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): August 4, 1995
National Home Health Care Corp.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-12927 22-2981141
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
850 Bronx River Road, Yonkers, New York 10708
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (914) 776-6800
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
On August 4, 1995, National Home Health Care Corp.
(the "Corporation") consummated the acquisition of 100% of the outstanding
capital stock of Nurse Care, Inc., a Connecticut corporation ("Nurse
Care"), from John and Aileen O'Connell (the "Selling Stockholders"). In
consideration for the transaction, the Corporation paid $3,150,000 in cash,
which was generated from internal funds, subject to certain post-closing
reductions. The purchase price was a result of arms-length negotiations
between the Corporation and the Selling Stockholders.
The acquisition of the stock of Nurse Care was made
pursuant to the Agreement for the Purchase of Stock of Nurse Care, Inc. and
Related Transactions between the Corporation and the Selling Stockholders
dated as of July 31, 1995. Nurse Care is the parent company of New England
Home Care, Inc., a Connecticut corporation ("New England"). New England is
a Medicare certified home health agency currently providing services in
Fairfield and New Haven counties in the state of Connecticut. New England
entered into a one-year employment agreement to retain the services of Ms.
O'Connell as an executive officer at an annual salary of $125,000.
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Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
It is impracticable to provide the financial
statements required by Item 7(a) relative to the
acquired business described in Item 2 at the time this
report on Form 8-K is filed. The Corporation will
file the required financial statements as soon as
practicable, but no later than October 18, 1995.
(b) Pro Forma Financial Information
It is impracticable to provide the pro forma financial
information required by Item 7(b) relative to the
acquired business described in Item 2 at the time this
report on Form 8-K is filed. The Corporation will
file pro forma financial information as soon as
practicable, but no later than October 18, 1995.
(c) Exhibits
Exhibit Number Description
10.1 Agreement for Purchase of Stock of
Nurse Care, Inc. and Related
Transactions dated as of July 31,
1995, between National Home Health
Care Corp., a Delaware corporation,
John O'Connell and Aileen O'Connell.
10.2 Employment Agreement, dated as of
August 1, 1995, between New England
and Aileen O'Connell.
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SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
NATIONAL HOME HEALTH CARE CORP.
Dated: August 16, 1995 By:/S/ ROBERT P. HELLER
Robert P. Heller
Vice President of
Finance, Chief Financial
Officer and Principal
Accounting Officer
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EXHIBIT INDEX
Exhibit No. Description Page No.
10.1 Agreement for Purchase of Stock
of Nurse Care, Inc. and Related
Transactions, dated as of July 31, 1995
between National Home Health Care
Corp., a Delaware corporation, John
O'Connell and Aileen O'Connell.
10.2 Employment Agreement, dated as
of August 1, 1995, between New England
Home Care, Inc. and Aileen O'Connell
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EXHIBIT 10.1
<PAGE>
AGREEMENT FOR THE PURCHASE OF THE
STOCK OF NURSE CARE, INC.
AND RELATED TRANSACTIONS
DATED AS OF JULY 31, 1995
<PAGE>
TABLE OF CONTENTS
Page
1. Purchase and Sale of Shares 2
1.1. Purchase and Sale 2
1.2. Purchase Price for the Acquired Shares 2
1.3. Manner of Payments at Closing 2
1.4. Lease of Waterbury Site 2
2. Time and Place of the Closing 3
3. Representations and Warranties of the Sellers 3
3.1. Authority of the Sellers 3
3.2. Authority of the Companies 3
3.3. Enforceability 4
3.4. Ownership of Stock 4
3.5. Existence and Qualification 4
3.6. Capitalization 5
3.7. Consents and Approvals; No Violation 6
3.8. Material Contracts 7
3.9. Financial Statements 9
3.10. Absence of Undisclosed Liabilities; Accounts
Payable 10
3.11. Assets Used in the Business 10
3.12. Waterbury Site 11
3.13. Leased Real Property 11
3.14. Intangible Assets 11
3.15. Receivables 12
3.16. Complete Business 13
3.17. Capital Improvements 13
3.18. Absence of Certain Changes 14
3.19. Litigation 16
3.20. Insurance 16
3.21. Employee Benefit Plans 17
3.22. Environmental Matters 18
3.23. Deliveries of Documents; Corporate Records 20
3.24. Tax Matters 20
3.25. Compliance with Laws; Permits, Etc. 23
3.26. Conflicts 24
3.27. Customers 25
3.28. Labor Matters 25
3.29. Bank Accounts 26
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TABLE OF CONTENTS (continued)
Page
3.30. Officers and Directors 26
3.31. Employees and Other Health Care Personnel 26
3.33. Subsidiaries 26
3.33. No Brokers 27
3.34. Material Disclosure 27
4. Representations and Warranties by the Buyer 27
4.1. Authority of the Buyer 27
4.2. Enforceability 28
4.3. Existence and Qualification 28
4.4. Consents and Approvals; No Violation 28
4.5. No Brokers 29
4.6. Accounts Receivable 29
5. Further Agreements of the Parties 30
5.1. Payment of Taxes, Etc. 30
5.2. Access to Books and Records 30
5.3. Payment of Certain Costs, Expenses, Etc. 30
5.4 Consents 31
5.5 Filings 31
5.6 Additional Agreements 31
5.7 Employment Agreement 32
5.8 Confidentiality and Non-Solicitation 32
5.9 Lease of Waterbury Site 32
5.10 Net Worth 32
5.11 Closing Date Balance Sheet; Purchase Price
Adjustment 32
6. Closing Conditions 33
6.1. Conditions to Obligation of the Buyer 33
6.2. Conditions of the Sellers to Closing 35
7. Deliveries at Closing 37
7.1. Deliveries by the Buyer 37
7.2. Deliveries by the Sellers 38
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TABLE OF CONTENTS (continued)
Page
8. Indemnification 39
8.1. Survival of Representations, Warranties
and Agreements 39
8.2. Indemnification by the Sellers 40
8.3. Indemnification by the Buyer 41
8.4. Procedure for Indemnification 42
8.5. Remedies Cumulative 43
9. Miscellaneous 43
9.1. Amendment and Modification 44
9.2. Waiver of Compliance; Consents 44
9.3. Notices 44
9.4. Assignment 45
9.5. Governing Law 45
9.6. Counterparts 46
9.7. Interpretation 46
9.9. Entire Agreement 46
9.9. Specific Performance 47
9.10. Severability 47
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INDEX TO SCHEDULES AND EXHIBITS
Schedules*
Schedule 3.4 Ownership of Stock and Allocation of Payments to
Sellers
Schedule 3.6(a) Capitalization of the Companies
Schedule 3.6(b) Options, Agreements, etc.
Schedule 3.7 Defaults, Accelerations, etc.
Schedule 3.8 Material Contracts
Schedule 3.10 Accounts Payable
Schedule 3.11 Certain Property Used by the Companies
Schedule 3.13 Leased Real Property
Schedule 3.14 Intangible Assets
Schedule 3.15 Certain Receivables Matters
Schedule 3.16 Assets Not Used Exclusively in Business
Schedule 3.17 Capital Improvements and Expenditures
Schedule 3.18 Certain Changes Since December 31, 1994
Schedule 3.18(g) -- Re Compensation or Benefits
Schedule 3.19 Litigation
Schedule 3.20 Insurance
Schedule 3.21(a) List of Benefit Plans
Schedule 3.21(c) Certain Premiums, etc.
Schedule 3.22(a) Environmental Permits
Schedule 3.22(b) Managed Hazardous Substances
Schedule 3.24 Tax Matters
Schedule 3.25 Compliance with Laws; Permits, Etc.
Schedule 3.26 Conflicts
Schedule 3.27 Customers
Schedule 3.29 Bank Accounts
Schedule 3.30 Officers and Directors
Schedule 3.31 Employees and Other Health Care Personnel with
Compensation in Excess of $10,000 Per Annum
_________________
* Omitted. The omitted schedules will be provided to the Securities and
Exchange Commission upon request.
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Exhibits
Exhibit A Escrow Agreement
Exhibit B Form of Employment Agreement
Exhibit C Form of Non-Competition Agreement
Exhibit D Form of Waterbury Lease Agreement
Exhibit E Form of Opinion of the Selling Group's Counsel
Exhibit F Form of Opinion of Buyer s Counsel
Exhibit G Accountants Reconciliation Schedule
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AGREEMENT FOR THE PURCHASE OF THE
STOCK OF NURSE CARE, INC.
AND RELATED TRANSACTIONS
Dated as of July 31, 1995
The parties to this agreement are National Home Health
Care Corp., a Delaware corporation (the "Buyer"), John O Connell and Aileen
O Connell (such two individuals, the "Sellers"), Nurse Care, Inc., a
Connecticut corporation (the "Company") and New England Home Care, Inc., a
Connecticut corporation ("New England"). The Company and New England are
sometimes referred to collectively as the "Companies," and the Companies
and the Sellers are sometimes referred to collectively as the "Selling
Group."
The Sellers collectively own all of the issued and
outstanding capital stock of the Company, consisting of the Company's
common stock, $100 par value (the "Common Stock"), in the amounts set forth
opposite their respective names on Schedule 3.4. In addition, the Company
owns all of the issued and outstanding capital stock of New England.
The Companies are engaged in the business of providing
home health care services, including staffing, within the State of
Connecticut (the "Business"). Each of the Sellers currently is employed by
the Companies in the Business. Mr. O'Connell has an ownership interest
in certain real property located in Waterbury, Connecticut leased to the
Company for use in the operation of the Business (the "Waterbury Site").
The Sellers wish to sell, and the Buyer wishes to
purchase, all of the outstanding capital stock of the Company on the terms
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set forth below. In addition, Mr. O'Connell and the Buyer wish to
terminate the existing lease relating to the Waterbury Site and enter into
a new lease relating thereto.
It is therefore agreed as follows:
1. Purchase and Sale of Shares .
1.1 Purchase and Sale. Upon the terms and subject
to the conditions of this agreement, each of the Sellers (as applicable)
hereby sells, assigns, transfers, conveys and delivers to the Buyer, and
the Buyer hereby purchases, acquires and accepts from each of the Sellers,
all of the shares of capital stock of the Company, owned by him or her
(collectively, the "Acquired Shares"), which are shown on Schedule 3.4,
free and clear of all Liens (as defined in Section 3.6(a)).
1.2 Purchase Price for the Acquired Shares . The
aggregate purchase price for the purchase of the Acquired Shares pursuant
to the transactions contemplated hereby is $3,150,000.
1.3 Manner of Payments at Closing. The cash payment
to be made pursuant to Section 1.2 shall be made as follows: (i) $575,000
(the "Escrow Fund") shall be delivered to Parker Chapin Flattau & Klimpl,
LLP, as escrow agent, to be held in escrow pursuant to the terms of the
escrow agreement to be entered into by the parties on the date hereof,
substantially in the form of Exhibit A (the "Escrow Agreement"), and (ii)
the balance shall be paid to the Sellers by bank or certified check or
wired funds.
1.4 Lease of Waterbury Site. In addition to the
sale of the Acquired Shares by the Sellers under this agreement, the
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existing lease relating to the Waterbury Site is being terminated and the
Buyer is entering into the Waterbury Lease Agreement referred to in section
5.9, relating thereto.
2. Time and Place of the Closing. The consummation
of the transactions contemplated under this agreement (the "Closing") shall
take place at 10:00 a.m., New York time, at the offices of Berchem, Moses &
Devlin, P.C., 75 Broad Street, Milford, Connecticut, or the offices of the
Buyer's counsel.
3. Representations and Warranties of the Sellers.
Each of the Sellers severally and jointly represents and warrants to the
Buyer as follows:
3.1 Authority of the Sellers. Each of the Sellers
has the full right and capacity to enter into and perform this agreement
and each of the following agreements, undertakings or instruments to which
it is a party: the Employment Agreement referred to in clause (b) of
section 5.9, the Waterbury Lease Agreement referred to in section 5.11, the
Non-Competition Agreement referred to in Section 5.10 hereof and each and
every other agreement, undertaking, document or other instrument being
executed and delivered by any of the Selling Group in connection with or
pursuant to this agreement, the Closing under this agreement or any of the
transactions contemplated by this agreement (collectively with this
agreement, the "Acquisition Documents").
3.2 Authority of the Companies. Each of the
Companies has the full corporate power and authority to enter into and
perform each of the Acquisition Documents to which it is a party. The
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execution and delivery of each of the Acquisition Documents to which any of
the Companies is a party and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate
action on the part of each of the respective Companies and no other
proceedings on the part of any of the respective Companies are necessary to
authorize each of the Acquisition Documents to which it is a party or the
consummation of the transactions contemplated thereby.
3.3 Enforceability. Each of the Acquisition
Documents has been duly executed and delivered by each of the Selling Group
a party thereto and constitutes the valid and binding agreement of each of
the Selling Group a party thereto enforceable against him, her or it in
accordance with its terms, except that such enforcement may be limited by
(i) applicable bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally, (ii) equitable rules or
principles affecting the enforcement of obligations generally, whether at
law or in equity, or (iii) the exercise of the discretionary powers of any
court before which may be brought any proceeding seeking equitable
remedies, including without limitation specific performance and injunctive
relief.
3.4 Ownership of Stock. Each Seller is the record
and beneficial owner of the number of shares issued by the Company as set
forth opposite his or her name on Schedule 3.4, free and clear of any and
all Liens. The Company is the record and beneficial owner of all issued
and outstanding shares of capital stock of New England.
3.5 Existence and Qualification. Each of the
Companies is a corporation duly organized, validly existing and in good
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standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business and to own and
operate its assets and properties as conducted and operated. Each of the
Companies is duly qualified to conduct business and is in good standing in
each jurisdiction wherein the nature of its business and operations
requires it to be qualified under the laws of such jurisdiction.
3.6 Capitalization.
(a) The authorized capital stock of each of the
Companies is as set forth on Schedule 3.6(a). All of the issued and
outstanding shares of capital stock of the Company are owned of record and
beneficially by the Sellers as set forth on Schedule 3.4 and all of the
issued and outstanding shares of capital stock of New England are owned of
record and beneficially by the Company. No other shares of the capital
stock of any of the Companies are, or at the time of the Closing will be,
outstanding. All of the Acquired Shares are duly authorized for issuance,
are validly issued, and are fully paid and nonassessable, with no personal
liability attaching thereto and each of the Acquired Shares and each of the
outstanding shares of capital stock of New England is free and clear of all
mortgages, pledges, security interests, liens, charges, encumbrances,
equities, claims, options, rights, restrictions on transfers (except those
imposed by applicable United States federal and state securities laws) and
encumbrances of any nature whatsoever (collectively, "Liens").
(b) Except as set forth in Schedule 3.6(b), there
are no outstanding options, warrants or rights or agreements of any kind to
acquire any shares of any class of capital stock of any of the Companies,
and there are no outstanding securities convertible into or exchangeable
for any shares of any class of capital stock of any of the Companies, nor
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do any of the Companies have any obligation to issue or enter into any such
options, warrants, rights, agreements or securities. There are no existing
proxies, agreements or arrangements of any kind that require or permit any
shares of any of the Companies to be voted by or at the discretion of
anyone other than the record owner.
3.7 Consents and Approvals; No Violation. The
execution, performance and delivery of each of the Acquisition Documents by
each of the Selling Group a party thereto, the consummation of the
transactions contemplated under each of the Acquisition Documents by each
of the Selling Group a party thereto and the compliance by each of the
Selling Group with the provisions of each of the Acquisition Documents to
which it is a party will not (a) except as set forth on Schedule 3.7,
require any of the Selling Group to make any filing or registration with,
or obtain any other permit, authorization, consent or approval of, any
governmental or regulatory authority; (b) conflict with or breach any
provision of the charter or by-laws of any of the Companies; (c) except as
set forth in Schedule 3.7, to the best knowledge of either Seller, conflict
with, violate or breach any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) under, any of the terms, covenants, conditions or provisions of,
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or give rise to a right to terminate or accelerate or increase the amount
of payment due under, any Contract (as defined in section 3.8) or other
instrument, commitment or obligation to which any of the Selling Group is a
party, or by which any of them or any of their respective properties or
assets may be bound, except for such as to which requisite waivers or
consents either have been obtained (and copies thereof delivered to the
Buyer) or the obtaining of which has been expressly waived in writing by
the Buyer; (d) to the best knowledge of either Seller, conflict with,
result in a breach or violation of, or constitute a default under any
Contract applicable to any of the Companies, to which any of the Sellers or
any of the Companies may be a party or by which any of the Sellers or any
of the Companies may be bound or affected; (e) to the best knowledge of
either Seller, result in the creation of any Lien on any asset of any of
the Companies or on any of the Acquired Shares; (f) violate any order,
writ, injunction, decree, judgment, or ruling of any court or governmental
authority applicable to any of the Companies or to any of the Acquired
Shares; or (g) violate any statute, law, rule or regulation applicable to
any of the Companies.
3.8 Material Contracts.
(a) Schedule 3.8 sets forth a complete and correct
list of all Material Contracts (as defined below) of any of the Companies.
(b) "Material Contracts" includes any Contract (as
defined below) that (i) provides for aggregate future payments by one or
more of the Companies of more than $2,000; (ii) was entered into other
than in the ordinary course of business; (iii) has an unexpired term
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exceeding six months and may not be canceled upon less than 30 days notice
without any liability, penalty or premium; (iv) was entered into with an
officer, director or any employee of any of the Companies; (v) constitutes
a collective bargaining or other labor agreement; (vi) guarantees or
indemnifies or otherwise causes the Companies to be liable for the
obligations or liabilities of another; (vii) involves the borrowing or
lending of money excluding leases of equipment to the Company in the
ordinary course of business and excluding employee advances, all of which
are reflected in the books and records of the Company; (viii) involves an
agreement with any bank, finance company or similar organization for the
sale of any products of the Companies on credit; (ix) involves the sale by
or to the Companies of products or services on consignment; (x) is or
contains a power of attorney; (xi) contains any renegotiation or
redetermination provisions; (xii) restricts any of the Companies from
carrying on its respective businesses as presently conducted anywhere in
the world; (xiii) involves as a party (A) any of the Selling Group, any
officer or director of any of the Companies or any affiliate of any such
person or (B) any corporation or other entity (in addition to any of the
Companies) in which any of the foregoing persons has any interest, or with
whom any of the foregoing persons has any relation by blood or marriage,
direct or indirect; (xiv) requires or is otherwise contingent upon the
payment of commissions or compensation to any person not a party to such
contract, agreement, lease, understanding or commitment; (xv) contains any
warranty terms in addition to the warranties normally given in connection
with the sale of the Companies' products; or (xvi) is a lease of real
property involving any of the Companies as either a lessor or lessee. True
and complete copies of all Material Contracts listed on Schedule 3.8 have
been delivered to the Buyer.
