labor relations are
satisfactory;
(d) To the best of Sellers' knowledge there has been no union organizing
activity in respect of the Business;
(e) there are no worker's compensation, sexual harassment,
discrimination or other claims pending against Seller in respect of
the Business nor is Seller aware of any facts that would give rise
to such claims, except as set forth in the Disclosure schedule;
(f) except as disclosed in the Disclosure Schedule with a reference to
this Section, no employee of Seller is subject to any secrecy or
non-competition agreement or any other agreement or restriction of
any kind that would impede in any way the ability of such employee
to carry out fully all activities of such employee in furtherance of
the business of Purchaser following the Closing; and
(g) To the best of Seller's knowledge no employee or former employee of
Seller has any claim with respect to any intellectual property
rights of Seller.
3.22 Gifts.
(a) Except as described in the Disclosure Schedule with a reference to
this Section, neither Seller, nor any of its officers, directors or
shareholders has made or agreed to make gifts of money, other
property or similar benefits (other than incidental gifts of
articles of nominal value) to any actual or potential customer,
supplier, governmental employee, political party, candidate for
office, governmental agency or instrumentality or any other person
in a position to assist or hinder Seller in connection with any
actual or proposed business transaction.
(b) Neither Seller nor any of their officers, directors, employees or
agents has directly or indirectly paid or delivered any fee,
occasion, or other money or property, however characterized, to any
physician or any other party that is in any manner remuneration for
the referral of patients to or that is in any manner remuneration
for purchasing any item or service from Seller.
3.23 [omitted]
3.24 Medicaid, Etc.
(a) Seller in respect of the Business is a participating provider, in
good standing, in the Medicaid program and in federal, state and
local Department of Health, Department of Education, Department of
Consumer Affairs ,workers compensation and Blue Cross Blue Shield
programs and in the health maintenance organizations, preferred
provider organizations, health benefit plans, health insurance
plans, and other third party reimbursement and payment programs
listed in the Disclosure Schedule (the "Payment Programs").
(b) There is no investigation or civil, administrative, or criminal
proceeding, threatened or pending, relating to Seller's
participation in any of the Payment Programs in respect of the
Business. Seller is not in respect of the Business subject to
utilization review by any
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Payment Program other than the ordinary and customary utilization
review of all providers participating in such Payment Program.
(c) No Payment Program has requested or threatened any recoupment,
refund, adjustment or set-off from Seller in respect of the
Business.
(d) No Payment Program has imposed any fine, penalty or other sanction
on Seller in respect of the Business, nor has Seller in respect of
the Business been excluded from participation in any Payment Program
nor is Seller now threatened with such exclusion.
(e) Seller has not submitted to any Payment Program any false or
fraudulent claim for payment, nor has Seller at any time violated
any condition for participation, or any rule, regulation, policy or
standard of any Payment Program. Seller has not at any time violated
any law prohibiting Payment Program fraud or abuse.
(f) Seller will in a timely manner, after consultation with and approval
by Purchaser, give notice of the transactions contemplated by this
Agreement to Payment Programs to the extent required by law or the
rules, regulations or policies of the Payment Programs and in
accordance with Seller's provider agreements with the Payment
Programs.
3.25 Seller Licenses. Each of Seller Licenses is valid and in full force
and effect as of the date hereof, and except as expressly set forth in the
Disclosure Schedule, no Seller's License is subject to any limitation,
restriction, probation or other qualification. Seller has operated within the
scope of the provisions of all Seller Licenses. There is not pending, or
threatened, any investigation or proceeding which could result in the
termination, revocation, limitation, suspension, restriction or impairment of
any of Seller Licenses or the imposition of any fine, penalty or other sanctions
for violation of any requirements of any of Seller Licenses. Seller now has and
has had at all relevant times all Governmental Approvals as are necessary in
respect of the Business in order to enable Seller to own and conduct the
Business and to occupy and lease its real property, each such currently
effective item being listed in the Disclosure Schedule.
3.26 Material Misstatements or Omissions. Neither this Agreement nor any
other document, certificate or statement furnished to Purchaser by or on behalf
of Seller in connection with this Agreement or the transactions contemplated
hereby contains any untrue statement of a material fact, or omits any material
fact necessary to make the statements contained herein or therein not misleading
in light of the context in which they were made.
