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EXHIBIT 2.4
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on this 13th day of August, 1996, by and among THE WILLIS VERNON SMITH
UNITRUST DATED AUGUST 8, 1996 (the "Trust") and CHARLES OLIVER ("Oliver") as
sellers (each of the Trust and Oliver are hereinafter referred to individually
as a "Shareholder," and collectively as the "Shareholders"), WILLIS V. SMITH
("Smith"), and NCS HEALTHCARE, INC., a Delaware corporation, as purchaser
("NCS").
RECITALS:
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A. Shareholders own all of the issued and outstanding
shares of the capital stock of Thrifty Medical Supply, Inc., an Oklahoma
corporation ("Thrifty").
B. Shareholders desire to sell to NCS, and NCS desires
to purchase from Shareholders, all of the issued and outstanding shares of the
capital stock of Thrifty for the consideration and subject to the terms and
conditions set forth in this Agreement.
C. Smith is a principal officer and a Director of
Thrifty and the grantor or settlor of the Trust, and as a beneficiary of the
Trust will benefit materially from the Trust.
NOW, THEREFORE, in consideration of and in reliance upon the
representations, warranties and covenants set forth in this Agreement, NCS,
Shareholders and Smith hereby agree as follows:
1. SALE AND PURCHASE OF SHARES. Upon the terms and
subject to the conditions of this Agreement, at the Closing (as defined below),
Shareholders shall sell, assign, transfer and deliver to NCS, and NCS shall
purchase and acquire from Shareholders, all of the issued and outstanding
shares of the capital stock of Thrifty (each individually, a "Share," and
collectively, the "Shares").
2. PURCHASE PRICE. The aggregate purchase price for the
Shares (the "Purchase Price") shall be One Million Two Hundred Nineteen
Thousand Eight Hundred Eleven Dollars ($1,219,811.00). Subject to the terms
and conditions of this Agreement, at the Closing, NCS shall pay and deliver the
Purchase Price to Shareholders as follows:
(a) NCS shall deliver to the Trust: (i) cash or its
equivalent in the amount of Eight Hundred Eighty-Nine Thousand Two
Hundred Eighty-Two Dollars ($889,282.00), and (ii) a Non-Negotiable 6%
Promissory Note in the form attached to this Agreement as EXHIBIT A
executed by NCS, dated as of the Closing Date, in the original
principal amount of Two Hundred Thirty-Two Thousand Nine Hundred
Forty-Four Dollars ($232,944.00); and
(b) NCS shall deliver to Oliver: (i) cash or its
equivalent in the amount of Seventy-Seven Thousand Three Hundred
Twenty- Nine Dollars ($77,329.00), and (ii) a
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Non-Negotiable 6% Promissory Note in the form attached to this
Agreement as EXHIBIT A executed by NCS, dated as of the Closing Date,
in the original principal amount of Twenty Thousand Two Hundred
Fifty-Six Dollars ($20,256.00).
3. CLOSING. If the conditions to the parties'
obligations are satisfied, the consummation of the transactions contemplated by
this Agreement (the "Closing") will take place simultaneously with the
execution and delivery of this Agreement by all of the parties hereto on the
date hereof, or on such other date as the parties may agree in writing (the
"Closing Date"), at the offices of Lamun, Mock, Featherly, Kuehling &
Cunnyngham, Oklahoma City, or at such other place as the parties may agree in
writing. If the Closing does not occur by August 31, 1996, this Agreement may
be terminated by NCS or Shareholders without prejudice to the rights of any
party against any other for any breach or nonperformance of its obligations
prior to termination.
4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS.
Shareholders and Smith hereby jointly and severally represent and warrant to
NCS, as of the date of this Agreement and as of the Closing Date, if later, as
follows:
4.1 ORGANIZATION, ETC., OF THRIFTY. Thrifty (i)
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Oklahoma, (ii) is qualified to do business as a
foreign corporation in every state or other jurisdiction where the conduct of
its business or the ownership of its assets and properties requires it to be so
qualified, and (iii) has full corporate power and authority to own, lease and
operate its assets and properties and to carry on its business as and where
such assets and properties are now owned or leased and as such business is
presently being conducted. SCHEDULE 4.1 sets forth correct and complete copies
of the Certificate of Incorporation and the By-Laws of Thrifty, including all
amendments thereto, each as in effect on the date hereof and as of the Closing
Date.
4.2 CAPACITY OF SHAREHOLDERS. Each of the
Shareholders and Smith has full power and capacity to execute, deliver and
perform this Agreement and each of the agreements and documents to be delivered
by such Shareholder or Smith in connection herewith. This Agreement and each
other agreement and document delivered by either of the Shareholders or Smith
in connection herewith has been duly executed and delivered by such Shareholder
or Smith, and constitutes a legal, valid and binding obligation of such
Shareholder or of Smith, as the case may be, enforceable in accordance with its
terms.
4.3 MINUTES AND STOCK RECORDS. The stock records
of Thrifty which have previously been delivered to NCS for inspection are
correct and complete in all material respects. The corporate minutes of
Thrifty which have previously been delivered to NCS for inspection are correct
and complete in all material respects and contain all of the proceedings of the
shareholders, directors and committees of directors of Thrifty. SCHEDULE 4.3
sets forth a correct and complete list of all incumbent directors and officers
of Thrifty.
