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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 19, 1997
CONTINUCARE CORPORATION
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EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA
(STATE OR OTHER JURISDICTION OF INCORPORATION)
0-21910 59-2716023
(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
CONTINUCARE CORPORATION
100 SOUTHEAST 2ND STREET, 36TH FLOOR
MIAMI, FLORIDA 33131
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (305) 350-7515
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Effective September 19, 1997, Continucare Corporation, a Florida
corporation (the "Registrant"), through a wholly-owned subsidiary, Continucare
Home Health of Broward, Inc., as assignee, acquired all of the issued and
outstanding capital stock of Maxicare, Inc., d/b/a/ Maxicare of Broward County,
Inc., a Delaware corporation ("Maxicare"). Maxicare is a Medicare certified home
health agency engaged in the business of providing home health services to
patients in Broward County, Florida. The aggregate purchase was $2.7 million.
The former shareholder of Maxicare is also entitled to receive additional
consideration, not to exceed $300,000, if certain targets are achieved during
the two-year period after the closing date. The source of the consideration paid
by the Registrant was as follows: (i) $2.5 million from the Registrant's credit
facility with First Union National Bank of Florida, and (ii) $200,000 from the
Registrant's working capital.
The foregoing summary is qualified in its entirety by a copy of the
Agreement attached hereto as an exhibit.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) & (b) It is currently impractical to provide financial statements,
pro forma or otherwise, required pursuant to Regulation S-K in connection with
the acquisition identified in Item 2 above. This Report will be amended within
60 days from the date this Report is filed to include such financial statement
information.
(c) Exhibits
2.1 Stock Purchase Agreement, dated as of August 13, 1997, by and
among Continucare Home Health Services, Inc., a wholly-owned subsidiary of
Continucare Corporation; Maxicare, Inc. d/b/a Maxicare of Broward County, Inc.
("Maxicare"); and the holders of Maxicare capital stock set forth therein.
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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.
CONTINUCARE CORPORATION
Date: October 3, 1997 By: /s/ Charles M. Fernandez
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Charles M. Fernandez
Chairman, Chief Executive Officer and President
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EXHIBIT INDEX
2.1 Stock Purchase Agreement, dated as of August 13, 1997, by and among
Continucare Home Health Services, Inc., a wholly-owned subsidiary of
Continucare Corporation; Maxicare, Inc. d/b/a Maxicare of Broward County,
Inc. ("Maxicare"); and the holders of Maxicare capital stock set forth
therein.
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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT, entered into as of August 13, 1997 (the
"Execution Date"), is by and among CONTINUCARE HOME HEALTH SERVICES, INC., a
Florida corporation and wholly owned subsidiary of Continucare Corporation (the
"Buyer"); MAXICARE, INC., d/b/a/ MAXICARE OF BROWARD COUNTY, INC., a Delaware
corporation (the "Company"); and, the holders of the Company's capital stock
listed on EXHIBIT A (collectively referred to as the "Stockholders" and
individually as a "Stockholder").
PRELIMINARY STATEMENTS
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1. The Stockholders own of record and beneficially all of the issued
and outstanding capital stock of the Company, consisting of two hundred (200)
shares of the Company's Common Stock, one dollar ($1.00) par value per share
(the shares are referred to in this Agreement as the "Company Shares").
2. The Stockholders desire to sell all of the Company Shares to Buyer,
and Buyer desires to acquire all of the Company Shares.
3. The Company is a Medicare certified Home Health Agency engaged in
the business of providing home health services to patients in need of such
services in Broward County, Florida.
NOW, THEREFORE, in order to consummate the purchase and sale of the
Company shares and in consideration of the mutual agreements contained in this
Agreement, the parties agree as follows:
AGREEMENT
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SECTION 1
SALE OF SHARES AND PURCHASE PRICE
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1.1 TRANSFER OF COMPANY SHARES. At the Closing, the Company shall
deliver or cause to be delivered to Buyer certificates representing all of the
Company Shares owned by Irving Carr, as listed on Exhibit A. Those stock
certificates shall be duly endorsed in blank for transfer or shall be presented
with stock powers duly executed in blank, with signature guarantees and other
documents which may be reasonably required by Buyer to effect a valid transfer
of the Company Shares, free and clear of any and all liens, encumbrances,
charges or claims. The Stockholders, by execution of this Agreement, appoint
Buyer as their attorney-in-fact to effectuate transfer of the Company Shares at
the Closing (as defined below).
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1.2 PURCHASE PRICE AND PAYMENT. In consideration of the sale by the
Company to Buyer of the Company Shares, in reliance upon the representations and
warranties of the Company and Stockholders contained in this Agreement and made
at the Closing and subject to the satisfaction of all of the conditions
contained in this Agreement, Buyer agrees that simultaneously with the execution
and delivery of this Agreement, it will deliver to the Stockholders the amount
specified in EXHIBIT A-1 by bank cashier check or by wire transfer of
immediately available funds (the "Closing Funds"). In addition to the Closing
Funds, the Stockholders shall also be entitled to the following:
a. Within ninety (90) days after the one year anniversary of the
Closing Date, Buyer shall to deliver to the Stockholders a report detailing the
number of patient visits of the Company. In the event Company maintains at least
eighty percent (80%) of the patient visits of _________, than Buyer shall pay
the Stockholders an additional amount of One Hundred Fifty Thousand Dollars
($150,000.00).
b. Within ninety (90) days after the two year anniversary of the
Closing Date, Buyer shall deliver to the Stockholders a report detailing the
number of patient visits of the Corporation. In the event Company maintains at
least eighty percent (80%) of the patient visits of _________, than Buyer shall
pay the Stockholders an additional amount of One Hundred Fifty Thousand Dollars
($150,000.00).
1.3 EXCLUDED ASSETS. "Excluded Assets" shall mean those assets which
are listed on SCHEDULE 1.3 attached hereto (the "Carr Assets");
1.4 TIME AND PLACE OF CLOSING. The closing of the purchase and sale
provided for in this Agreement (the "Closing") shall be held at the offices of
Buyer at 100 SE Second Street, 36th Floor, Miami, Florida, no later than thirty
days from the date all conditions are satisfied pursuant to Sections 7.1 and 7.2
of this Agreement, or at another place or an earlier or later date or time as
may be mutually agreed upon by the Company.
1.5 MEDICARE APPEALS. In the event that there is a Medicare Adjustment
(Medicare Adjustment shall mean an adjustment to any filed costs report, denial
of claims, or the reopening of any filed cost report, and subsequent adjustment
to such cost report), in connection with cost periods prior to Closing, the
Company shall pay all reimbursement costs associated with the Medicare Appeal
(Medicare Appeal shall mean an appeal of the Medicare Adjustments to either an
administrative or judicial body) as normal administrative costs and shall not
seek indemnification for the cost report disallowance against Seller until such
time as the Company has exhausted its administrative remedies and subsequent
judicial appeal rights.
1.6 FURTHER ASSURANCES. The Company, the Stockholders and Buyer from
time to time after the Closing, shall execute and deliver further instruments of
transfer and assignment and take all other actions as may be reasonably required
to more effectively transfer and assign to, and vest in Buyer the Company Shares
and all rights to the Company Shares, and to fully implement the provisions of
this Agreement.
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SECTION 2
REPRESENTATIONS AND WARRANTIES
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OF THE COMPANY AND STOCKHOLDERS
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2.1 MAKING OF REPRESENTATIONS AND WARRANTIES. As a material inducement
to Buyer to enter into this Agreement and consummate the contemplated
transactions, the Company and each of the Stockholders jointly and severally
make to Buyer the representations and warranties contained in this Section 2;
provided, however, that no Stockholder shall have any RIGHT of indemnity or
contribution from the Company with respect to any breach of representation or
warranty under this Agreement.
2.2 ORGANIZATION AND QUALIFICATIONS OF THE COMPANY. The Company is a
for profit corporation, duly organized, validly existing and in good standing
under the laws of Florida with full corporate power and authority to own or
lease its properties and to conduct its business in the manner and in the places
where those properties are owned or leased or that business is currently
conducted or proposed to be conducted. The copies of the Company's Articles of
Incorporation as amended to date, certified by Florida's Secretary of State, and
of the Company's by-laws, as amended to date, certified by the Company's
Secretary, and delivered to Buyer's counsel, are complete and correct, and no
amendments to them are pending. The Company is not in violation of any term of
its Articles of Incorporation or By-laws. The Company is not required to be
licensed or qualified to conduct its business or own its property in any other
jurisdiction.
2.3 CAPITAL STOCK OF THE COMPANY; BENEFICIAL OWNERSHIP.
a. The authorized capital stock of the Company consists of one
thousand (1,000) shares of Common Stock, one dollar ($1.00) par value per share,
of which two hundred (200) shares are duly and validly issued, outstanding,
fully paid and non-assessable. There are no outstanding options, warrants,
rights, commitments, preemptive rights or agreements of any kind for the
issuance or sale of, or outstanding securities convertible into, any additional
shares of capital stock of any class of the Company. None of the Company's
capital stock has been issued in violation of any federal or state law. Except
as described in SCHEDULE 2.3(A), there are no voting trusts, voting agreements,
proxies or other agreements, instruments or undertakings with respect to the
voting of the Company Shares to which the Company or any of the Stockholders is
a party.
b. Each of the Stockholders owns beneficially and of record the
Company Shares listed opposite that Stockholder's name on EXHIBIT A free and
clear of any liens, restrictions or encumbrances.