3.27 No Known Adverse Effects. Except for general economic conditions and
public information concerning health care regulatory and funding matters and the
health care industry generally, there are no facts known to Seller or to their
officers, directors or employees which have not been set forth in writing in
this Agreement or disclosed in the other documents, certificates or written
statements furnished to Purchaser by or on behalf of Seller in connection
herewith or the transactions contemplated hereby, and which materially and
adversely affect or may in the future materially and adversely affect, the
Assets in the hands of Purchaser or which would or may in the future materially
and adversely affect the Purchaser's ability to operate the Business.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND NYHC
NYHC and Purchaser jointly and severally represent and warrant to Seller
that the statements contained in this Section are true, correct and complete as
of the date of this Agreement and, except as otherwise expressly provided in
this Agreement, shall be true, correct and complete on the Closing Date as
though made on the Closing Date as follows:
4.1 Organization and Qualification of Purchaser. Purchaser and NYHC are
corporations duly organized, validly existing and in good standing under the
laws of the State of New York, and have the full
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corporate power and authority to own and operate their respective properties and
to carry on their respective businesses. Purchaser has additionally qualified to
do business as a foreign corporation in the State of New Jersey.
4.2 Authorization. This Agreement has been approved by all necessary
corporate action on behalf of Purchaser and NYHC, has been duly and validly
executed by Purchaser and NYHC, and the agreements, representations, and
warranties contained herein constitute valid and binding obligations,
representations, and warranties of Purchaser and NYHC, enforceable against each
in accordance with their terms.
4.3 No Conflicting Agreements. Except as set forth in the Disclosure
Schedule with a reference to this Section, the execution and delivery of this
Agreement by Purchaser and NYHC does not, and consummation by Purchaser and NYHC
of the transactions contemplated hereby will not: (i) violate any existing term
or provision of any law, regulation, order, writ, judgment, injunction or decree
applicable to Purchaser or NYHC, (ii) conflict with or result in a breach of any
of the terms, conditions or provisions of the Certificate of Incorporation or
bylaws of Purchaser or of any agreement or instrument to which Purchaser or NYHC
is a party, or (iii) result in the creation or imposition of any lien, charge,
security interest, encumbrance, restriction or claim upon Purchaser or NYHC or
any of their assets.
4.4 Compliance with Applicable Law. None of Purchaser, NYHC or any of
their respective officers, directors or employees knows of any facts which would
result in, nor has any of them received any notice or information of, any
violation, probable violation or default by Purchaser or NYHC under any
applicable law, regulation or order of any governmental department, commission,
board or agency or instrumentality, domestic or foreign, having jurisdiction
over Purchaser's operations which could materially adversely affect the
business, operations, financial condition, properties or assets of Purchaser or
its ability to consummate the transaction contemplated hereby.
4.5 Litigation. There are no actions, proceedings or investigations
pending, or to the knowledge of Purchaser, threatened, against Purchaser or NYHC
or any of their officers or directors, before any court or administrative agency
or administrative officer.
4.6 Material Misstatements or Omissions. Neither this Agreement nor any
other document, certificate or statement furnished to Seller by or on behalf of
Purchaser in connection with this Agreement contains any untrue statement of a
material fact, or omits to state any material fact necessary to make the
statements contained herein and therein not misleading in light of the context
in which they were made.
4.7 Consents and Approvals. The execution and delivery by Purchaser and
NYHC of this Agreement, and the performance by Purchaser and NYHC of their
respective obligations hereunder, do not require Purchaser or NYHC to obtain any
consent, approval or action of, or make any filing with or give any notice to,
any corporation, person or firm or any public, governmental or judicial
authority except (i) such as have been duly obtained or made, as the case may
be, (ii) those consents and approvals described in the Disclosure Schedule with
a reference to this Section and for which application has been made, and (iii)
those which the failure to obtain would not have a material adverse effect on
the transactions contemplated hereby.
4.8 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by representatives of
Purchaser and NYHC directly with Seller, without the intervention of any person
on behalf of Purchaser or NYHC in such manner as to give rise to any valid claim
by any person retained by Purchaser or NYHC against Seller for a finder's fee,
brokerage commission or similar payment.
4.9 SEC Filings. Purchaser has delivered to Seller copies of NYHC's Form
10K for its fiscal year ended December 31, 1996, and its Form 10Q for the
periods ending March 31, 1997 , June 30, 1997 and September 30,1997. The
financial information contained in such Forms 10K and 10Q of NYHC is based upon
the information contained in the books and records of NYHC and fairly and
accurately presents the financial condition of NYHC as of the dates thereof and
the results of the operations of NYHC for the periods referred to therein.
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5. PRE-CLOSING COVENANTS OF SELLER. Seller hereby covenants and agrees that,
between the date hereof and the Closing, it will comply with the provisions of
this Section, except to the extent Purchaser may otherwise consent in writing.
5.1 Inspection of Properties and Books.
(a) Seller shall, at reasonable times acceptable to both parties, assist
any individual or individuals designated by Purchaser with
reasonable prior notice to visit or inspect any property of Seller
with respect to the Business, including books of accounts and
records with respect to the Business, to make extracts or copies of
such books and records and to discuss the affairs, finances and
accounts of Seller with its officers, and shall use its best efforts
to obtain access for Purchaser to accountants' work papers.
