PARTNERSHIP INTEREST PURCHASE AGREEMENT DATED AS OF NOVEMBER 7, 2007 BY AND AMONG DOUGHERTY’S HOLDINGS, INC., DOUGHERTY’S OPERATING GP, LLC, DOUGHERTY’S LP HOLDINGS, INC., PARK INFUSIONCARE GP, LLC AND MAVERICK HEALTHCARE GROUP, L.L.C.
EXHIBIT
2.1
DATED
AS OF NOVEMBER 7, 2007
BY
AND AMONG
XXXXXXXXX’X
HOLDINGS, INC.,
XXXXXXXXX’X
OPERATING GP, LLC,
XXXXXXXXX’X
XX HOLDINGS, INC.,
PARK
INFUSIONCARE GP, LLC
AND
MAVERICK
HEALTHCARE GROUP, L.L.C.
-3-
TABLE
OF CONTENTS
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ARTICLE
1 PURCHASE AND SALE OF THE
INTERESTS1
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ARTICLE
2 CONSIDERATION AND MANNER OF
PAYMENT2
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Section
2.1.Purchase Price
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Section
2.2.Payment of Purchase
Price
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Section
2.3.Post-Closing Adjustment.
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Section
2.4.Earn-Out Consideration
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Section
2.5.Purchase Price
Allocation
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ARTICLE
3 REPRESENTATIONS AND WARRANTIES OF THE SELLING
PARTIES
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Section
3.1.Organization; Good
Standing
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Section
3.2.Authorization
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Section
3.3.Capitalization; Subsidiaries; Title to
Interests
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Section
3.4.Consents and Approvals
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Section
0.0.Xx Violation
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Section
0.0.Xx Brokers or Finders
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Section
0.0.Xxxxxxxxx Statements and Financial
Data
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Section
3.8.Absence of Undisclosed
Liabilities
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Section
3.9.Absence of Changes or
Events
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Section
3.10.Assets
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Section
3.11.Proprietary Rights
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Section
3.12.Material Contracts
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Section
3.13.Litigation
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Section
3.14.Compliance with Applicable
Laws
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Section
3.15.Licenses and Permits
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Section
0.00.Xxxxxx, Safety and
Environment
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Section
3.17.Taxes
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Section
0.00.Xxxxxxxxx Policies
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Section
0.00.Xxxxxxxxxx Matters.
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Section
3.20.Employee Benefit Plans
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Section
3.21.Labor Relations
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Section
3.22.Transactions With
Affiliates
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Section
3.23.Real Property
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Section
3.24.Warranties
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Section
3.25.Product Liability
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Section
0.00.Xxxx Accounts
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Section
3.27.Books and Records
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Section
3.28.Patients, Vendors and
Payors.
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Section
0.00.Xxxxx Names; Business
Locations
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Section
3.30.Workers Compensation
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Section
3.31.Disclosure Schedules
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Section
0.00.Xx Other
Representations
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-4-
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ARTICLE
4 REPRESENTATIONS AND WARRANTIES OF
BUYERS25
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Section
4.1.Buyer Organization
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Section
4.2.Authorization
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Section
0.0.Xx Violation
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Section
4.4.Consents and Approvals
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Section
0.0.Xx Brokers or Finders
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Section
0.0.Xx Other Representations
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ARTICLE
5 INDEMNIFICATION
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Section
5.1.Survival
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Section
5.2.Indemnification by the Selling
Parties
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Section
5.3.Indemnification by
Buyers
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Section
5.4.Indemnification
Procedure
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Section
5.5.Failure to Give Timely
Notice
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Section
5.6.Certain Limitations
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Section
5.7.Indemnification as Sole
Remedy
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Section
5.8.Special Rule for Fraud
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Section
5.9.Payments.
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Section
5.10.Set-off.
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Section
5.11.Purchase Price
Adjustment
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ARTICLE
6 CLOSING
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Section
6.1.Closing
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Section
6.2.Deliveries by the Selling
Parties
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Section
6.3.Deliveries by Buyer
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ARTICLE
7 COVENANTS AND OTHER
AGREEMENTS
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Section
7.1.Non-Competition;
Confidentiality
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Section
7.2.Agreements Regarding Tax
Matters.