(c) The term "Contract" includes any contract,
agreement, understanding, commitment, mortgage, debt instrument, security
agreement, license, guarantee, lease, charter, franchise, power of
attorney, agency and other agreement (whether or not in writing).
(d) The Contracts to which any one or more of the
Companies is a party and that are not listed on Schedule 3.8 are not
material individually to any of the Companies or in the aggregate, to the
Companies, the Business or the Acquired Shares.
(e) There is not, and has not been, claimed or
alleged by any person, with respect to any Material Contract, any existing
default, or event of default, or event that with notice or lapse of time or
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both would constitute a default or event of default on the part of the
Companies or on the part of the other party or parties thereto. The
Material Contracts are in full force and effect, constitute the legal,
valid and binding obligations of the Companies party thereto and, to the
best knowledge of either Seller, the other parties thereto. No other party
to a Material Contract has asserted the right, and, to the best knowledge
of either Seller, no basis exists for the assertion of any right, to
renegotiate the terms or conditions of any Material Contract, except upon
the normal expiration date thereof. No consent, approval, authorization or
waiver from, or notice to, any other party is required to maintain in full
force and effect all of the Material Contracts, other than such consents
and waivers as have been obtained and copies of which have been delivered
to the Buyer and are unconditional and in full force and effect and such
notices as have been duly given.
3.9 Financial Statements.
(a) The Selling Group has previously furnished to
the Buyer (i) the audited balance sheet of the Companies as of December 31,
1994 (the "Year-end Balance Sheet"), and (ii) the audited statements of
income and retained earnings and of cash flows for the year ended Decem-
ber 31, 1994 (the "1994 Operating Statements"), together with the notes
thereto and the audit report thereon by Simeone & Simeone (all of the
foregoing financial statements, the "Financial Statements").
(b) The Year-end Balance Sheet presents fairly the
assets and liabilities of the Company or each of the Companies (as
applicable), as of the date thereof in accordance with generally accepted
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accounting principles consistently applied ("GAAP"). The 1994 Operating
Statements presents fairly the results of operation and cash flows of the
Company or each of the Companies (as applicable), for the period thereof in
accordance with GAAP.
3.10 Absence of Undisclosed Liabilities; Accounts
Payable. None of the Companies has any liabilities (whether accrued,
contingent, known, or otherwise), including without limitation accrued
expenses and reserves, deferred revenues and Medicare cost reimbursement
obligations relating to the operations of the Companies prior to Closing,
other than those that (i) are set forth or fully reserved against in the
Year-end Balance Sheet; or (ii) were incurred since the date of the Year-
end Balance Sheet; in the ordinary course of business, none of which singly
or in the aggregate is materially adverse to the Business or to the
operations, condition or prospects of any of the Companies; or (iii) arise
under Material Contracts disclosed on Schedule 3.8; or (iv) arise under
Contracts that are not Material Contracts. Schedule 3.10 sets forth a
detailed list of all accounts payable, itemized by payee, and indicating
the age of such accounts payable as of May 31, 1995.
3.11 Assets Used in the Business.
(a) The Companies have good, marketable and valid
title, free and clear of any Lien, to all personal property used in the
Business or presently located on its premises, except for (i) the leased
items of personal property listed on Schedule 3.11, (ii) the leased items
of real property listed on Schedule 3.13, (iii) the Liens set forth on
Schedule 3.11 and (iv) Liens, if any, for current taxes not yet due and
payable. Except as set forth on Schedule 3.11, the Companies do not use
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any property (real or personal) in the Business owned or leased by, or,
with respect to such property, owe any amount to or have any contract with
or commitment to, any of the Selling Group or any director, officer,
employee, agent, or representative of the Company or their respective
affiliates or family members. Schedule 3.8 sets forth a detailed list of
all property, whether real, personal, mixed, tangible or intangible,
reflected on the 1994 Balance Sheet and owned as of the Closing.
(b) The equipment and other tangible personal
property used in or relating to the Business is in good operating condition
and in good condition of maintenance and repair (subject to ordinary wear
and tear), is adequate for use in the conduct of the Business as presently
conducted.
3.12 Waterbury Site. On the date hereof, the Company
is leasing the Waterbury Site pursuant to the Waterbury Lease Agreement.
3.13 Leased Real Property. Schedule 3.13 sets forth
a list of all real property leased to any of the Companies. Each such item
of real property is used exclusively in the Business. The real property
leased by the Company is sufficient and suitable for its present uses and
purposes, and the transactions contemplated by this agreement will not
adversely affect the Companies' right to use those properties for the same
purpose and to the same extent as they were being used by any of the
Companies prior to the date of this agreement.
3.14 Intangible Assets. Schedule 3.14 sets forth a
list of (x) all patents, trademarks, trade names, trade dress rights,
service names, service marks, copyrights, logos, franchises and permits,
designs, rights and similar rights, authorizations and applications
therefor (including registration and applications for registration thereof)
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(collectively, the "Rights") owned by the Company or New England and used
in the Business specifying as applicable: (i) the title of such Right;
(ii) the owner of such Right; and (iii) each jurisdiction by or in which
such Right has been issued or registered, or in which an application for
such issuance or registration, has been filed, including the respective
registration or application date and number, and (y) all license agreements
with respect to any Rights as to which any of the Companies is licensor or
licensee ("Licenses") specifying for each such License a complete listing
and summary description, including the licensor and licensee thereunder,
the particular Rights under license, the term thereof, and all royalties
paid or received thereunder by each of the Companies since January 1, 1993
(broken down by applicable period thereunder). The Rights listed in
Schedule 3.14 are all the Rights which are used in the conduct of the
Business as currently conducted or as proposed to be conducted and do not
infringe upon, and are not inconsistent with, the rights of any third
party. Except as set forth in Schedule 3.14, none of the Companies has been
sued or threatened with suit, for infringement, violation or breach of any
such Rights and no basis exists for any such suit and none of the Selling
Group is aware of any infringement, violation or breach of such Rights or
Licenses by any other person. All of such rights may be used by the
Companies after the Closing without the consent or approval of any person
and without violating the rights of any third party.
3.15 Receivables. The trade accounts and other
receivables of the Companies, except to the extent of the reserves set
forth in the Financial Statements, need not be written off as uncollectible
except in non-material amounts in the aggregate, are bona fide receivables,
arose out of arms' length transactions, are recorded correctly on the books
and records of the applicable Companies and will be collected in full
within one year from the original date of such receivable. Except as set
forth in Schedule 3.15, such trade accounts and other receivables are not
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subject to any counterclaim or set-off not reflected in the reserves set
forth on the Financial Statements other than in the ordinary course of
business and except in non-material amounts in the aggregate. Set forth in
Schedule 3.15 is a detailed list, as of May 31, 1995, of all accounts
receivable, showing payor names, invoice dates, invoice amounts, aging and
allowances for doubtful accounts, or, in the case of earned but unbilled
receivables, payor names and dates on which such receivables are billable.
3.16 Complete Business. The real property, personal
property and intangible assets owned or leased by the Companies represent
all of the assets necessary to conduct the Business in the manner in which
it has been conducted by the Companies. No part of the Business is
conducted by or through any person or entity other than one or more of the
Companies. Except as set forth in Schedule 3.16, none of the Companies
owns, leases or licenses any asset, or is a party to any contract,
arrangement or understanding, that is not used exclusively in the operation
of the Business. No entity (corporate or otherwise) other than the
Companies had or has any interest or involvement related to the Business as
it is currently conducted or has been conducted.
3.17 Capital Improvements. Schedule 3.17 contains a
description of each capital improvement, construction, renovation or
expenditure for new or used equipment or similar project in excess of
$2,000 (other than routine maintenance and repair) with respect to the
assets and properties of the Companies which is in process or for which any
contract has been entered into or for which any legally binding commitment
by any of the Companies has been made or purchase order issued (the
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"Capital Improvements") . All other capital improvements of the companies
in process or for which any contract has been entered into or for which any
commitment has been made or purchase order issued and which are not
required to be set forth in Schedule 3.17 will not require annual payments
in excess of $2,000 in the aggregate.
3.18 Absence of Certain Changes. Except as
contemplated by this agreement or as set forth in Schedule 3.18, since
December 31, 1994 there has not been, occurred or arisen:
(a) any material liability or obligation incurred by
the Companies other than in the ordinary course of business;
(b) any payment, discharge or satisfaction of any
claim, liability or obligation (absolute, accrued, contingent or otherwise)
of the Company or New England except (i) pursuant to existing contractual
commitments or (ii) in the ordinary course of business;
(c) any action taken by any of the Selling Group
which has or could result in the creation of a Lien on any of the assets of
the Company or New England;
(d) any debt or receivable in excess of $2,000
canceled or any claims or rights of substantial value waived by any of the
Companies except for fair consideration in the ordinary course of business;
(e) except in the ordinary course of business, any
sale, transfer or other disposition of any right, title or interest in or
to any of the properties or assets of the Company or New England (real,
personal or mixed, tangible or intangible);
(f) any declaration, payment or setting aside for
payment of any dividend or other distribution (whether in cash, stock or
property) in respect of the capital stock of any of the Companies, any
direct or indirect redemption, purchase or other acquisition of shares of
-14-<PAGE>
such capital stock or any split, combination or reclassification of such
capital stock (other than the transactions contemplated by this agreement);
(g) (i) any approval or action to put into effect
any general increase in any compensation or benefits payable to any class
or group of employees of the Company or New England, any increase in the
compensation payable or to become payable to any director, officer or key
employee or any payment, grant or accrual to or for the benefit of any
director, officer or key employee of any bonus, service award, percentage
compensation or other benefit, in each case other than raises given since
January 1, 1995 in the ordinary course and as set forth in Schedule 3.18(g)
or (ii) except for the termination of the Company s 401(k) plan (which the
Sellers hereby represent and warrant shall be terminated to the extent
practicable prior to Closing, such that no further contributions or
allocations of forfeitures may be made thereunder, and as promptly as
practicable following Closing, in either case without any cost or expense
to the Companies or the Buyer), any adoption or amendment of any employee
pension benefit plan, employee welfare benefit plan or foreign employee
benefit plan, or any severance agreement or employment contract to which
any director or officer of the Company or New England is a party;
(h) any change in any accounting principle or method
of election for tax purposes used by the Company or New England;
(i) any amendment or change in the articles of
incorporation or by-laws of the Company or New England;
(j) any adverse change in the business or financial
condition of the Company or New England;
-15-<PAGE>
(k) any prepayment of any obligation of any of the
Companies, except in the ordinary course of business;
(l) any guarantee, indemnity or other obligation of
any of the Companies causing any of the Companies to be liable for the
obligations or liabilities of another;
(m) any damage, destruction or loss, whether or not
covered by insurance, materially adverse to the assets or business of any
of the Companies; or
(n) any agreement, whether in writing or otherwise,
to take any action described in this Section 3.18.
3.19 Litigation. Except as set forth on Schedule
3.19, there are no private or governmental law suits, claims or actions or
administrative proceedings against any of the Company or New England
pending or threatened against the Company or New England, or the
transactions contemplated by this agreement, nor are there any judgments,
decrees or orders either naming any of the Company or New England or
enjoining any of the Company or New England in respect of the acquisition
of any securities, rights or property of any kind or in respect of the
conduct of business in any area. None of the matters listed in Schedule
3.19, if adversely determined against the Company or New England, might,
individually or in the aggregate, have a material adverse effect on the
business, operations, working capital, financial condition, revenues,
assets, liabilities (whether absolute, contingent or otherwise), reserves
or prospects of any of the Company or New England.
3.20 Insurance. Schedule 3.20 sets forth the
insurance coverage maintained by the Companies on their plant, property and
equipment and other assets and properties, and all other policies of
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insurance owned or maintained by any of the Selling Group on or in
connection with the Business or any real property used in the Business,
including all policies or binders of fire, liability, vehicular, title,
professional, errors and omission and other insurance, specifying the
insurer, the type of insurance, the amount of coverage, the deductible
amount, if any, the expiration date and the policy number. Except for
amounts deductible under such policies of insurance and described in
Schedule 3.20, the Companies are not and have not been prior to the date
hereof, subject to liability as a self-insurer. Except as set forth in
Schedule 3.20, there are no claims pending or threatened under any of said
policies or disputes with underwriters regarding coverage under such
policies. Within three years from the date hereof, none of the Companies
has been denied or been offered insurance only at a commercially
prohibitive premium. All of the policies disclosed on Schedule 3.20 are
valid and binding and in full force and effect, and there is no breach or
default with respect to any provision contained in any such policy.
3.21 Employee Benefit Plans.
(a) Except as set forth on Schedule 3.21, none of
the Company or New England, none of the Sellers and none of the affiliates
of the Company or New England maintains or contributes to any employee
pension benefit plans (as defined in section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")). The only
-17-<PAGE>
welfare benefit plan (as defined in section 3(1) of ERISA), bonus, stock
purchase, stock ownership, stock option, deferred compensation, incentive,
severance, termination or other compensation plan or arrangement, and other
employee fringe benefit plans presently or in the past maintained by, or
contributed to by the Company or New England, or by any Seller or any
affiliate for the benefit of any employee of the Company or New England
(the "Benefit Plans"), are those set forth in Schedule 3.21(a).
(b) The Company, New England and each of the Benefit
Plans are in compliance with all applicable provisions of ERISA, and those
provisions of the Internal Revenue Code of 1986, as amended (the "Code")
applicable to the Benefit Plans. All reports, returns and similar
documents with respect to the Benefit Plans required to be filed with any
government agency or distributed to any Benefit Plan participant have been
duly and timely filed or distributed, as the case may be.
(c) All premium payments or other contributions to,
and payments from, the Benefit Plans which may have been required to be
made in accordance with the Benefit Plans have been timely made. All such
premiums or other contributions to the Benefit Plans, and all payments
under the Benefit Plans, except those to be made by an insurer, for any
period ending before the date hereof that are not yet, but will be,
required to be made are properly accrued and reflected on the Year-end
Balance Sheet or are set forth in Schedule 3.21(c).
3.22 Environmental Matters.
(a) Each of the Companies holds and is in compliance
with all environmental permits, certificates, licenses, approvals,
registrations and authorizations ("Permits") required under all laws, rules
and regulations in connection with the Business, and all of such Permits
are in full force and effect. All such Permits and the expiration dates
thereof are listed in Schedule 3.22(a). Except as set forth on Schedule
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3.22(a), all of such Permits are transferable such that the Companies will
be entitled to all of the benefits thereof after the Closing without any
action on the part of any of the Companies or the Buyer. Each of the
Companies has complied with and is not in violation of all applicable
environmental statutes, rules, regulations, ordinances and orders of any
federal, state, local or foreign governmental or regulatory agency or
authority or court, including those relating to Hazardous Substances (as
hereinafter defined) . Each of the Companies has made timely application
for renewals of all such Permits, except for such Permits for which, by
their terms or by operation of law, a renewal application need not be made
more than 90 days before their expiration.
(b) Except as set forth in Schedule 3.22(b), none of
the Companies has managed or handled any hazardous or toxic or polluting
substances (a "Hazardous Substance") on any property now or previously
owned, operated or leased by any of the Companies, nor, to the best
knowledge of the Sellers, has anyone else managed any Hazardous Substances
on any property now or previously owned, operated or leased by the Company
or New England.
(c) To the best knowledge of each Seller, there are
no environmental liens on any properties owned or leased by any of the
Company or New England and no actions by any federal, state, local or
foreign governmental or regulatory agency or authority have been taken or
are in process or pending which could subject any of such properties to
such liens.
(d) The Selling Group have caused the Company and
New England to prepare and file all necessary applications for Permit
transfers in adequate time for transfer to occur prior to the date hereof.
Any and all work required after the date hereof to perfect the transfer of
all Permits will be performed by the Sellers.
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(e) None of the Selling Group knows of any facts or
circumstances related to environmental matters concerning the existing or
previously owned or leased properties or businesses of any of the Companies
that could lead to any future environmental claims, liabilities or
responsibilities against any of the Company, New England or the Buyer;
provided, however, that none of the Selling Group has retained any
independent expert to conduct any environmental review of such properties
or businesses.
3.23 Deliveries of Documents; Corporate Records.
(a) Each of Selling Group has delivered to the Buyer
true, correct and complete copies of all documents, instruments, agreements
and records referred to in the schedules to this agreement and copies of
the certificates or articles of incorporation and all amendments thereto
and the by-laws, as amended, of the each of the Company and New England.
The minute and stock record books of the Company and New England contain
true, correct and complete copies of the records of all meetings and
consents in lieu of a meeting of the Board of Directors (and any committee
thereof) and voting shareholders of the Company and New England since the
dates of their incorporation.
(b) The stock ledger and transfer books of the
Company and New England are complete and correct and properly reflect all
transfers of the capital stock of the Company and New England.
3.24 Tax Matters.
(a) Each of the Company and New England has timely
filed (after giving effect to all extensions) all of its federal, foreign,
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state and local Tax Returns (as hereinafter defined) required to be filed
on or before the date hereof and all such Tax Returns for the year ended
December 31, 1994, including those relating to carryback losses, actually
have been filed prior to the date hereof, regardless of extensions;
provided, however, that in the event that the Tax Returns for the year
ended December 31, 1994, including those relating to carryback losses,
shall not have been filed prior to the date hereof, then they shall be
filed by the Sellers immediately following the Closing in the form
reasonably approved by the Buyer prior to filing and in any event shall be
the sole responsibility of the Sellers and shall be deemed Tax Returns of
the Sellers for purposes of this Section 3.24. All Tax Returns filed by
each of the Company and New England are true, correct and complete and each
of the Company and New England has timely paid all Taxes (as hereinafter
defined) due and payable on such Tax Returns or on any Tax statement
(including real estate tax statements) to the extent that the same have
become due and payable on or before the Closing. To the best knowledge of
each Seller, each of the Company and New England has complied in all
respects with all applicable laws, rules and regulations relating to the
reporting, payment, collection and withholding of Taxes and has timely and
properly collected or withheld and timely paid over to the proper
governmental authorities all Taxes required to be so collected or withheld
and paid over. Since January 1, 1992, except as to each other, neither the
Company nor New England is or has been a member of any affiliated,
consolidated, combined or unitary group.
(b) Each of the Selling Group has delivered to the
Buyer copies of all federal, state and local income and franchise Tax
Returns of the Company and New England for all periods ending in calendar
-21-
years 1992, 1993 and 1994, together with copies of all reports of federal,
foreign, state, and local Tax authorities relating to any audit or
examination of such Tax Returns or any action or proceeding assessment or
collection relating thereto. Except as set forth in Schedule 3.24, neither
the Company nor New England is a party to, nor is expected to become a
party to, any pending or threatened audit, examination, action or
proceedings, assessment or collection of Taxes by any governmental
authority relating to the business and operations of any of the Company and
New England.