Purchaser agrees to treat all such material (the "Evaluation
Material") confidentially, and shall not disclose any Evaluation
Material or any information contained therein to any party, except
as otherwise set forth herein; provided, however, that Purchaser is
authorized to disclose the Evaluation Material to its investment
bankers, financial advisors and legal counsel. Purchaser shall
instruct its investment bankers, financial advisors, legal counsel,
officers, directors, employees, agents or representatives of the
confidential nature of the Evaluation Material and shall be
responsible for insuring that the Evaluation Material is kept
confidential by such persons.
(b) In the event the Closing is not consummated, all Evaluation Material
shall be returned to Seller within ten days of a request therefor,
with the understanding that Purchaser shall retain no copies of the
Evaluation Material and shall not disclose to any other party the
Evaluation Material or information contained therein, with the
exception of (i) information which becomes generally available to
the public other than as a result of disclosure by Purchaser, (ii)
information included in the Evaluation Material which is first
disclosed by a third party not bound by a confidentiality agreement
with Seller or (iii) information required to be disclosed in any
registration statement or periodic report under the disclosure
requirements of applicable federal and state securities laws, it
being agreed that prior to making any disclosure pursuant to this
clause (iii), Purchaser shall first provide Seller with reasonable
(under the circumstances) advance notice of the disclosure, and if
Seller does not consent to the disclosure, Purchaser may make the
disclosure only after providing Seller with an opinion of counsel
explaining the basis for the disclosure and the legal requirements
therefor.
5.2 Other Contracts. Except in the ordinary course of business, Seller
shall not enter into or become subject to any agreement, transaction, or
commitment which would restrict or impair the obligation or ability of Seller to
comply with all of the terms of this Agreement.
5.3 Ongoing Operation. Seller shall carry on its business diligently and
substantially in the same manner as heretofore conducted. The Business shall be
conducted only in the ordinary course and Seller shall not take any action
except in the ordinary course of the Business, on an arm-length basis and in
accordance in all material respects with all applicable laws, rules and
regulations and Seller's past custom and industry practice.
5.4 Indebtedness. Seller will not create, incur, assume, guarantee or
otherwise become liable with respect to any indebtedness related or connected
with, or secured by, the Assets or the Business, except in the ordinary course
of its business.
5.5 Records; Monthly Financial Statements. Seller shall maintain its
books, accounts and records in the usual, regular and ordinary manner, and
shall, upon Purchaser's request, promptly provide Purchaser with monthly
financial statements for such month prepared on a basis consistent with the
Financial Statements.
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5.6 Notice of Breach. Promptly after becoming aware of the occurrence or
threatened occurrence of any event which would cause or constitute a breach of
any warranty, representation, covenant or agreement of Seller contained herein,
Seller shall give notice in writing of such event or threatened event to
Purchaser and use all reasonable efforts to prevent or promptly remedy such
breach or threatened breach.
5.7 Employment Matters. With respect to the Business, Seller shall not,
directly or indirectly, (i) enter into or modify any employment, severance or
similar agreements or arrangements with, or grant any bonuses, salary increases,
severance or termination paid to, any officers or directors or executive
employees who are not shareholders or (ii) except in the ordinary course of
business, take any action with respect to the grant of any bonuses, salary
increases, severance or termination pay or with respect to any increase of
benefits payable in effect on the date hereof for any of its employees who are
not officers, directors or executive employees. With respect to the Business,
Seller shall not adopt or amend any bonus, profit sharing, compensation, stock
option, pension, retirement, deferred compensation, employment or other employee
benefit plan, trust, fund or group arrangement for, the benefit or welfare of
any employees.
5.8 Insurance. Prior to Closing, Seller shall not cancel or terminate its
current insurance policies or cause any of the coverage thereunder to lapse,
unless simultaneously with such termination, cancellation or lapse, replacement
policies providing coverage equal to or greater than the coverage under the
canceled, terminated or lapsed policies for substantially similar premiums are
in full force and effect.
5.9 Preservation of Business. Seller shall with respect to the Business
(i) use its best efforts to preserve intact the business organization and
goodwill, keep available the services of Seller's officers and employees as a
group and maintain satisfactory relationships with suppliers, distributors,
customers and others having business relationships with Seller, (ii) upon
request, confer on a regular basis with representatives of Purchaser to report
operational matters and the general status of ongoing operations, (iii) not
intentionally take any action which would render, or which reasonably may be
expected to render, any representation or warranty made by Seller in the
Agreement untrue at the Closing, (iv) notify Purchaser of any emergency or other
change in the normal course of Seller's business or in the operation of Seller's
properties and of any governmental or third party complaints, investigations or
hearings (or communications indicating that the same may be contemplated) if
such emergency, change, complaint, investigation or hearing would be material,
individually or in the aggregate, to the business, operations or financial
condition of Seller or the ability of Seller to consummate the transactions
contemplated by this Agreement, and (v) promptly notify Purchaser in writing if
Seller or its representatives shall discover that any representation or warranty
made by Seller in this Agreement was when made, or has subsequently become,
untrue in any respect.