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Section
7.3.Payment Of Indemnified Liabilities; Protection of
Relationships
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Section
7.4.Further Assurances
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Section
7.5.Names
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Section
7.6.Accounts Receivable
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Section
7.7.Employees
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Section
0.0.Xxxxxxxxx
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Section
7.9.Access to Books and
Records
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Section
7.10.Transition Services
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Section
7.11.Purchases of Supplies
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-5-
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ARTICLE
8 MISCELLANEOUS
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Section
8.1.Notices
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Section
8.2.General Definitions
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Section
8.3.Entire Agreement;
Amendment
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Section
8.4.Counterparts; Deliveries
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Section
8.5.Third Parties
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Section
8.6.Expenses
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Section
8.7.Waiver
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Section
8.8.Governing Law
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Section
8.9.Assignments
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Section
8.10.Headings
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Section
8.11.Jurisdiction of Courts
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Section
8.12.Waiver of Jury Trial
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Section
0.00.Xxxxxxxxxxxx
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Section
8.14.Knowledge of the Selling
Parties
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Section
8.15.Public
Announcements
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-6-
THIS
PARTNERSHIP INTEREST PURCHASE AGREEMENT (this
“Agreement”), dated as of November 7, 2007, is by and between
MAVERICK HEALTHCARE GROUP, L.L.C., an Arizona limited liability
company (“Maverick”), PARK INFUSIONCARE GP,
LLC, a Delaware limited liability company
(“GPBuyer” and, together with Maverick, the
“Buyers” and each individually
a “Buyer”),
XXXXXXXXX’X OPERATING GP, LLC, a Texas limited
liability company (“GP Seller”), XXXXXXXXX’X XX
HOLDINGS, INC., a Nevada corporation (“LP Seller” and,
together with GP Seller, the “Sellers” and each individually a
“Seller”) and XXXXXXXXX’X HOLDINGS, INC., a
Texas corporation (the “Owner” and, together with the Sellers,
the “Selling Parties” and each individually a “Selling
Party”).
RECITALS
A. The
Park Companies are engaged in the business of providing infusion therapy,
nutritional support and specialty pharmacy products and services (as conducted
by the Park Companies, the “Business”).
B. GP
Seller owns all of the issued and outstanding general partnership interests
in
the Company (the “GP Interests”) and LP Seller owns all of the
issued and outstanding limited partnership interests in the Company (the
“LP Interests” and, together with the GP Interests, the
“Interests” and each an
“Interest”).
C. The
Selling Parties desire to sell to Buyers, each an entity newly formed to
acquire
the Interests, and Buyers desire to purchase from the Selling Parties, all
of
the Interests, on the terms and conditions set forth herein.
D. Owner,
as the direct or indirect owner of each of the Sellers, will derive substantial
benefit from the consummation of the transactions contemplated by this
Agreement.
AGREEMENT
In
consideration of the mutual promises and agreements contained herein, and
for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties hereby agree as follows (capitalized terms
used
but not defined otherwise in this Agreement are defined in
Section 8.2):
-7-
ARTICLE
1
PURCHASE
AND SALE OF THE INTERESTS
On
the terms and conditions herein set forth, Sellers hereby agree to, and Owner
hereby agrees to cause Sellers to sell, assign, transfer, convey and deliver
to
Buyers at the Closing all right, title and interest in the Interests, free
and
clear of any and all (i) security interests, claims, liabilities, mortgages,
pledges, assessments and other encumbrances and liens affecting title to
the
Interests (“Liens”), and (ii) covenants, obligations,
agreements, options, rights of first refusal, restrictions and burdens of
every
kind or nature whatsoever (“Other
Encumbrances”). Buyers, in reliance upon the representations
and warranties of the Selling Parties contained herein and on the terms and
subject to the conditions herein set forth, hereby agree to acquire the
Interests from Sellers free and clear of all Liens and Other Encumbrances
at the
Closing on the terms and conditions set forth herein. For the
avoidance of doubt, GP Seller shall sell, assign, transfer, convey and deliver
the GP Interests to GP Buyer, and LP Seller shall sell, assign, transfer,
convey
and deliver the LP Interests to Maverick.