(c) For purposes of this agreement, the term "Taxes"
shall mean all taxes, levies or other like assessments, charges or fees
(including water, sewer and garbage assessments, charges or fees), and
shall include, without limitation, any and all income, gross receipts,
excise, property, sales, use, ad valorem, transfer, profits, severance,
stamp, occupation, capital stock, occupancy, license, payroll, withholding,
employment, unemployment, estimated, social security and franchise or other
governmental taxes, imposed by the United States, or any state, county,
local or foreign government or subdivision or agency thereof on any of the
Company and New England and/or any of their business activities; and such
term shall include any interest, penalties or additions to tax attributable
to such assessments.
(d) For purposes of this agreement, the term "Tax
Returns" shall mean all returns (including information returns and amended
returns), declarations, reports, estimates and statements regarding Taxes,
which are or were required to be filed under federal, foreign, state or
local law or which were actually filed.
-22-
3.25 Compliance with Laws; Permits, Etc.
(a) Except as described in Schedule 3.25, each of
the Company and New England is in compliance with, and no default or
violation exists under, any and all laws (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees, rulings and charges
thereunder) of federal and Connecticut state and local governments and all
agencies, including without limitation the Connecticut Department of Public
Health and Addiction Services, thereof (collectively, "Laws and
Requirements of Laws") applicable to the business, operations and
properties of each of the Company and New England (including, but not
limited to, material compliance with the federal Occupational Safety and
Health Administration and all laws, rules and regulations relating
thereto), and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against any
of them alleging any failure so to comply. Neither the Company nor New
England and none of the transactions contemplated under this agreement are
subject to any judgment, order or decree entered in any lawsuit,
governmental or legal proceeding, and no investigations by any governmental
authority, have been conducted (other than by the Sellers or the Company
and New England) during the two years prior to the date of this agreement,
in connection with the ownership, operations or business of the Company or
New England. Each of the Company and New England has duly filed all
reports and returns required to be filed with governmental authorities and
obtained all governmental or regulatory permits and licenses and all other
governmental consents which are required in connection with and related to
the business and operations of any of the Company and New England and in
connection with the transactions contemplated by this agreement. Such
permits, licenses and consents are in full force and effect, will remain in
full force and effect after the Closing, and no proceedings for the
suspension or cancellation of any of them is pending or threatened.
Schedule 3.25 contains a complete list or description or all of such
permits, license and consents. The Company and New England are eligible,
and are fully certified, to participate as providers under Medicare and the
Medicaid program of Connecticut and are in full compliance in all respects
with all applicable requirements for participation in those programs.
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(b) The Company and New England have maintained all
relevant records pertaining to their participation as Medicare and Medicaid
providers, which records have been and shall be preserved in order to
permit complete responses to any regulatory inquiries.
(c) All of the products sold by any of the Company
and New England or in connection with the Business are fit for the use or
uses intended, have been sold in all respects in compliance with all Laws
and Requirements of Laws and none of such products are subject to
regulation by any federal, state or local agency except as set forth on
Schedule 3.25.
3.26 Conflicts. Except as set forth in Schedule
3.26, none of the Selling Group or any officer or director of any of the
Company and New England or affiliate thereof (a) has or within the past
three years has had any direct or indirect interest in (i) any entity which
transacts any business with any of the Company and New England or (ii) any
property, asset or right that is used in the conduct of the business of any
of the Company and New England, or (b) has or within the past three years
has had any contractual relationship with any of the Company and New
England, other than such relationship as relates to being such officer or
director of any of the Company and New England.
-24-
3.27 Customers. Schedule 3.27 sets forth the
revenues of each of the Company and New England for the year ended December
31, 1994 and indicating the approximate total revenue from each of the 10
largest customers of the Business during said period. Except as set forth
in Schedule 3.27, there has not been any adverse change in the business
relationship of any of the Company and New England with any such customer
and none of the Selling Group is aware of any threatened loss of any such
customer or the basis for any such loss. None of the Selling Group and
none of the Company and New England has any Contracts with any such
customers other than Material Contracts. The actual consummation of the
specific transactions contemplated by this agreement will not result in any
of the twenty largest customers or suppliers reducing or terminating its
business with either the Company or New England. The business relationship
of each of the Company and New England with each such customer is an arms'
length relationship and no affiliation, relationship or transaction
(financial or otherwise) exists or has existed, directly or indirectly,
between any such parties (or officers, directors, employees or agents of
such parties) except as is expressly described in the Material Contracts
relating thereto.
3.28 Labor Matters. There are no labor strikes,
slowdowns or stoppages or other labor troubles pending or threatened with
respect to the employees or other health care personnel of any of the
Company and New England; no representation questions exist; no collective
bargaining agreement binding on any of the Company and New England
restricts any of the Company and New England from relocating or closing any
or all of their respective businesses or operations; there are no
grievances asserted which might have an adverse effect upon the Business,
-25-
or the financial condition or prospects of the Company and New England, nor
is there pending any arbitration proceeding arising out of or under any
labor union agreement; and none of the Company and New England has
experienced any work stoppage during the last five years. Schedule 3.28
contains a list of all employees of the Company and New England and a list
of all vacation and other benefits thereof accrued to the date hereof. The
Company and New England previously have provided to the Buyer all copies of
and information regarding its employment policies and manuals.
3.29 Bank Accounts. Schedule 3.29 sets forth the
names and locations of all banks, depositories and other financial
institutions in which each of the Company and New England has an account or
safe deposit box and the names of all persons authorized to draw thereon or
to have access thereto.
3.30 Officers and Directors. Schedule 3.30 sets
forth the names and titles of the directors and officers of each of the
Company and New England.
3.31 Employees and Other Health Care Personnel.
Schedule 3.31 contains a list of all persons receiving compensation from
any of the Company and New England in excess of $10,000 per annum and a
description of the compensation and the components thereof of which each
such person presently is or in the future will be entitled. None of such
persons has indicated to the officers of the Company and New England any
intent to leave the employ or other relationship of any of the Company and
New England.
3.32 Subsidiaries. None of the Company and New
England owns, directly or indirectly, any capital stock or other equity
securities of any corporation or has any other equity or ownership interest
-26-
or investment in any business or other entity; provided, however, that New
England is a wholly-owned subsidiary of the Company.
3.33 No Brokers. None of the Selling Group has
retained or utilized the services of any broker, finder or other similar
agent or representative in connection with the transactions contemplated by
this agreement.
3.34 Material Disclosure. No representation or
warranty by any of the Selling Group contained in this agreement and no
statement contained in any certificate, list, schedule exhibit or other
instrument specified or referred to in this agreement, whether heretofore
furnished to the Buyer or hereafter furnished to the Buyer pursuant to this
agreement, contains or will contain any untrue statement of a material fact
or omits or will omit any material fact necessary to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading. All information required to be disclosed by this
agreement concerning any of the Companies, the Sellers or the Business has
been disclosed.
4. Representations and Warranties by the Buyer.
The Buyer represents and warrants to the Sellers as follows:
4.1 Authority of the Buyer. The Buyer has the full
corporate power and authority to enter into and perform each of the
Acquisition Documents to which it is a party. The execution and delivery
of each of the Acquisition Documents to which the Buyer is a party and the
consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of the Buyer and
no other proceedings on the part of the Buyer are necessary to authorize
-27-
each of the Acquisition Documents to which it is a party or the
consummation of the transactions contemplated thereby.
4.2 Enforceability. Each of the Acquisition
Documents to which the Buyer is a party has been duly executed and
delivered by the Buyer and constitutes the valid and binding agreement of
the Buyer enforceable against it in accordance with the terms thereby,
except that such enforcement may be limited by (i) applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors'
rights generally, (ii) equitable rules or principles affecting the
enforcement of obligations generally, whether at law or in equity, or
(iii) the exercise of the discretionary powers of any court before which
may be brought any proceeding seeking equitable remedies, including without
limitation specific performance and injunctive relief.
4.3 Existence and Qualification. The Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, with full corporate power and
authority to conduct its business and to own and operate its assets and
properties as conducted and operated. The Buyer is duly qualified to
conduct business and is in good standing in each jurisdiction wherein it is
required to be qualified under the laws of such jurisdiction.
4.4 Consents and Approvals; No Violation. The
execution, performance and delivery by the Buyer of each of the Acquisition
Documents, the consummation by the Buyer of the transactions contemplated
thereby and the compliance by the Buyer with the provisions thereof will
not (a) require the Buyer to make any filing or registration with, or
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obtain any other permit, authorization, consent or approval of, any
governmental or regulatory authority; (b) conflict with or breach any
provision of the charter or by-laws of the Buyer; (c) conflict with,
violate or breach any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default)
under, any of the terms, covenants, conditions or provisions of, or give
rise to a right to terminate or accelerate or increase the amount of
payment due under, any note, bond, mortgage, indenture, deed of trust,
license, guarantee, franchise, permit, lease, charter, franchise, power of
attorney, contract, agreement, or other instrument, commitment,
understanding or obligation to which the Buyer is a party, or by which it
or any of its properties or assets may be bound, except for such as to
which requisite waivers or consents either have been obtained (and copies
thereof delivered to the Sellers) or the obtaining of which has been
expressly waived in writing by the Sellers; (d) conflict with, result in a
breach or violation of, or constitute a default under any agreement
applicable to the Buyer, to which the Buyer may be party or by which the
Buyer may be bound or affected; (e) result in the creation of any Lien on
any asset of the Buyer; (f) violate any order, writ, injunction, decree,
judgment, or ruling of any court or governmental authority, applicable to
the Buyer; or (g) violate any statute, law, rule or regulation applicable
to the Buyer.
4.5 No Brokers. The Buyer has not retained or
utilized the services of any broker, finder or other similar agent or
representative in connection with the transactions contemplated by this
agreement.
4.6 Accounts Receivable. The Buyer shall use all
reasonable efforts to collect the accounts receivable set forth on Schedule
3.15.
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5. Further Agreements of the Parties.
5.1 Payment of Taxes, Etc. Each of the Sellers
shall continue to be responsible for filing his or her own Tax Returns and
paying his or her own Taxes, with respect to all periods, either before or
after the Closing, and Buyer shall have no liability therefor.
5.2 Access to Books and Records. The Sellers agree
that on the date hereof all of the books and records relating to any of the
Companies are located at the main office of the Companies in Milford,
Connecticut.
5.3 Payment of Certain Costs, Expenses, Etc.
(a) The Sellers represent that none of the Companies
has incurred (whether by actual payment or accrual) any costs or expenses
for legal, accounting or other professional fees and disbursements of such
professionals in connection with the transactions contemplated by this
agreement, all of which costs or expenses are the sole responsibility of
the Sellers; provided, however, that the costs and expenses of Simeone &
Simeone in connection with that firm's preparation of the Financial
Statements and the Closing Date Financial Statements (as hereinafter
defined) shall be borne by the Buyer.
(b) Except as set forth in section 5.3(a), whether
or not the transactions contemplated hereby are consummated, all costs and
expenses incurred in connection with this agreement and the transactions
contemplated hereby will be paid by the party incurring such costs and
expenses, provided, however, that nothing contained in this section shall
relieve any party of any liability for a breach of a covenant set forth in
this agreement.
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5.4 Consents. Each of the parties hereto will use
his, her and its best efforts to obtain consents of all third parties and
governmental authorities necessary to the consummation of the transactions
contemplated by this agreement; provided, however, that the foregoing shall
not constitute a limitation upon the covenants and obligations of any of
the Selling Group and the Buyer otherwise expressly set forth in this
agreement.
5.5 Filings. The Buyer and the Selling Group shall
each cause to be made, as promptly as practicable, any necessary filing and
submissions under the laws of any domestic or foreign jurisdiction to the
extent to which the provisions thereof are applicable to each party in
connection with the transactions contemplated by this agreement and each
will cooperate with the other in causing all such filings and submissions
to be made timely.
5.6 Additional Agreements. Each of the parties
hereto agrees to use its, his or her best efforts to take, or cause to be
taken, all reasonable action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations, to
consummate and make effective the transactions contemplated by this
agreement as expeditiously as practicable. If at any time after the date of
the Closing any further action is necessary or desirable to carry out the
-31-<PAGE>
purposes of this agreement, each of the parties shall take or cause to be
taken all such necessary action, including, without limitation, the
execution and delivery of such further instruments and documents as may be
reasonably requested by any party for such purposes or otherwise to
complete or perfect the transactions contemplated hereby. Each of the
Sellers further agrees to use his or her best efforts following the Closing
to assist the Buyer in connection with the understanding, defense or
pursuance of all matters for which the Buyer shall reasonably request and
which the Sellers, by virtue of their relationship with the Companies prior
to Closing.
5.7 Employment Agreement. In consideration of the
monies to be paid by the Buyer to the Sellers under this agreement, and as
part of the reason the Buyer is entering into and executing this agreement
and in view of the relationship of the individual Sellers, at the Closing,
Aileen O Connell has entered into an employment agreement with the Company
substantially in the form of Exhibit B (the "Employment Agreement"), which
contains confidentiality, non-competition and non-solicitation provisions.
5.8 Confidentiality and Non-Solicitation. In
consideration of the monies to be paid by the Buyer to the Sellers under
this agreement, and as part of the reason the Buyer is entering into and
executing this agreement, John O Connell has entered into the Non-
Competition Agreement in the form of Exhibit C.
5.9 Lease of Waterbury Site. The Buyer and the
Company have entered into the Waterbury Lease Agreement in the form or
Exhibit D.
5.10 Net Worth. The Sellers covenant and agree that
they shall maintain their aggregate net worth in excess of $750,000 during
the three-year period commencing on the date hereof.
5.11 Closing Date Balance Sheet; Purchase Price
Adjustment.
As promptly as possible after the Closing,
subject to the completion thereof by Simeone & Simeone, Buyer will deliver
to the Sellers the audited balance sheet of the Companies as of the date of
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Closing (the "Closing Date Balance Sheet") and the audit statements of
income and retained earnings and of cash flows of the Companies for the
period from January 1, 1995 through the date of Closing, together with the
notes thereto and the audit report thereon by Simeone & Simeone (all of the
foregoing, the "Closing Date Financial Statements"), which Buyer shall
cause to be prepared in accordance with generally accepted accounting
principles consistently applied ("GAAP"). If and to the extent that the
Shareholders Equity (determined as provided below) shown on the Closing
Date Balance Sheet is less than an amount equal to the Shareholders Equity
shown on the Year-end Balance Sheet minus the sum of (i) $100,000 plus (ii)
up to $15,000 of the amount, if any, by which the amount of accrued
vacation as set forth on the Closing Date Balance Sheet exceeds such amount
as set forth on the Year-end Balance Sheet, then such difference shall be
treated as a reduction of purchase price and the Sellers will, within ten
(10) days thereafter, pay an amount equal to such difference to Buyer in
proportion to their interest in the Shares. The Sellers guarantee that the
first $135,000 of such amount shall be a primary and direct obligation paid
directly by Sellers and Buyer shall not be required to make any claim
against the Escrow Fund or pursue any other remedies for collection
thereof. Shareholders Equity shall be the difference between Total Assets
and Total Liabilities. "Total Assets" shall mean the total consolidated
assets of the Company and its subsidiaries and "Total Liabilities" shall
mean the total consolidated liabilities of the Company and its
subsidiaries, each as determined in accordance with GAAP.
6. Closing Conditions.
6.1 Conditions to Obligation of the Buyer. The
obligations of the Buyer to effect the transactions contemplated hereby
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shall be subject to the fulfillment, or the waiver by the Buyer, at or
prior to the Closing, of the conditions set forth below. Each of the
Selling Group shall use all reasonable efforts to cause each of those
conditions to be satisfied.
(a) There will have occurred no material adverse
change in the financial condition, operations or prospects of any of the
Company or New England or the Business from the assets, working capital,
financial condition, operations and prospects of the Company or New England
from that as of December 31, 1994, to the date of the Closing.
(b) The closing of the transactions contemplated
pursuant to the Waterbury Lease Agreement shall have occurred.
(c) Aileen O Connell shall have executed and
delivered the Employment Agreement.
(d) John O Connell shall have executed and delivered
the Non-Competition Agreement.
(e) All amounts owing to the Company or New England
from any of the Sellers shall have been repaid in full.
(f) The Buyer shall have received the opinion of
Messrs. Berchem, Moses & Devlin, P.C. in substantially the form of Exhibit
E (the "Opinion of the Selling Group's Counsel").
(g) The Buyer shall have received all closing
documents in form and substance satisfactory to the Buyer and its counsel
and all corporate, legal and other proceedings and related matters in
connection with the execution, delivery and performance of this agreement
shall have been reasonably satisfactory to such counsel.
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(h) The Buyer shall have received the written
resignations of each officer and each director of each of the Company and
New England which it shall have requested.
(i) There shall be no order, decree or injunction of
a court of competent jurisdiction which prevents or delays the consummation
of the transactions contemplated by this agreement.
(j) All waiting periods under any law, regulation,
rule or order applicable to, or deemed to be applicable to, any of the
transactions contemplated by this agreement shall have expired or been
terminated.
(k) There shall have not been proposed or enacted
(including, without limitation, any threatened proposals or enactment of)
any statute, rule or regulation, or any change in any existing statute,
rule or regulation, which prohibits or delays, or threatens to prohibit or
delay the performance of the transactions contemplated by this agreement or
which changes, or threatens to change in a material adverse manner the
business, operations, financial condition or prospects of the Companies
from that reflected in the Financial Statements.
(l) There shall not have occurred (i) a declaration
of a banking moratorium, or any suspension or payments in respect of banks
in the United States, or (ii) a commencement of a major war involving the
United States.
6.2 Conditions of the Sellers to Closing. The
obligations of the Sellers to effect the transactions contemplated hereby
shall be subject to the fulfillment, or the waiver by the Sellers of the
conditions set forth below. The Buyer shall use all reasonable efforts to
cause each of those conditions to be satisfied.
-35-
(a) The Sellers shall have received the payments to
be paid at the Closing pursuant to section 1.
(b) The Company shall have signed the Waterbury
Lease Agreement.
(c) The Company shall have executed and delivered
the Employment Agreement with Aileen O Connell.
(d) The Sellers shall have received all closing
documents in form and substance satisfactory to Sellers and their counsel
and all corporate, legal and other proceedings and related matters in
connection with the execution, delivery and performance of this agreement
shall have been reasonably satisfactory to such counsel.
(e) There shall be no order, decree or injunction of
a court of competent jurisdiction which prevents or delays the consummation
of the transactions contemplated by this agreement.