2.4 AUTHORITY OF THE COMPANY. The Company has full right, authority and
power to enter into this Agreement and each agreement, document and instrument
to be executed and delivered
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by the Company pursuant to this Agreement and to carry out the contemplated
transactions. The execution, delivery and performance by the Company of this
Agreement and each other agreement, document and instrument have been duly
authorized by all necessary action of the Company and no other action on the
part of the Company or the Stockholders is required. This Agreement and each
agreement, document and instrument executed and delivered by the Company
pursuant to this Agreement constitutes, or when executed and delivered will
constitute, valid and binding obligations of the Company enforceable in
accordance with their terms. The execution, delivery and performance by the
Company of this Agreement and each agreement, document and instrument:
a. does not and will not violate any provision of the Articles of
Incorporation or by-laws of the Company;
b. does not and will not violate any laws of the United States, or
any state or other jurisdiction applicable to the Company or require the Company
to obtain any approval, consent or waiver of, or make any filing with, any
person or entity (governmental or otherwise) that has not been obtained or made;
and
c. does not and will not result in a breach of, constitute a default
under, accelerate any obligation under, or give rise to a right of termination
of any indenture or loan or credit agreement or any other agreement, contract,
instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment,
injunction, decree, determination or arbitration award to which the Company is a
party or by which the property of the Company is bound or affected, or result in
the creation or imposition of any mortgage, pledge, lien, security interest or
other charge or encumbrance on any of the Company's assets or the Company
Shares, except as specifically identified on SCHEDULE 2.4(C).
2.5 REAL AND PERSONAL PROPERTY.
a. LEASED REAL PROPERTY. All of the real property leased by the
Company is identified on SCHEDULE 2.5(A) (referred to as the "Leased Real
Property").
i. STATUS OF LEASES. All leases of Leased Real Property are
identified on SCHEDULE 2.5(A), and true and complete copies of those leases have
been delivered to Buyer. Each of those leases has been duly authorized and
executed by the parties and is in full force and effect. The Company is not in
default under any of those leases, nor has any event occurred which, with notice
or the passage of time, or both, would give rise to a default. To the
Stockholders and Company's knowledge, the other party to each of the leases is
not in default under any of the leases and there is no event which, with notice
or the passage of time, or both, would give rise to a default.
ii. CONSENTS. Except as described in SCHEDULE 2.5(A)(II), no
consent or approval is required with respect to the transactions contemplated by
this Agreement from the
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other parties to any lease of Leased Real Property, or from any regulatory
authority, no filing with any regulatory authority is required in connection
therewith, and to the extent that any consents, approvals or filings are
required, the Company or the Stockholders will obtain or complete them before
the Closing.
iii. CONDITION OF LEASED REAL PROPERTY. Except as described in
SCHEDULE 2.5(A)(III), there are no material defects in the physical condition of
any land, buildings or improvements constituting part of the Leased Real
Property, including without limitation, structural elements, mechanical systems,
parking and loading areas, and all those buildings and improvements are in good
operating condition and repair, have been well maintained and are free from
infestation by rodents or insects. Access to the Leased Real Property is by a
public way or public street. To the best of the Company's and the Stockholders'
knowledge, all water, sewer, gas, electric, telephone, drainage and other
utilities required by law or necessary for the current or planned operation of
the Leased Real Property have been connected under valid permits and pursuant to
valid easements where required, and are sufficient to service the Leased Real
Property and are in good operating condition.
iv. COMPLIANCE WITH THE LAW. The Company has not received any
notice from any governmental authority of any violation of any law, ordinance,
regulation, license, permit or authorization issued with respect to any Leased
Real Property that has not been corrected and no violation exists which could
have an adverse affect on the operation or value of any Leased Real Property.
All improvements located on or constituting part of the Leased Real Property and
their use and operation by the Company were and are now in compliance in all
respects with all applicable laws, ordinances, regulations, licenses, permits
and authorizations expect as described in SCHEDULE 2.5(A)(IV). No approval or
consent to the transactions contemplated by this Agreement is required of any
governmental authority with jurisdiction over any aspect of the Leased Real
Property or its use or operations.
b. PERSONAL PROPERTY. A complete description of the machinery,
furniture, personalty and equipment of the Company is contained in SCHEDULE
2.5(B). Except as specifically disclosed in that Schedule or in the Base Balance
Sheet (as defined below), the Company has good and marketable title to all of
its personal property. None of the Company's personal property or assets is
subject to any mortgage, pledge, lien, conditional sale agreement, security
title, encumbrance or other charge except as specifically disclosed in that
Schedule or in the Base Balance Sheet. The Base Balance Sheet reflects all
personal property of the Company. Except as otherwise specified in SCHEDULE
2.5(B), all leasehold improvements, furnishings, machinery, personalty and
equipment of the Company are in good repair, have been well maintained, and
substantially comply with all applicable laws, ordinances and regulations, and
those furnishings, personalty, machinery and equipment are in good working
order. Neither the Company nor any of the Stockholders knows of any pending or
threatened change of any law, ordinance or regulation which could adversely
affect the Company, or any of its businesses.
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2.6 FINANCIAL STATEMENTS.
a. The Company has delivered to Buyer the following financial
statements, copies of which are attached as SCHEDULE 2.6: internally prepared,
unaudited balance sheet of the Company dated as of May 31, 1997 (the "Base
Balance Sheet") and statements of income, retained earnings and cash flows for
the period then ended. These financial statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") applied among
all periods covered thereby, are complete and correct in all material respects
and present fairly in all material respects the financial condition of the
Company at the dates of those statements and the results of its operations for
the periods covered thereby.
b. As of the date of the Base Balance Sheet, the Company had no
liabilities (which liabilities, when taken individually or in the aggregate,
were material) whether accrued, absolute, contingent, known or asserted and to
the best of the Company and Stockholders's knwoledge, unasserted or unknown
(including without limitation, liabilities as guarantor or otherwise with
respect to obligations of others, liabilities for taxes due or then accrued or
to become due, or contingent or potential liabilities relating to activities of
the Company or the conduct of its business prior to the date of the Base Balance
Sheet, regardless of whether claims had been asserted as of that date), except
liabilities stated or adequately reserved against on the Base Balance Sheet,.or
reflected in Schedules furnished to Buyer pursuant to this Agreement as of the
Execution Date.
c. As of the Execution Date and as of the date of the Closing, the
Company has not had and will not have any liabilities of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including without limitation, liabilities as guarantor or otherwise
with respect to obligations of others, or liabilities for taxes due or then
accrued or to become due or contingent or potential liabilities relating to
activities of the Company or the conduct of its business prior to Execution Date
or the date of the Closing, as the case may be, regardless of whether claims had
been asserted as of those dates), except liabilities: (i) stated or adequately
reserved against on the Base Balance Sheet or the notes to it; (ii) reflected in
Schedules furnished to Buyer under this Agreement on the Execution Date; or,
(iii) incurred after the date of the Base Balance Sheet in the ordinary course
of business of the Company consistent with the terms of this Agreement.
2.7 TAXES.
a. The Company has paid or caused to be paid all federal, state,
local, foreign, and other taxes, including without limitation, income taxes,
estimated taxes, alternative minimum taxes, excise taxes, sales taxes, use
taxes, value-added taxes, gross receipts taxes, franchise taxes, capital stock
taxes, employment and payroll-related taxes, withholding taxes, stamp taxes,
transfer taxes, windfall profit taxes, environmental taxes and property taxes,
whether or not measured in whole or in part by net income, and all deficiencies,
or other addition to tax, interest, fines and penalties owed by it
(collectively, "Taxes"), required to be paid by it through the Execution Date,
whether disputed or not.
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b. The Company has, in accordance with applicable law filed all
federal, state, local and foreign tax returns required to be filed by it through
the Execution Date, and all these returns correctly and accurately contain the
amount of any Taxes relating to the applicable period. A list of all federal,
state, local and foreign income tax returns filed with respect to the Company
for taxable periods ended on or after December 31, 1992 is provided in Schedule
2.7(B), and that Schedule indicates those returns that have been audited or
currently are the subject of an audit. For each taxable period of the Company
ended on or after December 31, 1992 the Company has delivered to Buyer correct
and complete copies of all federal, state, local and foreign income tax returns,
examination reports and statements of deficiencies assessed against or agreed to
by the Company.
c. Neither the Internal Revenue Service nor any other governmental
authority is now asserting or, to the knowledge of the Company or any
Stockholder, threatening to assert against the Company any deficiency or claim
for additional Taxes. No claim has ever been made by an authority in a
jurisdiction where the Company does not file reports and returns that the
Company is or may be subject to taxation by that jurisdiction. There are no
security interests on any of the assets of the Company that arose in connection
with any failure (or alleged failure) to pay any Taxes. The Company has never
entered into a closing agreement pursuant to Section 7121 of the Internal
Revenue Code of 1986, as amended (the "Code").
d. Except as described in SCHEDULE 2.7(D), there has not been any
audit of any tax return filed by the Company, no audit is in progress, and the
Company has not been notified by any tax authority that any audit is
contemplated or pending. Except as described in Schedule 2.7(D): (i) no
extension of time with respect to any date on which a tax return was or is to be
filed by the Company is in force; (ii) no waiver or agreement by the Company is
in force for the extension of time for the assessment or payment of any Taxes;
and, (iii) no agreement with any taxing authority is in force for an extension
of the statute of limitations for an audit.
e. The Company has never been (or has never had any liability for
unpaid Taxes because it once was) a member of an "affiliated group" (as defined
in Section 1504(a) of the Code). Except as described in Schedule 2.7(E), the
Company has never filed, and has never been required to file, a consolidated,
combined or unitary tax return with any other entity. Except as described in
SCHEDULE 2.7(E), the Company does not own and has never owned a direct or
indirect interest in any trust, partnership, corporation or other entity. Except
as described in SCHEDULE 2.7(E), the Company is not a party to any tax sharing
agreement.
f. For purposes of this Agreement, all references to Sections of the
Code shall include any predecessor provisions to those Sections and any similar
provisions of federal, state, local or foreign law.