ARTICLE
2
CONSIDERATION
AND MANNER OF PAYMENT
Section
2.1. Purchase
Price.
(a) The
aggregate purchase price for the Interests, and the rights and benefits
conferred herein, including the Selling Parties’ covenants set forth in
Article 7 (the “Purchase Price”), shall be
(subject to adjustment for prorations as described herein) (i) Three
Million Five Hundred Thousand Dollars ($3,500,000) (the “Base
Purchase Price”), minus (ii) the Indebtedness Payments, if any,
minus (iii) Fifty Eight Thousand Four Hundred Sixty Three
Dollars
($58,463), as agreed by the parties with respect to certain insurance matters
(the “Tail Policy Holdback”), plus or minus, as
applicable, (iv) the Post-Closing Adjustment (as defined below) and
plus (v) the Earn-Out Consideration, if any. The Purchase
Price shall be paid as set forth in this Article
2.
(b) On
or prior to the Closing Date, the Selling Parties shall either: (i) pay off
all
Indebtedness as of the open of business on the Closing Date or (ii) direct
Buyers, by delivering to Buyers a written notice at least one (1) business
day
prior to the Closing Date, to deliver to the creditors of the Park Companies
on
the Closing Date, on behalf of the Park Companies and for their account,
any
amounts necessary to pay off all Indebtedness as of the open of business
on the
Closing Date (the aggregate amount of such payments under this clause (ii),
the
“Indebtedness Payments”). In either case, for each
instrument of Indebtedness fully repaid, the Selling Parties shall cause
all
creditors of the Park Companies to surrender at Closing and cancel all
instruments evidencing such Indebtedness and obtain the release or termination
of all Guarantees or security interests relating thereto and termination
of all
UCC financing statements filed in connection therewith. If necessary,
Buyers will assist the Selling Parties in obtaining the release of all
Guarantees as of the Closing.
-8-
Section
2.2. Payment
of Purchase Price.
At
the Closing, Buyers shall deliver, by wire transfer of immediately available
funds to an account or accounts of the Selling Parties at a bank or banks
specified by the Selling Parties in writing, the Base Purchase Price
minus the Indebtedness Payments, if any, minus the Tail Policy
Holdback, plus or minus, as the case may be, the Estimated Post-Closing
Adjustment (as defined below).
Section
2.3. Post-Closing
Adjustment.
(a) Estimated
Post-Closing Adjustment Schedule. Prior to the Closing, the
Selling Parties shall have delivered to Buyers a schedule (setting out in
specific detail each of the items comprising such calculation), setting forth
the Selling Parties’ good faith estimate of the Post-Closing Adjustment (the
“Estimated Post-Closing Adjustment”), such schedule (the
“Estimated Net Working Capital Schedule”) to be delivered in a
form reasonably satisfactory to Buyers. For purposes of this
Agreement, the term “Net Working Capital” means the Current
Assets minus the Current Liabilities determined in accordance with GAAP
consistently applied. For purposes of this Agreement, the term
“Current Assets” means the value of the following assets of the
Park Companies on a consolidated basis: (i) accounts receivable (net of
reserves), (ii) inventory (net of reserves), and (iii) current prepaid assets
(including for the avoidance of doubt any prepaid rent or property taxes);
and
“Current Liabilities” means the value of all Park Company
liabilities that are required to be classified as current liabilities in
accordance with GAAP. “Closing Net Working Capital”
means the Net Working Capital as of the open of business
on the Closing
Date. “Net Working Capital Target” means One Million
Three Hundred Thirty Nine Thousand One Hundred Sixty Five Dollars ($1,339,165),
representing the average Net Working Capital on the last day of each of the
months of April, May and June 2007. “Post-Closing
Adjustment” means (y) the Closing Net Working Capital less
(z) the Net Working Capital Target (i.e., such difference between
(y) and (z), if positive, shall result in an increase in the Purchase Price
and,
if negative, shall result in a decrease to the Purchase Price).