(f) The Sellers shall have received the opinion of
Messrs. Parker Chapin Flattau & Klimpl, LLP in substantially the Form of
Exhibit F (the Opinion of the Buyer s Counsel ).
(g) All waiting periods under any law, regulation,
rule or order applicable to, or deemed to be applicable to, any of the
transactions contemplated by this agreement shall have expired or been
terminated.
(h) There shall have not been proposed or enacted
(including without limitation, any threatened proposals or enactment of)
-36-
any statute, rule or regulation, or any change in any existing statute,
rule or regulation, which prohibits or delays, or threatens to prohibit or
delay the performance of the transactions contemplated by this agreement.
(i) There shall not have occurred (i) a declaration
of a banking moratorium, or any suspension or payments in respect of banks
in the United States or (ii) a commencement of a major war involving the
United States.
In the event that the Sellers are unwilling to close
because of a breach by the Buyer of a representation or warranty or other
condition which, under this agreement, gives the Sellers the right not to
close, Sellers, upon learning of such breach or condition, shall provide
notice thereof and, if and to the extent practicable and without causing
damage to Sellers, the Buyer shall have a reasonable time in which the cure
the breach, condition, etc.
7. Deliveries at Closing.
7.1 Deliveries by the Buyer. At the Closing, the
Buyer will deliver or cause to be delivered to the Sellers the following
items:
(i) bank, certified or cashiers checks or wire
transfers for the payment to be made to the Sellers pursuant
to section 1;
(ii) the Non-Competition Agreement duly
executed by the Company;
(iii) the Employment Agreement with Aileen
O Connell duly executed by the Company;
(iv) the Waterbury Lease Agreement executed by
the Company;
(v) the opinion of the Buyer s Counsel;
-37-
(vi) such other certificates and other evidence
as Seller may reasonably request.
7.2 Deliveries by the Sellers. At the Closing, the
Sellers will deliver or cause to be delivered to the Buyer the following
items:
(i) stock certificates evidencing the Acquired
Shares, with stock transfer powers duly endorsed in blank
and free and clear of all Liens;
(ii) the opinion of the Selling Group's
Counsel;
(iii) "good standing" documents, including
certifications by each of their respective jurisdictions of
incorporation and qualification, of the current payment of
taxes and of the valid incorporation and good standing of
each Acquired Corporation;
(iv) a certificate, dated as of the date of the
Closing, executed by the Sellers, certifying the respective
by-laws and incumbency of the officers of such corporation;
(v) a copy, certified by the secretary of
state of the state of such corporation's incorporation, of
the corporations certificate of incorporation and all
amendments thereto;
(vi) resignations of each of the officers and
directors of each of the Company and New England requested
by the Buyer;
(vii) the Non-Competition Agreement, Waterbury
Lease Agreement and the Employment Agreement duly executed
by the parties thereto other than the Company or New
England;
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(viii) such other certificates and other
evidence as Buyer may reasonably request.
8. Indemnification.
8.1 Survival of Representations, Warranties and
Agreements.
(a) Subject to 8.1(c) below, all representations,
warranties, covenants and agreements of the parties contained in any
Acquisition Document shall survive the Closing and any investigation at any
time made by or on behalf of any other party.
(b) As used in this section 8, any reference to a
representation, warranty, covenant or agreement contained in any section of
this agreement shall also mean a representation, warranty, covenant or
agreement in each and every Acquisition Document.
(c) Notwithstanding the provisions of section
8.1(a), all representations and warranties of the parties contained in any
Acquisition Document, including those contained in this Section 8, shall
expire, terminate and be of no force and effect (nor provide the basis for
any claim) and no party shall have any obligation to indemnify under this
section 8 unless written notice of any claim resulting from any breach
thereof is received prior to two years after the date hereof; provided,
however, that (i) with respect to claims resulting from a breach of any
covenant or agreement or of any representation or warranty of any of the
Selling Group under any Acquisition Document relating to Taxes (including
under section 3.24, 5.3 or 10.1) (a "Tax Claim"), written notice of any
such Tax Claim must be received prior to the expiration of the statutory
period during which a taxing authority may bring a claim against the
Company or New England or with respect to any other property or right
acquired (including the real property used in the Business) for Taxes which
-39-<PAGE>
are the subject of any such Tax Claim and the Buyer, the Company or New
England shall have the right to extend any such statutory period, (ii) with
respect to claims resulting from a breach of any covenant or of any
representation or warranty contained in any of section 3.1, section 3.2,
section 3.4, section 3.6 or section 3.22 of this agreement, no such time
limitation shall be applicable, and (iii) with respect to any
indemnification obligations by the Sellers relating to Medicare cost
reimbursement, such obligations shall survive so long as any claims for
such reimbursement may be made under Medicare rules and regulations.
8.2 Indemnification by the Sellers.
(a) Subject to Section 8.1 above and 8.2(b)
and (d) below, the Sellers shall, jointly and severally, indemnify, defend
and hold the Buyer, the Company or New England and any director, officer,
employee, agent, advisor, parent, shareholder, subsidiary or affiliate of
the Buyer (each a "Buyer Indemnitee") harmless from, against and with
respect to any and all demands, claims, actions or causes of action,
assessments, liabilities, losses, costs, damages, penalties, charge or
expense, including, without limitation, interest, penalties and reasonable
counsel and accountants' fees, disbursements and expenses (collectively,
"Indemnifiable Losses") arising out of, or related to, (i) any breach by
any of the Selling Group of any representation or warranty made by any of
the Selling Group in this agreement or any Acquisition Document, (ii) the
failure on the part of any of the Selling Group to fully, faithfully and
timely perform all covenants to be performed by them, him, her or it under
this agreement or any Acquisition Document, (iii) any act or omission
-40-<PAGE>
arising from the conduct of the Business or of the actions of any of the
Companies prior to the Closing, or (iv) the termination of the Company's
401(k) plan (collectively, the "Buyer Claims").
(b) Except as to any adjustments in purchase
price hereunder, which shall not be subject to this Section 8.2(b), the
Sellers shall only be obligated to indemnify, defend and hold a Buyer
Indemnitee harmless for Indemnifiable Losses in the event and to the extent
that all such Indemnifiable Losses shall exceed $50,000.
(c) The Sellers shall indemnify the Buyer with
respect to Medicare cost reimbursement obligations relating to the
operations of the Companies prior to Closing, but only to the extent that
the aggregate amount of all such obligations exceeds the reserve
specifically provided for such obligations on the reconciliation schedule
prepared by Simeone & Simeone with respect to the Year-end Balance Sheet, a
copy of which is attached hereto as Exhibit G; provided, however, that such
indemnification shall be reduced by any positive (rather than negative)
Medicare cost settlement pursuant to any final Medicare Notice of Program
Reimbursement filed with respect to operations of the Companies prior to
Closing.
(d) The total liability of the Sellers in
respect of all Buyer Claims shall be limited to the purchase price set
forth in Section 1.2 hereof.
8.3 Indemnification by the Buyer. The Buyer hereby
agrees to indemnify, defend and hold each Seller harmless from, against and
with respect to any and all Indemnifiable Losses arising out of, or related
-41-<PAGE>
to, any breach by the Buyer of any of the representations or warranties
made by the Buyer in this agreement or any Acquisition Document, or the
failure on the part of the Buyer to fully, faithfully and timely perform
all covenants to be performed by it under this agreement or any Acquisition
Document or arising from the conduct of the business or operations of New
England occurring on or after the closing (collectively, the "Sellers'
Claims").
8.4 Procedure for Indemnification.
(a) If a party entitled to be indemnified pursuant
to this agreement (an "Indemnitee") receives notice of the assertion by a
third party of any claim or of the commencement by any such person of any
action or proceeding (a "Third Party Claim") with respect to which another
party hereto (an "Indemnifying Party") is obligated to provide
indemnification, the Indemnitee shall give the Indemnifying Party prompt
notice thereof after becoming aware of such Third Party Claim in reasonable
detail and shall indicate the amount (estimated if necessary) of the
Indemnifiable Loss that has been or may be sustained by the Indemnitee. If
the Indemnifying Party elects, at his or her expense to compromise or
defend such Third Party Claim, he or she shall promptly notify the
Indemnitee of his or her intent to do so, and the Indemnitee shall
cooperate, at the expense of the Indemnifying Party, in the compromise of,
or defense against, such Third Party Claim. If the Indemnifying Party
elects not to compromise or defend against the Third Party Claim as
aforesaid, or fails to notify the Indemnitee of his or her election to do
so as herein provided, the Indemnitee may pay (without prejudice to any of
-42-<PAGE>
his or her rights against the Indemnifying Party), compromise or defend
such Third Party Claim. Notwithstanding the foregoing, neither the
Indemnifying Party nor the Indemnitee may settle or compromise any claim
(unless the sole relief payable to a Third Party in respect of such Third
Party Claim is monetary damages that are paid in full by the party settling
or compromising such claim) over the objection of the other; provided,
however, that consent to settlement or compromise shall not be unreasonably
withheld. In any event, the Indemnitee and the Indemnifying Party may each
participate in the defense of such Third Party Claim. Such participation
shall be at the expense of each party except if the Indemnitee, in its
reasonable discretion, believes that because of its relationship with the
Third Party it must participate therein, then in such event the
participation of the Indemnitee shall be at the expense of the Indemnifying
Party. The Indemnitee shall make available to the Indemnifying Party
during normal business hours and for reasonable periods, any personnel and
any books, records or other documents within its control that are necessary
or appropriate for such defense.
(b) Any claim on account of an Indemnifiable Loss
which does not result from a Third Party Claim shall be asserted by written
notice given by the party claiming indemnity to the party from which
indemnity is claimed. The recipient of such notice shall have a period of
thirty (30) days within which to respond thereto. If the recipient does
not respond within such 30-day period, such recipient shall be deemed to
have accepted responsibility to make payment, and shall have no further
right to contest the validity of such claim. If the recipient does respond
within such 30-day period and rejects such claim in whole or in part, the
party claiming indemnity shall be free to pursue such remedies as may be
available to such party under applicable law.
8.5 Remedies Cumulative. The remedies provided
herein shall be cumulative and shall not preclude assertion by any party
hereto of any other rights or the seeking of any other remedies against any
other party hereto.
9. Miscellaneous.
-43-
9.1 Amendment and Modification. This agreement may
be amended, modified or supplemented only by written agreement of the
Sellers and the Buyer.
9.2 Waiver of Compliance; Consents. Except as
otherwise provided in this agreement, any failure of any of the parties to
comply with any obligation, covenant, agreement or condition herein may be
waived by the party entitled to the benefits thereof only by written
instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this agreement
requires or permits consent by or on behalf of a party, such consent shall
be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this section 9.2.
9.3 Notices. All notices and other communications
hereunder shall be given by personal delivery or by registered or certified
mail (return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice, provided that notices of a change of address
shall be effective only upon receipt thereof):
If to the Buyer, to:
National Home Health Care Corp.
850 Bronx River Road
Yonkers, New York 10708
Attn: Steven Fialkow
-44-
with a copy to:
Gary J. Simon
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
If to any of the Selling Group, to:
John and Aileen O Connell
120 Clark Hill Road
Milford, Connecticut 06460
with a copy to:
Winthrop S. Smith, Jr.
Berchem, Moses & Devlin, P.C.
75 Broad Street
Milford, Connecticut 06460
All such notices and other communications shall be deemed given or
delivered when received, or ten days after mailing, whichever occurs first.
9.4 Assignment. This agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the
parties hereto, their heirs, and legal representatives and their respective
successors and permitted assigns.
9.5 Governing Law. This agreement shall be governed
by the laws of the state of New York (regardless of the laws that might
otherwise govern under applicable principles of conflicts of law) as to all
matters, including but not limited to matters of validity, construction,
effect, performance and remedies and all disputes hereunder shall be
resolved in the state or federal courts in Westchester County, New York.
-45-
9.6 Counterparts. This agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same document.
9.7 Interpretation. The section headings contained
in this agreement are solely for the purpose of reference, are not part of
the agreement of the parties and shall not in any way affect the meaning or
interpretation of the Agreement. As used in this agreement: (a) the term
"person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof; (b) the term "subsidiary"
when used in reference to any other person shall mean any corporation of
which a majority of the outstanding securities having ordinary voting power
to elect the Board of Directors of such corporation are owned directly or
indirectly by such other person; (c) the term "affiliate" shall have the
meaning set forth in Rule 12b-2 of the General Rules and Regulations
promulgated under the Securities Exchange Act of 1934; and (d) the term
"family member" of any person shall mean any direct or indirect, natural or
adopted, parent, child, sibling, cousin, uncle, or aunt, or family member
thereof, of such person, whether by blood, marriage, in-law status or
otherwise and whether such relationship is full or in part.
9.8 Entire Agreement. This agreement, including the
schedules and exhibits hereto and the documents, schedules, certificates
-46-<PAGE>
and instruments referred to herein and therein, embodies the entire
agreement and understanding of the parties hereto in respect of the
transactions contemplated by this agreement. There are no restrictions,
promises, representations, warranties, covenants or undertakings other than
those expressly set forth or referred to herein or therein. This agreement
supersedes all prior agreements and understandings between the parties with
respect to such transactions.
9.9 Specific Performance. Each of the parties
hereto acknowledges and agrees that the Buyer, on the one hand, and the
Sellers on the other hand, would be irreparably damaged in the event any of
the provisions of this agreement were not performed in accordance with
their specific terms or were otherwise breached. Accordingly, each of the
parties hereto agrees that they each shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this agreement and to
enforce specifically this agreement and the terms and provisions hereof in
any action instituted in any court of the United States or any state
thereof having subject matter jurisdiction, in addition to any other remedy
to which such party may be entitled, at law or in equity.
9.10 Severability. The invalidity or
unenforceability of any provision hereof shall not affect the validity or
enforceability of any other provision hereof.
NATIONAL HOME HEALTH CARE CORP.
By: /s/ Robert P. Heller
Name: Robert P. Heller
Title: Chief Financial Officer
NURSE CARE, INC.
By: /s/ John O'Connell
Name: John O'Connell
Title: President
-47-<PAGE>
NEW ENGLAND HOME CARE, INC.
By: /s/ John O'Connell
Name: John O'Connell
Title: President
/s/ John O'Connell
John O'Connell
/s/ John O'Connell
John O'Connell, attorney-in-fact for
Aileen O'Connell
-48-<PAGE>
EXHIBIT A
ESCROW AGREEMENT
August 4, 1995
The parties to this agreement are John O'Connell and
Aileen O'Connell (the "Sellers"), National Home Health Care Corp., a
Delaware corporation (the "Buyer"), and Parker Chapin Flattau & Klimpl,
LLP, a New York partnership, 1211 Avenue of the Americas, New York, New
York 10036, as escrow agent (the "Escrow Agent").
The Buyer and the Sellers have entered into the
Agreement for the Purchase of the Stock of Nurse Care, Inc. and Related
Transactions (the "Purchase Agreement"), pursuant to which, among other
things, the Buyer has acquired all of the stock of Nurse Care, Inc.
As contemplated by the Purchase Agreement, the Buyer
and Sellers desire to have a portion of the purchase price delivered now to
the Escrow Agent to hold, and the Escrow Agent has agreed to receive, hold
and re-deliver said funds, on the terms set forth below. Capitalized terms
used and not otherwise defined herein shall have the meanings respectively
assigned to them in the Purchase Agreement.
The parties therefore agree as follows:
1. Escrow. Pursuant to Section 1.3(i) of the
Purchase Agreement, the Buyer contemporaneously herewith has delivered to
the Escrow Agent a check in good funds, a wire transfer or other readily
available funds in the amount of $575,000 (the "Escrow Amount") and the
Escrow Agent hereby acknowledges receipt thereof.
2. Investments. The Escrow Agent may invest the
Escrow Amount in securities issued or guarantied by the United States of
America or deposit the funds with, or invest the funds in certificates of
deposit, commercial paper or similar products of, domestic commercial banks
that have, or are members of a group of domestic commercial banks that has,
consolidated total assets of at least $1,000,000,000, or such other banks
or other financial institutions to which the Buyer and the Sellers have
consented in writing (hereinafter collectively the "Investments"). The
Escrow Amount and income paid or credited on Investments is hereinafter
referred to as the "Escrow Fund."
3. Release of Escrow Fund.
(a) The Escrow Agent shall release the Escrow
Fund only as permitted by this section 3.
(b) In the event that the Buyer determines
that there exists a claim for which it is entitled to be reimbursed or
indemnified, or an amount for which any Seller is otherwise responsible,<PAGE>
-1-
pursuant to the Purchase Agreement or any other document or agreement
delivered in connection therewith (including, without limitation, the
liabilities and obligations of any Seller under the Purchase Agreement),
the Buyer shall be entitled to assert a claim in writing (an Asserted
Claim ) against the Escrow Fund in respect of each such claim and amount,
as the case may be, by notifying the Sellers ( with a copy of the
notification to the Escrow Agent) in reasonable detail of the basis and
amount of such Asserted Claim. If, within ten (10) days after the sending
of such notice by the Buyer, the Escrow Agent shall not have received from
the Sellers a written statement disputing all or any part of such Asserted
Claim, then the Escrow Agent shall deliver to the Buyer so much of the
Escrow Fund as may be available and as may be necessary to pay the amount
of such Asserted Claim in full, and the Escrow Agent shall promptly follow
such instructions. If, within ten (10) days after the sending of such
notice by the Buyer, the Buyer and the Escrow Agent shall have received
from the Sellers a written statement disputing all or a portion of such
Asserted Claim, then the Buyer may order the Escrow Agent to deliver to the
Buyer so much of the Escrow Fund as may be available and as may be
necessary to pay any portion of such Asserted Claim that is not disputed,
and the Escrow Agent shall promptly follow such instructions. The Buyer
shall have the right to notify the Sellers of Asserted Claims at any time
and from time to time, but only prior to the Termination Date (as
hereinafter defined).
(c) In the event that the Sellers dispute all
or a portion of any Asserted Claim within the time and in the manner
prescribed in Section 3(b) hereof, the Escrow Agent shall have the right to
act in accordance with Section 5 hereof and shall not release any disputed
amounts of the Escrow Fund until (i) receipt by the Escrow Agent of joint
written instructions from the Buyer and the Sellers directing the manner in
which payment of such amounts is to be made, or (ii) as directed by final
order of a court of competent jurisdiction which is not subject to further
appeal or other appellate review, together with an opinion of counsel to
the party which successfully sought such order (or, if no party sought such
order, of counsel reasonably acceptable to the Escrow Agent) to the effect
that such order is not appealable.