2.8 COLLECTABILITY OF ACCOUNTS RECEIVABLE. All of the accounts
receivable of the Company shown or reflected on the Base Balance Sheet or
existing at the Execution Date (less the reserve for bad debts and contractual
allowances) are or will be at the Closing valid and
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enforceable claims, fully collectible and subject to no set off or counterclaim,
with the exception of the Medicare Program's right to set off against any
accounts receivable to recover any alleged or contingent overpayments. The
Company has no accounts or loans receivable from any person, firm or corporation
which is affiliated with the Company or from any director, officer or employee
of the Company, except as disclosed on SCHEDULE 2.8, and all accounts and loans
receivable from any of these persons, firms or corporations shall be paid in
cash prior to the Closing.
2.9 INTELLECTUAL PROPERTY.
a. Except as described in SCHEDULE 2.9(A), to the best of the
Company's knowledge, the Company has exclusive ownership of, or exclusive
license to use, all patent, copyright, trade secret, trademark, or other
proprietary rights (collectively, "Intellectual Property") used or to be used in
the business of the Company as presently conducted or contemplated. All of the
rights of the Company in the Intellectual Property are freely transferable.
There are no claims or demands of any other person pertaining to any. of the
Intellectual Property and no proceedings have been instituted, or are pending or
threatened, which challenge the rights of the Company. The Company has the right
to use, free and clear of claims or rights of other persons, all patient lists,
processes, computer software, systems, data compilations, research results and
other information required for or incident to its services or its business as
presently conducted or contemplated.
b. All patents, patent applications, trademarks, trademark
applications and registrations and registered copyrights which are owned by or
licensed to the Company or used or to be used by the Company in its business as
presently conducted or contemplated, and all other items of Intellectual
Property which are material to the business or operations of the Company, are
listed in SCHEDULE 2.9(B).
c. All licenses or other agreements under which the Company is
granted rights in Intellectual Property are listed in SCHEDULE 2.9(C). All these
licenses or other agreements are in full force and effect, there is no material
default by any party to those licenses or agreements, and, except as described
in SCHEDULE 2.9(C), all of the rights of the Company under those licenses and
agreements are freely assignable. To the knowledge of Company, the licensors
under these licenses and other agreements have and had all requisite power and
authority to grant the rights purported to be conferred thereby. True and
complete copies of all these licenses or other agreements, and any amendments to
them, have been provided to Buyer.
d. All licenses or other agreements under which the Company has
granted rights to others in Intellectual Property owned or licensed by the
Company are listed in SCHEDULE 2.9(D). All of these licenses or other agreements
are in full force and effect, there is no material default by any party to them,
and, except as described on SCHEDULE 2.9(D), all of the rights of Company under
those licenses and agreements are freely assignable. True and complete copies of
all licenses or other agreements, and any amendments to them, have been provided
to Buyer.
e. The Company has taken all steps required in accordance with sound
business
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practice to establish and preserve its ownership of all Intellectual Property
rights with respect to its services and technology.
f. The present and contemplated business, activities and products of
the Company do not infringe any Intellectual Property of any other person. No
proceeding charging the Company with infringement of any adversely held
Intellectual Property has been filed or is threatened to be filed. The Company
is not making unauthorized use of any confidential information or trade secrets
of any person, including without limitation, any former employer of any past or
present employee of Company. Except as described in SCHEDULE 2.9(F), neither the
Company nor, to the knowledge of the Company and the Stockholders, any of their
employees have any agreements or arrangements with any persons other than the
Company related to confidential information or trade secrets of those persons or
restricting any employee's ability to engage in business activities of any
nature.
2.10 CONTRACTS. Except for contracts, commitments, plans, agreements
and licenses described in SCHEDULE 2.10 (true and complete copies of which have
been delivered to Buyer), neither the Company, all of the physicians, nurses,
technicians and allied health care professionals employed or engaged by the
Company (those individuals shall be collectively, the "Health Care Providers")
nor any Stockholder is a party to or subject to:
a. any plan or contract providing for bonuses, pensions, options,
stock purchases, deferred compensation, retirement payments, profit sharing,
collective bargaining or the like, or any contract or agreement with any labor
union;
b. any employment contract or contract for services which requires
the payment of more than One Thousand Dollars ($1,000.00) annually or which is
not terminable within thirty (30) days by the Company without liability for any
penalty or severance payment;
c. any contract or agreement for the purchase of any service,
commodity, material or equipment, except as otherwise disclosed in another
schedule to this Agreement;
d. any other contracts or agreements creating any obligations of the
Company not specifically disclosed elsewhere under this Agreement;
e. any contract or agreement which by its terms does not terminate or
is not terminable without penalty by the Company or its successors within one
year after the Execution Date;
f. any contract containing covenants limiting the freedom of the
Company to compete in any line of business or with any person or entity;
g. any contract or agreement for the purchase of any fixed asset
whether or not that purchase is in the ordinary course of business;
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h. any license agreement (as licensor or licensee);
i. any indenture, mortgage, promissory note, loan agreement, guaranty
or other agreement or commitment for the borrowing of money which directly or
indirectly may affect the Company; or
j. any contract or agreement with any officer, employee, director or
stockholder of the Company or with any persons or organizations controlled by or
affiliated with any of them.
The Company is not in default under any contracts, commitments, plans,
agreements or licenses described in that Schedule nor has any knowledge of
conditions or facts which with notice or passage of time, or both, would
constitute a default.
2.11 LITIGATION, INVESTIGATIONS, ORDERS AND DECREES. Except as listed
on Schedule 2.11 or SCHEDULE 2.12, there are no actions, suits, claims,
governmental investigations or arbitration proceedings pending or, to the best
of the Company's knowledge, threatened against or affecting the Company, the
business, assets, prospects or financial condition of the Company or the
Stockholders that may have an adverse effect on the Company or any of the
Company's assets, and to the best of the Company's knowledge, there are no facts
or circumstances which are reasonably likely to create a basis for any of the
foregoing. Except as listed on Schedule 2.11, there are no outstanding orders,
decrees or stipulations issued by any local, state or federal judicial authority
in any proceeding to which the Company or any of the Stockholders are or were a
party which may have an adverse effect on any of them..
2.12 INSURANCE. The physical properties and assets of the Company are
insured to the extent disclosed in SCHEDULE 2.12 and all those insurance
policies and arrangements are disclosed in that Schedule. Those insurance
policies and arrangements are in full force and effect, all premiums with
respect to those policies and arrangements are currently paid, and the Company
is in compliance in all material respects with their terms. That insurance is
adequate and customary for the business engaged in by the Company and is
sufficient for compliance by the Company with all requirements of law and all
agreements and leases to which the Company is a party.
2.13 EQUITY INVESTMENTS. Except as set forth on SCHEDULE 2.13, neither
the Company nor any of the Stockholders own, directly or indirectly, of record
or beneficially, either directly or indirectly, any capital stock, other equity,
ownership or proprietary interest in any corporation, partnership, association,
trust, joint venture or other entity engaged in any business related to the
health care industry.
2.14 POWERS OF ATTORNEY. Neither the Company nor any Stockholder has
any outstanding power of attorney.
2.15 FINDER'S FEE. Except as provided in SCHEDULE 2.15, the Company has
not incurred or become liable for any broker's commission or finder's fee
relating to or in connection with the transactions contemplated by this
Agreement.
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2.16 LICENSES; PERMITS; COMPLIANCE. The Company possess all licenses
and other required governmental or official approvals, permits, consents and
authorizations (as listed on SCHEDULE 2.16 attached to this Agreement), the
failure of which to possess would, individually or in the aggregate, have a
material adverse effect on the business, financial condition, operations,
prospects or results of operations of the Company. The Company and the
Stockholders are in compliance with: (i) the terms of all contractual
obligations which directly or indirectly affect the Company; (ii) all laws,
ordinances, statutes and regulations where noncompliance could have an adverse
effect on the Company or its businesses, prospects or assets; and, (iii) all
judgments, orders, rulings or other decisions of any governmental or other
regulatory authority, court or arbitrator having jurisdiction over the
Stockholders or the Company. The Company has furnished to Buyer true and correct
copies of all correspondence from all governmental authorities asserting that
the Company or the Stockholders are not, was not or may not have been in
compliance with all applicable laws, rules, regulations, judgments, orders or
decrees.
2.17 TRANSACTIONS WITH INTERESTED PERSONS. Except as disclosed on
SCHEDULE 2.17, neither the Company nor any of its "Affiliates"(such term shall
hereinafter have the meaning set forth in Rule 405 promulgated by the SEC under
the Securities Act of 1933, as amended), nor the Stockholders nor any of the
Stockholders, Affiliates have any direct or indirect material interest or
familial or business relationship in any of the Stockholders, or the Company's
customers, patients, suppliers, vendors, payors or landlords. All of the
Company's rights with respect to the Assets are based upon and derived from arms
length transactions unrelated to any of their Affiliates and all of the Assumed
Obligations do not exceed the fair market value of the products, services or
rights being received in exchange toy the discharge of those obligations.
2.18 EMPLOYEE BENEFIT PROGRAMS.
SCHEDULE 2.18 to this Agreement sets forth a list of every Employee
Program (as defined below) that has been maintained (as that term is further
defined below) by the Company since its inception.
Each Employee Program which has been maintained by the Company and
which has at any time been intended to qualify under Section 401(a) or 501(c)(9)
of the Internal Revenue Code of 1986, as amended (the "Code"), has received a
favorable determination or approval letter from the IRS regarding its
qualification under that section and has, in fact, been qualified under the
applicable section of the Code from the effective date of that Employee Program
through and including the Closing (or, if earlier, the date that all of such
Employee Program's assets were distributed). No event or omission has occurred
which would cause any Employee Program to lose its Qualification under the
applicable Code section.