5.10 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by representatives of
Seller directly with Purchaser and NYHC, without the intervention of any person
on behalf of Seller in such manner as to give rise to any valid claim by any
person retained by Seller against Purchaser or NYHC for a finder's fee,
brokerage commission or similar payment.
5.11 Best Efforts. Seller agrees to use its best efforts in good faith to
satisfy the various conditions to Closing and to consummate the transactions
provided for herein as expeditiously as possible. Seller will not take or
knowingly permit to be taken any action that would be in breach of the terms or
provisions of this Agreement or that would cause any of its representations and
warranties contained herein to be or become untrue.
5.12 Additional Disclosure. From the date of this Agreement to and
including the Closing Date, Seller will advise Purchaser of each event
subsequent to the date hereof which would have had to be disclosed on any
schedule or exhibit to this Agreement had it occurred prior to the date hereof.
6. PRE-CLOSING COVENANTS OF PURCHASER AND NYHC
NYHC and Purchaser hereby jointly and severally covenant and agree that,
between the date hereof and the Closing, each of them will comply with the
provisions of this Section, except to the extent Seller may otherwise consent in
writing.
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6.1 Other Contracts. Except in the ordinary course of business, neither
Purchaser nor NYHC shall enter into or become subject to any agreement,
transaction or commitment which would restrict or impair the obligation or
ability of Purchaser or NYHC to comply with all of the terms of this Agreement.
6.2 Best Efforts. Purchaser and NYHC agree to use their respective best
efforts in good faith to satisfy the various conditions to Closing and to
consummate the transactions provided for herein as expeditiously as possible.
Neither Purchaser nor NYHC will take or knowingly permit to be taken any action
that would be in breach of the terms or provisions of this Agreement or that
would cause any of its representation and warranties contained herein to be or
become untrue.
6.3 Additional Disclosure. From the date of this Agreement to and
including the Closing Date, Purchaser and NYHC will advise Seller of each event
subsequent to the date hereof which would have had to be disclosed on any
schedule or exhibit to this Agreement had it occurred prior to the date hereof.
7. POST-CLOSING COVENANTS
The parties agree as follows with respect to the period following the
Closing:
7.1 Further Assurances. If at any time after the Closing, any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other party
reasonably may request, all at the sole cost and expense of the requesting party
unless the requesting party is entitled to indemnification therefor under this
Agreement.
7.2 Litigation Support. If and for so long as any party is actively
contesting or defending against any action, suit, proceedings, hearing,
investigation, charge, complaint, claim or demand in connection with (a) any
transaction contemplated by this Agreement, or (b) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction on or prior to the Closing Date
involving the Seller, the other party will cooperate with it and its counsel in
the contest or defense, make available their personnel, and provide such
testimony and access to their books and records as shall be necessary in
connection with the contest or defense, all at the sole cost and expense of the
contesting or defending party unless the contesting or defending party is
entitled to indemnification therefor under Section XI; provided, however, that
neither party shall charge the other for its internal personnel costs.
7.3 Non-Competition. During the five-year period beginning with the
Closing, Seller shall not, directly or indirectly:
(a) engage in any aspect of any home care related business within the
State of New Jersey.
7.4 Access to Records. During a period after the Closing consistent with
regulatory requirements, Purchaser will, on reasonable notice, give to Seller
access to the books and records of the Business for periods prior to the
Closing. Seller will have the right to copy such records, as needed.
8. CONDITIONS PRECEDENT TO CLOSING
8.1 Conditions Precedent to Obligation of Seller. The obligation of Seller
to consummate and effect this Agreement are subject to the satisfaction in all
material respects, on or before the Closing Date, of the following conditions
(unless waived by Seller in writing in the manner provided in this Agreement).
(a) The representations and warranties of Purchaser set forth in this
Agreement shall be accurate in all material respects on and as of
the Closing as though made on and as of the Closing (except where
stated to be as of an earlier date), except for any changes
resulting from activities or transactions which may have taken place
after the date hereof
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which are expressly permitted by this Agreement or which have been
entered into in the ordinary course of business and are not
expressly prohibited by this Agreement;
(b) Purchaser and NYHC shall have performed all obligations and complied
with all covenants required to be performed or to be complied with
by Purchaser under this Agreement prior to or at the Closing Date
including payment of the Purchase Price and the delivery of all
documents required at the Closing; and
(c) Seller shall have received a certificate dated the Closing Date and
signed by the President of Purchaser and NYHC to the effect that the
representations and warranties made by Purchaser in this Agreement
are true and accurate in all material respects as of the Closing
(or, where applicable, as of the earlier specified date), which
certificate shall be in the form of an Exhibit to this Agreement.