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4.4 SUBSIDIARIES AND AFFILIATES. Except as set
forth on SCHEDULE 4.4, Thrifty does not own, directly or indirectly, any equity
or ownership interest in any corporation, business trust, partnership, joint
venture, joint stock company, limited liability company, or other business
organization or association, and is not a partner or joint venturer of any
other person.
4.5 CAPITAL STOCK OF THRIFTY; TITLE TO SHARES.
The total authorized capital stock of Thrifty consists of Fifty Thousand
(50,000) shares, of which One Thousand (1,000) are shares of Common Voting
Stock, $1.00 par value (the "Voting Stock"), and Forty-Nine Thousand (49,000)
are shares of Common Non-Voting Stock, $1.00 par value (the "Non-Voting
Stock"). There are no shares of capital stock of Thrifty held in the treasury
of Thrifty. There are a total of Five Hundred (500) issued and outstanding
shares of Voting Stock, and there are no shares of Non-Voting Stock issued or
outstanding. All of such issued and outstanding shares of Voting Stock
(collectively, the "Shares") are owned of record and beneficially by
Shareholders in the respective amounts set forth on SCHEDULE 4.5, and are owned
by them, respectively, free and clear of all liens, claims, charges or
encumbrances of any nature whatsoever, or any other restrictions affecting the
ability to transfer such Shares, and the consummation of the transactions
contemplated by this Agreement will vest in NCS good and merchantable title to
all of the Shares. All of the Shares are duly authorized, validly issued,
fully paid and nonassessable, and have been issued in compliance with all
applicable state and federal securities laws. There exist no options,
warrants, stock appreciation, conversion or similar rights or obligations,
whether vested or contingent, providing for the purchase, redemption, sale, or
issuance of any shares of capital stock of Thrifty, and there exist no claims
or rights, whether vested or contingent, of an equity ownership nature of
Thrifty which will not be completely and permanently extinguished upon transfer
of the Shares by Shareholders to NCS hereunder.
4.6 NO CONSENTS, APPROVALS OR CONFLICTS. No
consent or approval of, and no registration, declaration or filing with, any
governmental authority or third party is required in connection with the
execution, delivery or performance of this Agreement by Shareholders or Smith.
Neither the execution or delivery nor the performance of this Agreement or any
of the other agreements, instruments or documents to be delivered by or on
behalf of Thrifty, either Shareholder or Smith in connection herewith will
cause, or give any person grounds to cause (with or without notice, the passage
of time, or both) the maturity of any obligation or liability of Northside to
be accelerated or increased, or conflict with, violate or result in any breach
of: (i) any judgment, decree, order, statute, rule or regulation applicable to
Thrifty, either Shareholder or Smith, (ii) any contract, agreement, instrument
or understanding to which Thrifty, either Shareholder or Smith is a party or by
which Thrifty, any of its assets, either Shareholder or Smith is bound, or
(iii) any provision of the Certificate of Incorporation or the By-Laws of
Thrifty.
4.7 FINANCIAL STATEMENTS. SCHEDULE 4.7 includes
the annual financial statements of Thrifty for each of its fiscal years ended
May 31, 1994, 1995 and 1996 (collectively, the "Financial Statements"). Except
as set forth on SCHEDULE 4.7, all of the Financial Statements are accurate and
complete in all material respects and present fairly the
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financial position and results of operations of Thrifty for the periods they
cover in conformity with generally accepted accounting principles applied on a
consistent basis. Thrifty's books of account accurately reflect all items of
income and expense (including accruals) and all of Thrifty's assets and
liabilities in accordance with normal accrual accounting practices, subject to
customary, immaterial year-end adjustments.
4.8 NET WORTH. The net book value of Thrifty at
and as of the Closing, determined in accordance with Thrifty's internal
accounting practices applied on a consistent basis, will be at least
$446,714.00.
4.9 NO LIABILITIES. Thrifty has no material
liabilities or obligations of any kind (whether contingent or otherwise) except
(i) as reflected on the balance sheet of Thrifty as of May 31, 1996 which is
included in SCHEDULE 4.7 (the "Balance Sheet"), subject to any exceptions
described in SCHEDULE 4.7, (ii) future performance obligations under contracts
disclosed in writing to NCS before the Closing, or (iii) as incurred in the
ordinary course of business, consistent with past practice, since the date of
the Balance Sheet. Neither Thrifty, nor any other party, has breached any
obligation under any contract to which Thrifty is a party or by which any of
Thrifty's assets is bound.
4.10 INDEBTEDNESS. SCHEDULE 4.10 sets forth a
complete and accurate list of all contracts, agreements, facilities, notes,
guaranties, letters of credit, and any other commitments, instruments and
obligations to which Thrifty is a party or by which Thrifty or any of its
assets is bound, relating to indebtedness or obligations of Thrifty, whether
fixed or contingent, in respect of borrowed money, and includes, without
limitation, all bank or other institutional debt, other loans or commitments,
and capitalized leases undertaken by Thrifty.
4.11 CONTRACTS. SCHEDULE 4.11 sets forth a
complete and accurate list of:
4.11.1 All contracts to which Thrifty is a
party or by which it is bound (other than contracts listed on SCHEDULE 4.10),
which either (a) involve amounts in excess of $100,000, or payments based on
profits or sales, or (b) are not cancelable by Thrifty upon less than 30 days'
notice, or (c) involve terms or quantities exceeding normal commitments in the
ordinary course of business.
