SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): November 1, 1999
NATIONAL HOME HEALTH CARE CORP.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-12927 22-2981141
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
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700 White Plains Road, Suite 275, Scarsdale, New York 10583
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (914) 722-9000
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition of Assets.
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On November 1, 1999, National Home Health Care Corp. (the
"Company") acquired, through wholly-owned subsidiaries, certain of the assets of
Optimum Care Services of Connecticut, Inc., Optimum Home Health of Connecticut,
Inc. and Optimum Home Care of Connecticut, Inc., (the "Optimum Entities"). The
Optimum Entities were acquired from a court-appointed Chapter 7 Trustee for a
purchase price of $4,400,000 in cash, which amount was generated from internal
funds of the Company. The final purchase price was determined through an auction
process conducted at the United States Bankruptcy Court for the District of
Massachusetts. The assets acquired included certain, but not all, machinery,
equipment, intangibles and accounts receivable. The initial offer by the Company
did not include acquiring any accounts receivable, but the offer was revised in
order to satisfy the requirements of the Trustee. The assets acquired excluded
any and all contracts (except two real estate leases), including any and all
contracts with customers, and also excluded the Medicare and Medicaid provider
numbers pursuant to which the Optimum Entities operated. In addition, the
Company in the acquisition did not assume any employees. The acquisition
represents the Company's opportunity to expand its existing Connecticut
operations into additional areas in the state. The Company is operating the
acquired assets under the Company's existing New England Home Care name and does
not intend to use the Optimum name.
The Optimum Entities had been engaged in the business of
providing home health care, staffing and related services in Connecticut,
including a Medicare-certified and licensed home health care company and an
affiliate providing staffing services.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial statements of business acquired: Not applicable.
(b) Pro forma financial statements: Not applicable.
(c) Exhibits:
2. Amended and Restated Asset Purchase Agreement, dated as of
October 15, 1999, among the Company, certain of its
wholly-owned affiliates and the trustee for Optimum Care
Services of Connecticut, Inc., Optimum Home Health of
Connecticut, Inc., and Optimum Home Care of Connecticut,
Inc.
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SIGNATURE
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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 thereunto duly authorized.
NATIONAL HOME HEALTH CARE CORP.
Date: November 16, 1999 By: /s/ Robert P. Heller,
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Robert P. Heller,
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
Number Description
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2. Amended and Restated Asset Purchase Agreement, dated as of
October 15, 1999, among the Company, certain of its
wholly-owned affiliates and the trustee for Optimum Care
Services of Connecticut, Inc., Optimum Home Health of
Connecticut, Inc., and Optimum Home Care of Connecticut, Inc.
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EXHIBIT 2
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AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
AMONG
CHARLES L. GLERUM
AS TRUSTEE FOR
OPTIMUM CARE SERVICES OF CONNECTICUT, INC.
OPTIMUM HOME HEALTH OF CONNECTICUT, INC.
OPTIMUM HOME CARE OF CONNECTICUT, INC.
AND
NEW ENGLAND HOME CARE, INC.
CONNECTICUT STAFFING WORKS CORP.
NATIONAL HOME HEALTH CARE CORP.
DATED AS OF OCTOBER 15, 1999
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TABLE OF CONTENTS
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<S> <C> <C> <C> <C> <C> <C>
Page No.
ARTICLE I DEFINITIONS 1
Section 1.1. Definitions...........................................1
ARTICLE II SALE AND PURCHASE OF PURCHASED ASSETS AND
ASSUMPTION OF ASSUMED LIABILITIES............................5
Section 2.1. Purchase And Sale of Purchased Assets................
Section 2.2. Assumption of Obligations And Liabilities............
Section 2.3. Purchase Price.......................................
Section 2.4. Condition of Purchased Assets........................
Section 2.5. Allocation of Purchase Price.........................
Section 2.6. Sale at Closing Date.................................
Section 2.7. Apportionments.......................................
Section 2.8. Deposit Escrow.......................................
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER.................... 7
Section 3.1. Authority of Seller.................................
Section 3.2. No Conflict or Violation............................
Section 3.3. Consents and Approvals..............................
Section 3.4. Ownership of Purchased Assets.......................
Section 3.5. Assigned Contracts..................................
Section 3.6. Labor Relations.....................................
Section 3.7. Brokers.............................................
Section 3.8. Accounts Receivable.................................
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER................. 8
Section 4.1. Authority of Purchasers.............................
Section 4.2. No Conflict or Violation............................
Section 4.3. Consents and Approvals..............................
Section 4.4. Brokers.............................................
ARTICLE V CERTAIN COVENANTS OF SELLER.................................10
Section 5.1. Conduct of Business Before the Closing Date. .......
Section 5.2. Consents and Approvals..............................
Section 5.3. Information and Access..............................
Section 5.4. Further Assurances..................................
Section 5.5. Assignment of Contracts.............................
Section 5.6. Restrictions as to Employees........................
Section 5.7. Bankruptcy Court Filings............................
Section 5.8. Referral of Business Opportunities..................
Section 5.9 Accounts Receivable.................................
ARTICLE VI CERTAIN COVENANTS OF PURCHASERS.............................12
Section 6.1. Adequate Assurances Regarding Executory Contracts...
Section 6.2. Further Assurances..................................
ARTICLE VII CONDITIONS TO SELLER'S OBLIGATIONS..........................12
Section 7.1. Representations and Warranties......................
Section 7.2. Compliance with Agreement...........................
Section 7.3. Purchasers' Closing Deliveries and Obligations......
Section 7.4. Entry of the Preliminary Order and the Sale and
Assignment Order....................................
ARTICLE VIII CONDITIONS TO PURCHASERS' OBLIGATIONS.......................13
Section 8.1. Representations and Warranties..................... 3
Section 8.2. Compliance with Agreement.......................... 3
Section 8.3. Consents........................................... 3
Section 8.4. Seller's Closing Deliveries and Obligations........ 3
Section 8.5. Entry of the Preliminary Order and the Sale and
Assignment Order................................... 4
Section 8.6. Assignment of Contracts............................ 4
ARTICLE IX CLOSING; BREAK-UP FEE; TERMINATION..........................14
Section 9.1. The Closing........................................ 4
Section 9.2. Procedures and Break-up Fee........................ 5
Section 9.3. Termination........................................ 7
Section 9.4. Effects of Termination............................. 7
ARTICLE X SURVIVAL 18
Section 10.1. Survival of Representations and Warranties.............18
ARTICLE XI TAXES 18
Section 11.1. Taxes Related to Purchase of Assets...............18
Section 11.2. Proration of Personal Property Taxes..............18
Section 11.3. Cooperation on Tax Matters........................19
ARTICLE XII GUARANTY..................................................19
Section 12.1. Guaranty By National..............................19
ARTICLE XIII MISCELLANEOUS PROVISIONS..................................19
Section 13.1. Exclusivity.......................................19
Section 13.2. Notices...........................................19
Section 13.3. Amendments........................................20
Section 13.4. Assignment........................................20
Section 13.5. Announcements.....................................20
Section 13.6. Expenses..........................................20
Section 13.7. Entire Agreement..................................21
Section 13.8. Descriptive Headings..............................21
Section 13.9. Counterparts......................................21
Section 13.10. Governing Law; Jurisdiction.......................21
Section 13.11. Construction......................................21
Section 13.12. Severability......................................21
Section 13.13. Confidentiality...................................22
Section 13.14. Amendment to Restatement..........................22
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TABLE OF CONTENTS
Page No.