(d) All action necessary to authorize the execution, delivery and
performance of this Agreement by Purchaser and NYHC and the
consummation of the transactions contemplated hereby shall have been
duly and validly taken by Purchaser or NYHC, as the case may be.
(e) Purchaser and NYHC shall have furnished Seller with copies of all
consents or resolutions adopted or executed by Purchaser or NYHC, as
the case may be, in connection with such actions, certified by the
Secretary of Purchaser or NYHC, as the case may be.
(f) All material governmental filings, authorizations and approvals that
are required for the consummation of the transactions contemplated
hereby shall have been duly made and obtained by Purchaser
(excepting filings required by Purchaser or NYHC pursuant to
applicable securities laws).
(g) Seller shall have received from counsel to Purchaser and NYHC an
opinion dated the Closing, to the following effect:
(i) Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of New York.
(ii) Execution and delivery of this Agreement and the Note, and the
consummation of the transactions contemplated hereby have and
thereby, been duly and validly authorized by all necessary corporate
action by Purchaser and this Agreement and the Note are the valid
and binding obligations of Purchaser, enforceable against Purchaser
in accordance with their respective terms except as enforcement can
be limited by general equitable principles or bankruptcy, insolvency
or similar laws affecting creditor's rights generally.
(iii) The execution and delivery of this Agreement and the Note will
not violate or conflict with the Certificate of Incorporation or
bylaws of Purchaser and NYHC or any agreement known to such counsel
to which Purchaser or NYHC is a party or by which Purchaser or NYHC
or its assets are bound.
(iv) No consent, approval, authorization or order of, and no notice
to or filing with, any governmental agency or body or any court is
required to be obtained or made by Purchaser pursuant to this
Agreement except such as has been obtained or made.
(v) NYHC is a corporation duly organized, validly existing and in
good standing in the State of New York.
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(vi) Execution and delivery of this Agreement by NYHC and the
consummation of the transactions contemplated hereby and thereby,
have been duly and validly authorized by all necessary corporate
acts by NYHC and is the valid and binding obligation of NYHC,
enforceable against NYHC in accordance with its terms except as
enforcement can be limited by general equitable principles or
bankruptcy, insolvency or similar laws affecting creditor's rights
generally.
(vii) The execution and delivery of this Agreement by NYHC will not
violate or conflict with the Certificate of Incorporation or bylaws
of NYHC or any agreement known to such counsel to which NYHC is a
party or by which NYHC or its assets are bound.
(viii) No consent, approval, authorization or order of, and no
notice to or filing with, any governmental agency or body or any
court is required to be obtained or made by NYHC in connection with
the execution or delivery of this Agreement and the Note, except
such as has been obtained or made.
(ix) After due inquiry, such counsel is not aware of any pending or
threatened action, proceeding or investigation against Purchaser or
NYHC before any court or administrative agency which would result in
any materially adverse change in the operations or financial
condition of Purchaser.
8.2 Waiver of Conditions Precedent. Seller may waive any or all of the
conditions precedent set forth in this Section, either prospectively or
retroactively, by giving written notice of such waiver to Purchaser. No waiver
of any condition precedent pursuant to this Section shall, unless otherwise
expressly stated in such written notice of waiver, extend to any covenant or
agreement contained herein or to any other condition precedent.
9. Conditions Precedent to Obligation of Purchaser. The obligation of Purchaser
to consummate and effect this Agreement are subject to the satisfaction in all
material respects, on or before the Closing Date, of the following conditions
(unless waived by Purchaser in writing in the manner provided in this
Agreement):
9.1 Representations and Warranties of Seller Performance by Seller .
(a) The representations and warranties of Seller set forth in this
Agreement shall be accurate in all material respects on and as of
the Closing as though made on and as of the Closing (except where
stated to be as of an earlier date), except for any changes
resulting from activities or transactions which may have taken place
after the date hereof which are expressly permitted by this
Agreement;
(b) Seller shall have performed all obligations and complied with all
covenants required to be performed or to be complied with by it
under this Agreement prior to the Closing;
(c) Purchaser shall have received a certificate dated as of the Closing
and signed by the President of Seller to the effect that the
representations and warranties made by Seller in this Agreement are
true and accurate in all material respects as of the Closing (or,
where applicable, as of the earlier specified date) in the form
attached as an Exhibit;
(d) All action necessary to authorize the execution, delivery and
performance of this Agreement by Seller and the consummation of the
transactions contemplated hereby shall have been duly and validly
taken by Seller.