4.11.2 All contracts pursuant to which
Thrifty provides pharmaceuticals, medical supplies, therapies, intravenous
infusion services, or any other products, services or therapies related to any
of the foregoing.
4.11.3 All contracts with wholesalers,
distributors, dealers, sales representatives, or co-operative associations to
which Thrifty is a party or by which Thrifty is bound.
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4.11.4 All contracts with any federal,
state or local governmental authorities, agencies or subdivisions to which
Thrifty is a party or by which Thrifty is bound.
4.11.5 All contracts for the past or
present disposal of hazardous or infectious waste or other materials to which
Thrifty is or was a party or by which Thrifty is or was bound.
4.11.6 All employment, consulting,
management, or agency contracts to which Thrifty is a party or by which Thrifty
is bound.
4.11.7 All contracts containing an
obligation of confidentiality with respect to information furnished by Thrifty,
Shareholders or Smith to a third party, or received by Thrifty, Shareholders or
Smith from a third party.
4.11.8 All contracts limiting the freedom
of Thrifty, Shareholders or Smith to compete in any line of business, or with
any person, or in any geographic area or market.
4.11.9 All contracts providing for the
present or future lease (whether as lessee or lessor), purchase or sale of any
real property by Thrifty.
4.12 COMPLIANCE WITH LAWS. Thrifty is not in
violation of any law, regulation or order of any jurisdiction or governmental
authority (a "Law"), including, without limitation, any Law pertaining to
Medicare or Medicaid reimbursement, environmental protection, infectious or
biomedical waste, occupational health or safety, or employment practices.
Thrifty has all permits and licenses necessary in the conduct of its business.
All such permits and licenses are in full force and effect, and no proceeding
is pending or, to the knowledge of Thrifty, either Shareholder or Smith,
threatened to revoke or limit any of them.
4.13 NO LITIGATION. There is no claim,
litigation, investigation or proceeding by any person or governmental authority
pending or, to the knowledge of any Shareholder or Smith, threatened against
Thrifty. There are no pending or, to the knowledge of any Shareholder or
Smith, threatened controversies or disputes with, or grievances or claims by,
any employees or former employees of Thrifty or any of its predecessors of any
nature whatsoever, including, without limitation, any controversies, disputes,
grievances or claims with respect to their employment, compensation, benefits
or working conditions.
4.14 COMPLETENESS OF AND TITLE TO ASSETS.
Included in the assets reflected on the Balance Sheet are all those assets
which have been or are being used to operate the business of Thrifty in the
ordinary course as such business is presently conducted. Except as set forth
on SCHEDULE 4.14, Thrifty owns all of the assets reflected on the Balance Sheet
free and clear of all liens, claims, encumbrances and other restrictions or
limitations affecting Thrifty's ability to use or transfer them.
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4.15 RECEIVABLES. All of the accounts receivable
of Thrifty reflected on the Balance Sheet, except where described on the
Balance Sheet or otherwise in SCHEDULE 4.7, arose from valid sales in the
ordinary course of business and reflect goods actually sold and delivered or
services in fact rendered. At least ninety percent (90%) of all such accounts
receivable reflecting goods sold or services rendered will be collected by
Thrifty within 240 days after the Closing.
4.16 INVENTORIES. The inventories reflected on
the Balance Sheet are sufficient to cover the immediate needs of Thrifty and to
cover time required for re-stocking after the Closing.
4.17 CONDITION. All of the tangible assets
reflected on the Balance Sheet are in good operating condition, ordinary wear
and tear excepted, neither require nor can reasonably be expected to require
any special or extraordinary expenditures to remain in such condition beyond
normal maintenance, and are capable of being used for their intended purposes
in the ordinary course of business consistent with past practice.
4.18 REAL PROPERTY. SCHEDULE 4.18 lists all real
property which is now or at any time prior to the Closing Date was owned,
leased or occupied by Thrifty or any of its predecessors, and indicates for
each such property whether it was owned, leased and/or occupied. Neither
Thrifty nor either Shareholder nor Smith is, or has received notification
alleging that it or he is, in breach of any lease of any such leased real
property.
4.19 ENVIRONMENTAL MATTERS. Thrifty has no
liability, whether absolute or contingent, in respect of any activities
associated with the generation, transportation, release, storage, treatment,
disposal or identification of any substance or material which could result in
damage to the environment or danger to the health and safety of the public.
4.20 EMPLOYEE BENEFITS. SCHEDULE 4.20 lists each
Employee Benefit Plan (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) which Thrifty
maintains or to which Thrifty is required to contribute (each, a "Plan"). None
of the Plans is a "Multiemployer Plan" within the meaning of Section 3(37) of
ERISA. Each Plan has been operated in accordance with its terms and with all
laws applicable thereto. Neither Thrifty nor any such Plan is subject to any
liability (other than routine claims for benefits) or any tax in connection
with any such Plan. Except as set forth on SCHEDULE 4.20, no such Plan
provides benefits for persons who are not active employees or directors of
Thrifty. Except as prohibited by law, Thrifty has the right to amend or
terminate any Plan without the consent of any other person. There is no Plan
under which Thrifty would be obligated to pay, accrue or contribute benefits
because of the consummation of the transactions contemplated by this Agreement.