SCHEDULE
NUMBER SCHEDULE NAME
3.5 Assigned Contracts
3.8 Accounts Receivable
EXHIBIT EXHIBIT NAME
A Assignment and Assumption Agreement
B Bill of Sale
C Escrow Agreement
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AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this
"Agreement") is made and entered into as of October 15, 1999 among CHARLES L.
GLERUM, AS CHAPTER 7 TRUSTEE (the "Seller") for OPTIMUM CARE SERVICES OF
CONNECTICUT, INC., OPTIMUM HOME HEALTH OF CONNECTICUT, INC. and OPTIMUM HOME
CARE OF CONNECTICUT, INC., each a Connecticut corporation and a debtor and
debtor-in-possession in cases pending under Chapter 7 of the Bankruptcy Code
(collectively, the "Optimum Entities"), and NATIONAL HOME HEALTH CARE CORP., a
Delaware corporation ("National"), NEW ENGLAND HOME CARE, INC., a Connecticut
corporation ("New England") and CONNECTICUT STAFFING WORKS CORP., a Connecticut
corporation ("Staffing" and, collectively with New England, "Purchasers").
RECITALS
WHEREAS, the Optimum Entities are engaged in home health care,
staffing and related businesses (the "Business") at two facilities leased in
Cromwell, Connecticut and Norwich, Connecticut (collectively, the "Business
Locations");
WHEREAS, each of the Optimum Entities filed a voluntary
petition with the Bankruptcy Court initiating a case under Chapter 11 of the
Bankruptcy Code, all of which cases have been converted to cases under Chapter 7
of the Bankruptcy Code with Charles L. Glerum appointed as Trustee;
WHEREAS, the parties previously have entered into that certain
Asset Purchase Agreement dated as of the date hereof (the "Original Agreement")
and, in light of a hearing held before the Bankruptcy Court on October 19, 1999,
desire to amend and restate the Original Agreement.
WHEREAS, Purchasers desire to purchase from Seller, and Seller
desires to sell to Purchasers, certain of the assets of the Optimum Entities,
all on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section I.1. Definitions. Unless otherwise defined herein, the
terms defined in the introductory paragraph and the Recitals to this Agreement
shall have the respective meanings specified therein, and the following terms
shall have the meanings specified below:
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"Affiliate" means "affiliate" as defined in Rule 405
promulgated under the Securities Act of 1933, as amended.
"Accounts Receivable" means all accounts receivable and
unbilled fees and charges of each Optimum Entity as of October 31, 1999,
including without limitation in respect of Medicare, Medicaid, insurance
companies, health maintenance organizations or other parties.
"Agreement" has the meaning set forth in the preamble and
shall include all Schedules and Exhibits hereto.
"Ancillary Agreements" means, collectively, the Assignment
and Assumption Agreement, the Bill of Sale and the Deposit Escrow Agreement.
"Apportionment Date" has the meaning set forth in Section 2.7.
"Assignment and Assumption Agreement" means the form of
Assignment and Assumption Agreement to be executed at Closing by Purchasers and
Seller for each of the Assigned Contracts, in substantially the form attached
hereto as Exhibit A.
"Assigned Contracts" means the Contracts to be assigned by
Seller to Purchasers and set forth on Schedule 3.5.
"Assumed Liabilities" has the meaning set forth in Section
2.2.
"Bank" means Silicon Valley Bank.
"Bankruptcy Code" means The Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. Section 101, et seq.
"Bankruptcy Court" means the United States Bankruptcy Court
for the District of Massachusetts, or any other court, having jurisdiction over
the Cases from time to time.
"Bill of Sale" means the Bill of Sale to be executed at
Closing by Purchasers and Seller in substantially the form attached hereto as
Exhibit B.
"Break-up Fee" has the meaning set forth in Section 9.2.
"Business" has the meaning set forth in the Recitals hereto.
"Business Day" means a day, other than a Saturday or a Sunday,
on which commercial banks are not required or authorized to close in The City of
New York.
"Business Locations" has the meaning set forth in the Recitals
hereto.
"Cases" means the Chapter 7 cases of the Optimum Entities
pending in the Bankruptcy Court as In re The Frontier Group, Inc., et. al.,
Case No. 99-15947-WCH.
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"Closing" has the meaning set forth in Section 9.1.
"Closing Date" has the meaning set forth in Section 9.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Deposit Escrow Agreement" means the Deposit Escrow Agreement
entered into by Purchasers, Seller and Parker Chapin Flattau & Klimpl, LLP, as
escrow agent, pursuant to which Deposit Escrow Agreement Purchasers have placed
a portion of the Purchase Price in escrow as a good faith deposit towards the
transactions contemplated hereby, substantially in the form attached hereto in
Exhibit C.
"Excluded Assets" means all of the Optimum Entities' assets
other than those specifically defined as Purchased Assets.
"GAAP" means United States generally accepted accounting
principles, applied on a consistent basis and consistent with the Optimum
Entities' historical practices, as in effect from time to time.
"Governmental Agency" means (a) any international, foreign,
federal, state, county, local or municipal governmental or administrative agency
or political subdivision thereof, (b) any governmental authority, board, bureau,
commission, department or instrumentality, or (c) any court or administrative
tribunal.
"Intangibles" means all intangible personal property used,
usable or held for use in the conduct of the Business, including without
limitation customer lists, supplier lists, mailing lists, catalogs, brochures,
handbooks and other customer or supplier information.
"Intellectual Property" means all patents and patent
applications, trademarks, trade names, logos, characters, fictitious business
names and other marks, names and applications (including without limitation the
name "Optimum" and any variation thereof), whether or not registered or
registrable, copyrights in published or unpublished works, know-how, trade
secrets, confidential information, recipes, software (to the extent transferable
by the Seller), technical information, processed technology, plans, drawings,
specifications and prints licensed to, owned by or otherwise used, usable or
held for use by the Optimum Entities.
"IRS" means the Internal Revenue Service of the United States
Department of the Treasury.
"Leases" means the leases by any Optimum Entity relating to
their premises in Cromwell, Connecticut and Norwich, Connecticut, and all
amendments thereto as of the date hereof in the forms previously provided to
Purchasers.
"Lien" means any mortgage, pledge, security interest, charge
or other encumbrance.
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"Original Agreement" has the meaning set forth in the Recitals
hereto.
"Permit" means any permit, approval, authorization, license,
variance or permission required by a Governmental Agency under any applicable
law.
"Preliminary Order" means an order of the Bankruptcy Court
which order shall not have been stayed, vacated or otherwise rendered
ineffective containing all of the terms and conditions set forth in Section 9.2
and approved by the Purchasers in their reasonable discretion prior to filing
with the Bankruptcy Court.
"Purchase Price" has the meaning set forth in Section 2.3.