There has not been any failure of any party to comply with any laws
applicable with respect to the Employee Programs that have been maintained by
the Company. With respect to any Employee Program now or heretofore maintained
by the Company, there has occurred no "prohibited transaction," as defined in
Section 406 of the Employee Retirement Income Security
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Act of 1974, as amended ("ERISA"), or Section 4975 of the Code, or breach of any
duty under ERISA or other applicable law (including, without limitation, any
health care continuation requirements or any other tax law requirements, or
conditions to favorable tax treatment, applicable to such plan), which could
result, directly or indirectly (including without limitation through any
obligation of indemnification or contribution), in any taxes, penalties or other
liability to the Company or any Affiliate (as defined below). No litigation,
arbitration, or governmental administrative proceeding (or investigation) or
other proceeding (other than those relating to routine claims for benefits) is
pending or, to the best knowledge of the Company and the Stockholders,
threatened with respect to any Employee Program.
The Company has not incurred any liability under Title IV of ERISA
which has not be paid in full prior to the Closing. There has been no
"accumulated funding deficiency" (whether or not waived) with respect to any
Employee Program ever maintained by the Company and subject to Code Section 412
or ERISA Section 302. With respect to any Employee Program maintained by the
Company and subject to Title IV of ERISA, there has been no (nor will be any as
a result of the transaction contemplated by this Agreement) (i) "reportable
event," within the meaning of ERISA Section 4043, or the regulations thereunder
(for which notice the notice requirement is not waived under 29 C.F.R. Part
2615); or, (ii) event or condition which presents a material risk of plan
termination or any other event that may cause the Company to incur liability or
have a lien imposed on its assets under Title IV of ERISA. All payments and/or
contributions required to have been made (under the provisions of any agreements
or other governing documents or applicable law) with respect to all Employee
Programs ever maintained by the Company, for all periods prior to the Closing,
either have been made or have been accrued. No Employee Program maintained by
the Company and subject to Title IV of ERISA (other than a Multiemployer Plan)
has any "unfunded benefit liabilities" within the meaning of ERISA Section
4001(a)(18), as of the Closing Date. The Company has not ever maintained a
Multiemployer Plan. None of the Employee Programs ever maintained by the Company
has ever provided health care or any other non-pension benefits to any employees
after their employment was terminated (other than as required by part 6 of
subtitle B of title I of ERISA) or has ever promised to provide those post-
termination benefits.
The Company and each Employee Program that is a welfare plan subject to
Part 6 of Title I of ERISA and Code Section 4980B, as applicable, have complied
in all material respects with their respective requirements of such statutes in
each and every case. There is no provision in any of Company's Employee Programs
or in any other agreement that would preclude the Company from amending or
terminating any of its Employee Programs.
With respect to each Employee Program maintained by the Company within
the past five years, complete and correct copies of the following documents (if
applicable to that Employee Program) have previously been delivered to Buyer:
(i) all documents embodying or governing that Employee Program, and any funding
medium for the Employee Program (including, without limitation, trust
agreements) as they may have been amended to the date hereof; (ii) the most
recent IRS determination or approval letter with respect to such Employee
Program under Code Section 401 or 501(c)(9), and any applications for
determination or approval subsequently filed
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with the IRS; (iii) the three most recently filed IRS Forms 5500, with all
applicable schedules and accountants' opinions attached thereto; (iv) the
summary plan description for such Employee Program (or other descriptions of
such Employee Program provided to employees) and all modifications thereto; (v)
any insurance policy (including any fiduciary liability insurance policy)
related to such Employee Program; (vi) any documents evidencing any loan to an
Employee Program that is a leveraged employee stock ownership plan; and (vii)
with respect to any Multiemployer Plan, any participation or adoption agreement
relating to the Company's participation in or contributions under such plan.
Each Employee Program maintained by the Company as of the date of this
Agreement is subject to termination by the Board of Directors of the Company
without any further liability or obligation on the part of the Company to make
further contributions to any trust maintained under any such Employee Program
following such termination.
For purposes of this SECTION 2.18:
i. "Employee Program" means (A) all employee benefit plans within
the meaning of ERISA Section 3(3), including, but not limited to, multiple
employer welfare arrangements (within the meaning of ERISA Section 3(40)), plans
to which more than one unaffiliated employer contributes and employee benefit
plans (such as foreign or excess benefit plans) which are not subject to ERISA;
and (B) all stock option plans, bonus or incentive award plans, severance pay
policies or agreements, deferred compensation agreements, supplemental income
arrangements, vacation plans, and all other employee benefit plans, agreements,
and arrangements not described in (A) above. In the case of an Employee Program
funded through an organization described in Code Section 501(c)(9), each
reference to such Employee Program shall include a reference to such
organization;
ii. an entity "maintains" an Employee Program if such entity
sponsors, contributes to, or provides (or has promised to provide) benefits
under such Employee Program, or has any obligation (by agreement or under
applicable law) to contribute to or provide benefits under such Employee
Program, or if such Employee Program provides benefits to or otherwise covers
employees of such entity (or their spouses, dependents, or beneficiaries);
iii. An entity is an "Affiliate" of the Company for purposes of
this Section 2.18 if it would have ever been considered a single employer with
the Company under ERISA Section 4001(b) or part of the same "controlled group"
as the Company for purposes of ERISA Section 302(d)(8)(C); and,
iv. "Multiemployer Plan" means a (pension or non-pension)
employee benefit plan to which more than one employer contributes and which is
maintained pursuant to one or more collective bargaining agreements.
2.19 ENVIRONMENTAL MATTERS. Except as provided in SCHEDULE 2.19 and
except for biohazardous materials which have been disposed of in compliance with
all applicable laws and
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regulations, neither the Company nor any of the Stockholders has ever generated,
transported, used, stored, treated, disposed of, or managed any Hazardous Waste
(as defined below); and (i) no Hazardous Material (as defined below) has ever
been or is threatened to be spilled, released, or disposed of at any site
presently or formerly owned, operated, leased, or used by the Company or the
Stockholders, or has come to be located in the soil or groundwater at any such
site; (ii) no Hazardous Material has ever been transported from any site
presently or formerly owned, operated, leased, or used by the Company or the
Stockholders for treatment, storage, or disposal at any-other place; (iii)
neither the Company nor any of the Stockholders presently owns, operates,
leases, or uses, nor has either of them ever owned, operated, leased, or used
any site on which underground storage tanks are or were located; and, (iv) no
lien ever has been imposed by any governmental agency or any property, facility,
machinery, or equipment owned, operated, leased, or used by the Company or the
Stockholders in connection with the presence of any Hazardous Material.
Neither the Company nor any of the Stockholders has any liability
under, nor has the Company or any of the Stockholders ever violated in any
material respect, any Environmental Law (as defined below); and: (i) the Company
and the Stockholders and any property owned, operated, leased, or used by the
Company and any facilities and operations on that property, are presently in
compliance in all respects with all applicable Environmental Laws; (ii) neither
the Company nor any of the Stockholders has ever entered into or been subject to
any judgment, consent, decree, compliance order, or administrative order with
respect to any environmental or health and safety matter or received any request
for information, notice, demand letter, administrative inquiry, or formal or
informal compliant or claim with respect to any environmental or health and
safety matter or the enforcement of any Environmental Law; and, (iii) the
Company has no reason to believe that any of the items enumerated in clause (ii)
of this paragraph will be forthcoming.
No site owned, operated, leased, or used by the Company contains any
asbestos or asbestos-containing material, any polychlorinated biphenyls (PCBS)
or equipment containing PCBS, or any urea formaldehyde foam insulation.
The Company and the Stockholders have provided to Buyer copies of all
documents, records, and information available to the Company or the Stockholders
concerning any environmental or health or safety matter relevant to the Company
or the Stockholders, whether generated by others or by the Company, including,
without limitation, environmental audits, environmental risk assessments, site
assessments, documentation regarding off-site disposal of Hazardous Materials,
spill control is plans, and reports, correspondence, permits, licenses,
approvals, consents, and other authorizations related to environmental or health
or safety matters issued by any governmental agency.
For purposes of this Section 2.19: (i) "Hazardous Material" shall mean
and include any hazardous material, hazardous substance, petroleum product, oil,
toxic substance, pollutant, or contaminant, as defined or regulated under any
Environmental Law, or any other substance which may pose a threat to the
environmental or to human health or safety, including without limitation,
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bio-hazardous materials; (ii) "Hazardous Waste" shall mean and include any
hazardous waste as defined or regulated under any Environmental Law; (iii)
"Environmental Law" shall mean any environmental or health and safety-related
law, regulation, rule, ordinance, or by-law at the foreign, federal, state, or
local level, whether existing as of the date of this Agreement, previously
enforced, or subsequently enacted; and (iv) the Company shall mean and include
the Company, its respective predecessors and all other entities for whose
conduct the Company is or may be held responsible under any Environmental Law.
2.20 LIST OF DIRECTORS AND OFFICERS. SCHEDULE 2.20 contains a true and
complete list of all current directors and officers of the Company. In addition,
SCHEDULE 2.20 contains a list of all managers, employees and consultants of the
Company who, individually, have received or are scheduled to receive
compensation from the Company for the period ending December 31, 1995. In each
case that Schedule shall include the current job title and aggregate annual
compensation of each individual.
2.21 DISCLOSURE; ACCURACY OF DOCUMENTS AND EXHIBITS. The
representations, warranties and statements contained in this Agreement and in
the certificates, exhibits and schedules delivered by the Company pursuant to
this Agreement to Buyer do not contain any untrue statement of a material fact,
and, when taken together, do not omit to state a material fact required to be
stated therein or necessary in order to make those representations, warranties
or statements not misleading in light of the circumstances under which they were
made. There are no facts known to the Company or any Stockholder which presently
or may in the future have a material adverse affect on the business, properties,
prospects, operations or condition of the Company which have not been
specifically disclosed in this Agreement or in a Schedule furnished with this
Agreement, other than general economic conditions affecting the health care
industry.
All contracts, instruments, agreements and other documents delivered by
the Company and the Stockholders to Buyer or its agents for Buyer's or its
agents, review in connection with this Agreement and the contemplated
transactions, including articles of incorporation, by-laws, corporate minutes,
stock record books and tax returns, are true, correct and complete copies of all
those contracts, instruments, agreements and other documents. All Exhibits and
Schedules to this Agreement are true, correct and complete as of the Closing.