Since December 31, 1995, there has not been any increase made or promised in
the benefits payable under any Plan.
4.21 NO CHANGES. Since May 31, 1996, Thrifty has
been operated only in the ordinary course, consistent with past practice, and
there has not been any
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material adverse change, or any event, fact or circumstance which might
reasonably be expected to result in a material adverse change in the assets,
liabilities, operating performance, business relationships, or prospects of
Thrifty's business. Except as set forth on SCHEDULE 4.21, since May 31, 1996,
Thrifty has not paid any dividend, distribution or other payment to either
Shareholder or Smith or to any relative of either Shareholder or Smith other
than payments of salary and expense reimbursements, if any, made in the
ordinary course of business, consistent with past practice, for employment
services actually rendered or expenses actually incurred on behalf of Thrifty.
4.22 TAXES. All tax returns, reports and
declarations (collectively, "Tax Returns") required by any governmental
authority to be filed in connection with the properties, business, income,
expenses, net worth and franchises of Thrifty have been timely filed, and all
such Tax Returns are correct and complete in all respects. All tax due in
connection with the properties, business, income, expenses, net worth and
franchises of Thrifty has been paid, other than tax which is not yet due or
which, if due, is not yet delinquent or is being contested in good faith, and
for which in all cases reserves have been established in the Balance Sheet
which are sufficient to cover the payment of all such tax. There are no tax
claims, audits or proceedings pending in connection with the properties,
business, income, expenses, net worth or franchises of Thrifty, and, to the
knowledge of either Shareholder or Smith, there are no such threatened claims,
audits or proceedings.
4.23 CUSTOMERS. Except as set forth on SCHEDULE
4.23, no entity or group of affiliated entities which is or are customers of
Thrifty operates more than 500 beds. Except as set forth on SCHEDULE 4.23, no
nursing home or other facility or institution served by Thrifty has, since
December 31, 1995, cancelled or otherwise terminated, or made any threat to
cancel or otherwise terminate, its relationship with Thrifty. Neither Thrifty
nor either Shareholder nor Smith has any knowledge that any customer of Thrifty
is dissatisfied with the performance of Thrifty or its employees or that any
such customer intends to cancel or otherwise terminate its relationship with
Thrifty or to materially decrease its purchases of products and/or services
from Thrifty.
4.24 NO CONFLICTS. Except as set forth on
SCHEDULE 4.24, neither Smith, nor any Shareholder, nor any director, officer or
employee of Thrifty, nor any relative of any such person, has any direct or
indirect interest in any business enterprise which does business with Thrifty
or competes with Thrifty in any manner, or is a party to any contract to which
Thrifty is also a party or by which any of Thrifty's assets is bound.
4.25 BROKERS AND FINDERS. No broker, finder or
other person or entity acting in a similar capacity has participated on behalf
of Thrifty, either Shareholder or Smith in bringing about the transactions
contemplated by this Agreement, rendered any services with respect thereto, or
been in any way involved therewith.
4.26 NO UNDISCLOSED INFORMATION. This Agreement
(including the Schedules hereto), and all documents or certificates delivered
by either Shareholder or Smith to NCS in connection herewith, do not contain
any untrue statement of a material fact by
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either Shareholder or Smith, and do not omit to state a material fact necessary
in order to make the statements by Shareholders and Smith contained herein or
therein, in light of the circumstances under which such statements are made,
not misleading.
5. REPRESENTATIONS AND WARRANTIES OF NCS. NCS hereby
represents and warrants to Shareholders and Smith as follows:
5.1 ORGANIZATION, ETC., OF NCS AND NCS/OKLAHOMA.
NCS is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware. NCS/Oklahoma is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Oklahoma.
5.2 AUTHORITY; NO VIOLATION, ETC. The execution,
delivery and performance by NCS of this Agreement and of each other document,
agreement and instrument to be executed and delivered by NCS or NCS/Oklahoma in
connection with the provisions of this Agreement, have been duly and validly
authorized and approved by all necessary action on the part of NCS,
NCS/Oklahoma and their respective Boards of Directors. This Agreement and all
other documents, agreements and instruments to be delivered by NCS or
NCS/Oklahoma in connection herewith constitute legal, valid and binding
obligations of NCS and NCS/Oklahoma, respectively, enforceable in accordance
with their respective provisions.
5.3 NO CONSENTS, APPROVALS OR CONFLICTS. No
consent or approval of, and no registration, declaration or filing with, any
governmental authority or third party is required in connection with the
execution, delivery or performance of this Agreement by NCS or NCS/Oklahoma.
Neither the execution or delivery nor the performance of this Agreement or any
of the other agreements, instruments or documents to be delivered by or on
behalf of NCS or NCS/Oklahoma in connection herewith conflicts with, violates
or results in any breach of: (i) any judgment, decree, order, statute, rule or
regulation applicable to them, (ii) any contract, agreement, instrument or
understanding to which either of them is a party or by which either of them is
bound, or (iii) any provision of the respective Certificates of Incorporation
or By-Laws of NCS or NCS/Oklahoma.
5.4 BROKERS AND FINDERS. No broker, finder or
other person or entity acting in a similar capacity has participated on behalf
of NCS or NCS/Oklahoma in bringing about the transactions contemplated by this
Agreement, rendered any services with respect thereto, or been in any way
involved therewith.