(b) Post-Closing
Adjustment Schedule. No later than ninety (90) days following the
Closing Date (the “Settlement Date”), Buyers and/or their
representatives shall prepare a schedule (setting out in reasonable detail
each
of the items comprising such calculation) setting forth their final
determination of the Post-Closing Adjustment (the “Post-Closing
Adjustment Schedule”) and shall deliver the Post-Closing Adjustment
Schedule to the Selling Parties.
-9-
(c) Protest
Notice. Within thirty (30) days of Buyers’ delivery of the
Post-Closing Adjustment Schedule, the Selling Parties may deliver written
notice
(the “Protest Notice”) to Buyers of any objections, specifying
in reasonable detail any contested items, the basis therefor and the Selling
Parties’ final determination of the Post-Closing Adjustment, which the Selling
Parties may have to the Post-Closing Adjustment Schedule. The failure
of the Selling Parties to deliver such Protest Notice within the prescribed
time
period will constitute the Selling Parties’ acceptance of the Post-Closing
Adjustment Schedule as determined by Buyers. Upon receipt of the
Post-Closing Adjustment Schedule, the Selling Parties and their accountants
will
be given reasonable access to the Park Companies’ relevant books, records,
workpapers and personnel during reasonable business hours for the purpose
of
verifying the Post-Closing Adjustment Schedule.
(d) Resolution
of the Protest. If Buyers and the Selling Parties are unable to
resolve any disagreement with respect to the Post-Closing Adjustment Schedule
within fifteen (15) days following Buyers’ receipt of the Protest Notice, then
the items in dispute will be referred to Xxxxxx, Xxxxx & Company, LLP (the
“Accountants”) for final determination within thirty (30)
days. The determination by the Accountants shall be based solely on
presentations by Buyers, on the one hand, and the Selling Parties, on the other
hand, and shall not involve independent review. Any determination by
the Accountants with respect to the disputed items shall not be outside the
range defined by the respective amounts in the Post-Closing Adjustment Schedule
proposed by Buyers and the Selling Parties’ proposed adjustments thereto with
respect to such items, and such determination shall be final, binding and
non-appealable upon the parties. Each of Buyers on the one hand, and
the Selling Parties, on the other hand, shall bear that percentage of the
fees
and expenses of the Accountants equal to the proportion of the dollar value
of
the unresolved disputed issues determined in favor of the other
party.
(e) Post
Closing Payment. For purposes of this Agreement, “Actual
Post-Closing Adjustment” means the Post-Closing Adjustment as finally
determined pursuant to this Section 2.3 (which may be a
positive or negative number). All payments to be made pursuant to
this Section 2.3 shall be made by wire transfer of immediately
available funds to an account designated by the recipient
thereof. Within ten (10) business days of the final determination of
the Post-Closing Adjustment pursuant to this
Section 2.3:
(i) If
the difference between the Actual Post-Closing Adjustment minus the Estimated
Post-Closing Adjustment results in a positive amount, then Buyers shall be
jointly and severally obligated to pay to the Selling Parties an amount equal
to
such difference; and
(ii) If
the difference between the Actual Post-Closing Adjustment minus the Estimated
Post-Closing Adjustment results in a negative amount, then the Selling Parties
shall be jointly and severally obligated to pay Buyers an amount equal to
such
difference.
-10-
Section
2.4. Earn-Out
Consideration.
As
additional consideration for the Interests (the “Earn-Out
Consideration”), the Selling Parties will be eligible to receive up to
an aggregate of Five Hundred Thousand Dollars ($500,000) from the Buyers
as set
forth below:
(a) In
the event that the Business achieves 2007 Gross Profit (as defined below)
of
Five Million Six Hundred Thirty Thousand Dollars ($5,630,000) (such amount,
the
“Full Target Gross Profit Amount”) or more, Buyers shall pay to
the Selling Parties an aggregate of Five Hundred Thousand Dollars ($500,000)
as
Earn-Out Consideration in accordance with this Section 2.4;
provided, however, in the event that 2007 Gross Profit is
less
than the Full Target Gross Profit Amount, but equal to or greater than Four
Million Seven Hundred Eighty Five Thousand Five Hundred Dollars ($4,785,500)
(the “Minimum Target Gross Profit Amount”), Buyers shall pay
the Selling Parties an aggregate amount equal to Five Hundred Thousand Dollars
($500,000) multiplied by the quotient obtained by dividing (i) the
difference between the 2007 Gross Profit and the Minimum Target Gross Profit
Amount, by (ii) an amount equal to Eight Hundred Forty-Four Thousand Five
Hundred Dollars ($844,500).