2.22 NON-FOREIGN STATUS. The Company is not a "foreign person" within
the meaning of Section 1445 of the Code and Treasury Regulations Section
1.1445-2.
2.23 EMPLOYEES; LABOR MATTERS; REGULATORY COMPLIANCE The Company
employs the Stockholders and a total of _______ (_) full-time employees and
_______ (___) part-time employee and generally enjoys good employer-employee
relationships. The Company is not delinquent in payments to any of its employees
for any wages, salaries, commissions, bonuses or other direct compensation for
any services performed for it through the Execution Date or amounts required to
be reimbursed to those employees. Upon termination of the employment of any of
those employees, neither the Company, nor Buyer will by reason of the
transactions contemplated under this Agreement or anything done prior to the
Closing be liable to any of those
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employees for so-called "severance pay" or any other payments, except as
described in SCHEDULE 2.23. The Company has no policy, practice, plan or program
of paying severance pay or any form of severance compensation in connection with
the termination of employment, except as described in that Schedule. The Company
is in compliance with all applicable laws and regulations including, without
limitation, labor laws, employment laws, fair employment practice laws,
occupational health and safety laws, disabilities laws, sexual harassment laws,
work place safety and health laws, terms and conditions of employment and wage
and hours laws and environmental laws. There are no charges of employment
discrimination or unfair labor practices, nor are there any strikes, slowdowns,
stoppages of work, or any other concerted interference with normal operations
which are existing, pending or threatened against or involving the Company. No
question concerning labor representation exists respecting any employees of the
Company. There are no grievances, complaints or charges that have been filed
against the Company under any dispute resolution procedure (including, but not
limited to, any proceedings under any dispute resolution procedure under any
collective bargaining agreement) that might have an adverse effect on the
Company or the conduct of its business, and there is no arbitration or similar
proceeding pending and no claim therefor has been asserted. No collective
bargaining agreement is in effect or is currently being or is about to be
negotiated by the Company. The Company has not received any information
indicating that any of its employment policies or practices is currently being
audited or investigated by any federal, state or local government agency. The
Company is, and at all times since November 6, 1986 has been, in compliance with
the requirements of the Immigration Reform Control Act of 1986.
2.24 PROVIDER AGREEMENTS; SUPPLIERS; CHANGES. SCHEDULE 2.24 sets forth
any third party payor arrangement or agreement or Provider Agreement which
accounts for more than five percent (5%) of the collections of the Company for
the twelve months ended December 31, 1996 (collectively, the "TPAs"). The
relationships of the Company with its TPAs are good commercial working
relationships. None of the TPAs has canceled, materially modified, or otherwise
terminated its relationship with the Company, or has during the last twelve
months decreased materially its use of the services of the Company, nor to the
knowledge of Company, do any TPAs have any plan or intention to do any of the
foregoing. Further, the Company has not received notice that any health plan,
insurance company, employer or any other TPA which has done business with the
Company since January 1, 1997 intends to terminate, limit or restrict its
relationship with the Company.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
----------------------------------------------
As a material inducement to Buyer to enter into this Agreement and
consummate the contemplated transactions, each Stockholder jointly and severally
makes to Buyer each of the representations and warranties in this Section 3 with
respect to that Stockholder. No Stockholder shall have any right of indemnity or
contribution from the Company with respect to the breach of any representation
or warranty under this Agreement.
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3.1 COMPANY SHARES. Each Stockholder owns of record and beneficially
the number of the Company Shares set forth opposite that Stockholder's name in
Exhibit A. Those Company Shares are, and when delivered by those Stockholders to
Buyer pursuant to this Agreement will be, duly authorized, validly issued, fully
paid, non-assessable and free and clear of any and all liens, encumbrances,
charges or claims, under Article 8 of the Florida Uniform Commercial Code or
otherwise.
3.2 AUTHORITY. Each Stockholder has full right, authority, power and
capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of that Stockholder
pursuant to this Agreement and to carry out the contemplated transactions. This
Agreement and each agreement, document and instrument executed and delivered by
each Stockholder pursuant to this Agreement constitutes a valid and binding
obligation of that Stockholder, enforceable in accordance with their respective
terms, each Stockholder has full power and authority to transfer, sell and
deliver the Company Shares to Buyer pursuant to this Agreement. The execution,
delivery and performance of this Agreement and each agreement, document and
instrument:
a. does not and will not violate any laws of the United States or any
state or other jurisdiction applicable to that Stockholder, or require any
Stockholder to obtain any approval, consent or waiver from, or make any filing
with, any person or entity (governmental or otherwise) that has not been
obtained or made; and
b. does not and will not result in a breach of, constitute a default
under, accelerate any obligation under or give rise to a right of termination
of, any indenture or loan or credit agreement or any other agreement, contract,
instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment,
injunction, decree, determination or arbitration award to which a Stockholder is
a party or by which the property of a Stockholder is bound or affected, or
result in the creation or imposition of any mortgage, pledge, lien, security
interest or other charge or encumbrance on any assets of the Company or on
Company Shares owned by a Stockholder.
3.3 FINDER'S FEE. Except as provided in SCHEDULE 3.3, no Stockholder
has incurred or become liable for any broker's commission or finder's fee
relating to or in connection with the transactions contemplated by this
Agreement.
3.4 AGREEMENTS. Each Stockholder who is employed by the Company is not
a party to any non-competition, trade secret or confidentiality agreement with
any party other than the Company. There are no agreements or arrangements not
contained in this Agreement or disclosed in a Schedule, to which any Stockholder
is a party relating to the business of the Company or to any Stockholder's
rights and obligations as a stockholder, director or officer of the Company. No
Stockholder owns, directly or indirectly, on an individual or joint basis, any
material interest in, or serve as an officer or director of any customer,
competitor or supplier of the Company, or any organization which has a contract
or arrangement with the Company. No Stockholder has at any time transferred any
of the stock of the Company held by or for that holder to any employee of the
Company, which transfer constituted or could be viewed as
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compensation for services rendered to the Company by that employee. The
execution, delivery and performance of this Agreement will not violate or result
in a default or acceleration of any obligation under any contract, agreement,
indenture or other instrument involving the Company to which any Stockholder is
a party.
SECTION 4
COVENANTS OF THE COMPANY AND THE STOCKHOLDERS
---------------------------------------------
4.1 MAKING OF COVENANTS AND AGREEMENTS. The Company and the
Stockholders jointly and severally hereby make the covenants and agreements in
this Section 4 and the Stockholders agree to cause the Company to comply with
those agreements and covenants. No Stockholder shall have any right of indemnity
or contribution from the Company with respect to the breach of any covenant or
agreement under this Agreement.
4.2 CONDUCT OF BUSINESS. Between the date of this Agreement and the
Closing Date, the Company will:
a. conduct its business only in the ordinary course and refrain from
changing or introducing any method of management or operations except in the
ordinary course of business and consistent with prior practices;
b. refrain from making any purchase, sale or disposition of any asset
or property other than in the ordinary course of business, from purchasing any
capital asset costing more than Twenty Five Thousand Dollars ($25,000.00) and
from mortgaging, pledging, subjecting to a lien or otherwise encumbering any of
its properties or assets;
c. refrain from incurring any contingent liability as a guarantor or
otherwise with respect to the obligations of others, and from incurring any
other contingent or fixed obligations or liabilities, except in the ordiany
course of business;
d. refrain from making any change or incurring any obligation to make
a change in its Articles of Incorporation (except as provided in Section 4),
by-laws or authorized or issued capital stock;
e. refrain from declaring, setting aside or paying any dividend,
making any other distribution in respect of its capital stock or making any
direct or indirect redemption, purchase or other acquisition of its stock;
f. refrain from making any change in the compensation payable or to
become payable to any of its officers, employees, agents or independent
contractors, other than in the ordinary course of business;
g. refrain from prepaying any loans (if any) from its stockholders,
officers or
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directors or making any change in its borrowing arrangements;
h. use its best efforts to prevent any change with respect to its
management and supervisory personnel and banking arrangements;
i. use its best efforts to keep intact its business organization, to
keep available its present officers and employees and to preserve the goodwill
of all suppliers, customers, independent contractors and others having business
relations with it;
j. have in effect and maintain at all times all insurance of the
kind, in the amount and with the insurers listed in SCHEDULE 2.13 or equivalent
insurance with any substitute insurers approved in writing by Buyer;
k. furnish Buyer with unaudited monthly balance sheets and statements
of income and retained earnings and cash flows of the Company on a consolidated
and consolidating basis within ten (10) days after each month end for each month
ending more than ten (10) days before the Closing;
l. permit Buyer and its authorized representatives to have full
access to all of its properties, assets, records, tax returns, contracts and
documents and furnish to Buyer or its authorized representatives all financial
and other information with respect to its business or properties as Buyer may
from time to time reasonably request; and
4.3 AUTHORIZATION FROM OTHERS. Prior to the Closing Date, the
Stockholders and the Company will obtain all authorizations, consents and
permits of others required to permit the consummation by the Stockholders and
the Company of the transactions contemplated by this Agreement.
4.4 NOTICE OF DEFAULT. Promptly upon the occurrence of, or promptly
upon the Company or a Stockholder becoming aware of the impending or threatened
occurrence of, any event which would cause or constitute a breach or default, or
would have caused or constituted a breach or default had that event occurred or
been known to the Company or that Stockholder prior to the Execution Date, of
any of the representations, warranties or covenants of the Company or the
Stockholders contained in or referred to in this Agreement or in any Schedule or
Exhibit referred to in this Agreement, the Company or the Stockholders shall
give detailed written notice to Buyer and the Company and the Stockholders shall
use their best efforts to prevent or promptly remedy the same.