(d) Subject to the foregoing and all of the
other provisions hereof (i) upon the receipt by the Escrow Agent from the
Buyer of written notice that the Buyer has received the final Medicare
Notice of Program Reimbursement ("NPR") for the year ended June 30, 1994
and that there is no Asserted Claim relating thereto, which written notice
(if applicable) shall be given by the Buyer to the Escrow Agent and the
Sellers within 30 days of its receipt of such NPR, the Escrow Agent shall
release $287,500 (to the extent not subject to Asserted Claims) of the
Escrow Fund then held by it to the Sellers in accordance with the
allocation of the Purchase Price among the Sellers as set forth in the
Purchase Agreement; and (ii) upon receipt by the Escrow Agent from the
Buyer of written notice that the Buyer has received the final NPR for the
year ended June 30, 1995 and that there is no Asserted Claim relating
thereto, which written notice (if applicable) shall be given by the Buyer
to the Escrow Agent and the Sellers within 30 days of its receipt of such
NPR, the Escrow Agent shall release (the date of such release, the
"Termination Date") so much of the Escrow Fund that is not disputed and
that is then held by it to the Sellers in accordance with the allocation of
the Purchase Price among the Sellers set forth in the Purchase Agreement.
-2-
4. Further Assurances. The parties agree to do
such further acts and things and to execute and deliver such statements,
assignments, agreements, instruments and other documents as the Escrow
Agent from time to time reasonably may request in connection with the
administration, maintenance, enforcement or adjudication of this agreement
in order (a) to give the Escrow Agent confirmation and assurance of the
Escrow Agent's rights, powers, privileges, remedies and interests under
this agreement and applicable law, (b) to better enable the Escrow Agent to
exercise any such right, power, privilege or remedy, or (c) to otherwise
effectuate the purpose and the terms and provisions of this agreement, each
in such form and substance as may be acceptable to the Escrow Agent.
5. Conflicting Demands.
(a) The Escrow Agent shall not be or become
liable for damages, losses, expenses or interest to the Sellers or any
other person for its failure to comply with conflicting or adverse demands.
The Escrow Agent shall be entitled to continue to refrain and refuse to act
until: (i) the rights of the adverse claimants have been finally
adjudicated in a court assuming and having jurisdiction and venue over the
parties and/or the documents, instruments or funds involved herein or
affected hereby; and/or (ii) the Escrow Agent shall have received an
executed copy of a dispositive settlement agreement to which the parties
and all other adverse claimants, if any, are parties and signatories.
(b) In the event conflicting claims are made
or notices are received the Escrow Agent may elect to commence an
interpleader or other action for declaratory judgment for the purpose of
having the respective rights of the claimants adjudicated, and may deposit
with the court all funds held pursuant to this agreement; and if it so
commences and deposits, the Escrow Agent shall be relieved and discharged
from any further duties and obligations under this agreement.
6. Consent to Jurisdiction, Etc. The parties
hereby covenant and agree that the federal and/or state courts located in
Westchester County, New York shall have personal jurisdiction and proper
venue over any dispute with the Escrow Agent. In any action or proceeding
involving the Escrow Agent in any jurisdiction, each of the parties waives
trial by jury.
7. Reliance on Documents and Experts. The Escrow
Agent shall be entitled to rely upon any notice, consent, certificate,
affidavit, statement, paper, document, writing or communication (which to
the extent permitted hereunder may be by telegram, cable, telex, facsimile
transmission, or telephone) reasonably believed by it to be genuine and to
have been signed, sent or made by the proper person or persons, and upon
opinions and advice of legal counsel (including itself or counsel for any
party hereto), independent public accountants and other experts selected by
the Escrow Agent.
8. Status of the Escrow Agent, Etc. The Escrow
Agent is acting under this agreement as a stakeholder only and shall be
-3-
considered an independent contractor. No term or provision of this
agreement is intended to create, nor shall any such term or provision be
deemed to have created, any principal-agent, trust, joint venture,
partnership, debtor-creditor or attorney-client relationship between or
among the Escrow Agent and the parties. This agreement shall not be deemed
to prohibit or in any way restrict the Escrow Agent's representation of the
Buyer, who may be advised by the Escrow Agent on any and all matters
pertaining to this agreement and the escrowed funds and documents. To the
extent the Buyer is or has been represented by the Escrow Agent, the
Sellers hereby waive any conflict of interest and authorize and direct the
Escrow Agent to carry out the terms and provisions of this agreement fairly
as to all parties, without regard to any such representation. The Escrow
Agent's only duties are those expressly set forth in this agreement, and
the parties authorize the Escrow Agent to perform those duties in
accordance with its usual practices in holding funds and documents of its
own or those of other escrows. The Escrow Agent may exercise or otherwise
enforce any of its rights, powers, privileges, remedies and interests under
this agreement and applicable law or perform any of its duties under this
agreement by or through its partners, employees, attorneys, agents or
designees.
9. Exculpation. The Escrow Agent and its
designees, and their respective directors, officers, partners, employees,
attorneys and agents, shall not incur any liability (other than for a
person's own acts or omissions breaching a duty owed to the claimant and
amounting to gross negligence or willful misconduct, whatsoever for the
investment or disposition of funds, the holding or delivery of documents or
the taking of any other action in accordance with the terms and provisions
of this agreement, for any mistake or error in judgment, for compliance
with any applicable law or any attachment, order or other directive of any
court or other authority (irrespective of any conflicting term or provision
of this agreement), or for any act or omission of any other person engaged
by the Escrow Agent in connection with this agreement; and each of the
Sellers and the Buyer hereby waives any and all claims and actions
whatsoever against the Escrow Agent and its designees, and their respective
directors, officers, partners, employees, attorneys and agents, arising out
of or related directly or indirectly to any and all of the foregoing acts,
omissions and circumstances. Furthermore, the Escrow Agent and its
designees, and their respective directors, officers, partners, employees,
attorneys and agents, shall not incur any liability (other than for a
person's own acts or omissions breaching a duty owed to the claimant and
amounting to gross negligence or willful misconduct, for other acts and
omissions arising out of or related directly or indirectly to this
agreement or the escrowed funds or documents; and each of the Sellers and
the Buyer hereby expressly waives any and all claims and actions (other
than those attributable to a person's own acts or omissions breaching a
duty owed to the claimant and amounting to gross negligence or willful
misconduct) against the Escrow Agent and its designees, and their
respective directors, officers, partners, employees, attorneys and agents,
arising out of or related directly or indirectly to any and all of the
foregoing acts, omissions and circumstances.
10. Indemnification. The Escrow Agent and its
designees, and their respective directors, officers, partners, employees,
attorneys and agents, shall be indemnified, reimbursed, held harmless and,
at the request of the Escrow Agent, defended by the parties, from and
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against any and all claims, liabilities, losses and expenses (including,
without limitation, the reasonable disbursements, expenses and fees of
their respective attorneys) that may be imposed upon, incurred by, or
asserted against any of them, or any of their respective directors,
officers, partners, employees, attorneys or agents, arising out of or
related directly or indirectly to this agreement or any escrowed funds or
documents, except such as are occasioned by the indemnified person's own
acts and omissions breaching a duty owed to the claimant and amounting to
gross negligence or willful misconduct.
11. Notices. All notices and other communications
under this agreement shall be in writing and shall be deemed given when
d e livered personally or mailed by registered mail, return receipt
requested, to the parties at the following addresses (or to such other
address as a party may have specified by notice given to the other party
pursuant to this provision):
if to the Sellers:
John and Aileen O'Connell
120 Clark Hill Road
Milford, Connecticut 06460
with a copy to:
Winthrop S. Smith, Jr.
Berchem, Moses & Devlin, P.C.
75 Broad Street
Milford, Connecticut 06460
if to Escrow Agent:
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
if to the Buyer:
National Home Health Care Corp.
850 Bronx River Road
Yonkers, New York 10708
Attn: Steven Fialkow
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with a copy to:
Gary J. Simon
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
12. Section and Other Headings. The section and
other headings contained in this agreement are for reference purposes only
and shall not affect the meaning or interpretation of this agreement.
13. Governing Law. This agreement has been executed
and delivered, and shall be governed by and construed in accordance with
the applicable laws pertaining, in the state of New York, without regard to
principles of conflicts of law.
14. Severability. In the event that any term or
provision of this agreement shall be finally determined to be superseded,
invalid, illegal or otherwise unenforceable pursuant to applicable law by a
governmental authority having jurisdiction and venue, that determination
s h a l l not impair or otherwise affect the validity, legality or
enforceability (a) by or before that authority of the remaining terms and
p r ovisions of this agreement, which shall be enforced as if the
unenforceable term or provision were deleted, or (b) by or before any other
authority of any of the terms and provisions of this agreement.
15. Counterparts. This agreement may be executed in
two or more counterparts, each of which may be executed by one or more of
the parties hereto, but all of which, when taken together, shall constitute
but one agreement binding upon all of the parties hereto.
16. Successors and Assigns; Assignment. Whenever in
this agreement reference is made to any party, such reference shall be
deemed to include the successors, assigns, heirs and legal representatives
of such party, and, without limiting the generality of the foregoing, all
representations, warranties, covenants and other agreements made by or on
behalf of each parties in this agreement shall inure to the benefit of the
successors and assigns of the Escrow Agent; provided, however, that nothing
herein shall be deemed to authorize or permit the parties to assign any of
their rights or obligations hereunder to any other person.
17. No Third Party Rights. The representations,
warranties and other terms and provisions of this agreement are for the
exclusive benefit of the parties hereto, and no other person, shall have
any right or claim against any party by reason of any of those terms and
provisions or be entitled to enforce any of those terms and provisions
against any party.
18. No Waiver by Action, Etc. Any waiver or consent
respecting any representation, warranty, covenant or other term or
provision of this agreement shall be effective only in the specific
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instance and for the specific purpose for which given and shall not be
deemed, regardless of frequency given, to be a further or continuing waiver
or consent. The failure or delay of a party at any time or times to
require performance of, or to exercise its rights with respect to, any
representation, warranty, covenant or other term or provision of this
agreement in no manner (except as otherwise expressly provided herein)
shall affect its right at a later time to enforce any such term or
provision. No notice to or demand on any party in any case shall entitle
such party to any other or further notice or demand in the same, similar or
other circumstances. All rights, powers, privileges, remedies and
interests of the Escrow Agent under this agreement are cumulative and not
alternatives, and they are in addition to and shall not limit (except as
otherwise expressly provided herein) any other right, power, privilege,
remedy or interest of the Escrow Agent under this agreement or applicable
law.
19. Modification, Amendment, Etc. Each and every
modification and amendment of this agreement shall be in writing and signed
by all of the parties hereto, and each and every waiver of, or consent to
any departure from, any covenant, representation, warranty or other
provision of this agreement shall be in writing and signed by each party
affected thereby.
20. Entire Agreement. This agreement contains the
entire agreement of the parties and supersedes all other representations,
agreements and understandings, oral or otherwise, among the parties with
respect to the matters contained herein.
Aileen O'Connell
John O'Connell
National Home Health Care Corp.
By:
Name:
Title:
The Escrow Agent:
Parker Chapin Flattau & Klimpl, LLP
By:
-7-<PAGE>
EXHIBIT B
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of the 1st day of August 1995, by
and between New England Home Care, Inc., a Connecticut corporation (the
"Company"), and Aileen O Connell (the "Executive").
Simultaneously with the execution and delivery of this
agreement, National Home Health Care Corp., a Delaware corporation (the
"Buyer"), is purchasing from the existing shareholders of the Company,
including the Executive, all of the outstanding capital stock of the
Company and certain affiliates for an aggregate of approximately $3,150,000
(the "Acquisition").
The Company (which hereinafter in this agreement shall include
New England Home Care, Inc., a Connecticut corporation, which is a
subsidiary of the Company being acquired as part of the Acquisition) has
developed trade secrets, confidential business relationships and other
confidential and proprietary property and information in connection with
its business and operations all of which are essential and integral
components of its success and profitability.
Prior to the Acquisition, the Executive was a principal
shareholder and was actively involved in the business of the Company as an
executive officer and, as a result, possesses an intimate knowledge of the
Company and its business.
In order to continue to obtain the benefits of the Executive's
services after the Acquisition, the Company wishes to employ the Executive,
and the Executive wishes to be employed by the Company, on the terms set
forth below.
It is therefore agreed as follows:
1. Employment and Term of Employment. The Company hereby
employs the Executive, and the Executive hereby accepts and agrees to be
employed by the Company for the period commencing on the date hereof and
ending on the first anniversary of the date hereof, unless extended as
provided in section 6(a) or sooner terminated (the "Employment Period").
-1-<PAGE>
2. Duties.
(a) The Executive shall perform all duties that are
customary for a management executive and shall have such other authority
and perform such other duties, consistent with her position as may be
assigned to her by the President of the Company, to whom the Executive
shall report, and by the Board of Directors of the Company. The Executive
shall undertake her duties in a manner consistent with the best interests
of the Company, shall perform those duties in accordance with the
guidelines, policies and procedures established by the Company's Board of
Directors, shall perform those duties to the best of her ability and in a
diligent manner and shall devote her full time and skills and best efforts
to the performance of those duties and to the furtherance of the interests
of the business of the Company; provided that the Executive and the Company
shall reasonably agree to a work schedule for the Executive that shall
permit the Executive to have two afternoons off during any week, subject to
the reasonable prior approval of the Company, it being agreed that the
Executive in any event shall observe a forty-hour work week.
(b) The Executive shall perform her duties based out of
the Company's facilities (except as provided in the following sentence),
although it is understood and agreed that the Executive shall be required
to travel to such locations for business purposes as shall, from time to
time, be necessary or desirable for the business of the Company and as may
reasonably be requested of her.
3. Confidentiality; Nonsolicitation; Noncompetition.
(a) The Executive shall not at any time, either during
the Employment Period or thereafter, divulge or reveal, in any manner, to
any person, firm or corporation (except as may be required by law or as
required in the ordinary course of the business of the Company) any
confidential or privileged information received by the Executive during the
Executive's prior employment with the Company or during the term of this
agreement, with regard to the financial, business or other affairs of the
Company, or any of the Company's officers, directors, stockholders,
subsidiaries, affiliates, customers, suppliers, employees or consultants.
The Executive shall keep all such information confidential.
(b) The Executive shall not at any time during, or
within four years after the termination (however caused) of, the Employment
Period, solicit, interfere with, employ or endeavor to entice away any
e m ployee, agent or consultant from the Company, from any of its
subsidiaries or affiliates, or from any of its customers or suppliers
provided that nothing herein shall prevent the Executive from employing or
otherwise maintaining a relationship with the accountants, attorneys and
other professionals engaged by the Company.
(c) The Executive shall not, during the Employment
Period and for a period of four years after the termination (whensoever and
-2-<PAGE>
however caused) of the Employment Period (including any extensions
thereof), directly or indirectly, engage in any business, or own, manage,
or control any interest in any manner, or act as a director, officer or
employee or consultant of or perform any services for, any firm,
corporation or partnership, that is, directly or indirectly, engaged in any
business involved in providing home health care services, including
staffing, within the State of Connecticut; provided, however that the
Executive shall have the right to make passive investments in public
companies, provided that none of the foregoing shall interfere with the
duties of the Executive as provided in this agreement.
(d) The Executive acknowledges that this agreement is
being entered into concurrently with the consummation of the Acquisition
and that this agreement, including, but not limited to, the provisions of
this section 3, are an essential part of the Acquisition and the
transactions contemplated in connection therewith and that the Buyer would
not invest in the Company or participate in the Acquisition without the
benefit of the foregoing covenants by the Executive. The Executive
acknowledges that she has consulted with counsel concerning the terms of
this agreement, including, but not limited to, the provisions of this
section 3, and that the provisions of this section 3 are fair and
reasonable. The Executive further acknowledges that compliance with the
provisions of this section 3 will not create any hardship on the Executive
as the Executive has both independent means and sufficient income to be
fully self-supporting without competing with the Company or violating any
of the provisions hereof. Accordingly, the Executive shall be bound by the
provisions hereof to the maximum extent permitted by law, it being the
intent and spirit of the parties that the foregoing shall be fully
enforceable. However, if any of the provisions hereof shall for any reason
be held to be excessively broad as to duration, geographical scope,
property or subject matter, that provision shall be construed by limiting
and reducing it so as to be enforceable to the extent compatible with the
applicable law as it shall herein pertain.
(e) The Executive acknowledges that the services to be
rendered under the provisions of this agreement are of a unique nature and
that it would be difficult or impossible to replace such services and that
by reason thereof the Executive agrees and consents that, if she violates
or threatens to violate any provision of this section 3, the Company, in
addition to any other rights and remedies available under this agreement or
otherwise, shall be entitled to an injunction to be issued (without the
necessity of a bond) or specific enforcement to be required, by any
t r i bunal of competent jurisdiction restricting the Executive from
committing or continuing any such violation.
4. Compensation. The compensation for the Executive during
the Employment Period (including any extensions thereof in accordance with
clause (i) of section 6(a)) shall be an annual salary of $125,000 payable
in accordance with normal Company policies.
5. Benefits; Expenses and Vacation.
(a) The Executive shall be entitled to such health,
medical, insurance and fringe benefits as are generally available to all
other full-time employees of the Company. The Executive acknowledges that
the Company may modify any of its prior benefit policies after the
Acquisition.
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(b) With prior written consent, the Executive shall be
reimbursed for all reasonable expenses incurred in connection with the
business of the Company upon the submission of appropriate documentation
with respect thereto.
(c) The Executive shall be entitled to six weeks paid
vacation in accordance with the plans, policies, programs and practices of
the Company as generally in effect with respect to the employees of the
Company, which vacation shall be taken as mutually agreed between the
Executive and the Company.
6. Continuation, Termination, Death and Disability.
(a) The term of the Employment Period may be extended
beyond the initial period set forth in section 1 hereof, either (i) at the
sole option of the Company (exercisable by giving notice to the Executive
not less than 90 days before the expiration of the initial term), for an
additional one-year period which shall end on the second anniversary of the
date hereof; provided that in the event that the Company shall not exercise
this option within the ninety-day period before the expiration of the
initial term and the Executive does not otherwise accept employment by the
Company, then the Company shall pay the Executive a one-time severance
amount upon the expiration of the initial term in the lump sum amount of
$30,000, or (ii) as mutually agreed upon by the Company and the Executive.
(b) In the event of the death of the Executive during
the term of this agreement, the Employment Period shall terminate
automatically and the Executive's estate shall be entitled to receive all
monies to which the Executive otherwise would have been entitled under
section 4 through the end of the month in which death occurred, and no
other monies, except such as may have been accrued for her.
(c) In the event of the "disability" of the Executive
during the term of this agreement (which shall mean the inability, by
reason of physical or mental disability, of the Executive to satisfactorily
perform her services under this agreement for a period of 45 consecutive
days or an aggregate of 60 days in any 12-month period), the Company shall
have the right to terminate the Employment Period upon written notice. If
so terminated, the Executive shall be entitled to receive all monies to
which the Executive otherwise would have been entitled under section 4
through the end of the 45-day period or 60-day period, as the case may be,
and no other monies, except such as may have been accrued for her.