(b) Within
ninety (90) calendar days following the end of the Earn-Out Period (as defined
below), Buyers shall prepare in good faith and deliver to the Selling Parties
a
schedule showing its calculation of 2007 Gross Profit and a calculation of
the
corresponding Earn-Out Consideration (the “Earn-Out
Schedule”). Within thirty (30) days following receipt by the
Selling Parties of the Earn-Out Schedule (the “Earn-Out Review
Period”), the Selling Parties shall send written notice (an
“Gross Profit Notice of Disagreement”) to Buyers of any
objection to the Earn-Out Schedule, specifying in reasonable detail any
contested items, the basis therefor and the Selling Parties’ final determination
of the 2007 Gross Profit and the corresponding Earn-Out
Consideration. The Gross Profit Notice of Disagreement must describe
in reasonable detail the items contained in such financial statements or
the
calculation of 2007 Gross Profit that the Selling Parties disputes and the
basis
for any such dispute. During the Earn-Out Review Period, Buyers shall
provide the Selling Parties and their accountants reasonable access upon
reasonable notice to the Park Companies’ relevant books, records, workpapers and
personnel during regular business hours for the purpose of verifying the
Earn-Out Schedule. If the Selling Parties do not send to Buyers a
Gross Profit Notice of Disagreement within such thirty (30) day period, Buyers’
calculation of 2007 Gross Profit as set forth in the Earn-Out Schedule shall
be
final, conclusive and binding on the Selling Parties and Buyers. If a
Gross Profit Notice of Disagreement is delivered to Buyers within such thirty
(30) day period, Buyers and the Selling Parties shall negotiate in good faith
to
resolve the disputed items contained therein. If Buyers and the
Selling Parties, notwithstanding such good faith effort, fail to resolve
such
disputed items within fifteen (15) days after delivery of the Gross Profit
Notice of Disagreement to Buyers, such disputed items shall be resolved in
accordance with the procedures set forth in Section
2.3(d).
-11-
(c) In
the event that 2007 Gross Profit is less than the Minimum Target Gross Profit
Amount, no payment shall be due from Buyers to the Selling Parties under
this
Section 2.4 and the Selling Parties will have no rights to any
Earn-Out Consideration. In no event shall the Earn-Out Consideration
exceed Five Hundred Thousand Dollars ($500,000).
(d) The
Earn-Out Consideration, if any, shall be paid as follows:
(i) Buyers
shall have the right to set off the Earn-Out Consideration against any pending
post-Closing obligations of the Selling Parties pursuant to Section
5.2 (the “Setoff Amount”); and
(ii) Buyers
shall deliver, by wire transfer of immediately available funds, the lesser
of
(A) Two Hundred Fifty Thousand Dollars ($250,000) of the Earn-Out Consideration
and (B) such amount payable to the Selling Parties as Earn-Out Consideration
pursuant to Section 2.4(a) (the “Escrow
Amount”) to Xxxxx Fargo Bank, National Association (the “Escrow
Agent”) for purposes of securing the Selling Parties’ post-Closing
obligations pursuant to Section 5.2, to be held in an escrow
account (the “Escrow Account”) and disbursed in the manner set
forth in an agreement executed by each of the Selling Parties, Buyers and
the
Escrow Agent (the “Escrow Agreement”), a form of which is
attached hereto as Exhibit A.