"Purchased Assets" means all of the assets of each Optimum
Entity located at the Business Locations, including without limitation (i)
pre-paid expenses and deposits, (ii) machinery, equipment, vehicles, computers
and other data processing hardware (and all software, to the extent transferable
by the Seller, related thereto) and other tangible personal property, (iii)
office furniture, equipment, fixtures and similar tangible personal property,
(iv) patent, copyright, trademark, trade name, service mark, logo, names
(including "Optimum Home Health" and "Optimum Staffing Works"), except that such
names may be used by the Seller to the extent required in connection with any
Frontier Chapter 7 cases, and all other trade secret, know-how, proprietary
properties, information or other Intellectual Property, (v) the Assigned
Contracts, (vi) the Accounts Receivable (vii) other Intangibles relating to the
Business, including patient lists, employee files, etc. (but excluding patient
files, except that Purchasers shall be allowed possession thereof in accordance
with Section 5.9) and (viii) all other assets used or usable in the Business;
provided, however, that the assets to be acquired exclude, (A) except as relate
to purchased Accounts Receivable, claims and causes of action against third
parties, including bankruptcy avoidance actions, (B) assets located at the
Boston office of The Frontier Group, Inc., (C) cash, and (D) any and all
Medicare and Medicaid provider numbers and other provider license numbers (all
of which shall be surrendered and terminated immediately upon the later of (i)
the Closing, or (ii) such time as such numbers are no longer required to be
retained by Seller in order for Seller to discharge his duties as Trustee);
provided, however, that notwithstanding any of the foregoing provisions of this
definition, the Purchased Assets shall not include any Excluded Assets.
"Sale and Assignment Hearing Date" has the meaning set forth
in Section 9.2.
"Sale and Assignment Order" means an order of the Bankruptcy
Court, which order shall not have been stayed, vacated or otherwise rendered
ineffective, authorizing, among other things, the sale of the Purchased Assets
to Purchasers, the assumption and assignment of the Assigned Contracts to
Purchasers, the transactions contemplated by the Escrow Agreement and all other
transactions and agreements contemplated hereby and approved by the Purchasers
prior to filing with the Bankruptcy Court.
"Schedules" means the various Schedules referred to in this
Agreement delivered separately to Purchasers on or before the date of this
Agreement, except as otherwise specified in this Agreement.
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"Tax Return" means any report, return, information return,
filing, claim for refund or other information, including any schedules or
attachments thereto, and any amendments to any of the foregoing required to be
supplied to a taxing authority in connection with Taxes.
"Taxes" means all federal, state, local and foreign taxes,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, withholding, Social Security,
unemployment, disability, real property, personal property, registration,
alternative or add-on minimum, estimated or other tax, including any interest,
penalties or additions thereto, whether disputed or not.
"Transaction Taxes" has the meaning set forth in Section 11.1.
ARTICLE II
SALE AND PURCHASE OF PURCHASED ASSETS AND
ASSUMPTION OF ASSUMED LIABILITIES
Section II.1. Purchase And Sale of Purchased Assets. Subject
to the approval of the Bankruptcy Court and on the terms and subject to the
conditions set forth in this Agreement, at the Closing Purchasers shall purchase
from Seller, and Seller shall sell, transfer, assign, convey and deliver to
Purchasers, all of Seller's (including all of the Optimum Entities') right,
title and interest in and to the Purchased Assets, free and clear of all liens,
claims, encumbrances and other interests pursuant to the Sale and Assignment
Order. The parties agree that Purchasers shall purchase the Purchased Assets in
the name of one and/or the other of such Purchasers as Purchasers shall
determine, it being agreed that, in general, Staffing shall purchase the
staffing portion of the Business, New England shall purchase the home health
portion of the Business and the Accounts Receivable may be purchased by a
wholly-owned subsidiary of one of the Purchasers formed solely for such purpose.
Section II.2. Assumption of Obligations And Liabilities. On
the terms and subject to the conditions set forth in this Agreement, from and
after the Closing, Purchasers will assume and pay, perform, discharge and be
responsible for all obligations and liabilities of Seller under the Assigned
Contracts which accrue after the Closing Date (the "Assumed Liabilities").
Purchasers shall not assume or pay, perform, discharge or be responsible for any
of the obligations or liabilities of Seller or otherwise other than the Assumed
Liabilities, including without limitation that Purchasers expressly do not
assume any obligations or liabilities relating to the Optimum Entities'
employees. No Purchaser is a successor to any Optimum Entity for any purpose and
shall not be liable for any claim related thereto, including but not limited to
(a) liabilities for personal injuries, or property damage; (b) liabilities for
claims brought by any employee of any Optimum Entity, or for any compensation,
vacation pay, sick pay, bonus, health or other benefits (other than pursuant to
any plan included in the Assigned Contracts) or any payments due or accrued or
contingently owed to any employee or former employee of any Optimum Entity for
any period prior to the Closing Date; (c) liabilities for claims alleging
violation of applicable environmental laws to the extent such alleged violations
occurred prior to the Closing Date; (d) liabilities for payment of any Taxes, if
any (including interest or penalties thereon); (e) liabilities for any claim for
reimbursement or recoupment of funds previously paid to any Optimum Entity
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by any payor, including without limitation, Medicare, Medicaid, insurance
companies, health maintenance organizations or other parties (except liabilities
for such claims as may be applied by Medicare or Medicaid against purchased
Accounts Receivable); (f) any liability or obligation arising out of a breach or
default by any Optimum Entity under any contract or governmental permit or
license, attributable to any period prior to the Closing Date; (g) any claims,
liabilities and obligations of any kind arising out of, or resulting from the
ownership or use of the Purchased Assets or the operation of the Business, to
the extent same are attributable to any period prior to the Closing Date; (h)
any liability or obligation in respect of the Excluded Assets.
Section II.3. Purchase Price.
(1) Purchasers agree to pay to Seller an aggregate amount
equal to $2,600,000 in the manner set forth in and subject to the provisions of
Section 2.3(b) (the "Purchase Price").
(2) The Purchase Price shall be payable on the Closing Date by
check or wire transfer of immediately available funds, pursuant to written
instructions to be provided by Seller to Purchasers at least three business days
prior to the Closing Date; provided that a portion of the Purchase Price equal
to $100,000 (the "Good Faith Deposit") shall be paid by delivery thereof
immediately after the execution and delivery of the Original Agreement into
escrow in accordance with the terms of the Escrow Agreement and shall constitute
payment of that portion of the Purchase Price.
(3) Upon payment of the Purchase Price in accordance with
Section 2.3(b), Seller shall be obligated to, among other things, cure the
defaults, if any, under the Assumed Contracts (other than the Leases) arising or
existing prior to the Closing Date.
Section II.4. Condition of Purchased Assets. Except for the
warranty of title set forth in Section 3.5, the Purchased Assets are being sold
"AS IS" and "WHERE IS" and Seller hereby expressly disclaims any and all other
warranties both express and implied.
Section II.5. Allocation of Purchase Price. Promptly following
the Closing Date, the Purchase Price shall be allocated among the Purchased
Assets in such amounts as shall be specified in a schedule to be prepared by
Purchasers and reasonably acceptable to Seller, which allocation shall be
binding upon Purchasers and Seller, each of which agrees to report the effect of
the transactions contemplated hereby on all applicable tax returns or filings in
a manner consistent with such schedule. Seller hereby assumes liability for and
shall pay all Transaction Taxes incurred as a result of the sale of the
Purchased Assets hereunder.