(d) If a majority of the directors of the Company vote
to remove the Executive from her duties "for cause" (as defined below), the
Company shall have the right to immediately terminate the Employment Period
and the Executive shall be removed from office effective on the date
specified by such Directors, and in such case the Executive shall receive
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no further monies under section 4 or otherwise, except such as may have
been accrued for her. For purposes of this agreement, removal of the
Executive from office shall not be deemed "for cause" unless:
(i) such removal shall have been the
result of the conviction of the Executive of fraud or embezzlement on the
part of the Executive; or
(ii) there has occurred a breach of
section 3 of this agreement which has had, or in the reasonable opinion of
the Board of Directors of the Company may have, a material adverse effect
upon the business or operations of the Company; or
(iii) the Executive has been convicted of
or has pleaded guilty or no contest to any felony or any crime involving
moral turpitude on her part; or
(iv) The Executive has failed to
discharge the duties, responsibilities or obligations of the Executive
under this agreement; provided, however, the Directors shall not terminate
this agreement or remove the Executive pursuant to this subparagraph unless
the Board of Directors shall have notified the Executive and given the
Executive an opportunity to explain such failure to the Board and the Board
shall have concluded, after any such presentation the Executive may make,
that it is unlikely that the Executive due to the fault of the Executive
will be able to properly resume and fully discharge the Executive's duties
and obligations hereunder.
(e) If the Executive voluntarily leaves the
employ of the Company before the expiration of the first year of employment
hereunder without the written consent of the Company or as otherwise
permitted under this agreement, the Executive shall be entitled to receive
no further monies or benefits under section 4 or otherwise, except such as
may have been accrued for her.
7. Amendment and Modification. This agreement may
not be amended, modified or changed except in a writing signed by the party
against whom such amendment, modification or the like is sought to be
enforced.
8. Waiver of Compliance; Consents. Except as
otherwise provided in this agreement, any failure of any of the parties to
comply with any obligation, covenant, agreement or condition herein may be
waived by the party entitled to the benefits thereof only by written
instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this agreement
requires or permits consent by or on behalf of a party, such consent shall
be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this section 8.
9. Notices. All notices and other communications
hereunder shall be given by personal delivery or by registered or certified
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mail (return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice, provided that notices of a change of address
shall be effective only upon receipt thereof):
(a) If to the Company, to:
New England Home Care, Inc.
c/o National Home Health Care Corp.
850 Bronx River Road
Yonkers, New York 10708
Attn: Thomas A. Smith
with a copy to:
Gary J. Simon, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
(b) If to the Executive, to:
Aileen O Connell
120 Clark Road
Milford, Connecticut 06460
with a copy to:
Winthrop S. Smith, Jr., Esq.
Berchem, Moses & Devlin, P.C.
75 Broad Street
Milford, Connecticut 06460
All such notices and other communications shall be deemed given or
delivered when received, or five days after mailing, whichever occurs
first.
10. Assignment. Neither this agreement nor any of
the Executive's rights, powers, duties or obligations hereunder may be
assigned by the Executive. This agreement shall be binding upon and inure
-6-<PAGE>
to the benefit of the Executive and her heirs and legal representatives,
and the Company and its successors and assigns. Successors of the Company
shall include, without limitation, any person acquiring, directly or
indirectly, all or substantially all of the assets of the Company, whether
by merger, consolidation, purchase, lease or otherwise, and such successor
shall thereafter be deemed "the Company" for the purposes hereof.
11. Governing Law. This agreement shall be governed
by the laws of the state of New York applicable to agreements made and to
be performed entirely in New York and all disputes arising out of this
agreement shall be resolved in the state or federal courts in Westchester
County, New York.
12. Entire Agreement. This agreement embodies the
entire agreement and understanding of the parties hereto. There are no
restrictions, promises, representations, warranties, covenants or
undertakings other than those expressly set forth or referred to herein.
This agreement supersedes all prior agreements and understandings between
the parties with respect to such transactions.
NEW ENGLAND HOME CARE, INC.
By:
Name:
Title:
Aileen O'Connell
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EXHIBIT C
NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT made as of the 1st day of
August 1995, by and between New England Home Care, Inc., a Connecticut
corporation (the Company"), and John O'Connell (the "Selling Shareholder").
Simultaneously with the execution and delivery of
this agreement, National Home Health Care Corp., a Delaware corporation
(the "Buyer) , is purchasing from the existing shareholders of the Company,
including the Selling Shareholder, all of the outstanding capital stock of
the Company for an aggregate of approximately $3,150,000 ( Acquisition").
The Company (which hereinafter in this agreement shall
include New England Home Care, Inc., a Connecticut corporation, which is a
subsidiary of the Company and which is being acquired as part of the
Acquisition) has developed trade secrets, confidential business
r e l ationships and other confidential and proprietary property and
information in connection with its business and operations all of which are
essential and integral components of its success and profitability.
Prior to the Acquisition, the Selling Shareholder was
a principal shareholder and executive officer of the Company and, as a
result, possesses an intimate knowledge of the Company and its business.
The Company wishes to assure itself that the Selling
Shareholder will not engage in certain types of activities that would be
competitive with or harmful to the business to be carried on by the Company
after the consummation of the Acquisition, and the Selling Shareholder has
agreed not to engage in any such activities, subject to the terms and
conditions of this agreement.
It is therefore agreed as follows:
1. Confidentiality; Nonsolicitation; Noncompetition.
(a) The Selling Shareholder shall not at any
time divulge or reveal, in any manner, to any person, firm or corporation
(except as may be required by law) any confidential or privileged
information received by the Selling Shareholder during the Selling
Shareholder's prior association with the Company, with regard to the
financial, business or other affairs of the Company, or any of the
Company's officers, directors, stockholders, subsidiaries, affiliates,
customers, suppliers, employees or consultants. The Selling Shareholder
shall keep all such information confidential.
-1-<PAGE>
(b) The Selling Shareholder shall not, within
four years after the date of this agreement, solicit, interfere with,
employ or endeavor to entice away any employee, agent or consultant from
the Company, from any of its subsidiaries or affiliates, or from any of its
customers or suppliers provided that nothing herein shall prevent the
Selling Shareholder from employing or otherwise maintaining a relationship
with the accountants, attorneys and other professionals engaged by the
Company and Selling Shareholder.
(c) The Selling Shareholder shall not, for a
period of four years after the date of this agreement, directly or
indirectly engage in any business, or own, manage, or control any interest
in any manner, or act as a director, officer or employee or consultant of
or perform any services for, any firm, corporation or partnership, that is,
directly or indirectly, engaged in any business involved in providing home
health care services, including staffing, within the State of Connecticut;
provided, however that the Selling Shareholder shall have the right to make
passive investments in public companies.
(d) The Selling Shareholder acknowledges that
this agreement is being entered into concurrently with the consummation of
the Acquisition and that this agreement, including, but not limited to, the
provisions of this section 1, are an essential part of the Acquisition and
the transactions contemplated in connection therewith and that the Buyer
would not invest in the Company or participate in the Acquisition without
the benefit of the foregoing covenants by the Selling Shareholder. The
Selling Shareholder acknowledges that he has consulted with counsel
concerning the terms of this agreement, including, but not limited to, the
provisions of this section 1, and that the provisions of this section 1 are
fair and reasonable. The Selling Shareholder further acknowledges that
compliance with the provisions of this section 1 will not create any
hardship on the Selling Shareholder as the Selling Shareholder has both
independent means and sufficient income to be fully self-supporting without
competing with the Company or violating any of the provisions hereof.
Accordingly, the Selling Shareholder shall be bound by the provisions
hereof to the maximum extent permitted by law, it being the intent and
spirit of the parties that the foregoing shall be fully enforceable.
However, if any of the provisions hereof shall for any reason be held to be
excessively broad as to duration, geographical scope, property or subject
matter, that provision shall be construed by limiting and reducing it so as
to be enforceable to the extent compatible with the applicable law as it
shall herein pertain.
(e) The Selling Shareholder acknowledges that
the covenants under this agreement are of a unique nature and that it would
be difficult or impossible to replace such covenants and that by reason
thereof the Selling Shareholder agrees and consents that, if he violates or
threatens to violate any provision of this section 1, the Company, in
addition to any other rights and remedies available under this agreement or
otherwise, shall be entitled to an injunction to be issued (without the
-2-<PAGE>
necessity of a bond) or specific enforcement to be required, by any
tribunal of competent jurisdiction restricting the Selling Shareholder from
committing or continuing any such violation.
2. Amendment and Modification. This agreement may
not be amended, modified or changed except in a writing signed by the party
against whom such amendment, modification or the like is sought to be
enforced.
3. Waiver of Compliance; Consents. Except as
otherwise provided in this agreement, any failure of any of the parties to
comply with any obligation, covenant, agreement or condition herein may be
waived by the party entitled to the benefits thereof only by written
instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this agreement
requires or permits consent by or on behalf of a party, such consent shall
be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this section 3.
4. Notices. All notices and other communications
hereunder shall be given by personal delivery or by registered or certified
mail (return receipt requested) , postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice, provided that notices of a change of address
shall be effective only upon receipt thereof):
(a) If to the Company, to:
New England Home Care, Inc.
c/o National Home Health Care Corp.
850 Bronx River Road
Yonkers, New York 10708
Attn: Thomas A. Smith
with a copy to:
Gary J. Simon, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
(b) If to the Selling Shareholder, to:
John O'Connell
120 Clark Road
Milford, Connecticut 06460
-3-<PAGE>
with a copy to:
Winthrop S. Smith, Jr., Esq.
Berchem, Moses & Devlin, P.C.
75 Broad Street
Milford, Connecticut 06460
All such notices and other communications shall be deemed given or
delivered when received, or ten days after mailing, whichever occurs first.
5. Assignment. Neither this agreement nor any of
the Selling Shareholder's duties or obligations hereunder may be assigned
by the Selling Shareholder. This agreement shall be binding upon and inure
to the benefit of the Selling Shareholder and his heirs and legal
r e p resentatives, and the Company and its successors and assigns.
Successors of the Company shall include, without limitation, any person
acquiring, directly or indirectly, all or substantially all of the assets
of the Company, whether by merger, consolidation, purchase, lease or
otherwise, and such successor shall thereafter be deemed "the Company" for
the purposes hereof.
6. Governing Law. This agreement shall be governed
by the laws of the state of New York applicable to agreements made and to
be performed entirely in New York and all disputes hereunder shall be
resolved in the state or federal courts in Westchester County, New York.
7. Entire Agreement. This agreement embodies the
entire agreement and understanding of the parties hereto. There are no
restrictions, promises, representations, warranties, covenants or
undertakings other than those expressly set forth or referred to herein.
This agreement supersedes all prior agreements and understandings between
the parties with respect to such transactions.
NEW ENGLAND HOME CARE, INC.
By: ____________________
Name:
Title:
____________________
John O'Connell
-4-<PAGE>
EXHIBIT D
THIS LEASE, dated the ______ day of August, 1995
Between JOHN AND AILEEN O'CONNELL and ROBERT AND EILEEN FARAKAS
hereinafter referred to as the Landlord, and NEW ENGLAND HOME
CARE, INC. hereinafter referred to as the Tenant, WITNESSETH: That
the Landlord hereby demises and leases unto the Tenant, and the
Tenant hereby hires and takes from the Landlord for the term and
upon the rentals hereinafter specified, the premises described as
follows, situated in the City of Waterbury, County of New Haven
and State of Connecticut, more particularly known as 1110 West
Main Street, Waterbury, Connecticut, the demised premises being
the first two floors thereof.
The term of this demise shall be for five (5) years
beginning August 1995 and ending August 2000.
The rent for the demised term shall be, for the first
year, Twenty-Four Thousand Dollars and 00/100ths ($24,000.00),
which shall accrue at the monthly rate of Two Thousand ($2,000)
Dollars per month. Each year after the first year, said rent
shall increase by three (3%) percent per year, payable on a
monthly basis.
The said rent is to be payable monthly in advance on
the first day of each calendar month for the term hereof.
The rent shall be payable at the office of John
O'Connell at 120 Clark Hill Road, Milford, Connecticut 06460 or as
may be otherwise directed by the Landlord in writing.
THE ABOVE LETTING IS UPON THE FOLLOWING CONDITIONS:
First, -- The Landlord covenants that the Tenant, on
paying the said rental and performing the covenants and conditions
in this Lease contained, shall and may peaceably and quietly have,
hold and enjoy the demised premises for the term aforesaid.
Second, -- The Tenant covenants and agrees to use the
demised premises as a
and agrees not to use or permit the premises to be used for any
other purpose without the prior written consent of the Landlord
endorsed hereon.
Third, -- The Tenant shall, without any previous
demand therefor, pay to the Landlord, or its agent, the said rent
at the times and in the manner above provided. In the event of
the non-payment of said rent, or any installment thereof, at the
-1-<PAGE>
times and in the manner above provided, and if the same shall
remain in default for ten days after becoming due, or if the
Tenant shall be dispossessed for non-payment of rent, or if the
leased premises shall be deserted or vacated, the Landlord or its
agents shall have the right to and may enter the said premises as
the agent of the Tenant, either by force or otherwise, without
being liable for any prosecution or damages therefor, and may
relet the premises as the agent of the Tenant, and receive the
rent therefor, upon such market terms as shall be reasonably
satisfactory to the Landlord, and all rights of the Tenant to
repossess the premises under this lease shall be forfeited. Such
re-entry by the Landlord shall not operate to release the Tenant
from any rent to be paid or covenants to be performed hereunder
during the full term of this lease. For the purpose of reletting,
the Landlord shall be authorized to make such repairs or
alterations in or to the leased premises as may be reasonably
necessary to place the same in good order and condition. The
Tenant shall be liable to the Landlord for the reasonable cost of
such repairs or alterations, and all reasonable expenses of such
reletting subject to any existing and/or future secured purchase
money financings. If the sum realized or to be realized from the
reletting is insufficient to satisfy the monthly or term rent
provided in this lease, the Landlord, at its option, may require
the Tenant to pay such deficiency month by month, on may hold the
Tenant in advance for the entire deficiency to be realized during
the term of the reletting. The Tenant shall not be entitled to
any surplus accruing as a result of the reletting. The Landlord
is hereby granted a lien, in addition to any statutory lien or
right to distrain that may exist on all personal property of the
Tenant in or upon the demised premises, to secure payment of the
rent and performance of the covenants and conditions of the lease.
The Landlord shall have the right, as agent of the Tenant, to take
possession of any furniture, fixtures or other personal property
of the Tenant found in or about the premises, and sell the same at
public or private sale and to apply the proceeds thereof to the
payment of any monies becoming due under this lease, the Tenant
hereby waiving the benefit of all laws exempting property from
execution, levy and sale or distress or judgment. The Tenant
agrees to pay, as additional rent, all reasonable attorney's fees
and other reasonable expenses incurred by the Landlord in
enforcing any of the obligations under this lease.
Fourth, -- The Tenant shall not sublet the demised
premises nor any portion thereof, nor shall this lease be assigned
by the Tenant without the prior written consent of the Landlord,
which consent shall not be unreasonably withheld or delayed.
Notwithstanding anything to the contrary in this Lease, Landlord's
consent shall not be required to (a) the assignment of this Lease
or the subletting of the demised premises to any parent
corporation wholly-owning Tenant or any wholly-owned subsidiary of
Tenant or Tenant's parent corporation; (b) the assignment of this
Lease or the subletting of the demised premises to (i) any entity
fifty (50%) percent or more of which is owned by Tenant, or (ii)
any entity which owns fifty (50%) percent of more of Tenant, or
(iii) any entity fifty (50%) percent or more of which is under
common ownership with Tenant; (c) the assignment of this Lease to
a corporation or other entity acquiring all or substantially all
of the Tenant's assets; or (d) the transfer of t his Lease to any
successor of Tenant by consolidation, merger or other corporate
action; provided, however, that Tenant shall remain liable for the
rent and other obligations hereunder and any assignee shall not
change the use of the demised premises.
Fifth, -- The Tenant has examined the demised
premises, and accepts them in their present condition (except as
-2-
otherwise expressly provided herein) and without any
representations on the part of the Landlord or its agents as to
the present or future condition of the said premises. The Tenant
shall keep the demised premises in good condition, and shall
redecorate, paint and renovate the said premises as may be
necessary to keep them in repair and good appearance. The Tenant
shall quit and surrender the premises at the end of the demised
term in as good condition as the reasonable use thereof will
permit. The Tenant shall not make any structural or building
systemic (e.g. plumbing, HVAC, electrical) alterations, additions,
or improvements to said premises without the prior written consent
of the Landlord, which consent shall not be unreasonably withheld
or delayed. All erections, alterations, additions and
improvements, whether temporary or permanent in character, which
may be made upon the premises either by the Landlord or the
Tenant, except furniture or movable trade fixtures installed at
the expense of the Tenant, shall be the property of the Landlord
and shall remain upon and be surrendered with the premises as a
part thereof at the termination of this Lease, without
compensation to the Tenant. The Tenant further agrees to keep
said premises and all parts thereof in a clean and sanitary
condition and free from trash, inflammable material and other
objectionable mater. If this lease covers premises, all or a part
of which are on the ground floor, the Tenant further agrees to
keep the sidewalks in front of such ground floor portion of the
demised premises clean and free of obstructions, snow and ice.
Sixth, -- In the event that any mechanics' lien is
filed against the premises as a result of alterations, additions
or improvements made by the Tenant, and such lien has not been
bonded, the Landlord, at its option, after sixty days' notice to
the Tenant may bond the said lien, without inquiring into the
validity thereof, and the Tenant shall forthwith reimburse the
Landlord the total reasonable expense incurred by the Landlord in
bonding the said lien, as additional rent hereunder.
Seventh, -- The Tenant agrees to replace at the
Tenant's expense any and all glass which may become broken in and
on the demised premises. Plate glass and mirrors, if any, shall
be self-insured by the Tenant at their full insurable value.
Eighth, -- Except where caused by the negligence or
misconduct of Landlord or its employees, contractors, invitees or
agents, the Landlord shall not be responsible for the loss of or
damage to property, or injury to persons, occurring in or about
the demised premises, by reason of any existing or future
condition, defect, matter or thing in said demised premises or the
property of which the premises are a part (except for latent
defects, conditions, matters or things) for the acts, omissions or
negligence of the persons or tenants in and about the said
property. The Tenant agrees to indemnify and save the Landlord
harmless from all claims and liability for losses of or damages to
property, or injuries to persons occurring in or about the demised
premises, except for those caused by the negligence or misconduct
of the Landlord or its employees, contractors, invitees or agents.