The
excess, if any, of the Earn-Out Consideration over the sum of the Setoff
Amount
and the Escrow Amount shall be payable by Buyers to the Selling Parties by
wire
transfer of immediately available funds to the account or accounts of the
Selling Parties designated by the Selling Parties within fifteen (15) days
following the final determination of the Earn-Out Consideration.
(e) During
the period following the Closing Date and ending on December 31, 2007 (the
“Earn-Out Period”), Buyers shall cause the Company to operate
the Business at all times during such period in good faith and not in a manner
intended to avoid or otherwise reduce the Earn-Out
Consideration. Notwithstanding the foregoing, prior to the end of the
Earn-Out Period, Buyers shall not be required to take any action or refrain
from
taking any action in order to maximize the Earn-Out Consideration if the
boards
of directors of Buyers in good faith believe it is not in the long term best
interest of the Business to take such action or refrain from taking such
action,
as the case may be.
(f) For
purposes of this Section 2.4, “2007 Gross
Profit” shall mean, with respect to the Business, total revenue (as
determined in accordance with GAAP) less contractual discounts and the
cost of drugs, such amount to be calculated in accordance with past
practices.
-12-
Section
2.5. Purchase
Price Allocation.
Buyers
shall prepare an allocation of the Purchase Price (along with any other items
constituting consideration for purposes of Section 1060 of the Code), taking
into account any adjustments made thereto pursuant to this Agreement, among
the
Assets in accordance with Code Section 1060 and the Treasury Regulations
thereunder (and any similar provision of state, local or foreign law, as
appropriate), which allocations (the “Allocation”) shall be
binding upon the Selling Parties. Buyers shall deliver the Allocation
to the Selling Parties within sixty (60) days after the final determination
of
the Actual Post-Closing Adjustment pursuant to Section
2.3. In the event an adjustment to the Purchase Price is
made pursuant to this Agreement, the Allocation shall be revised accordingly
by
Buyers and delivered to the Owner as soon as reasonably
practicable. Buyers and the Selling Parties and each of their
respective Affiliates shall take all actions and properly and timely file
all
Tax Returns (including, but not limited to IRS Form 8594 (Asset Acquisition
Statement)) consistent with the Allocation and shall not take any action
inconsistent therewith. The Selling Parties shall timely and properly
prepare, execute, file and deliver all such documents, forms and other
information as Buyers may reasonably request to prepare the
Allocation.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE SELLING PARTIES
Each
of the Selling Parties hereby jointly and severally represents and warrants
to
Buyers that, except as set forth in or expressly incorporated by reference
into
the corresponding section of the disclosure schedules to this Agreement (the
“Disclosure Schedules”):
Section
3.1. Organization;
Good Standing»
(a) The
Company is a Texas limited partnership, and is duly organized, validly existing
and in good standing under the laws of Texas and has all requisite power
and
authority to own, lease and operate its assets, properties and business and
to
carry on its business as now being conducted. The Company is duly
qualified or otherwise authorized as a foreign entity to transact business
in
each jurisdiction listed on Schedule 3.1(a), which are all of
the jurisdictions in which the nature of the Business or the location of
any of
the assets used in the Business requires the Company to so qualify.
(b) Each
of the Company’s Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation as set forth
on
Schedule 3.1(b), and has all requisite power and authority to
own, lease and operate its assets, properties and business and to carry on
its
business as now being conducted. Each of the Company’s Subsidiaries
is duly qualified or otherwise authorized as a foreign entity to transact
business in each jurisdiction listed on Schedule 3.1(b), which
are all of the jurisdictions in which the nature of the Business or the location
of any of the assets used in the Business requires each of the Company’s
Subsidiaries to so qualify.
-13-
(c) GP
Seller is a Texas limited liability company, and is duly organized, validly
existing and in good standing under the laws of Texas and has all requisite
power and authority to own, lease and operate its assets, properties and
business and to carry on its business as now being conducted. GP
Seller is duly qualified or otherwise authorized as a foreign entity to transact
business in each jurisdiction listed on Schedule 3.1(c), which
are all of the jurisdictions in which the nature of the Business or the
ownership of the GP Interests requires GP Seller to so qualify.