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Section II.6. Sale at Closing Date. The sale, transfer,
assignment and delivery by Seller of the Purchased Assets to Purchasers as
herein provided shall be effected on the Closing Date by (a) the execution and
delivery by Seller and Purchasers of an Assignment and Assumption Agreement for
all of the Assigned Contracts substantially in the form of Exhibit A, pursuant
to which Assignment and Assumption Agreement Purchasers shall be subject to all
liabilities and obligations under the Assigned Contracts which accrue after the
Closing Date, and (b) with respect to the other Purchased Assets, the execution
and delivery by Seller and Purchasers of the Bill of Sale substantially in the
form of Exhibit B.
Section II.7. Apportionments. Except as otherwise provided
herein, apportionments and adjustments as are customarily apportioned in
transactions of this nature are to be apportioned as of 12:00 midnight on the
day preceding the Closing Date (the "Apportionment Date") to the extent such are
valid post-petition claims or are subject to non-avoidable liens. Except as
otherwise provided herein, all prorations shall be made on the basis of actual
bills, to the extent available, or, in the absence of such actual bills, on good
faith estimates of Seller based on the most recent bill received by Seller. All
prorations shall be adjusted within ten (10) Business Days of Seller's receipt
of the final bills. Notwithstanding anything herein to the contrary, Seller
shall be entitled to receive the allocable portions of prepaid insurance premium
refunds (other than with respect to Assigned Contracts) relating to any and all
periods following the Closing Date, which portions of such refunds shall be
excluded from Purchased Assets.
Section II.8. Deposit Escrow. In accordance with Section
2.3(b), Purchasers shall deliver, as part payment of the Purchase Price, the
Good Faith Deposit in cash to Parker Chapin Flattau & Klimpl, LLP, as escrow
agent, pursuant to the terms of the Deposit Escrow Agreement. Such amounts shall
be held in, and released from, escrow pursuant to the terms of the Deposit
Escrow Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller makes the following representations and warranties to
Purchasers, each of which is true and correct as of the date hereof and shall be
true and correct as of the Closing Date and shall be unaffected by any
investigation heretofore of hereafter made by Purchasers (WHICH REPRESENTATIONS
AND WARRANTIES SHALL TERMINATE AND BE OF NO FORCE OR EFFECT UPON THE CLOSING AND
ARE MADE SOLELY FOR PURPOSES OF SECTION 8.1 HEREOF AND NOT FOR PURPOSES OF
INDEMNIFICATION OF ANY KIND) (Purchasers acknowledge that the following are
based substantially upon information supplied to Seller by officers or employees
of the Optimum Entities and contained in the business records maintained by the
Optimum Entities):
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Section III.1. Authority of Seller. The execution and delivery
by Seller of this Agreement and the Ancillary Agreements and the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary action and this Agreement constitutes, and each of
the Ancillary Agreements upon its execution will constitute, the legal, valid
and binding obligation of Seller enforceable in accordance with its terms,
subject to receipt of the Preliminary Order and the Sale and Assignment Order
and the receipt of the consents, waivers and approvals specified on Schedule
3.3, if any.
Section III.2. No Conflict or Violation. Upon entry of the
Sale and Assignment Order, the execution, delivery and performance by Seller of
this Agreement and the Ancillary Agreements do not and will not violate or
conflict with or result in a breach of or constitute (with due notice or lapse
of time or both) a default under any Assigned Contract.
Section III.3. Consents and Approvals. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental Agency is required to be obtained or made by or with respect to
Seller in connection with the execution and delivery of this Agreement or the
Ancillary Agreements by Seller or the performance by Seller of the transactions
contemplated hereby or thereby to be performed by Seller, except for approval of
the Bankruptcy Court.
Section III.4. Ownership of Purchased Assets. Subject to the
issuance of the Sale and Assignment Order, at the Closing Purchasers will
receive, good, valid and marketable title to all Purchased Assets, free and
clear of any Liens.
Section III.5. Assigned Contracts. True and complete copies
(including all modifications and amendments) of the Assigned Contracts listed on
Schedule 3.5 have been provided by Seller to Purchasers. Other than as set forth
on Schedule 3.5, Seller has not and, to the best knowledge of Seller, no other
party under any of the Assigned Contracts has commenced any action against the
other or any Optimum Entity or given or received any written notice of default
or violation under any Assigned Contract which was not withdrawn or dismissed,
except only for those defaults which will be cured in accordance with the Sale
and Assignment Order. Subject to Bankruptcy Court approval and the Sale and
Assignment Order, each of the Assigned Contracts listed on Schedule 3.5 is or
will be at the Closing valid, binding and in full force and effect as against
each party thereto.
Section III.6. Labor Relations. No Optimum Entity is party to
any collective bargaining agreement covering any employees. To the best
knowledge of Seller, no organizational effort is presently being made or
threatened by or on behalf of any labor union with respect to any employees.
Section III.7. Brokers. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by
Seller without the intervention of any other person acting on its behalf in such
manner as to give rise to any valid claim by any such person against Purchasers
or their respective Affiliates for a finder's fee, brokerage commission or other
similar payment based on an arrangement with Seller.
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Section III.8. Accounts Receivable. Attached hereto as
Schedule 3.8 is a true and complete list of all accounts receivable of the
Optimum Entities as of September 30, 1999, including the itemized aging thereof,
which list is at least as current as such a list as has been provided to any
other potential bidder. To the best knowledge of Seller without independent
investigation, all Accounts Receivable have arisen and as of the Closing Date
will have arisen from bona fide transactions in the ordinary course of the
Business consistent with past practice and in the ordinary course.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Purchasers make the following representations and warranties
to Seller each of which is as true and correct as of the date hereof and shall
be true and correct as of the Closing Date (WHICH REPRESENTATIONS AND WARRANTIES
SHALL TERMINATE AND BE OF NO FORCE OR EFFECT UPON THE CLOSING AND ARE MADE
SOLELY FOR PURPOSES OF SECTION 7.1 HEREOF AND NOT FOR PURPOSES OF
INDEMNIFICATION OF ANY KIND, EXCEPT THE GOOD FAITH DEPOSIT):
Section IV.1. Authority of Purchasers. Each Purchaser is a
corporation, validly existing, and in good standing under the laws of the State
of Connecticut. Purchasers have full corporate power and authority to execute
and deliver this Agreement, and the execution and delivery by each Purchaser of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the part
of each Purchaser, and this Agreement constitutes the legal, valid and binding
obligation of each Purchaser enforceable in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, or similar laws from time to time in effect which affect creditors'
rights generally, and by legal and equitable limitations on the enforceability
of specific remedies.
Section IV.2. No Conflict or Violation. The execution,
delivery and performance by each Purchaser of this Agreement and the Ancillary
Agreements do not and will not violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of each Purchaser and do not and will
not violate any provision of law, or any order, judgment or decree of any court
or other Governmental Agency applicable to each Purchaser, or violate or result
in a material breach of or constitute (with due notice or lapse of time or both)
a default under any loan agreement, mortgage, security agreement, indenture or
other instrument to which each Purchaser is a party or by which it is bound.