5.5 NO UNDISCLOSED INFORMATION. This Agreement
(including the Schedules hereto), and all documents or certificates delivered
by NCS to any Shareholder or Smith in connection herewith, do not contain any
untrue statement of a material fact by NCS, and do not omit to state a material
fact necessary in order to make the statements by NCS contained herein or
therein, in light of the circumstances under which such statements are made,
not misleading.
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6. CLOSING CONDITIONS.
6.1 CONDITIONS OF NCS. The obligation of NCS to
perform this Agreement is subject to the satisfaction of the following
conditions at or before the Closing:
6.1.1 Shareholders shall have delivered to
NCS all certificates representing all of the Shares, in each case duly endorsed
(or accompanied by appropriate stock powers duly executed in blank or in favor
of NCS) and otherwise in proper form for transfer to NCS, together with all
other documents necessary or appropriate to validly transfer the Shares to NCS
free and clear of all liens or adverse claims.
6.1.2 NCS shall have received letters of
resignation, effective as of the Closing, from those directors and officers of
Thrifty whom NCS shall have requested to resign.
6.1.3 NCS/Oklahoma shall have received
from Oliver and Smith a mutually acceptable Employment and Noncompetition
Agreement, duly executed by such individual (collectively, the "Employment
Agreements").
6.1.4 Thrifty shall have received a
mutually acceptable lease agreement covering Thrifty's premises located at 6815
N.W. 10th Street, Oklahoma City, Oklahoma 73127 (the "Premises"), duly executed
by Willis Smith and Lisa Smith (collectively, "Landlord").
6.1.5 NCS shall have received all consents
and permits necessary for the consummation of the transactions contemplated by
this Agreement, and no suit, action or other proceeding shall be pending or
threatened before any court or before or by any governmental authority in which
it is sought to restrain, prohibit, invalidate or set aside in whole or in part
the consummation of the transactions contemplated by this Agreement.
6.1.6 Shareholders and Smith shall have
performed and complied in all material respects with all obligations, covenants
and conditions required by this Agreement to have been performed or complied
with by Shareholders or Smith at or prior to the Closing, and if the Closing
occurs after the date of this Agreement, all representations and warranties of
Shareholders and Smith contained herein shall continue to be accurate in all
material respects at and as of the Closing, just as if made as of the Closing.
6.1.7 If the Closing occurs after the date
of this Agreement, NCS shall have received a certificate from Shareholders and
Smith, in form and substance acceptable to NCS, dated as of the Closing and
duly executed by Shareholders and Smith, certifying as to the fulfillment of
the conditions set forth in Section 6.1.6 hereof.
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6.1.8 There shall have been no material
adverse change since the date of the Balance Sheet in the financial condition,
business or affairs of Thrifty, and Thrifty shall not have suffered any
material loss, not covered by insurance, which materially affects the value of
its assets, properties or business.
6.2 CONDITIONS OF SHAREHOLDER. The obligations
of Shareholders and Smith to perform this Agreement are subject to the
satisfaction of the following conditions at or before the Closing:
6.2.1 Shareholders shall have received the
cash payments and promissory notes described in Section 2.
6.2.2 Shareholders shall have received all
consents and permits necessary for the consummation of the transactions
contemplated by this Agreement, and no suit, action or other proceeding shall
be pending or threatened before any court or before or by any governmental
authority in which it is sought to restrain, prohibit, invalidate or set aside
in whole or in part the consummation of the transactions contemplated by this
Agreement.
6.2.3 NCS shall have performed and
complied in all material respects with all obligations, covenants and
conditions required by this Agreement to have been performed or complied with
by NCS at or prior to the Closing, and if the Closing occurs after the date of
this Agreement, all representations and warranties of NCS contained herein
shall continue to be accurate in all material respects at and as of the
Closing, just as if made as of the Closing.
6.2.4 Each of Oliver and Smith shall have
received a mutually acceptable Employment Agreement, each duly executed by
NCS/Oklahoma.
6.2.5 Landlord shall have received a
mutually acceptable lease agreement covering the Premises, duly executed by
Thrifty.
6.3 INTERDEPENDENCE. The transfers and
deliveries described in this Section 6 shall be mutually interdependent and
regarded as occurring simultaneously, and, unless waived by Shareholders, Smith
and NCS, no such transfer of delivery shall become effective unless and until
all the other transfers and deliveries provided for in this Section 6 have also
been consummated. The transfers and deliveries herein contemplated shall be
deemed to have occurred and the Closing shall be effective as of the
commencement of business on the Closing Date.
7. RESTRICTIVE COVENANTS.
7.1 SMITH COVENANTS. The covenants made by Smith
in Sections 3.1 (relating to noncompetition), 3.2 (relating to nondisclosure of
Confidential Information, as
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defined therein), and 3.3 (relating to noninterference with the business of
NCS/Oklahoma) of the Employment Agreement entered into between Smith and
NCS/Oklahoma in connection with this Agreement (the "Smith Employment
Agreement") are all hereby incorporated into this Agreement by reference and
made a part hereof as if fully rewritten herein (the "Smith Covenants"). Smith
agrees (i) to be bound by and to observe and comply with all of the Smith
Covenants, (ii) that a breach thereof by him will constitute a breach of this
Agreement, and (iii) that for purposes of this Agreement, the term "Company" as
used in the Smith Employment Agreement will be deemed to mean and include NCS,
NCS/Oklahoma, and all other persons or entities controlled directly or
indirectly by NCS.