Ninth, -- Utilities and services furnished to the
demised premises for the benefit of the Tenant shall be provided
and paid for as follows: water by the
; gas by the
; electricity by the
; heat by the
; refrigeration by the
; hot water by the
. All utilities shall be pro-rated based on
amount of building used by Tenant. The Landlord shall not be
liable for any interruption or delay in any of the above services
for any reason.
-4-
Tenth, -- The Landlord, or its agents, shall have the
right to enter the demised premises after reasonable notice to
Tenant at reasonable hours in the day or night to examine the
same, or to run telephone or the other wires, or to make such
repairs, additions or alterations as it shall deem necessary for
the safety, preservation or restoration of the improvements, or
for the safety or convenience of the occupants or users thereof
(there being no obligation, however, on the part of the Landlord
to make any such repairs, additions or alterations), or to exhibit
the same to prospective purchasers and put upon the premises a
suitable "For Sale" sign. For three months prior to the
expiration of the demised term, the Landlord, or its agents, may
similarly exhibit the premises to prospective tenants. In such
instances, Landlord shall minimize its or its agents, employees or
contractor's interference with the conduct of Tenant's business in
the demised premises and Tenant's access to the demised premises.
Eleventh, -- In the event of the destruction of the
demised premises or the building containing the said premises by
fire, explosion, the elements or otherwise during the term hereby
created, or previous thereto, or such partial destruction thereof
as to render the premises wholly untenantable or unfit for
occupancy, or should the demised premises be so badly injured that
the same cannot be repaired within ninety days from the happening
of such injury, then and in such case the term hereby created
shall, at the option of the Landlord or Tenant, cease and become
null and void from the date of such damage or destruction, and the
Tenant shall immediately surrender said premises and all the
Tenant's interest therein to the Landlord, and shall pay rent only
to the time of such surrender, in which event the Landlord may re-
enter and re-possess the premises thus discharged from this lease
and may remove all parties therefrom. Should the demised premises
be rendered untenantable and unfit for occupancy, but yet be
repairable within ninety days from the happening of said injury,
the Landlord may enter and repair the same with reasonable speed,
and the rent shall not accrue after said injury or while repairs
are being made, but shall recommence immediately after said
repairs shall be completed. But if the premises shall be so
slightly injured as not to be rendered untenantable and unfit for
occupancy, then the Landlord agrees to repair the same with
reasonable promptness and in that case the rent accrued and
accruing shall not cease or determine. The Tenant shall
immediately notify the Landlord in case of fire or other damage to
the premises.
Twelfth, -- The Tenant agrees to observe and comply
with all laws, ordinances, rules and regulations of the Federal,
State, County and Municipal authorities applicable to the business
to be conducted by the Tenant in the demised premises. The Tenant
agrees not to do or permit anything to be done in said premises,
or keep anything therein, which will increase the rate of fire
insurance premiums on the improvements or any part thereof, or on
property kept therein, or which will obstruct or interfere with
the rights of other tenants, or conflict with the regulations of
the Fire Department or with any insurance policy upon said
improvements or any part thereof. In the event of any increase in
insurance premiums resulting for the Tenant's peculiar use of the
premises, the Tenant agrees to pay said increase in insurance
-3-
premiums on the improvements or contents thereof as additional
rent.
Thirteenth, -- No sign, advertisement or notice shall
be affixed to or place upon any part of the demised premises by
the Tenant, except in such manner, and of such size, design and
color as shall be approved in advance in writing by the Landlord.
Fourteenth, -- This lease is subject and is hereby
subordinated to all present and future mortgages, deeds of trust
and other encumbrances affecting the demised premises or the
property of which said premises are a part. The Tenant agrees to
execute, at no expense to the Landlord, any instrument which may
be deemed necessary or desirable by the Landlord to further effect
the subordination of this lease to any such mortgage, deed of
trust or encumbrance. Landlord shall use best efforts to get a
Non-Disturbance Agreement from the holder of each such mortgage,
deed of trust and/or encumbrance.
Fifteenth, -- [Deleted]
Sixteenth, -- The rules and regulations regarding the
demised premises, affixed to this lease, if any, as well as any
other and further reasonable rules and regulations which shall be
made by the Landlord, shall be observed by the Tenant and by the
Tenant's employees, agents and customers. The Landlord reserves
the right to rescind any presently existing rules applicable to
the demised premises, and to make such other and further
reasonable rules and regulations as, in its judgment, may from
time to time be desirable for the safety, care and cleanliness of
the premises, and for the preservation of good order therein,
which rules, when so made and notice thereof given to the Tenant,
shall have the same force and effect as if originally made a part
of this lease. Such other and further rules shall not, however,
be inconsistent with the proper and rightful enjoyment by the
Tenant of the demised premises. All such rules and regulations
shall be non-discriminatory among the tenants and occupants of the
building and shall be uniformly enforced.
Seventeenth, -- In case of violation by the Tenant of
any of the covenants, agreements and conditions of this lease, or
of the rules and regulations now or hereafter to be reasonably
established by the Landlord, and upon failure to discontinue such
violation within 30 days after notice thereof given to the Tenant,
this lease shall thenceforth, at the option of the Landlord,
become null and void after five days notice to Tenant and, the
Landlord may re-enter without further notice or demand. The rent
in such case shall become due, be apportioned and paid on and up
to the day of such re-entry, and the Tenant shall be liable for
all loss or damage resulting from such violation as aforesaid. No
waiver by the Landlord of any violation or breach of condition by
the Tenant shall constitute or be construed as a waiver of any
other violation or breach of condition, nor shall lapse of time
after breach of condition by the Tenant before the Landlord shall
exercise its option under this paragraph operate to defeat the
right of the Landlord to declare this lease null and void and to
re-enter upon the demised premises after the said breach or
violation.
-5-<PAGE>
Eighteenth, -- All notices and demands, legal or
otherwise, incidental to this lease, or the occupation of the
demised premises, shall be in writing. if the Landlord or its
agent desires to give or serve upon the Tenant any notice or
demand, it shall be sufficient to send a copy thereof by
registered mail, addressed to the Tenant at the demised premises,
or to lease a copy thereof with a person of suitable age found on
the premises. Notices from the Tenant to the Landlord shall be
sent by registered mail or delivered to the Landlord at the place
hereinbefore designated for the payment of rent, or to such party
or place as the Landlord may from time to time designate in
writing.
Nineteenth, -- It is further agreed that if at any
time during the term of this lease the Tenant shall make any
assignment for the benefit of creditors, or be decreed insolvent
or bankrupt according to law, or if a receiver shall be appointed
for the Tenant, then the Landlord may, at its option, terminate
this lease, exercise of such option to be evidenced by notice to
that effect served upon the assignee, receiver, trustee or other
person in charge of the liquidation of the property of the Tenant
or the Tenant's estate, but such termination shall not release or
discharge any payment of rent payable hereunder and then accrued,
or any liability then accrued by reason of any agreement or
covenant herein contained on the part of the Tenant, or the
Tenant's legal representatives.
Twentieth, -- In the event that the Tenant shall
remain in the demised premises after the expiration of the term of
this lease without having executed a new written lease with the
Landlord, such holding owner shall not constitute a renewal or
extension of this lease. The Landlord may, at its option, elect
to treat the Tenant as on who has not removed at the end of his
term, and thereupon be entitled to all the remedies against the
Tenant provided by law in that situation, or the Landlord may
elect, at its option, to construe such holding over as a tenancy
from month to month, subject to all the terms and conditions of
this lease, except as to duration thereof, and in that event the
Tenant shall pay monthly rent in advance at the rate provided
herein as effective during the last month of the demised term.
Twenty-first, -- If the property or any part thereof
wherein the demised premises are located shall be taken by public
or quasi-public authority under any power of eminent domain or
condemnation, this lease, at the option of the Landlord or Tenant,
may forthwith terminate and the Tenant shall have no claim or
interest in or to any award of damages for such taking.
Twenty-second, -- [Deleted]
Twenty-third, -- Any dispute arising under this lease
shall be settled by arbitration. Then Landlord and Tenant shall
each choose an arbitrator, and the two arbitrators thus chosen
shall select a third arbitrator. The findings and award of the
three arbitrators thus chosen shall be final and binding on the
parties hereto.
Twenty-fourth, -- No rights are to be conferred upon
the Tenant or Landlord until this lease has been signed by the
Tenant and Landlord, and an executed copy of the lease has been
delivered to the Tenant and Landlord.
-6-
Twenty-fifth, -- The foregoing rights and remedies
are not intended to be exclusive but as additional to all rights
and remedies the Landlord would otherwise have by law.
Twenty-sixth, -- All of the terms, covenants and
conditions of this lease shall inure to the benefit of and be
binding upon the respective heirs, executors, administrators,
successors and assigns of the parties hereto. However, in the
event of the death of the Tenant, if an individual , the Landlord
may, at its option, terminate this lease by notifying the executor
or administrator or the Tenant at the demised premises.
Twenty-seventh, -- This lease and the obligation of
Tenant to pay rent hereunder and perform all of the other
covenants and agreements hereunder on part of Tenant to be
performed shall in nowise be affected, impaired or excused because
Landlord is unable to supply or is delayed in supplying any
service expressly or impliedly to be supplied or is unable to
make, or is delayed in making any repairs, additions, alterations
or decorations or is unable to supply or is delayed in supplying
any equipment or fixtures if Landlord is prevented or delayed from
so doing by reason of governmental preemption in connection with
the National Emergency declared by the President of the United
States or in connection with any rule, order or regulation of any
department or subdivision thereof of any governmental agency or by
reason of the conditions of supply and demand which have been or
are affected by the war.
Twenty-eighth, -- This instrument may not be changed
orally.
All parking available at the demised premises shall be
reserved for Tenant, provided that 1 space shall be reserved for
the third floor tenant.
The tenant shall have its own set of keys and access
to the building at all times and on all days.
IN WITNESS WHEREOF, the said Parties have hereunto set
their hands and seals the day and year first above written.
Witness:
-------------------------- ---------------------------- (SEAL)
John O'Connell, Landlord
-------------------------- ---------------------------- (SEAL)
Aileen O'Connell, Landlord
-------------------------- ---------------------------- (SEAL)
Robert Farakas, Landlord
-7-
NEW ENGLAND HOME CARE/Tenant
By:_________________________
---------------------------- (SEAL)
Eileen Farakas, Landlord
-8-<PAGE>
EXHIBIT E
August 4, 1995
National Home Health Care Corp.
850 Bronx River Road
Yonkers, New York 10708
Re: National Home Health Care Corp.
Stock Acquisition of Nurse Care, Inc. ("Nurse Care")
and New England Home Care, Inc. ("New England")
Gentlemen:
We have acted as special counsel to Nurse Care and New
England and the individual stockholders of Nurse Care, John
O'Connell and Aileen O'Connell (the "Individual Stockholders")
(Nurse Care, New England and the Individual Stockholders are
sometimes hereinafter collectively referred to as the "Sellers")
in connection with the above described transaction. However, you
should be aware that (except for the financing transaction with
Liberty Bank disclosed in the Agreement (as hereinafter defined))
we have not previously served as counsel to Nurse Care, New
England or the Individual Stockholders nor did we serve as counsel
for the formation of Nurse Care or New England (hereinafter
referred to jointly as the "Companies"), and thus have no
particular familiarity with the formation or corporate affairs of
the Companies. Other than the corporate documentation necessary
for this transaction, we have not prepared or provided legal
services to the Companies with respect to any other corporate
documentation, nor have we maintained the corporate books or
minutes for either of the Companies.
We have examined the following documents (the
"Organization Documents") which have been represented to us as
being true and accurate copies of the originals of each of the
Companies:
(1) Certificates of Incorporation;
(2) By-Laws;
(3) Minutes of the Special Meetings of the Shareholders; and
(4) Minutes of the Special Meetings of the Directors.
<PAGE>
National Home Health Care Corp.
August 4, 1995
Page 2
In addition we have examined the original or a copy
certified or otherwise identified to our satisfaction as a true
copy of each of the following documents (the "Transactional
Documents").
(1) Agreement For The Purchase Of The Stock of Nurse
Care, Inc. And Related Transactions By and
Between National Home Health Care Corp. (the
"Buyer") and the Sellers (the "Agreement");
(2) The Employment Agreement by and between Aileen
O'Connell and Nurse Care:
(3) The Covenant Not To Compete by and between John
O'Connell and Nurse Care;
(4) The Escrow Agreement by and between Buyer, the
Individual Stockholders and the law firm of
Parker, Chapin, Flattau & Klimpl, LLP (the
"Escrow Agent").
(5) The lease dated August 4, 1995 with respect to
1110 West Main Street, Waterbury, Connecticut by
and between New England, as tenant, and the
Individual Stockholders as landlord.
We have examined such records, documents, instruments,
certificates of public officials and of the Companies, made such
inquiries of officials of the Companies and considered such
questions of law as we have deemed necessary for the purpose of
rendering the opinions set forth herein.
The opinions which follow are subject to the following
assumptions and limitations:
(a) We have assumed the organization, existence,
good standing and capacity of all relevant persons and entities
(other than the Sellers), including, without limitation, the Buyer
and the Escrow Agent, and further assume that such persons and
entities have the right, power and authority to enter into the
Transactional Documents.
(b) We have assumed that all documents executed and
delivered by parties other than the Sellers have, in fact, been<PAGE>
National Home Health Care Corp.
August 4, 1995
Page 3
executed and delivered by such parties or their duly authorized
representatives.
We have assumed the authenticity of all documents
submitted to us as originals and the conformity with the original
documents of any copies thereof submitted to us for our
examination. We have further assumed that the signatures other
than as to the Sellers on all documents and instruments submitted
to us as copies conform to the originals.
(c) We have assumed that: (i) the execution,
delivery and performance of the Transactional Documents and the
other documents relating thereto or delivered in connection
therewith, the performance of any oral agreements relating
thereto, and the consummation of the transactions contemplated by
the Transactional Documents or any such other documents or
agreements, by any party thereto other than the Sellers, did not,
does not now and will not violate or result in any breach of any
law, statute, ordinance, rule, regulation, award, order, decree or
judgment, in each case whether then or subsequently in effect;
(ii) the persons other than the Sellers authorizing such
execution, delivery, performance or transaction by a party did not
violate, are not now violating and will not be in violation of any
fiduciary duty owed by such person; (iii) at all times thereafter,
such execution, delivery, performance, and transaction by any
party thereto other than the Sellers, will not violate, result in
a breach of or constitute a default under any indenture,
agreement, contract or other instrument to which such other party
becomes a party or by which it or any of its assets shall be
bound.
(d) This opinion is rendered solely for the use of
any may be relied upon only by Buyer and may not be filed with or
relied upon by any other entity or individual or otherwise
released without our written consent.
(e) This opinion addresses only those matters as to
which you may have requested our opinion and we disclaim any
obligation to provide an opinion on any other matter. This letter
speaks only as of the date hereof and we expressly disclaim any
obligation to update or supplement this opinion.
(f) Opinions herein respecting the enforceability of
agreements are given on the assumption that such agreements have
been duly authorized by the Buyer and the Escrow Agent. We
express no opinion with respect to the applicability of, or your
compliance with, any law or regulation relating to your
obligations under the Transactional Documents. The enforceability
of the obligations of the Sellers under any agreement or
instrument are subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law), and may be limited to applicable laws which may
effect the remedies provided for therein, and are further subject
to the effect of bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws, relating to or
affecting the rights of creditors generally.
National Home Health Care Corp.
August 4, 1995
Page 4
(g) We express no opinion with respect to laws other
than laws of the State of Connecticut.
(h) We are relying upon the Affidavit of the Sellers
attached hereto as Schedule A (the "Affidavit"), and in the course
of our review of the Transactional Documents and the
Organizational Documents, and as to the matters set forth therein,
we have undertaken no independent investigation. A statement
which is based solely upon the Affidavit indicates that we have
relied solely on the Affidavit and that we have not made an
independent investigation of the facts set forth.
(i) To the extent that we have expressly relied upon
a statement or representation from any of the Sellers and such
statement or representation from any of the Sellers and such
statement or representation proves to be incorrect, our opinion is
modified accordingly.
Based upon and subject to the foregoing, we are of the
opinion that:
(1) To the best of our knowledge, each of the
Individual Stockholders has the full right and capacity to enter
into and perform the Agreement and each of the Transactional
Documents.
(2) Each of the Companies has full corporate power
to enter into and perform each of the Transactional Documents to
which it is a party. The execution and delivery of each of the
Transactional Documents to which either of the Companies is a
party and the consummation of the transactions contemplated
thereby have been duly authorized by all necessary corporate
action on the part of each of the respective Companies.
(3) Each of the Transactional Documents has been
duly executed and delivered by each of the Sellers and constitutes
the valid and binding agreement of each of the Sellers enforceable<PAGE>
against him, her or it, as applicable, in accordance with its
terms.
(4) Based solely upon our review of the records
maintained in the corporate books of each of the Companies (the
"Corporate Books"), and upon the Affidavit, each of the Sellers is
the record and beneficial owner of the number of shares issued by
the Companies as set forth opposite his, her or its name on
Schedule 3.4 to the Agreement (the "Shares"), the Shares are not
subject to any liens, and there are no options or similar rights
to purchase any Shares of capital stock of either of the
Companies. Based solely upon our review of the records maintained
in the Corporate Books and upon the Affidavit, Nurse Care is the
record and beneficial owner of all issued and outstanding shares
of capital stock of New England.
National Home Health Care Corp.
August 4, 1995
Page 5
(5) Based solely on the Good Standing Certificates
attached hereto as Schedule B (the "Good Standing Certificates"),
each of the Companies is a corporation in good standing under the
laws of the State of Connecticut.
(6) Based solely on our review of the records
maintained in the Corporate Books and the Affidavit, the
authorized capital stock of each of the Companies is set forth on
Schedule 3.6(a) to the Agreement.
(7) The execution, performance and delivery of each
of the Transactional Documents by each of the Sellers, the
consummation of the transactions contemplated under each of the
Transactional Documents by each of the Sellers and the compliance
by each of the Sellers with the provisions of each of the
Transactional Documents to which it is a party will not conflict
with or breach any provision of the charter or by-laws of either
of the Companies or, to the best of our knowledge, conflict with,
violate or breach any provision of, or constitute a default under,
any of the terms, covenants, conditions of any contract or other
instrument, commitment or obligation to which any of the Sellers
is a party, or by which any of them or any of their respective
properties or assets may be bound or violate any statute, law,
rule or regulation applicable to any of the Companies.