4.5 CONSUMMATION OF AGREEMENT. The Company and each of the Stockholders
shall use their best efforts to perform and fulfill all conditions and
obligations on their parts to be performed and fulfilled under this Agreement,
to the end that the transactions contemplated by this Agreement shall be fully
carried out. To this end the Company will obtain prior to the Closing all
necessary authorizations or approvals of its stockholders and Board of
Directors.
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4.6 COOPERATION OF THE COMPANY AND STOCKHOLDERS. The Company and each
of the Stockholders shall cooperate with all reasonable requests of Buyer and
Buyer's counsel in connection with the consummation of the contemplated
transactions.
4.7 RESTRICTIVE COVENANTS. The Stockholders recognize that to assure
the Buyer that it will realize the value inherent in the transactions
contemplated in connection with this Agreement (including, but not limited to,
the acquisition of the Company's business on a "going concern" basis), it is
necessary for the Stockholders to enter into this Agreement. The Stockholders
also acknowledge that the terms of this Agreement are inherently reasonable in
all respects. Accordingly, each of the Stockholders agrees with the Buyer that
for a five-year period following the Closing Date anywhere within Dade, Broward
or Palm Beach County, Florida ("Restricted Area"); either on their own behalf or
as a principal, partner, stockholder, officer, employee, agent, consultant,
independent contractor, director or trustee of any person, partnership, entity,
firm or corporation or otherwise:
a. except in their capacity as employees of the Buyer, own, manage,
operate, control or otherwise engage an a Competing Business, or receive any
compensation in any capacity from any Competing Business. A Competing Business
shall mean any business which is competitive with the Company;
b. other than as a patient himself or as the Buyer directs, have any
business relationship, in any capacity whatsoever with any home health care
agency in the Restricted Area;
c. attempt to solicit or solicit the patients or facilities serviced
by the Buyer to terminate, curtail or restrict their relationship with the Buyer
or attempt to provide or provide those patients or facilities with medical
services previously furnished to them by any of the Stockholders while employed
by the Buyer during the Term of their Employment Agreements and any Renewal
Terms;
d. otherwise divert or attempt to divert from the Buyer any business
or business opportunity whatsoever; or,
e. attempt to solicit or solicit any person employed or contracted by
the Buyer, or any of their affiliates, to leave their employment or not fulfill
their contractual responsibility, whether or not the employment or contracting
is full-time or temporary, pursuant to a written or oral agreement, or for a
determined period or at will.
4.8 RESTRICTIVE COVENANT REMEDIES. Each of the Stockholders acknowledge
that: (i) a breach by the Company or any of the Stockholders of the provisions
of Section 4.7 would cause the Buyer irreparable harm; and, (ii) monetary
damages in an action at law would not provide an adequate remedy in the event of
a breach. Accordingly, the Stockholders, jointly and severally, agree that, in
addition to any other remedies (legal, equitable or otherwise) available to the
Buyer, Buyer may seek and obtain injunctive relief against the breach or
threatened breach of the provisions of Section 4.7 (without the necessity of any
bond or other security being posted) as
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well as all other rights and remedies available at law and equity including,
without limitation, the right to be indemnified by the Stockholders for all
claims, damages, actions, suits whatsoever for a breach of Section 4.7 and if
the Buyer prevails in that action, its reasonable attorneys' fees, expenses and
costs incurred in enforcing any provisions of Section 4.7 at pretrial, trial and
appellate levels. Nothing contained in this Section 4.8 shall be construed as
prohibiting the Buyer and all other injured parties from pursuing all other
remedies available to them for a breach or threatened breach of the provisions
of Section 4.7. The Stockholders further acknowledge and agree that the
covenants contained in this Article are necessary for the protection of the
Buyer's legitimate business and professional duties, ethical obligations and
interests, and are reasonable in scope and content. In the event of any breach
or violation by the Stockholders of any of the provisions of Section 4.7, the
running of such five-year period (but not the Company's and any of the
Stockholders, obligations thereunder) shall be tolled during the continuation of
any breach or violation.
4.9 NO SOLICITATION OF OTHER OFFERS. Neither the Company, the
Stockholders, nor any of their representatives will, directly or indirectly,
solicit, encourage, assist, initiate discussions or engage in negotiations with,
provide any information to, or enter into any agreement or transaction with, any
person, other than Buyer, relating to the possible acquisition of the Company
Shares, the Company, or any of its assets.
4.10 CONFIDENTIALITY. The Company and the Stockholders agree that,
unless and until the Closing has been consummated, each of the Company, the
Stockholders and their officers, directors, agents and representatives will hold
in strict confidence, and will not use, any confidential or proprietary data or
information obtained from Buyer with respect to its business or financial
condition except for the purpose of evaluating, negotiating and completing the
transaction contemplated hereby. Information generally known in Buyer's industry
or which has been disclosed to the Company, or the Stockholders by third parties
which have a right to do so shall not be deemed confidential or proprietary
information for purposes of this agreement. If the transaction contemplated by
this Agreement is not consummated, the Company, and the Stockholders will return
to Buyer (or certify that they have destroyed) all copies of data and
information, including but not limited to financial information, customer lists,
business and corporate records, worksheets, test reports, tax returns, lists
memoranda, and other documents prepared by or made available to the Company or
the Stockholders in connection with the transaction.
4.11 TAX RETURNS. The Company and the Stockholders shall cooperate with
Buyer to permit the Company in accordance with applicable law to promptly
prepare and file on or before the due date or any extension of all federal,
state and local tax returns required to be filed by the Company with respect to
taxable periods ending on or before the Closing.
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SECTION 5
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
5.1 MAKING OF REPRESENTATIONS AND WARRANTIES. As a material inducement
to the Company and the Stockholders to enter into this Agreement and consummate
the contemplated transactions, Buyer hereby makes the representations and
warranties to the Company and the Stockholders contained in this Section 5.
5.2 ORGANIZATION OF BUYER. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Florida with full
corporate power to own or lease its properties and to conduct its business in
the manner and in the places where those properties are owned or leased or that
business is conducted by it.
5.3 AUTHORITY OF BUYER. Buyer has full right, authority and power to
enter into this Agreement, and each agreement, document and instrument to be
executed and delivered by Buyer pursuant to this Agreement and to carry out the
contemplated transactions. The execution, delivery and performance by Buyer of
this Agreement, and each other agreement, document and instrument have been duly
authorized by all necessary corporate action of Buyer and no other action on the
part of Buyer is required in connection therewith. This Agreement, and each
other agreement, document and instrument executed and delivered by Buyer
pursuant to this Agreement constitute, or when executed and delivered will
constitute, valid and binding obligations of Buyer enforceable in accordance
with their terms. The execution, delivery and performance by Buyer of this
Agreement, and each agreement, document and instrument:
a. does not and will not violate any provision of the Articles of
incorporation or by-laws of Buyer;
b. does not and will not violate any laws of the United States or of
any state or any other jurisdiction applicable to Buyer or require Buyer to
obtain any approval, consent or waiver of, or make any filing with, any person
or entity (governmental or otherwise) which has not been obtained or made; and,
c. does not and will not result in a breach of, constitute a default
under, accelerate any obligation under, or give rise to a right of termination
of any indenture, loan or credit agreement, or other agreement mortgage, lease,
permit, order, judgment or decree to which Buyer is a party and which is
material to the business and financial condition of Buyer and its parent and
affiliated organizations on a consolidated basis.
5.4 LITIGATION. There is no litigation pending or, to its knowledge,
threatened against Buyer which would prevent or hinder the consummation of the
transactions contemplated by this Agreement.
5.5 FINDER'S FEE. Buyer has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
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SECTION 6
COVENANTS OF BUYER
------------------
6.1 MAKING OF COVENANTS AND AGREEMENT. Buyer hereby makes the covenants
and agreements in this Section 6.
6.2 CONFIDENTIALITY. Buyer agrees that, unless and until the Closing
has been consummated, Buyer and its officers, directors, agents and
representatives will hold in strict confidence, and will not use any
confidential or proprietary data or information obtained from the Company or the
Stockholders with respect to the business or financial condition of the Company
except for the purpose of evaluating, negotiating and completing the transaction
contemplated hereby. Information generally known in the industries of the
Company or which has been disclosed to Buyer by third parties which have a right
to do so shall not be deemed confidential or proprietary information for
purposes of this agreement. If the transaction contemplated by this Agreement is
not consummated, Buyer will return to the Company (or certify that it has
destroyed) all copies of data and information, including but not limited to
financial information, Customer lists, business and corporate records,
worksheets, test reports, tax returns, lists, memoranda, and other documents
prepared by or made available to Buyer in connection with the transaction.
6.3 CONSUMMATION OF AGREEMENT. Buyer shall use its best efforts to
perform and fulfill all conditions and obligations on its part to be performed
and fulfilled under this agreement, to the end that the transactions
contemplated by this agreement shall be fully carried out. To this end, Buyer
will obtain prior to the Closing all necessary authorizations or approvals of
its Board of Directors.
6.4 EMPLOYEE BENEFIT PLAN. Buyer agrees, if permissible under
applicable laws, to continue the Company's Employee Benefit Plan (listed on
Schedule 2.8) at the level currently maintained by the Company. In the event
that Buyer is prohibited under applicable laws to continue the current Employee
Benefit Plan, Buyer shall pay to the Company's employees, for the fiscal year
ended May 31, 1998 only, the cash value of the difference between the Company's
current Employee Benefit Plan and any subsequest employee benefit plan
established by Buyer as additional salary for such fiscal year.