7.2 OLIVER COVENANTS. The covenants made by
Oliver in Sections 3.1 (relating to noncompetition), 3.2 (relating to
nondisclosure of Confidential Information, as defined therein), and 3.3
(relating to noninterference with the business of NCS/Oklahoma) of the
Employment Agreement entered into between Oliver and NCS/Oklahoma in connection
with this Agreement (the "Oliver Employment Agreement") are all hereby
incorporated into this Agreement by reference and made a part hereof as if
fully rewritten herein (the "Oliver Covenants"). Oliver agrees (i) to be bound
by and to observe and comply with all of the Oliver Covenants, (ii) that a
breach thereof by him will constitute a breach of this Agreement, and (iii)
that for purposes of this Agreement, the term "Company" as used in the Oliver
Employment Agreement will be deemed to mean and include NCS, NCS/Oklahoma, and
all other persons or entities controlled directly or indirectly by NCS.
7.3 TRUST COVENANTS. The Trust covenants and
agrees that it will not, until the seventh (7th) anniversary of the date of
this Agreement, invest in or finance any person, entity or enterprise which
Smith would be prohibited from investing in or financing pursuant to the
covenants of Smith contained in Section 3.1 of the Smith Employment Agreement.
7.4 ADEQUATE CONSIDERATION. Shareholders and
Smith acknowledge and agree that the obligations of NCS and NCS/Oklahoma
hereunder and under the Employment Agreements constitute adequate consideration
for all of Shareholders' and Smith's obligations under this Section 7.
7.5 REMEDIES. Shareholders and Smith acknowledge
and agree that a breach of any of the provisions of this Section 7 will result
in irreparable damage to NCS and NCS/Oklahoma for which there will be no
adequate remedy at law, and agree that NCS and NCS/Oklahoma, in addition to
their rights at law, will be entitled to injunctive relief to enforce such
provisions, without having to post any bond.
7.6 REFORMATION. In the event of the
unenforceability or invalidity of any provision of this Section 7, such
provision shall be enforceable in part to the fullest extent permitted by law,
such invalidity or unenforceability shall not otherwise affect any other
provision of this Agreement or any similar agreement, and this Agreement shall
otherwise remain in full force and effect.
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8. FURTHER ASSURANCES. NCS, Shareholders and Smith
shall each execute and deliver to the other parties any and all documents and
instruments, and do and perform such acts, in addition to those expressly
provided for herein, as may be reasonably necessary or appropriate to carry out
or evidence the transactions contemplated by this Agreement, whether before, at
or after the Closing.
9. ORDINARY COURSE. From the date of this Agreement
until the Closing, if later, Shareholders and Smith will cause Thrifty (i) to
operate its business substantially as presently operated and only in the
ordinary course, consistent with past practice, (ii) not to pay (nor will
Shareholders or Smith accept) any dividend, distribution or other payment to
Shareholders other than payments, if any, of salary and expense reimbursements
in the ordinary course, consistent with past practice, (iii) not to effect any
amendment to the Certificate of Incorporation or the By-Laws of Thrifty, (iv)
not to redeem or repurchase any issued and outstanding shares of capital stock
of Thrifty, and not to issue any additional shares of capital stock of Thrifty,
or undertake any obligation, whether absolute or contingent, to redeem,
repurchase or issue any shares of capital stock of Thrifty.
10. EXPENSES. NCS shall pay all of the expenses incident
to the transactions contemplated by this Agreement which are incurred by NCS or
its representatives, and Shareholders and Smith shall pay all of the expenses
incident to the transactions contemplated by this Agreement which are incurred
by Thrifty, Shareholders, Smith or their representatives.
11. SURVIVAL OF REPRESENTATIONS, WARRANTIES & COVENANTS;
INDEMNIFICATION. The representations, warranties and covenants contained in
this Agreement or in any other document, certificate, instrument, Schedule or
Exhibit delivered in connection herewith, shall survive the Closing and
continue to be binding thereafter, regardless of any investigation made by any
party hereto at any time. Nevertheless, the right of NCS to bring claims for
breaches is subject to the limits in Section 11.3, and the rights of
Shareholders and Smith to bring claims for breaches are subject to the limits
in Section 11.5.
11.1 INDEMNIFICATION BY SHAREHOLDERS AND SMITH.
Shareholders and Smith jointly and severally agree (except where such agreement
is expressly made severally but not jointly hereinbelow), to indemnify and hold
NCS, NCS/Oklahoma and their respective officers, directors and subsidiaries
(the "NCS Indemnified Parties") harmless from and against any and all loss,
damage, liability or deficiency resulting from or arising out of any inaccuracy
in or breach of any representation or warranty made by Shareholders or Smith,
or the breach or nonperformance of any covenant or obligation made or incurred
by Shareholders or Smith, in this Agreement, and any and all costs and expenses
(including reasonable attorneys' and accountants' fees) related thereto
(collectively, "Losses"). Shareholders and Smith agree severally, but NOT
jointly, to indemnify and hold the NCS Indemnified Parties harmless from and
against Losses resulting from breaches or nonperformances of covenants made or
incurred by them pursuant to Section 7 hereof ("Restrictive Covenants").