Section IV.3. Consents and Approvals. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental Agency is required to be obtained or made by or with respect to
Purchasers in connection with the execution and delivery of this Agreement or
the Ancillary Agreements by each Purchaser or the performance by each Purchaser
of the transactions contemplated hereby or thereby to be performed by each
Purchaser, except for approval of the Bankruptcy Court.
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Section IV.4. Brokers. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by
Purchasers without the intervention of any other person acting on their behalf
in such manner as to give rise to any valid claim by any such person against
Seller or their respective Affiliates for a finder's fee, brokerage commission
or other similar payment based on an arrangement with Purchaser.
ARTICLE V
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ARTICLE VI
CERTAIN COVENANTS OF SELLER
Section VI.1. Conduct of Business Before the Closing Date.
Prior to the Closing Date, the Business shall be conducted only in the ordinary
course consistent with past practices, it being acknowledged and agreed by
Purchasers that each of the Optimum Entities is a debtor under Chapter 7 of the
Bankruptcy Code; provided, however, that Seller shall not make any change or
modification in any manner of its billing and collection policies, procedures
and practices with respect to Accounts Receivable, including without limitation
relating to the acceleration of such collections in light of the purchase of
Accounts Receivable hereunder. In addition, notwithstanding anything else
contained herein, Seller shall pay or cause to be paid, in a manner consistent
with past payment practices, all salary and 401(k) Plan contributions, if any,
relating to the period from September 9 through the Closing Date to all
employees of Seller. Seller shall not be obligated hereunder to pay or cause to
be paid accrued vacation time, if any, owed to the employees of the Optimum
Entities.
Section VI.2. Consents and Approvals. Subject to Section 9.2
and Seller's right to accept a higher and better offer, Seller shall obtain (i)
entry of the Preliminary Order and the Sale and Assignment Order by the
Bankruptcy Court as contemplated in Section 5.7, and (ii) the requisite consent
or consents of the Bank to this Agreement and the transactions contemplated
hereby.
Section VI.3. Information and Access. Seller will permit
representatives of Purchasers to have reasonable access during normal business
hours to all premises, properties, personnel, accountants, books, records,
contracts and documents of or pertaining to the Purchased Assets. Purchasers and
each of their respective representatives will treat and hold such information as
confidential. Seller further agrees to permit and to use reasonable efforts as
reasonably requested by Purchasers for the facilitation of representatives of
Purchasers to contact vendors, customers and other third parties relating to the
Business for purposes of the transactions contemplated by this Agreement and the
Ancillary Agreements.
Section VI.4. Further Assurances. Upon the request of
Purchasers at any time after the Closing Date, Seller shall forthwith execute
and deliver such documents and take such actions as Purchasers or their counsel
may reasonably request to effectuate the purposes of this Agreement.
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Section VI.5. Assignment of Contracts. Seller shall obtain
from the Bankruptcy Court an order authorizing Seller, effective on the Closing
Date, to cure as permitted by the Bankruptcy Code all defaults (except under the
Leases) of, and assign to Purchasers, the Assigned Contracts. Notwithstanding
anything herein to the contrary, Seller's obligation hereunder to cure shall not
exceed $50,000 in the aggregate. Anything in excess of $50,000 shall be borne by
Purchasers, provided that there shall be no default hereunder if Purchasers fail
to cure amounts in excess of $50,000. Purchasers agree that Seller shall have no
obligation to assume any Assigned Contract if Purchasers are unwilling or unable
to pay cure amounts. Seller may utilize security deposits to pay cure amounts up
to the maximum of $50,000. Seller agrees that, notwithstanding herein to the
contrary, Seller shall terminate and cancel all contracts of the Optimum
Entities other than the Assigned Contracts, except to the extent required by
Seller for the prosecution of any claims against third parties, including
bankruptcy avoidance actions, in connection with the Cases.
Section VI.6. Restrictions as to Employees. Seller
acknowledges that Purchasers assume no responsibilities of Seller as to Seller's
employees. With respect to each employee of any Seller, if any, for which
Purchasers make an offer of employment, Seller covenants and agrees that it
shall not directly or indirectly attempt to entice or induce any such employee
to either not accept the employment offer from Purchasers or to leave such
employment with Purchasers.
Section VI.7. Bankruptcy Court Filings.
(1) Seller shall file motions with the Bankruptcy Court by
4:30 p.m. (Boston time) on October 15, 1999 seeking approval of the Preliminary
Order, which shall contain the terms and conditions set forth in Section 9.2
hereunder.
(2) On or before October 28, 1999 Seller shall obtain approval
of the Sale and Assignment Order, which order shall (i) approve the sale of the
Purchased Assets free and clear of all liens, claims, encumbrances and other
interests pursuant to the Bankruptcy Code; (ii) provide that Seller cures all
defaults, up to the $50,000 maximum, under the Assigned Contracts (other than
the Leases); (iii) provide that Purchasers are "good faith purchasers" and are
afforded all protections granted under the Bankruptcy Code; and (iv) provide
that Purchasers shall not be deemed successors to Seller or any Optimum Entity
for any purpose, including but not limited to any and all liabilities or claims
of any kind whatsoever that may exist against any of them.
(3) As promptly as practicable, Seller will provide Purchasers
with copies of all motions, applications and supporting papers prepared by
Seller in connection with this Agreement (including forms of orders and notices
to interested parties) prior to the filing thereof in the Case.
Section VI.8. Referral of Business Opportunities. From and
after the Closing Date, Seller will forward to Purchasers and only Purchasers
all incoming business inquiries, customer orders and other matters related to
the Business, the Acquired Assets and the Assumed Liabilities.
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Section VI.9. Accounts Receivable. In addition to the terms of
Section 5.3, for so long as Accounts Receivable are outstanding Seller shall,
solely for purposes of facilitating Purchasers' collection thereof, allow
Purchasers to take temporary possession of all books and records relating
thereto, including without limitation remittance slips, billing advices, patient
files, etc. Promptly following Purchasers' use thereof for such purposes,
Purchasers shall return all such books and records to Seller for Seller's
maintenance thereof. For purposes of facilitating collection of Accounts
Receivable, following the Closing, Seller shall deposit the proceeds of all such
collections immediately following the receipt thereof in an account (i) solely
and specifically designated for purposes hereof, and (ii) as to which Purchasers
and/or their designees otherwise shall have sole withdrawal authority, access
and control. On or as soon as practicable following the Closing, Seller shall
deliver to Purchasers a true and complete list of all Accounts Receivable as of
October 31, 1999.
ARTICLE VII
CERTAIN COVENANTS OF PURCHASERS
Section VII.1. Adequate Assurances Regarding Executory
Contracts. With respect to each Assigned Contract, Purchasers shall make
commercially reasonable efforts to provide adequate assurance as required under
the Bankruptcy Code of the future performance of such Assigned Contract by
Purchasers. Purchasers agree that they will promptly take all actions as are
reasonably required by Seller to assist in obtaining the Bankruptcy Court's
entry of the Preliminary Order and the Sale and Assignment Order, such as
furnishing affidavits, non-confidential financial information or other documents
or information for filing with the Bankruptcy Court and making Purchasers'
employees and representatives available to testify before the Bankruptcy Court,
with respect to demonstrating adequate assurance of future performance by
Purchasers under the Assigned Contracts. In the event that an Assigned Contract
is not assigned to Purchasers as a result of Purchasers' failure to provide
adequate such assurance, such non-assignment shall not constitute a default
hereunder.