SECTION 7
CONDITIONS FOR CLOSING AND
PROCEDURE FOR CLOSING
--------------------------
7.1 CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligation of Buyer to
consummate this Agreement and the contemplated transactions are subject to the
fulfillment, prior to or at the Closing, of the following conditions precedent:
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<PAGE> 24
a. REPRESENTATIONS; WARRANTIES; COVENANTS. Each of the
representations and warranties of the Company and the Stockholders contained in
this Agreement shall be true and correct as of the date of this Agreement and as
of the Closing Date as though made on and as of the Closing; and the Company and
each of the Stockholders shall, on or before the Closing, have performed all of
their obligations under this Agreement which by the terms are to be performed on
or before the Closing.
b. NO MATERIAL CHANGE. There shall have been no material adverse
change in the financial condition, prospects, properties, assets, liabilities,
business or operations of the Company since the Execution Date, whether or not
in the ordinary course of business.
c. APPROVAL OF BUYER'S COUNSEL. All actions, proceedings, instruments
and documents required to carry out this Agreement and the contemplated
transactions and all related legal matters contemplated in this Agreement shall
have been approved by counsel for Buyer that counsel shall have received on
behalf of Buyer all other certificates, opinions, and documents in form
satisfactory to counsel, as Buyer may reasonably require from the Company and
the Stockholders to evidence compliance with the terms and conditions of this
Agreement as of the Closing and the correctness as of the Closing of the
representations and warranties of the Stockholders and the Company and the
fulfillment of their respective covenants.
d. NO LITIGATION. There shall have been no determination by Buyer,
acting in good faith, that the consummation of the transactions contemplated by
this Agreement has become inadvisable or impracticable by reason of the
institution or threat by any person or any federal, state or other governmental
authority of litigation, proceedings or other action against Buyer, the Company
or Stockholder or any material adverse change in the laws or regulations
applicable to the Company.
e. CONSENTS. The Company or the Stockholders shall have made all
filings with and notifications of governmental authorities, regulatory agencies
and other entities required to be made by the Company or the Stockholders in
connection with the execution and delivery of this Agreement, the performance of
the contemplated transactions and the continued operation of the business of the
Company by Buyer subsequent to the Closing; and the Company, the Stockholders
and Buyer shall have received all authorizations, waivers, consents and permits,
in form and substance reasonably satisfactory to Buyer, from all third parties,
including, without limitation, applicable governmental authorities, regulatory
agencies, lessors, lenders and contract parties, required to permit the
continuation of the business of the Company and the consummation of the
transactions contemplated by this Agreement, and to avoid a breach, default,
termination, acceleration or modification of any material indenture, loan or
credit agreement or any other material agreement, contract, instrument,
mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction,
decree, determination or arbitration award as a result of, or in connection
with, the execution and performance of this Agreement.
f. DUE DILIGENCE. In the event that Buyer reasonably determines, in
its sole and absolute discretion, that it would not be in the Buyer's best
interest to consummate the transactions contemplated by this Agreement, than
this Agreement shall be null and void and no party to this Agreement shall not
have any liability to any other party to this Agreement.
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<PAGE> 25
g. FUNDING OF PENSION. All pension benefits required to be funded for
all periods prior to the Closing date shall have been funded by the Company.
7.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDERS. The
obligation of the Company and the Stockholders to consummate this Agreement and
the contemplated transactions is subject to the fulfillment, prior to or at the
Closing, of the following conditions precedent:
a. REPRESENTATIONS; WARRANTIES; COVENANTS. Each of the
representations and warranties of Buyer contained in Section 5 shall be true and
correct in all material respects as though made on and as of the Closing and
Buyer shall, on or before the Closing, have performed all of its obligations
under this Agreement which by the terms are to be performed on or before the
Closing.
b. APPROVAL OF THE COMPANY'S COUNSEL. All actions, proceedings,
instruments and documents required to carry out this Agreement and the
contemplated transactions and all related legal matters contemplated by this
agreement shall have been approved by MacKelvie & Associates, P.C., in their
capacity as counsel for the Company and the Stockholders, and that counsel shall
have received on behalf of the Company and the Stockholders all other
certificates, opinions and documents in form satisfactory to that counsel as the
Company may reasonably require from Buyer to evidence compliance with the terms
and conditions of this Agreement as of the Closing and the correctness as of the
Closing of the representations and warranties of Buyer and the fulfillment of
its covenants.
c. NO LITIGATION. There shall have been no determination by the
Company, acting in good faith, that the consummation of the transactions
contemplated by this Agreement has become inadvisable or impracticable by reason
of the institution or threat by any person or any federal, state or other
governmental authority of material litigation, proceedings or other action
against Buyer, the Company, or any Stockholder.
7.3 PROCEDURE AT THE CLOSING. At the Closing, the parties agree to take
the following steps in the order listed below (provided, however, that upon
their completion all of these steps shall be deemed to have occurred
simultaneously):
a. legal counsel for the Company and the Stockholders shall deliver a
legal opinion to the Buyer in substantially the form of EXHIBIT C attached to
this Agreement;
b. legal counsel for the Buyer shall deliver a legal opinion to the
Company and the Stockholders in substantially the form of EXHIBIT D attached to
this Agreement;
c. the Company shall execute and deliver resolutions adopted by the
board of directors of the Company approving the transactions contemplated by
this Agreement, in substantially the form of EXHIBIT E attached to this
Agreement, certified by the corporate secretary of the Company;
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<PAGE> 26
d. the Buyer shall execute and deliver resolutions adopted by the
board of directors of the Buyer approving the transactions contemplated by this
Agreement, in substantially the form of EXHIBIT F attached to this Agreement,
certified by the corporate secretary of the Buyer;
e. the Company shall deliver to the Buyer a Certificate of the
Company's President, in substantially the form of EXHIBIT G attached to this
Agreement, dated as of the Closing to the effect that the statements contained
in Sections 7.1(a) and (b) are true and correct;
f. the Buyer shall deliver to the Company a Certificate of the
Buyer's President, in substantially the form of EXHIBIT H attached to this
Agreement, dated as of the Closing Date to the effect that the statements
contained in Section 7.2(a) are true and correct;
g. the Buyer shall deliver the Closing Funds to the Company;
h. each of the Stockholders shall execute and deliver to the Buyer
Employment Agreements, in substantially the form of EXHIBIT I attached to this
Agreement;
i. the Company and each of the Stockholders shall execute and deliver
to the Buyer general releases of all claims which any of them may have against
the Company in the form of EXHIBIT J attached to this Agreement;
j. the Buyer shall deliver to the Company a Certificate of Good
Standing issued by the Secretary of State of Florida in the form of EXHIBIT K
attached to this Agreement; and,
k. the Company shall deliver to the Buyer a Certificate of Good
Standing issued by the Secretary of State of Florida in the form of EXHIBIT L
attached to this Agreement.
SECTION 8
RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING
--------------------------------------------
8.1 SURVIVAL OF WARRANTIES. Each of the representations, warranties,
agreements, covenants and obligations in this Agreement or in any schedule,
exhibit, certificate or financial statement delivered by any party to the other
party incident to the contemplated transactions are material, shall be deemed to
have been relied upon by the other party and shall survive the Closing, for a
period not to exceed three (3) years, regardless of any investigation and shall
not merge in the performance of any obligation by either party to this
Agreement.
8.2 AUDIT FOR THE PERIOD MAY 31, 1997. Within seventy five (75) days
after the Closing Date, the Stockholders shall cause Oliver Collins, Jr.,
certified public accountant, to deliver to Buyer a balance sheet of the Company
dated as of May 31, 1997 and statements of income, retained earnings and cash
flows for the fiscal year then ended, which have been audited by Oliver Collins,
Jr. These financial statements will be prepared in accordance with generally
accepted accounting principles ("GAAP"), will be complete and correct in all
material respects and present fairly in all material respects the financial
condition of the Company at May 31, 1997.
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SECTION 9
INDEMNIFICATION
---------------
9.1 INDEMNIFICATION BY THE STOCKHOLDERS. The Stockholders jointly and
severally agree subsequent to the Closing, for a period of three (3) years from
the Closing Date, to indemnify and hold the Company, Buyer and its subsidiaries
and affiliates and persons serving as officers, directors, partners or employees
of the Company or Buyer (individually a "Buyer Indemnified Party" and
collectively the "Buyer Indemnified Parties") harmless from and against any
damages, liabilities, losses, taxes, fines, penalties, costs, and expenses
(including, without limitation, reasonable fees of counsel) of any kind or
nature whatsoever of any kind or nature arising out of the business prior to
Closing (whether or not arising out of third-party claims and including all
amounts paid in investigation, defense or settlement of the foregoing) which may
be sustained or suffered by any of them arising out of or based upon any of the
following matters:
a. fraud, intentional misrepresentation or a deliberate or wilful
breach by the Company or any Stockholder of any of their representations,
warranties or covenants under this Agreement or in any certificate, schedule or
exhibit delivered pursuant to this Agreement;
b. any other breach of any representation, warranty or covenant of
the Company or any Stockholder under this Agreement or in any certificate,
schedule or exhibit delivered pursuant to this Agreement, or by reason of any
claim, action or proceeding asserted or instituted growing out of any matter or
thing constituting a breach of those representations, warranties or covenants;
and
any liability of the Company for Taxes arising from an event or transaction
prior to the Closing or as a result of the Closing which have not been paid or
provided for by the Company, including without limitation, any increase in Taxes
due to the unavailability of any loss or deduction claimed by the Company.
9.2 LIMITATIONS ON INDEMNIFICATION BY THE STOCKHOLDERS. No
indemnification shall be payable pursuant to Subsection 9.1(b) above to any
Buyer Indemnified Party, unless the total of all claims for indemnification
pursuant to Section 9.1 shall exceed Ten Thousand Dollars ($10,000.00) in the
aggregate, whereupon the full amount of claims shall be recoverable in
accordance with the terms of this Agreement.
9.3 INDEMNIFICATION BY BUYER. Buyer agrees to indemnify and hold the
Stockholders (individually a "Stockholder Indemnified Party" and collectively
the "Stockholder Indemnified Parties") harmless from and against any damages,
liabilities, 1osses and expenses (including, without limitation, reasonable fees
of counsel) of any kind or nature whatsoever (whether or not arising out of
third-party claims and including all amounts paid in investigation, defense or
settlement of the foregoing) which may be sustained or suffered by any of them
arising out of or based upon any breach of any representation, warranty or
covenant made by Buyer in this Agreement or in any certificate delivered by
Buyer under this Agreement, or by reason of any claim, action or proceeding
asserted or instituted growing out of any matter or thing constituting
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<PAGE> 28
that breach.