(8) Based solely on the Affidavit and to the best of
our knowledge, there is not action, suit, or proceeding pending or
threatened against the Sellers which, if adversely determined,
would either in any case or in the aggregate, materially and
adversely affect their properties, assets, financial condition or
businesses or materially impair their right to carry on their<PAGE>
businesses substantially as now conducted or proposed to be
conducted.
A statement which is made "to the best of our
knowledge" indicates that in the course of our representation of
the Sellers in this matter, we have not become aware of any facts
which would cause us to have an opinion contrary to that set forth
herein but that we have not made an independent investigation of
the facts set forth above, except for the review of the
Organization Documents and the Transactional Documents.
Very truly yours,
BERCHEM, MOSES & DEVLIN, P.C.
<PAGE>
EXHIBIT F
August 4, 1995
John and Aileen O'Connell
120 Clark Hill Road
Milford, Connecticut 06460
Sir and Madam:
We have acted as counsel to National Home Health Care
Corp., a Delaware corporation (the Buyer ), in connection with
(i) the agreement for the purchase of the stock of Nurse Care,
Inc. and related transactions, dated as of July 31, 1995 (the
Stock Purchase Agreement ) between the Buyer, John O'Connell and
Aileen O'Connell (such two individuals, the "Sellers"), Nurse
Care, Inc., a Connecticut corporation ("Nurse Care"), and New
England Home Care, Inc. a Connecticut corporation ("New England");
(ii) the employment agreement (the Employment Agreement ) dated
as of July 31, 1995 between Aileen O'Connell and Nurse Care; (iii)
the non-competition agreement (the Non-Competition Agreement )
dated as of July 31, 1995 between John O'Connell and Nurse Care;
and (iv) the escrow agreement (the "Escrow Agreement") dated as
of the date hereof between the Sellers, the Buyer, and us, as
Escrow Agent (the Escrow Agreement, together with the Stock
P u rchase Agreement, the Employment Agreement and the Non-
Competition Agreement, the Acquisition Documents ). This opinion
is delivered to you pursuant to section 6.2(f) of the Stock
Purchase Agreement. Capitalized terms used but not defined in
this opinion have the meanings given to them in the Stock Purchase
Agreement.
We have examined the executed Stock Purchase Agreement
and the other Acquisition Documents. We also have examined
certificates of certain governmental authorities including the
Secretary of State of the state of Delaware. In addition, we have
made such other investigations and reviewed such other documents
as we deemed necessary to enable us to render this opinion.
We express no opinion respecting the Stock Purchase
Agreement or any of the other Acquisition Documents, or any right,
power, privilege, remedy or interest intended to be created
thereunder, insofar as: (a) any of the rights, powers, privileges,
remedies and interests of a party thereunder may be limited (i) by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other laws affecting any rights, powers,
privileges, remedies and interests of creditors generally, (ii) by
rules or principles of equity affecting the enforcement of
obligations generally, whether at law, in equity or otherwise, or
(iii) by the exercise of the discretionary powers of any court or<PAGE>
other authority before which may be brought any proceeding seeking
equitable or other remedies, including (without limitation)
specific performance and injunctive relief; (b) the rights,
powers, privileges, remedies and interests of any party under the
Stock Purchase Agreement or any other Acquisition Document or
applicable law which may be exercised or otherwise enforced in bad
faith or a commercially unreasonable manner; and (c) any term or
provision of the Stock Purchase Agreement or any other Acquisition
Document purports to permit a party to exercise or otherwise
National Home Health Care Corp.
August 4, 1995
Page 2
enforce powers and privileges and pursue rights and remedies in a
manner impermissible under or otherwise inconsistent with
applicable laws or public policy from time to time in effect,
including (without limitation) exculpations and indemnifications,
waivers, powers of attorney and collateral disposition, and non-
judicial remedies.
We have not examined or reviewed any communication,
instrument, agreement, document or other item or conducted any
independent inquiry or investigation of any matter except as
otherwise expressly set forth in this opinion letter. Where
reference is made in this opinion letter to matters within our
knowledge, or to facts and circumstances known to us, such
reference means the actual knowledge of those attorneys within our
firm who have substantively represented the Company in connection
with the Acquisition Documents.
We have assumed that all documents executed and
delivered by parties other than the Buyer have, in fact, been
executed and delivered by such parties or their duly authorized
representatives. We have assumed the authenticity of all
documents submitted to us as originals and the conformity with the
original documents of any copies thereof submitted to us for our
examination. We have further assumed that the signatures other
than as to the Buyer on all documents and instruments submitted to
us as copies conform to the originals.
Our opinions are limited to the date hereof, and we do
not in any event undertake to advise you of any facts or
circumstances occurring or coming to our attention subsequent to
the date hereof.
Finally, we are counsel admitted to practice only in
the state of New York, and we express no opinion as to the
applicable laws of any jurisdiction other than those of the State
of New York, the federal laws of the United States of America and
the Delaware General Corporation Law.
Based on the foregoing, we are of the following
opinion:
1. The Buyer has the full corporate power and
authority to enter into and perform each of the Acquisition
Documents to which it is a party. The execution and delivery of
each of the Acquisition Documents to which the Buyer is a party
and the consummation of the transactions contemplated thereby have
been duly authorized by all necessary corporate action on the part
of the Buyer.
2. Each of the Acquisition Documents to which the
Buyer is a party has been duly executed and delivered by the Buyer
and constitutes the valid and binding agreement of the Buyer
enforceable against it in accordance with the terms thereof.
National Home Health Care Corp.
August 4, 1995
Page 3
3. Except for franchise taxes payable, the Buyer is
a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation.
4. The execution, performance and delivery by the
Buyer of each of the Acquisition Documents, the consummation by
the Buyer of the transactions contemplated thereby and the
compliance by the Buyer with the provisions thereof will not
conflict with or breach any provision of the charter or by-laws of
the Buyer.
No persons other than the addressees may rely upon
this opinion. This opinion may not be quoted in whole or in part
in any documents or filed with any governmental agency or other
person without the prior written consent of this firm.
Very truly yours,
PARKER CHAPIN FLATTAU & KLIMPL, LLP
<PAGE>
EXHIBIT G
July 18, 1995
Mr. John O'Connell
President
57 Plains Road
Milford, Connecticut 06460
Dear John:
For your information, the composition of the account
"estimated third-party payor settlements" amounting to $900,586 as
of December 31, 1994 is as follows:
Cost Report Period Receivable
(Payable)
Medicare:
June 30, 1993 $ 14,677
June 30, 1994 (401,327)
December 31, 1994 (385,913)
Medicaid (TPL Project):
1994 (128,023)
---------
($900,586)
The above figures include various reserves based upon the
June 30, 1993 field audit by Medicare.
Very truly yours,
Simione & Simione
Certified Public Accountants
<PAGE>
EXHIBIT 10.2
<PAGE>
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of the 1st day of August
1995, by and between New England Home Care, Inc., a Connecticut
corporation (the "Company"), and Aileen O'Connell (the "Executive").
Simultaneously with the execution and delivery of this
agreement, National Home Health Care Corp., a Delaware corporation
(the "Buyer"), is purchasing from the existing shareholders of the
Company, including the Executive, all of the outstanding capital
stock of the Company and certain affiliates for an aggregate of
approximately $3,150,000 (the "Acquisition").
The Company (which hereinafter in this agreement shall
include New England Home Care, Inc., a Connecticut corporation,
which is a subsidiary of the Company being acquired as part of the
Acquisition) has developed trade secrets, confidential business
relationships and other confidential and proprietary property and
information in connection with its business and operations all of
which are essential and integral components of its success and
profitability.
Prior to the Acquisition, the Executive was a
principal shareholder and was actively involved in the business of
the Company as an executive officer and, as a result, possesses an
intimate knowledge of the Company and its business.
In order to continue to obtain the benefits of the
Executive's services after the Acquisition, the Company wishes to
employ the Executive, and the Executive wishes to be employed by
the Company, on the terms set forth below.
It is therefore agreed as follows:
1. Employment and Term of Employment. The Company
hereby employs the Executive, and the Executive hereby accepts and
agrees to be employed by the Company for the period commencing on
the date hereof and ending on the first anniversary of the date
hereof, unless extended as provided in section 6(a) or sooner
terminated (the "Employment Period").
<PAGE>
2. Duties.
(a) The Executive shall perform all duties
that are customary for a management executive and shall have such
other authority and perform such other duties, consistent with
her position as may be assigned to her by the President of the
Company, to whom the Executive shall report, and by the Board of
Directors of the Company. The Executive shall undertake her duties
in a manner consistent with the best interests of the Company, shall
perform those duties in accordance with the guidelines, policies
and procedures established by the Company's Board of Directors,
shall perform those duties to the best of her ability and in a
diligent manner and shall devote her full time and skills and best
efforts to the performance of those duties and to the furtherance of
the interests of the business of the Company; provided that the
Executive and the Company shall reasonably agree to a work schedule
for the Executive that shall permit the Executive to have two
afternoons off during any week, subject to the reasonable prior
approval of the Company, it being agreed that the Executive in any
event shall observe a forty-hour work week.
(b) The Executive shall perform her duties
based out of the Company's facilities (except as provided in the
following sentence), although it is understood and agreed that the
Executive shall be required to travel to such locations for
business purposes as shall, from time to time, be necessary or
desirable for the business of the Company and as may reasonably be
requested of her.
3. Confidentialty; Nonsolicitation; Noncompetition.
(a) The Executive shall not at any time,
either during the Employment Period or thereafter, divulge or
reveal, in any manner, to any person, firm or corporation (except as
may be required by law or as required in the ordinary course of
the business of the Company) any confidential or privileged infor-
mation received by the Executive during the Executive's prior
employment with the Company or during the term of this agreement,
with regard to the financial, business or other affairs of the
Company, or any of the Company's officers, directors, stockholders,
subsidiaries, affiliates, customers, suppliers, employees or
consultants. The Executive shall keep all such information
confidential.
(b) The Executive shall not at any time during,
or within four years after the termination (however caused) of,
the Employment Period, solicit, interfere with, employ or endeavor
to entice away any employee, agent or consultant from the Company,
from any of its subsidiaries or affiliates, or from any of its
customers or suppliers provided that nothing herein shall prevent
the Executive from employing or otherwise maintaining a relationship
with the accountants, attorneys and other professionals engaged by
the Company.
-2-
(c) The Executive shall not, during the Employ-
ment Period and for a period of four years after the termination
(whensoever and however caused) of the Employment Period (including
any extensions thereof), directly or indirectly, engage in any
business, or own, manage, or control any interest in any manner, or
act as a director, officer or employee or consultant of or perform
any services for, any firm, corporation or partnership, that is,
directly or indirectly, engaged in any business involved in provi-
ding home health care services, including staffing, within the State
of Connecticut; provided, however that the Executive shall have the
right to make passive investments in public companies, provided that
none of the foregoing shall interfere with the duties of the
Executive as provided in this agreement.
(d) The Executive acknowledges that this agree-
ment is being entered into concurrently with the consummation of the
Acquisition and that this agreement, including, but not limited
to, the provisions of this section 3, are an essential part of
the Acquisition and the transactions contemplated in connection
therewith and that the Buyer would not invest in the Company or
participate in the Acquisition without the benefit of the foregoing
covenants by the Executive. The Executive acknowledges that she has
consulted with counsel concerning the terms of this agreement,
including, but not limited to, the provisions of this section 3, and
that the provisions of this section 3 are fair and reasonable.
The Executive further acknowledges that compliance with the provi-
sions of this section 3 will not create any hardship on the Execu-
tive as the Executive has both independent means and sufficient
income to be fully self-supporting without competing with the
Company or violating any of the provisions hereof. Accordingly, the
Executive shall be bound by the provisions hereof to the maximum
extent permitted by law, it being the intent and spirit of the
parties that the foregoing shall be fully enforceable. However, if
any of the provisions hereof shall for any reason be held to be
excessively broad as to duration, geographical scope, property or
subject matter, that provision shall be construed by limiting and
reducing it so as to be enforceable to the extent compatible with
the applicable law as it shall herein pertain.
(e) The Executive acknowledges that the services
to be rendered under the provisions of this agreement are of a
unique nature and that it would be difficult or impossible to re-
place such services and that by reason thereof the Executive
agrees and consents that, if she violates or threatens to violate
any provision of this section 3, the Company, in addition to any
other rights and remedies available under this agreement or other-
wise, shall be entitled to an injunction to be issued (without the
necessity of a bond) or specific enforcement to be required, by any
tribunal of competent jurisdiction restricting the Executive from
committing or continuing any such violation.
4. Compensation. The compensation for the Executive
during the Employment Period (including any extensions thereof in
accordance with clause (i) of section 6(a)) shall be an annual
salary of $125,000 payable in accordance with normal Company
policies.
-3-
5. Benefits; Expenses and Vacation.
(a) The Executive shall be entitled to such
health, medical, insurance and fringe benefits as are generally
available to all other full-time employees of the Company. The
Executive acknowledges that the Company may modify any of its prior
benefit policies after the Acquisition.
(b) With prior written consent, the Executive
shall be reimbursed for all reasonable expenses incurred in
connection with the business of the Company upon the submission
of appropriate documentation with respect thereto.
(c) The Executive shall be entitled to six
weeks paid vacation in accordance with the plans, policies,
programs and practices of the Company as generally in effect with
respect to the employees of the Company, which vacation shall be
taken as mutually agreed between the Executive and the Company.
6. Continuation, Termination, Death and Disability.
(a) The term of the Employment Period may be
extended beyond the initial period set forth in section 1 hereof,
either (i) at the sole option of the Company (exercisable by
giving notice to the Executive not less than 90 days before the
expiration of the initial term), for an additional one-year
period which shall end on the second anniversary of the date
hereof; provided that in the event that the Company shall not
exercise this option within the ninety-day period before the
expiration of the initial term and the Executive does not other-
wise accept employment by the Company, then the Company shall pay
the Executive a one-time severance amount upon the expiration
of the initial term in the lump sum amount of $30,000, or
(ii) as mutually agreed upon by the Company and the Executive.
(b) In the event of the death of the Executive
during the term of this agreement, the Employment Period shall
terminate automatically and the Executive's estate shall be
entitled to receive all monies to which the Executive otherwise
would have been entitled under section 4 through the end of the
month in which death occurred, and no other monies, except such
as may have been accrued for her.
(c) In the event of the "disability" of the
Executive during the term of this agreement (which shall mean the
inability, by reason of physical or mental disability, of the
Executive to satisfactorily perform her services under this
agreement for a period of 45 consecutive days or an aggregate
of 60 days in any 12-month period), the Company shall have the
right to terminate the Employment Period upon written notice.
-4-
If so terminated, the Executive shall be entitled to receive
all monies to which the Executive otherwise would have been
entitled under section 4 through the end of the 45-day period
or 60-day period, as the case may be, and no other monies, except
such as may have been accrued for her.
(d) If a majority of the directors of the
Company vote to remove the Executive from her duties "for cause"
(as defined below), the Company shall have the right to
immediately terminate the Employment Period and the Executive
shall be removed from office effective on the date specified
by such Directors, and in such case the Executive shall receive
no further monies under section 4 or otherwise, except such
as may have been accrued for her. For purposes of this agreement,
removal of the Executive from office shall not be deemed "for
cause" unless:
(i) such removal shall have been the result of
the conviction of the Executive of fraud or embezzlement on the
part of the Executive; or
(ii) there has occurred a breach of section 3 of
this agreement which has had, or in the reasonable opinion of the
Board of Directors of the Company may have, a material adverse
effect upon the business or operations of the Company; or
(iii) the Executive has been convicted of or has
pleaded guilty or no contest to any felony or any crime involving
moral turpitude on her part; or
(iv) The Executive has failed to discharge the
duties, responsibilities or obligations of the Executive under
this agreement; provided, however, the Directors shall not
terminate this agreement or remove the Executive pursuant to
this subparagraph unless the Board of Directors shall have
notified the Executive and given the Executive an opportunity to
explain such failure to the Board and the Board shall have
concluded, after any such presentation the Executive may make,
that it is unlikely that the Executive due to the fault of the
Executive will be able to properly resume and fully discharge the
Executive's duties and obligations hereunder.
(e) If the Executive voluntarily leaves the
employ of the Company before the expiration of the first year of
employment hereunder without the written consent of the Company
or as otherwise permitted under this agreement, the Executive
shall be entitled to receive no further monies or benefits under
section 4 or otherwise, except such as may have been accrued for
her.
7. Amendment and Modification. This agreement may
not be amended, modified or changed except in a writing signed by
the party against whom such amendment, modification or the like
is sought to be enforced.
-5-
8. Waiver of Compliance; Consents. Except as other-
wise provided in this agreement, any failure of any of the
parties to comply with any obligation, covenant, agreement or
condition herein may be waived by the party entitled to the
benefits thereof only by written instrument signed by the party
granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement0
or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this
agreement requires or permits consent by or on behalf of a party,
such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth
in this section 8.
9. Notices. All notices and other communications
hereunder shall be given by personal delivery or by registered
or certified mail (return receipt requested), postage prepaid,
to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice,
provided that notices of a change of address shall be effective
only upon receipt thereof):
(a) If to the Company, to:
New England Home Care, Inc.
c/o National Home Health Care Corp.
850 Bronx River Road
Yonkers, New York 10708
Attn: Thomas A. Smith
with a copy to:
Gary J. Simon, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
(b) If to the Executive, to:
Aileen O'Connell
120 Clark Road
Milford, Connecticut 06460
-6-
with a copy to:
Winthrop S. Smith, Jr., Esq.
Berchem, Moses & Devlin, P.C.
75 Broad Street
Milford, Connecticut 06460
All such notices and other communications shall be deemed given or
delivered when received, or five days after mailing, whichever
occurs first.
10. Assignment. Neither this agreement nor any of the
Executive's rights, powers, duties or obligations hereunder may be
assigned by the Executive. This agreement shall be binding upon
and inure to the benefit of the Executive and her heirs and legal
representatives, and the Company and its successors and assigns.
Successors of the Company shall include, without limitation, any
person acquiring, directly or indirectly, all or substantially
all of the assets of the Company, whether by merger, consolidation,
purchase, lease or otherwise, and such successor shall thereafter
be deemed "the Company" for the purposes hereof.
11. Governing Law. This agreement shall be governed
by the laws of the state of New York applicable to agreements made
and to be performed entirely in New York and all disputes arising
out of this agreement shall be resolved in the state or federal
courts in Westchester County, New York.
12. Entire Agreement. This agreement embodies the
entire agreement and understanding of the parties hereto. There are
no restrictions, promises, representations, warranties, covenants
or undertakings other than those expressly set forth or referred
to herein. This agreement supersedes all prior agreements and
understandings between the parties with respect to such
transactions.
NEW ENGLAND HOME CARE, INC.
By:_______________________
Name:
Title:
________________________
Aileen O'Connell
<PAGE>