Section VII.2. Further Assurances. Upon the request of Seller
at any time after the Closing Date, Purchasers shall forthwith execute and
deliver such documents and take such actions as Seller or their counsel may
reasonably request to effectuate the purposes of this Agreement.
ARTICLE VIII
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, unless waived in
writing by Seller, of each of the following conditions on or prior to the
Closing Date:
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Section VIII.1. Representations and Warranties. The
representations and warranties of Purchasers contained in this Agreement, the
Ancillary Agreements and any exhibits, schedules, documents, deliveries,
pursuant hereto and thereto, shall be true on and as of the Closing Date in all
material respects as though such representations and warranties were made on and
as of the Closing Date.
Section VIII.2. Compliance with Agreement. Purchasers shall
have performed and complied in all material respects with all covenants and
conditions to be performed or complied with by them hereunder on or prior to the
Closing Date.
Section VIII.3. Purchasers' Closing Deliveries and
Obligations. Purchasers shall have delivered all items and satisfied all
obligations pursuant to Section 9.1(c).
Section VIII.4. Entry of the Preliminary Order and the Sale
and Assignment Order. (i) The Bankruptcy Court shall have entered the
Preliminary Order and the Sale and Assignment Order and (ii) the Preliminary
Order and the Sale and Assignment Order, as entered by the Bankruptcy Court,
shall not be subject to stay pending appeal.
ARTICLE IX
CONDITIONS TO PURCHASERS' OBLIGATIONS
The obligation of Purchasers to consummate the transactions
contemplated by this Agreement is subject to the satisfaction, unless waived in
writing by Purchasers, of each of the following conditions on or prior to the
Closing Date:
Section IX.1. Representations and Warranties. The
representations and warranties of Seller contained in this Agreement, the
Ancillary Agreements and any exhibits, schedules or documents delivered pursuant
hereto or thereto, shall be true on and as of the Closing Date in all material
respects.
Section IX.2. Compliance with Agreement. Seller shall have
performed and complied in all material respects with all covenants and
conditions to be performed or complied with hereunder by it on or prior to the
Closing Date.
Section IX.3. Consents. The consent of the Bank under its
existing credit or similar agreements with the Optimum Entities as required by
the terms thereof and, to the extent required under the Bankruptcy Code, the
consents, if any, required in connection with the assignment of the Assigned
Contracts shall have been duly obtained and shall be in full force and effect on
the Closing Date.
Section IX.4. Seller's Closing Deliveries and Obligations.
Seller shall have delivered all items and satisfied all obligations pursuant to
Section 9.1(b).
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Section IX.5. Entry of the Preliminary Order and the Sale and
Assignment Order. (i) The Bankruptcy Court shall have entered the Preliminary
Order, which shall contain all of the terms and conditions in Section 9.2
hereunder and shall be subject to Purchasers' prior approval in their reasonable
discretion, and the Sale and Assignment Order, which shall be subject to
Purchasers' prior approval, and (ii) the Preliminary Order and the Sale and
Assignment Order, as entered by the Bankruptcy Court, shall not be subject to a
stay. The Sale and Assignment Order shall not modify the terms and conditions of
this Agreement and shall provide, other than as set forth herein or expressly
agreed to by Purchasers and their counsel, (i) that the sale of the Purchased
Assets to Purchasers is free and clear of all liens, claims, encumbrances and
other interests pursuant to the Bankruptcy Code; (ii) that, subject to Section
5.5, Seller cure any and all defaults under the Assigned Contracts (except the
Leases); (iii) that Purchasers are "good faith purchasers" and are afforded all
protections granted under; and (iv) that Purchasers shall not be deemed
successors to Seller or any Optimum Entity for any purpose, including but not
limited to any and all claims arising out of any liability or claim of any kind
that may exist as against Seller or any Optimum Entity.
Section IX.6. Assignment of Contracts. The Bankruptcy Court
shall have entered the Sale and Assignment Order, or some additional order that
expressly authorizes the assumption and assignment of the Assigned Contracts,
effective on the Closing Date. In addition, subject to Section 5.5, Seller shall
cure all defaults under the Assigned Contracts (other than the Leases) and all
liabilities and obligations accrued prior to the Closing Date.
ARTICLE X
CLOSING; BREAK-UP FEE; TERMINATION
Section X.1. The Closing.
(1) The Closing of the purchase and sale of the Purchased
Assets (the "Closing") shall be held on October 29, 1999, or such later date as
the parties shall agree, but in no event later than November 1, 1999, and shall
be effective as of such date (the "Closing Date"). The Closing shall be held at
the Boston offices of Choate, Hall & Stewart. At the Closing, all of the
transactions provided for in Article II hereof shall be consummated on a
substantially concurrent basis.
(2) Seller's Deliveries and Obligations at Closing. At the
Closing, Seller shall deliver (or cause to be delivered) to Purchasers the
following (in form and substance reasonably satisfactory to counsel for
Purchasers):
(a) a duly executed Assignment and Assumption Agreement
assigning to Purchasers the rights, title, interest and obligations in, under,
and to each of the Assigned Contracts being assigned to Purchasers,
substantially in the form attached hereto as Exhibit A;
(b) a duly executed Bill of Sale and such other documents or
instruments of transfer necessary to vest in Purchasers full and complete title
to the Purchased Assets, free and clear of all liens, pledges, security
interests and encumbrances, and other interests, pursuant to the Bankruptcy Code
on the Closing Date, substantially in the form attached hereto as Exhibit B;
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(c) a duly executed Deposit Escrow Agreement, substantially in
the form attached hereto as Exhibit C; and
(d) such other instruments, documents and considerations which
may be reasonably required by Purchasers or Purchasers' counsel to effectuate
the transaction contemplated by this Agreement.
(3) Purchasers' Deliveries and Obligations at Closing. At the
Closing, Purchasers shall deliver (or cause to be delivered) to Seller the
following (in form and substance reasonably satisfactory to counsel for Seller):
(a) payment of the Purchase Price and other amounts in
accordance with the terms and conditions set forth in Section 2.3;
(b) a duly executed Assignment and Assumption Agreement
accepting the assignment of the rights, title, interest and obligations in,
under, and to each of the Assigned Contracts being assigned to Purchasers,
substantially in the form attached hereto as Exhibit A;
(c) certified resolutions of the directors of National and
Purchasers approving and authorizing the transactions contemplated by this
Agreement;
(d) a duly executed Deposit Escrow Agreement, substantially in
the form attached hereto as Exhibit C; and
(e) such other instruments, documents and considerations which
may be reasonably required by Seller or Seller's counsel to effectuate the
transaction contemplated by this Agreement.
Section X.2. Procedures and Break-up Fee.
(1) The Preliminary Order shall (i) authorize the conduct of a
single open auction relating to the sale of the Purchased Assets and (ii)
approve the bidding procedures for the open auction as set forth below,
including a break-up fee, and notice for the auction and sale process.