9.4 LIMITATION ON INDEMNIFICATION BY BUYER. No indemnification pursuant
to Section 9.3 shall be payable to the Stockholders, unless the total of all
claims for indemnification pursuant to Section 9.3 shall exceed Ten Thousand
Dollars ($10,000.00) in the aggregate, whereupon the full amount of all claims
shall be recoverable in accordance with the terms of this Agreement.
9.5 NOTICE; DEFENSE OF CLAIMS. An indemnified party may make claims for
indemnification under this Agreement by giving written notice of the claim to
the indemnifying party within the period in which indemnification claims can be
made under this Agreement. If indemnification is sought for a claim or liability
asserted by a third party, the indemnified party shall also give written notice
of the claim to the indemnifying party promptly after it receives notice of the
claim or liability being asserted, but the failure to do so shall not relieve
the indemnifying party from any liability except to the extent that it is
prejudiced by the failure or delay in giving that notice. The notice shall
summarize the bases for the claim for indemnification and any claim or liability
being asserted by a third party. Within twenty (20) days after receiving any
notice, the indemnifying party shall give written notice to the indemnified
party stating whether it disputes the claim for indemnification and whether it
will defend against any third party claim or liability at its own cost and
expense. If the indemnifying party fails to give notice that it disputes an
indemnification claim within twenty (20) days after receipt of notice of the
claim, it shall be deemed to have accepted and agreed to the claim, which shall
become immediately due and payable. The indemnifying party shall be entitled to
direct the defense against a third party claim or liability with counsel
selected by it (subject to the consent of the indemnified party, which consent
shall not be unreasonably withheld) as long as the indemnifying party is
conducting a good faith and diligent defense. The indemnified party shall at all
times have the right to fully participate in the defense of a third party claim
or liability at its own expense directly or through counsel; provided, however,
that if the named parties to the action or proceeding include both the
indemnifying party and the indemnified party and the indemnified party is
advised that representation of both parties by the same counsel would be
inappropriate under applicable standards of professional conduct, the
indemnified party may engage separate counsel at the expense of the indemnifying
party. If no notice of intent to dispute and defend a third party claim or
liability is given by the indemnifying party, or if that good faith and diligent
defense is not being or ceases to be conducted by the indemnifying party, the
indemnified party shall have the right, at the expense of the indemnifying
party, to undertake the defense of that claim or liability (with counsel
selected by the indemnified party), and to compromise or settle it, exercising
reasonable business judgment. If the third party claim or liability is one that
by its nature cannot be defended solely by the indemnifying party, then the
indemnified party shall make available all information and assistance as the
indemnifying party may reasonably request and shall cooperate with the
indemnifying party in that defense, at the expense of the indemnifying party.
SECTION 10
MISCELLANEOUS
-------------
10.1 FEES AND EXPENSES. Each of the parties will bear its own expenses
in
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connection with the negotiation and the consummation of the transactions
contemplated by this Agreement, and no expenses of the Company, or the
Stockholders relating in any way to the purchase and sale of the Company's
Assets under this Agreement and the contemplated transactions, including without
limitation legal, accounting or other professional expenses of the Company or
Stockholder, shall be charged to or paid by the Company or Buyer.
10.2 GOVERNING LAW. This Agreement shall be construed under and
governed by the internal laws of the State of Florida without regard to its
conflict of laws provisions.
10.3 NOTICES. Any notice, request, demand or other communication
required or permitted under this Agreement shall be in writing and shall be
deemed to have been given if delivered or sent by facsimile transmission, upon
receipt, or if sent by registered or certified mail, upon the sooner of the date
on which receipt is acknowledged or the expiration of three days after deposit
in United States post office facilities properly addressed with postage prepaid.
All notices to a party will be sent to the addresses listed below or to any
other address or person as a party may designate by notice to each other party
under this Agreement:
if to the Buyer: ContinuCare Home Health Services, Inc.
100 SE Second Street
36th Floor
Miami, Florida 33131
Attention: Susan Tarbe, Esq.,
Executive Vice President and
General Counsel
if to the Company: Maxicare, Inc.
800 Fairway Drive, Suite 250
Deerfield Beach, FL 33441
With a copy to: MacKelvie & Associates, P.C.
333 West Wacker Drive, Suite 830
Chicago, Illinois 60606
Attn: Charles MacKelvie, Esq.
if to the Stockholders: Irving Carr
800 Fairway Drive, Suite 250
Deerfield Beach, FL 33441
With a copy to: MacKelvie & Associates, P.C.
333 West Wacker Drive, Suite 830
Chicago, Illinois 60606
Attn: Charles MacKelvie, Esq.
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Any notice given under this Agreement may be given on behalf of any party by his
counsel or other authorized representatives.
10.4 ENTIRE AGREEMENT. This Agreement, including the Schedules and
Exhibits referred to in this Agreement and the other writings specifically
identified in this Agreement or contemplated by this Agreement, is complete,
reflects the entire agreement of the parties with respect to its subject matter,
and supersedes all previous written or oral negotiations, commitments and
writings. No promises, representations, understandings, warranties and
agreements have been made by any of the parties to this Agreement except as
referred to in this Agreement or in its Schedules and Exhibits or in other
writings; and all inducements to the making of this Agreement relied upon by
either party to this Agreement have been expressed in this Agreement or in the
Schedules or Exhibits or in other writings.
10.5 ASSIGNABILITY; BINDING EFFECT. This Agreement shall only be
assignable by Buyer to a corporation or partnership controlling, controlled by
or under common control with Buyer upon written notice to the Company and the
Stockholders. This Agreement may not be assigned by the Stockholders or the
Company without the prior written consent of Buyer. This Agreement shall be
binding upon and enforceable by, and shall inure to the benefit of, the parties
to this Agreement and their respective successors and permitted assigns.
10.6 CAPTIONS AND GENDER. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision of this Agreement. The use in this Agreement of the masculine
pronoun in reference to a party to this Agreement shall be deemed to include the
feminine or neuter, as the context may require.
10.7 EXECUTION IN COUNTERPARTS. For the convenience of the parties and
to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
10.8 AMENDMENTS. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant contained in this Agreement be waived,
except by a writing duly and validly executed by each party to this Agreement,
or in the case of a waiver, the party waiving compliance.
10.9 SEVERABILITY. The invalidity or unenforceability of any one or
more of the words, phrases, sentences, clauses, or sections contained in this
Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement or any part of any provision, all of which are
inserted conditionally on their being valid in law, and in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid or unenforceable, this Agreement shall
be construed as if the invalid or unenforceable word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted or shall be enforced as nearly as possible according to their
original terms and intent to eliminate any invalidity or unenforceability. If
any invalidity or . unenforceability is caused by the length of any period of
time or the size of any area contained in any part of this Agreement, the period
of time or area, or both, shall be considered to be reduced to a period or
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area which would cure the invalidity or unenforceability.
10.10 LITIGATION; PREVAILING PARTY. Except as otherwise required by
applicable law or as expressly provided in this Agreement, in the event of any
litigation, including appeals, with regard to this Agreement, the prevailing
party shall be entitled to recover from the non-prevailing party all reasonable
fees, Costs, and expenses of counsel (at pre-trial, trial and appellate levels).
10.11 PUBLICITY. Subject to applicable law, all press releases and
other publicity, except as required by applicable law, concerning the
transactions contemplated by this Agreement will be subject to the review and
approval of the Company, the Stockholders and the Buyer, provided that the
approval shall not be unreasonably withheld or delayed.
10.12 NO BREACH. The parties agree that the execution of this Agreement
shall not be deemed to be an assignment of any contract where consent to that
assignment is required by the terms of that contract provided that the foregoing
shall not affect the Company's and the Stockholders' respective obligations to
obtain all consents as provided in this Agreement.
10.13 CONSTRUCTION. This Agreement shall be construed without regard-to
any presumption or other rule requiring construction against the party causing
this Agreement to be drafted, including any presumption of superior knowledge or
responsibility based upon a party's business or profession or any professional
training, experience, education or degrees of any member, agent, officer of
employee of any party. If any words in this Agreement have been stricken out or
otherwise eliminated (whether or not any other words or phrases have been added)
and the stricken words initialed by the party against whom the words are
construed, then this Agreement shall be construed as if the words so stricken
out or otherwise eliminated were never included in this Agreement and no
implication or inference shall be drawn from the fact that those words were
stricken out or otherwise eliminated.
10.14 JURISDICTION; VENUE; INCONVENIENT FORUM; JURY TRIAL. ANY SUIT,
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY
ANY COURT IN RESPECT TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS OF THE
STATE OF FLORIDA OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
FLORIDA IN DADE COUNTY, AND THE PARTIES ACCEPT THE EXCLUSIVE PERSONAL
JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
IN ADDITION, THE PARTIES KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR LATER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY ANY COURT BROUGHT IN THE
STATE OF FLORIDA, AND FURTHER, KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE
ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF FLORIDA
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY WAIVES ALL RIGHTS TO ANY
TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed as of the Execution Date.
BUYER:
CONTINUCARE HOME HEALTH
SERVICES, INC., a Florida
corporation
By: /s/ Charles M. Fernandez
-----------------------------------
Its: President & Chief Executive Officer
-----------------------------------
COMPANY:
MAXICARE, INC., d/b/a MAXICARE OF
BROWARD INC., a Delaware corporation
By: /s/ Irving Carr
-----------------------------------
Its: President
-----------------------------------
STOCKHOLDERS:
/s/ Irving Carr
----------------------------------------
----------------------------------------
32