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11.2 INDEMNIFICATION BY NCS. NCS agrees to
indemnify and hold Shareholders and Smith harmless from and against any and all
loss, damage, liability or deficiency resulting from or arising out of any
inaccuracy in or breach of any representation or warranty made by NCS, or the
breach or nonperformance of any covenant or obligation made or incurred by NCS,
in this Agreement, and any and all costs and expenses (including reasonable
attorneys' and accountants' fees) related thereto.
11.3 LIMITATIONS ON INDEMNIFICATION BY
SHAREHOLDERS AND SMITH. The indemnification of the NCS Indemnified Parties
provided for in Section 11.1 shall be limited in certain respects as follows:
11.3.1 Any claim for indemnification under
Section 11.1 shall be made in writing by the second anniversary of the Closing
Date, except that a claim for such indemnification relating to the
representations, warranties and covenants contained in Sections 4.22 ("Taxes"),
4.12 ("Compliance With Laws"), 4.19 ("Environmental Matters"), and 4.20
("Employee Benefits") may be made until the expiration of the applicable
statutes of limitation, if any, relating to such matters, and except that there
shall be no limit on the time for making a claim for such indemnification
relating to the representations and warranties contained in Sections 4.1
("Organization, Etc., of Thrifty"), 4.2 ("Capacity of Shareholders"), and 4.5
("Capital Stock of Northside; Title to Shares"), or, subject to the terms
thereof, the covenants of Shareholders and Smith contained in Section 7
("Restrictive Covenants").
11.3.2 Subject to the following sentence,
Shareholders and Smith shall not be liable for indemnification claims under
Section 11.1 until the aggregate amount of indemnification claims under Section
11.1 exceeds $15,000.00. Notwithstanding the foregoing sentence, Shareholders
and Smith shall be liable for indemnification claims under Section 11.1 to the
extent relating the representations, warranties and covenants in Section 7 from
the first dollar to the full extent of such claims.
11.3.3 The aggregate liability of
Shareholders and Smith for indemnification claims under Section 11.1, exclusive
of indemnification claims relating to the representations, warranties and
covenants contained in Section 7, will not exceed the amount of One Million Two
Hundred Sixty-Six Thousand Dollars ($1,266,000.00). There shall be no limit on
the aggregate liability of Shareholders and Smith for indemnification claims
under Section 11.1 to the extent relating the representations, warranties and
covenants in Section 7.
11.3.4 Subject to the other provisions of
this Section 11.3, NCS shall have the right to deduct from any amounts
remaining due under either of the promissory notes deliverable under Section 2
hereof to Shareholders, in the order in which such amounts become due, all of
the NCS Indemnified Parties' claims for indemnification pursuant to Section
11.1; PROVIDED, however, that any claims not so satisfied shall continue until
satisfied in full, and such right of offset will be in addition to and not in
lieu of any other rights or remedies that may be available to the NCS
Indemnified Parties as against any
452\18485MWC.342 -13-
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Shareholder or Smith at law or in equity. Any Shareholder or Smith may elect
to satisfy all or any portion of the amount of any indemnification claim
hereunder by delivering shares of Class A Common Stock, $.01 par value, of NCS
("NCS Stock") in payment thereof, which NCS Stock shall be valued for purposes
of such satisfaction at the fair market value thereof on the date of such
delivery.
11.4 CONTRIBUTION AMONG SHAREHOLDERS AND SMITH.
Notwithstanding that the liability of Shareholders and Smith with respect to
the representations, warranties and covenants made by them herein is joint and
several (except as to the covenants in Section 7 hereof, where such liability
is several but not joint), Shareholders and Smith hereby agree with and among
themselves that each Shareholder or Smith (an "Indemnifying Person") shall have
and be entitled to a right of contribution from each of the other Shareholders
or Smith to the extent that such Indemnifying Person satisfies more than his or
its percentage of the amount of any indemnification claim of any NCS
Indemnified Party, as follows: the Trust, 92 percent; and Oliver, 8 percent.
11.5 LIMITATIONS ON INDEMNIFICATION BY NCS. The
indemnification of Shareholders and Smith provided for in Section 11.2 shall be
limited in certain respects as follows:
11.5.1 Any claim for indemnification under
Section 11.2 shall be made in writing by the second anniversary of the Closing
Date, except that there shall be no limit on the time for making a claim for
such indemnification relating to the representations and warranties contained
in Sections 5.1 ("Organization, Etc., of NCS and NCS/Oklahoma") and 5.2
("Authority, No Violation, Etc.").
11.5.2 NCS shall not be liable for
indemnification claims under Section 11.2 until the aggregate amount of
indemnification claims under Section 11.2 exceeds $15,000.00.