(2) The following bidding procedures shall govern the open
auction and sale process:
(a) Any party wishing to submit a competing bid for the
Purchased Assets and participate in the open auction must comply with
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these bid procedures and submit such offer, in writing, to Choate, Hall &
Stewart, 53 State Street, Boston, MA 02109-2891, Attn: Charles L. Glerum,
Trustee, no later than 12:00 noon, Boston Time on the day prior to the open
auction (the "Qualifying Bid");
(b) All Qualifying Bids must (i) contain the identity of such
potential bidder with an irrevocable offer to purchase all of the Purchased
Assets under the same terms as set forth in this Agreement, including without
limitation that, notwithstanding any of the other terms and conditions of such
offer, such offer shall be required to close in full not later than November 1,
1999, (ii) contain a purchase price having a net present value exceeding the
Purchase Price set forth in this Agreement by not less than $150,000 (the
"Minimum Overbid") payable in cash at the closing, (iii) be accompanied by
delivery of a certified check payable to "Charles L. Glerum, as Trustee of the
Optimum Entities" in the amount of $100,000 (the "Bid Deposit"), and (iv) proof
satisfactory to the Seller of the bidder's financial ability to complete the
transaction contemplated by such offer. The Bid Deposit shall be credited to the
purchase price if such bidder is the successful bidder or, if not, returned to
the potential bidder. In the event that the successful bidder does not close,
the Bid Deposit shall be retained as liquidated damages and Seller shall seek to
close with the next highest bidder;
(c) Any party seeking to obtain any financial or other
information in connection with evaluating Seller's assets and/or submitting a
bid must execute a confidentially agreement in customary form;
(d) Bids at the open auction shall be made in aggregate
minimum increments of $50,000;
(e) If no Qualified Bid is received, no auction will be
conducted and Seller shall request that the Bankruptcy Court enter an order
approving the sale of the Purchased Assets to Purchasers pursuant to this
Agreement; and
(f) The only bidding to be conducted other than Qualifying
Bids as set forth above shall be at the single open auction conducted and
completed not later than October 28, 1999 (the "Sale and Assignment Hearing
Date") at the Bankruptcy Court through "open bidding" such that Purchasers shall
retain the right to bid against any higher and better offer and no bidders shall
be permitted to participate in such open auction unless they have submitted a
Qualifying Bid in accordance with all of the terms of this Section 9.2(b).
(3) In the event that Seller shall accept an offer in any form
at any time, including a higher and better offer, relating to the sale of any of
the Purchased Assets, and a closing relating thereto shall occur, then
Purchasers shall, without further court order, be entitled to receive, and
Seller shall forthwith pay as liquidated damages and not as a penalty, a
break-up fee equal to $75,000 (the "Break-up Fee") pursuant to 11 U.S.C.
ss.ss.503(b)(1) and 506(c). The Break-up Fee shall be secured by a first
priority lien on any sale proceeds received in connection with any such sale.
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(4) Immediately upon entry of the Preliminary Order, Seller
shall cause notice of the auction and bidding procedures to be sent via U.S.
first class mail, postage prepaid, to (i) the United States Trustee, (ii) each
party that has filed a notice of appearance in this case and (iii) any party who
Seller believes may have an interest in purchasing the Purchased Assets. Seller
shall publish such notice in a form and at such time(s) approved by the
Bankruptcy Court.
Section X.3. Termination. Anything in this Agreement to the
contrary notwithstanding, this Agreement and the transactions contemplated
hereby may be terminated in any of the following ways at any time before the
Closing and in no other manner:
(1) by mutual written consent of Purchasers and Seller (in the
case of Seller, upon consultation with, and with the written consent of, the
Bank); or
(2) by Seller, if Seller receives, accepts and a closing
occurs with respect to a higher and better offer, subject to Purchasers' rights
set forth in Section 9.2(b); or
(3) in the event that the Bankruptcy Court has not entered the
Preliminary Order by October 22, 1999, then Purchasers may terminate this
Agreement without any liability or obligation to Seller; or
(4) in the event that the Bankruptcy Court has not entered the
Sale and Assignment Order by October 28, 1999, then Purchasers may terminate
this Agreement without further liability or obligation to Seller; or
(5) by Purchasers, in the event of a material breach by or
default of Seller; or
(6) by Seller, in the event of a material breach by or default
of Purchasers.
Section X.4. Effects of Termination. In the event this
Agreement is terminated pursuant to Section 9.3, except as provided in Section
9.2(c) or in this Section 9.4, all further obligations of the parties hereunder
shall terminate. If this Agreement is terminated as permitted by Section 9.3,
termination shall be without liability of any party (or any stockholder,
director, officer, employee, agent, consultant or representative of such party)
to any other party to this Agreement; provided, however, that if this Agreement
is terminated by Seller pursuant to Section 9.3(b), Seller shall pay to
Purchasers, as their sole and exclusive remedy, the Breakup Fee pursuant to the
provisions of Section 9.2; and provided further that the Good Faith Deposit
shall be subject to the terms of the Deposit Escrow Agreement. Notwithstanding
anything herein to the contrary, in the event that this Agreement is terminated
(i) pursuant to Sections 9.3(a)-(e), then the Purchasers shall be entitled to
the Good Faith Deposit, and (ii) pursuant to Section 9.3(f), then the Seller
shall be entitled to the Good Faith Deposit as liquidated damages. The
provisions of this Section 9.4 shall survive any termination hereof pursuant to
Section 9.3.
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ARTICLE XI
SURVIVAL
Section XI.1. Survival of Representations and Warranties. All
representations and warranties of Seller made in this Agreement or in any
certificate delivered pursuant hereto shall survive the execution and delivery
hereof, BUT SHALL TERMINATE AND BE OF NO FORCE OR EFFECT UPON THE CLOSING AND
ARE MADE SOLELY FOR PURPOSES OF SECTION 8.1 HEREOF AND NOT FOR PURPOSES OF
INDEMNIFICATION OF ANY KIND.
ARTICLE XII
TAXES
Section XII.1. Taxes Related to Purchase of Assets. The
parties recognize and acknowledge that the sale, transfer, assignment and
delivery of the Purchased Assets shall be exempt under the Bankruptcy Code and
the Sale and Assignment Order from all state and local transfer, recording,
stamp or other similar transfer taxes (collectively, "Transaction Taxes") that
may be imposed by reason of the sale, transfer, assignment and delivery of the
Purchased Assets; provided, however, that if Transaction Taxes are assessed for
any reason, then Seller shall pay such Transaction Taxes along with any
recording and filing fees. Purchasers and Seller agree to cooperate to determine
the amount of Transaction Taxes payable in connection with the transactions
contemplated under this Agreement. Transaction Taxes shall not include any Taxes
for which Seller is responsible under Section 11.2. At the Closing, Purchasers
shall remit to the Seller such properly completed resale exemption certificates
and other similar certificates or instruments as are applicable to claim
available exemptions from the payment of sales, transfer, use or other similar
taxes under applicable law. Purchasers and Seller shall cooperate in preparing
such forms and will execute and deliver such affidavits and forms as are
reasonably requested by the other party.
Section XII.2. Proration of Personal Property Taxes. Personal
property taxes and assessments on the Purchased Assets shall be prorated between
Purchasers and Seller as of the Apportionment Date, provided, however, that
Seller shall not be responsible for any increased assessments on personal
property resulting from the transactions contemplated hereby. All such
prorations shall be allocated so that items relating to time periods ending
prior to the Closing Date shall be allocated to Seller and items related to time
periods beginning on or after the Closing Date shall be allocated to Purchasers.