(e) Seller shall have furnished Purchaser with copies of all consents or
resolutions adopted or executed by Seller in connection with such
actions, certified by the Secretary of Seller.
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(f) There shall have been no event or change occurring between the
execution of this Agreement and the Closing which in the aggregate
may be deemed to have an adverse effect on the business, operations,
financial condition or properties of the Business which is material
to Purchaser as purchaser of the Assets.
(g) Except as described in the Disclosure Schedule with a reference to
this Section, there shall be no actions, proceedings or
investigations pending, or threatened against Seller or its officers
or directors before any court, any administrative agency or
administrative officer or executive, which could result in any
adverse change in the business, operations, financial condition or
properties of the Business which is material to the Purchaser as
purchaser of the Assets.
(h) Except as set forth in this Agreement, Seller shall have obtained,
or caused to be obtained, each consent and approval necessary in
order that the transactions contemplated herein not constitute a
breach or violation of, or result in a right of termination or
acceleration of, or creation of any encumbrance on any of the
Assets, pursuant to the provisions of any agreement, arrangement or
undertaking of or affecting Seller or any license, franchise or
permit of or affecting Seller.
(i) All material governmental filings, authorizations and approvals that
are required for the consummation of the transactions contemplated
hereby shall have been duly made and obtained by Seller (excepting
filings required by Purchaser pursuant to applicable securities
laws).
(j) Purchaser shall not have discovered any fact or circumstance
existing as of the date of this Agreement which has not been
disclosed to Purchaser as of the date of this Agreement regarding
the business, assets, liabilities, properties, condition (financial
or otherwise), results of operations or prospects of Seller which
is, individually or in the aggregate with other such facts and
circumstances, materially adverse to Seller or the value of the
Assets.
(k) There shall have been no damage, destruction or loss of or to any of
the Assets, whether or not covered by insurance which, in the
aggregate, has or would be reasonably likely to have, a material
adverse effect on Seller.
(l) Purchaser shall have received from counsel to Seller, an opinion
dated the Closing, to the following effect:
(i) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of New Jersey;
(ii) Execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action, corporate or otherwise, by
Seller and this Agreement is a valid and binding obligation of
Seller , enforceable against Seller in accordance with its terms
except as enforcement can be limited by general equitable principles
or bankruptcy, insolvency or similar laws affecting creditor's
rights generally;
(iii) The execution and delivery of this Agreement and the sale of
the Assets by Seller will not violate or conflict with the
Certificate of Incorporation or bylaws of Seller or any agreement
known to such counsel to which Seller is a party or by which Seller
or its assets are bound (except that no opinion need be given as to
the assignability of any contract or agreement included in the
Assets);
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(iv) No consent, approval, authorization or order of, and no notice
to or filing with, any governmental agency or body or any court is
required to be obtained or made by Seller for the sale of the Assets
pursuant to this Agreement, except such as have been obtained or
made;
(v) Except as disclosed in this Agreement or the Exhibits or
Schedules, after due inquiry such counsel is not aware of any
pending or threatened action, proceeding or investigation before any
court or administrative agency which could result in any material
adverse change in the operation or financial condition of Seller or
have a materially adverse effect on the Assets in the hands of
Purchaser.
9.2 Waiver of Conditions Precedent. Purchaser may waive any or all of the
conditions precedent set forth in this Section, either prospectively or
retroactively, by giving written notice of such waiver to Seller. No waiver of
any condition precedent pursuant to this Section shall, unless otherwise
expressly stated in such written notice of waiver, extend to any other covenant
or agreement contained herein or to any other condition precedent.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
10.1 The representations, warranties, covenants and agreements made by the
respective parties in this Agreement or in any certificate executed and
delivered in connection with the transactions contemplated hereby shall survive
the Closing for a period of two (2) years following the Closing, except that
representations as to Taxes shall survive without limit as to time. All
covenants, agreements, representations and warranties made herein or pursuant
shall be deemed to be material and to have been relied upon by the parties,
notwithstanding any investigation heretofore or hereafter made by or on behalf
of the parties prior to the Closing or any knowledge of any breach or other
event which is obtained or learned prior to the Closing.
11. INDEMNIFICATION
11.1 Indemnification.
(a) Seller agrees to indemnify in respect of, and hold Purchaser and
NYHC harmless against, any and all damages, claims, deficiencies,
losses, and expenses (including, without limitation, legal and
investigatory and other fees in attempting to avoid the same or
defending against the same) (collectively "Damages") resulting from:
(i) any misrepresentation, breach of warranty, or non-fulfillment or
failure to perform any covenant or agreement on the part of Seller
made as a part of or contained in this Agreement or in any
certificate executed and delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby,
(ii) any liabilities not expressly assumed by Purchaser hereunder;
and
(iii) Seller's operation of the Business prior to the Closing.