11.6 THIRD PARTY CLAIMS. If any legal proceeding
is instituted or any claim asserted by any third party (a "Claim") in respect
of which the Shareholders or Smith on the one hand, or the NCS Indemnified
Parties on the other hand, may be entitled to indemnity hereunder, the party
asserting such right to indemnity (the "Indemnitee") will give the party from
whom indemnity is sought (the "Indemnitor") written notice thereof. The
Indemnitor will have the right, at its option and expense, to participate in
the defense of such a Claim, but not to control the defense, negotiation or
settlement thereof, which control will at all times rest with the Indemnitee,
unless the Claim involves only money damages, not an injunction or other
equitable relief, and unless the Indemnitor (a) irrevocably acknowledges in
writing complete responsibility for and agrees to indemnify the Indemnitee, and
(b) furnishes satisfactory evidence of the financial ability to indemnify the
Indemnitee, in which case the Indemnitor may assume such control through
counsel of its choice and at its expense, but the Indemnitee will continue to
have the right to be represented, at its own expense, by counsel of its choice
in connection with the defense of such a Claim.
452\18485MWC.342 -14-
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If the Indemnitor does not assume control of the
defense of such a Claim, the entire defense of the Claim by the Indemnitee, any
settlement made by the Indemnitee, and any judgment entered in the Claim will
be deemed to have been consented to by, and will be binding on, the Indemnitor
as fully as though it alone had assumed the defense thereof and a judgment had
been entered in the Claim in the amount of such settlement or judgment, except
that the right of the Indemnitor to contest the right of the Indemnitee to
indemnification under this Agreement with respect to the Claim will not be
extinguished. If the Indemnitor does assume control of the defense of such a
Claim, it will not, without the prior written consent of the Indemnitee, settle
the Claim or consent to entry of any judgment relating thereto which does not
include as an unconditional term thereof the giving by the claimant to the
Indemnitee a release from all liability in respect of the Claim. The parties
hereto agree to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such Claim.
12. AMENDMENTS; BINDING EFFECT. This Agreement
(including each Schedule and Exhibit hereto) may not be amended or modified
except by a document in writing signed by each Shareholder, Smith and NCS.
This Agreement and the rights and obligations of each party hereunder shall be
binding upon and shall inure to the benefit of the respective successors and
assigns of the parties hereto.
13. NOTICES. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given on the third day
following deposit in the United States Mail if delivered or mailed, via first
class certified or registered mail, return receipt requested, postage prepaid,
addressed as set forth below, and shall be deemed to have been duly given on
the next business day following documented delivery thereof to any national
overnight delivery service addressed as set forth below, and otherwise shall be
deemed duly given when received:
If to Smith, to: Willis V. Smith
6221 Beavercreek Road
Oklahoma City, Oklahoma 73162
If to Shareholders, to: Charles Oliver
13229 Cedar Springs Road
Oklahoma City, Oklahoma 73120
and to: The Willis Vernon Smith Unitrust dtd 8/8/96
Attention: M. Phil Goss, Special Trustee
201 Northeast Expressway
Oklahoma City, Oklahoma 73105
With a copy to: Lamun, Mock, Featherly, Kuehling & Cunnyngham
5900 Northwest Grand Blvd.
Oklahoma City, Oklahoma 73118
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Attention: Barry D. Mock, Esq.
And a copy to: Crowe & Dunlevy
20 North Broadway, Suite 1800
Oklahoma City, Oklahoma 73102
Attention: James H. Holloman Jr., Esq.
If to NCS, to: NCS HealthCare, Inc.
3201 Enterprise Parkway, Suite 220
Beachwood, Ohio 44122
Attention: President
With a copy to: Calfee, Halter & Griswold
800 Superior Avenue, Suite 1400
Cleveland, Ohio 44114
Attention: Patrick Morris, Esq.
14. SUIT FEE PROVISION. In the event any legal action or
arbitration proceeding is undertaken by a party in respect of the matters
addressed in this Agreements and the agreements collateral hereto, the
prevailing party shall be awarded his or its legal expenses and costs incurred
in the prosecution or defense of any such action or proceeding. The
"prevailing party" as used herein shall mean the party, if any, determined by
the court or arbitrator to have most nearly prevailed, even if such party did
not prevail in all matters, and not necessarily the party in whose favor a
judgment or award is rendered.
15. PERSONAL GUARANTIES. NCS, Smith and Shareholders
will cooperate wth each other and use their respective best efforts to obtain
after the Closing the release or cancellation of any guaranty or similar
instrument by which Smith or any Shareholder has guaranteed the payment or
performance of any obligation of Thrifty, provided that such obligation is
disclosed in this Agreement or a Schedule hereto (a "Guaranteed Obligation").
If any such release or cancellation cannot be obtained, NCS will indemnify and
hold Smith or such Shareholder harmless from and against any liability for such
Guaranteed Obligation.
16. MISCELLANEOUS. This Agreement sets forth the
exclusive statement of the agreement among the parties concerning the subject
matter hereof, and there are no agreements or understandings between the
parties concerning such subject matter other than as set forth herein. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed and original, and all of which together shall constitute one and the
same document. This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio applicable to contracts made and to be
performed entirely within the State of Ohio.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
/s/ Willis V. Smith
________________________________________
WILLIS V. SMITH
/s/ Charles Oliver
________________________________________
CHARLES OLIVER
/s/ M. Phil Goss
________________________________________
M. PHIL GOSS, AS
INDEPENDENT SPECIAL TRUSTEE
OF THE WILLIS VERNON SMITH
UNITRUST DATED AUGUST 8, 1996
NCS HEALTHCARE, INC.
By: /s/ Kevin B. Shaw
______________________________
Title: President
__________________________
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