The amount of all such prorations shall be settled and paid on the Closing Date
unless, with respect to Seller's obligations hereunder, otherwise ordered by the
Bankruptcy Court or as otherwise required by applicable Bankruptcy Law.
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Section XII.3. Cooperation on Tax Matters. Purchasers and
Seller agree to furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance relating to the Purchased Assets as
is reasonably necessary for the preparation and filing of any return, claim for
refund or other required or optional filings relating to tax matters, for the
preparation for and proof of facts during any tax audit, for the preparation for
any tax protest, for the prosecution or defense of any suit or other proceeding
relating to tax matters and for the answer of any governmental or regulatory
inquiry relating to tax matters.
ARTICLE XIII
GUARANTY
Section XIII.1. Guaranty By National. National, which owns all
of the outstanding capital stock of each Purchaser, hereby unconditionally and
irrevocably guarantees the full and timely payment and performance of each of
the obligations of Purchasers in this Agreement.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section XIV.1. Exclusivity. Seller understands and agrees that
Purchasers will devote substantial time and effort and incur substantial expense
conducting business, financial and legal due diligence in connection herewith.
Accordingly, Seller agrees to immediately provide Purchasers with copies of any
written offers received from any third parties and to immediately notify
Purchasers as to the receipt by Seller of any oral such offers; provided that
Seller shall not be required to provide to Purchasers any of the details of such
oral offers.
Section XIV.2. Notices. All notices, demands or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given (a)
when delivered personally to the recipient, (b) when sent to the recipient by
telecopy (receipt electronically confirmed by sender's telecopy machine) if
during normal business hours of the recipient, otherwise on the next Business
Day, (c) one (1) Business Day after the date when sent to the recipient by
reputable express courier service (charges prepaid) or (d) seven (7) Business
Days after the date when mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid. Such notices, demands and
other communications will be sent to Seller and to Purchasers at the addresses
indicated below:
If to any Purchaser: National Home Health Care Corp.
700 White Plains Road
Scarsdale, NY 10583
Attention: Steven Fialkow, President
Facsimile No.: 914-722-9199
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With a copy (which shall not
constitute notice) to: Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
Attention: Gary J. Simon, Esq.
Facsimile No.: 212-704-6288
If to Seller: Charles L. Glerum
Trustee - The Frontier Group, Inc.
et al.
c/o Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109-2891
Facsimile No.: 617-248-4000
or to such other address as any party hereto may, from time to time, designate
in writing delivered pursuant to the terms of this Section.
Section XIV.3. Amendments. The terms, provisions and
conditions of this Agreement may not be changed, modified or amended in any
manner except by an instrument in writing duly executed by each of the parties
hereto.
Section XIV.4. Assignment. This Agreement is binding upon and
inures to the benefit of the successors and assigns of each party to this
Agreement (including any successor, substitute or joint trustee appointed in
respect of any or all Optimum Entities under the Bankruptcy Code), but no
rights, obligations or liabilities under this Agreement may be assigned by any
party without the prior written consent of the other parties hereto.
Section XIV.5. Announcements. All press releases, notices to
customers and suppliers and other announcements prior to the Closing Date with
respect to this Agreement and the transactions contemplated by this Agreement
shall be approved by both Purchasers and Seller prior to the issuance thereof;
provided that any party may make any public disclosure it believes in good faith
is required by law or regulation (in which case the disclosing party shall
advise the other party (which shall be Seller in the case of disclosure proposed
to be made by Purchasers and Purchasers in the case of disclosure proposed to be
made by Seller) prior to making such disclosure and provide such other party an
opportunity to review the proposed disclosure).
Section XIV.6. Expenses. Except as otherwise set forth in this
Agreement, each party to this Agreement shall bear all of its legal, accounting,
investment banking and other expenses incurred by it or on its behalf in
connection with the transactions contemplated by this Agreement, whether or not
such transactions are consummated.
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Section XIV.7. Entire Agreement. This Agreement and the
Ancillary Agreements constitute the entire agreement between the parties hereto
with respect to the subject matter hereof and supersede and are in full
substitution for any and all prior agreements and understandings between them
relating to such subject matter, including without limitation, any
confidentiality agreements and letters of intent between the parties prior to
the date hereof. The Exhibits and Schedules to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
The provisions of this Section 13.7 shall survive any termination hereof
pursuant to Section 9.3.
Section XIV.8. Descriptive Headings. The descriptive headings
of the several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section XIV.9. Counterparts. For the convenience of the
parties, any number of counterparts of this Agreement may be executed by any one
or more parties hereto, and each such executed counterpart shall be, and shall
be deemed to be, an original, but all of which shall constitute, and shall be
deemed to constitute, in the aggregate but one and the same instrument.
Section XIV.10. Governing Law; Jurisdiction. This Agreement
shall be construed, performed and enforced in accordance with, and governed by,
the laws of the State of New York, without giving effect to conflict of laws
principles thereof. For so long as Seller is subject to the jurisdiction of the
Bankruptcy Court, the parties hereto irrevocably elect as the sole judicial
forum for adjudication of any matters arising under or in connection with this
Agreement, and consent to the jurisdiction of, the Bankruptcy Court.
Section XIV.11. Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction will be applied against
any party. Any references to any federal, state, local or foreign statute or law
will also refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise.
Section XIV.12. Severability. In the event that any one or
more of the provisions contained in this Agreement or in any other instrument
referred to herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by law, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any other such instrument. Furthermore, in lieu of any such
invalid or unenforceable term or provision, the parties hereto intend that there
shall be added as a part of this Agreement a provision as similar in terms to
such invalid or unenforceable provision as may be possible and be valid and
enforceable.
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Section XIV.13. Confidentiality. Seller and Purchasers agree
to keep, and to cause each of their affiliates, directors, officers and
employees to keep, confidential any and all confidential information of the
other party that any of them receives in the course of performing their
obligations hereunder (except that such information may be shared, on a
confidential basis, with the party's attorneys and auditors) and will not,
without the other party's written consent, use any of such confidential
information except as reasonably necessary to perform their duties under this or
another of its agreements with the other party. Upon termination of this
Agreement, each party will return, and will cause its affiliates to return, to
the other party all original documents and copies of the confidential
information which are in its possession.
Section XIV.14. Amendment to Restatement. The Original
Agreement is hereby amended and stated by this Agreement. References to the
Original Agreement in any document, certificate, agreement or other instrument
of any kind (including without limitation the Deposit Escrow Agreement and any
court orders) are hereby deemed to be references to this Agreement.
IN WITNESS WHEREOF, Seller and Purchasers have executed and
delivered this Agreement as of the day and year first written above.
CONNECTICUT STAFFING WORKS CORP.
By: _______________________________________
Name:
Title:
NEW ENGLAND HOME CARE, INC.
By: _______________________________________
Name:
Title:
CHARLES L. GLERUM, as Chapter 7 Trustee for
Optimum Care Services of Connecticut, Inc.,
Optimum Home Health of Connecticut, Inc.
and Optimum Home Care of Connecticut, Inc.
AS TO ARTICLE XII:
NATIONAL HOME HEALTH CARE CORP.
By: ______________________________________
Name:
Title:
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