(b) Purchaser and NYHC jointly and severally agree to indemnify in
respect of, and hold Seller harmless against, any and all Damages
resulting from:
(i) any misrepresentation, breach of warranty, or non-fulfillment or
failure to perform any covenant or agreement on the part of
Purchaser or NYHC made as a part of or contained in this Agreement
or in any certificate executed and delivered pursuant to this
Agreement or in connection with the transactions contemplated
hereby,
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(ii) for periods after the Closing, the Assumed Liabilities, and
(iii) Purchaser's operation of the Assets after the Closing.
(c) The party claiming indemnification hereunder is hereinafter referred
to as the "Indemnified Party" and the party against whom such claims
are asserted hereunder is hereinafter referred to as the
"Indemnifying Party."
11.2 Limitation of Liability. Neither party shall be liable to the other
party to this Agreement except to the extent that the aggregate amount of
Damages for which they would otherwise (but for this provision) be liable under
this Section, net of any insurance payments, exceeds in the aggregate the sum of
five thousand dollars ($5000) and then only to the extent of such excess.
11.3 Other Rights and Remedies Not Affected. The indemnification rights of
the parties under this Section are independent of and in addition to such rights
and remedies as the parties may have at law or in equity or otherwise for any
misrepresentation, breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any party including without limitation the
right to seek specific performance, rescission or restitution, none of which
rights or remedies shall be affected or diminished hereby.
12. CLOSING
12.1 Closing. The closing of this Agreement (the "Closing") shall take
place at the New York offices of Purchaser during the week of March 23,1998
unless a later time and date is mutually agreed upon by the parties (the
"Closing Date").It is agreed between the parties that the effective date of the
sale shall be March 1,1998.
12.2 Closing is contingent upon the following: Receiving a fairness
opinion and unrestricted due diligence.
12.3 Seller's Deliveries at Closing. At the Closing Seller will deliver
the following documents to the Purchaser all of which shall be reasonably
satisfactory in form and substance to the Purchaser and its counsel:
(a) Bill of Sale for the Assets in the form attached as Exhibit 3.
(b) An opinion from counsel to Seller, dated the Closing Date, in the
form described elsewhere in this Agreement.
(c) All consents, approvals and authorizations, all notices and all
registrations and filings required to be obtained, given or made
under any law, statute, rule, regulation, judgment, order,
injunction, contract, agreement or other instrument to which Seller
is subject, bound or a party, or by which Seller or any of its
properties is bound or subject, in each case which is required to
permit the consummation of the transactions contemplated by the
Agreement without contravention, violation or breach by Seller of
any of the terms thereof.
(d) Certificate of good standing for Seller from the Secretary of the
State of New Jersey dated as of a date reasonably prior to the
Closing Date.
(e) Certified copy of resolutions of the Board of Directors and the
shareholders of Seller authorizing, inter alia, the execution and
delivery of this Agreement, the sale of the Assets and the other
transactions contemplated under this Agreement.
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(f) At Seller's office, such business records related to the Assets as
may be reasonably requested by the Purchaser, including, without
limitation, employee and personnel folders and applications,
payroll, tax related records and financial data.
(g) Officer's Certificate in the form described elsewhere in this
Agreement.
(h) Such other documents, instruments, certificates and agreements,
including assignment of space lease to Purchaser, as Purchaser and
its counsel may reasonably request.
12.4 Purchaser's Deliveries at Closing. At the Closing, Purchaser and NYHC
shall deliver the following documents to Seller all of which shall be in a form
reasonably acceptable to Seller and its counsel:
(a) Satisfactions of Purchaser's purchase price obligations by the
issuance of the Note.
(b) All consents, approvals and authorizations, all notices and all
registrations and filings required to be obtained, given or made
under any law, statute, rule, regulation, judgment, order,
injunction, contract, agreement or other instrument to which the
Purchaser or NYHC is a party, or by which either of them or any of
their respective properties is bound or subject, in each case which
is required to permit the consummation of the transactions
contemplated by this Agreement without contravention, violation or
breach by the Purchaser or NYHC of any of the terms thereof.
(c) An opinion from counsel to the Purchaser and NYHC dated the Closing
Date, in the form described elsewhere in this Agreement.
(d) Certificates of good standing, dated as of a date reasonably prior
to the date of Closing, from the Secretary of State of the State of
New York as to the good standing of the Purchaser and NYHC.
(e) An assumption agreement pursuant to what the Purchaser assumes the
Assumed Liabilities.
(f) Certified copy of resolutions of the Board of Directors of Purchaser
and NYHC authorizing, inter alia, the execution and delivery of this
Agreement and in the case of Purchaser, the Note, and in both cases,
the purchase of the Assets, and the other transactions contemplated
hereby.
(g) Officer's Certificate in the form described elsewhere in this
Agreement.
(h) Such other documents, instruments, certificates and agreements
including without limitation, if assumed, the assumption of the
lease, as Seller and its counsel may reasonably request.
13. MISCELLANEOUS
13.1 Notice. All notices and communications required or permitted to be
given hereunder shall be in writing, signed by the sender, and delivered by
personal delivery overnight courier service or by registered mail to:
If to Seller :
- --------------------------------------------------------------------------------
With a copy to:
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If to Purchaser :
c/o New York Health Care, Inc.
1850 McDonald Avenue
Brooklyn New York 11223
With a copy to:
Avrohom P. Dubin, Esq.
1140 East 19th Street
Brooklyn New York 11230
Or such other address as shall have been furnished in writing. Receipt by,
or filing with, the respective parties of any communications shall be deemed to
have occurred for the purpose of this Agreement, when personally delivered, or
next business day if sent by overnight courier, or two days after deposit
thereof, postage prepaid, properly addressed, in the United States mail.
13.2 Entire and Sole Agreement. This Agreement, including all Exhibits and
Schedules (which by this reference shall incorporate herein all such Exhibits
and Schedules as if more fully set forth herein), constitutes the entire
agreement between the parties and as of Closing supersedes all agreements,
representations, warranties, statements, promises and understandings, whether
oral or written, with respect to the subject matter hereof. After Closing
neither party shall be bound by or charged with any oral or written agreements,
representations, warranties, statements, promises or understandings not
specifically set forth in this Agreement or in the certificates or documents
delivered in connection herewith.
13.3 Successors and Assigns. Except as otherwise provided in this
Agreement, all covenants and agreements of the parties contained in this
Agreement shall be binding upon and inure to the benefit of the respective
successors and permitted assigns of the parties and the heirs, personal
representatives, executors and assigns of Seller and Purchaser. This Agreement
may not be assigned by any party without the prior express written consent of
the other parties.
13.4 Expenses. Whether or not the transactions contemplated hereby shall
be consummated, each party shall be solely responsible for payment of all
expenses incurred by it in connection with the consummation of this Agreement
and the transactions contemplated hereunder, except as otherwise provided
herein. None of Seller's expenses with respect to this transaction shall be
charged to the Business or shall otherwise reduce the Assets.
13.5 Sales Taxes. Seller shall collect from Purchaser all New York, New
Jersey and any other state or local sales or use taxes, if any, payable by
Purchaser in connection with this transaction.
13.6 Severability. Should any one or more of the provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions of
this Agreement shall be given effect separately, from the provision or
provisions determined to be illegal or unenforceable and shall not be affected
thereby.
13.7 Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York without regard
to conflicts of laws principles.
13.8 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be an original, but all of which together
shall constitute one and the same Agreement.
13.9 Amendments. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing.
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13.10 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of the parties , and it is not the
intention of the parties to confer third-party beneficiary rights upon any other
person or entity.
13.11 Headings. The headings in this Agreement are for purposes of
convenience and easy reference only and shall not limit or otherwise affect the
meaning hereof.
13.12 Disputes. In the event of any dispute which arises between the
parties and which relates to the subject matter of this Agreement, the parties
acknowledge and agree that any such dispute shall be submitted for binding
arbitration in New York, New York in accordance with the Arbitration Commercial
Rules procedures established by the American Arbitration Association or, if such
association is not then in existence, an independent association of arbitrators
which may be designated by, agreement of the parties. In the event the parties
are unable to agree on an independent association of arbitrators from which
arbitrators may be drawn, either party may apply to a court of competent
jurisdiction for appointment of arbitrators, however, such application will only
be made in the event the American Arbitration Association is not then in
existence. The arbitrator(s) shall make detailed written findings to support
their award. The prevailing party in any such arbitration proceeding shall be
awarded such costs and expenses (including reasonable attorney's fees and expert
witness fees) as were incurred by the prevailing party as a result of the
institution and prosecution of the arbitration proceeding including all costs
and expenses (including reasonable attorney's fees and expert witness fees) to
enter judgment upon or enforce any such award including all appellate
proceedings.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
NYHC NEWCO PAXXON, INC.
By:________________________________
Its:_________________________________
NEW YORK HEALTH CARE, INC.
By:________________________________
Its:_________________________________
HEART TO HEAT HEALTH CARE SERVICES, INC.
By:________________________________
Its: ________________________________
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