(d) LP
Seller is a Nevada corporation, and is duly organized, validly existing and
in
good standing under the laws of Nevada and has all requisite power and authority
to own, lease and operate its assets, properties and business and to carry
on
its business as now being conducted. LP Seller is duly qualified or
otherwise authorized as a foreign entity to transact business in each
jurisdiction listed on Schedule 3.1(d), which are all of the
jurisdictions in which the nature of the Business or the ownership of the
LP
Interests requires LP Seller to so qualify.
(e) The
Owner is a Texas corporation, and is duly organized, validly existing and
in
good standing under the laws of Texas and has all requisite power and authority
to own, lease and operate its assets, properties and business and to carry
on
its business as now being conducted. The Owner is duly qualified or
otherwise authorized as a foreign entity to transact business in each
jurisdiction listed on Schedule 3.1(e), which are all of the
jurisdictions in which the nature of the Business or the location of any
of the
assets used in the Business requires the Owner to so qualify.
Section
3.2. Authorization.
Each
Selling Party and Park Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement and each agreement,
document, certificate or instrument executed in connection with this Agreement
(collectively the “Transaction Documents”) to which it is a
party. The execution and delivery of this Agreement and the
Transaction Documents to which any Selling Party or any Park Company is a
party,
the performance of all obligations hereunder and thereunder and the consummation
of the transactions contemplated hereby and thereby have been duly authorized
by
each such Selling Party or Park Company and no other proceeding on the part
of
any Person is necessary. This Agreement and the Transaction Documents
have been duly executed and delivered by each Selling Party and Park Company
party thereto and constitute the legal, valid and binding obligation of each
Selling Party and Park Company party thereto, enforceable in accordance with
their respective terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights of creditors generally, and the availability of equitable
remedies.
-14-
Section
3.3. Capitalization;
Subsidiaries; Title to Interests.
(a) Schedule
3.3(a) sets forth the entire capitalization (including the identity of
each partner and the percentage and type of partnership interest held by
each
such partner) of the Company. All of the outstanding partnership
interests in the Company are validly issued, fully paid and non-assessable
and
owned of record in the amounts listed on Schedule 3.3(a) and no
partnership interest in the Company is subject to, nor has any partnership
interest in the Company been issued in violation of, any preemptive or similar
rights. Except as set forth on Schedule 3.3(a), no
partner in of the Company is subject to any voting agreement or other
restrictions with respect to the voting of its partnership interest in the
Company. All issuances, sales and repurchases by the Company of its
partnership interests have been effected in compliance with all applicable
laws,
including applicable Federal, state and provincial securities
laws. No Person has the right to acquire any partnership interest in
the Company or any security directly or indirectly exercisable for, or
convertible into, a partnership interest in the Company. Except as
set forth on Schedule 3.3(a), no Person other than the Sellers
have ever owned partnership or other equity interests of the
Company.
(b) Schedule
3.3(b) sets forth a list of the Subsidiaries of the Company, including
each such Subsidiary’s form of organization, jurisdiction of formation and
capitalization (including the identity of each holder of equity in such
Subsidiary and the percentage and type of equity interest held by each such
Person). Each of the Subsidiaries listed on Schedule
3.3(b) is wholly-owned, directly or indirectly, by the Company, all of
the outstanding equity interests in each such Subsidiary are validly issued,
fully paid and non-assessable, and no Person has the right to acquire any
equity
interest in any such Subsidiary or any security directly or indirectly
exercisable for, or convertible into, an equity interest in any such
Subsidiary. Except as set forth on Schedule 3.3(b),
no Person other than the Company or another Subsidiary has ever owned any
equity
interests of such Subsidiaries.
(c) Except
as set forth on Schedule 3.3(c): (i) each Seller has
sole voting power and sole power of disposition, in each case with respect
to
all of the Interests listed on Schedule 3.3(a) opposite its
name with no limitations, qualifications or restrictions on such rights and
powers; (ii) the Interests listed on Schedule 3.3(a) opposite
each Seller’s name will be transferred to the applicable Buyer pursuant to this
Agreement, free and clear of any Liens, Other Encumbrances and any other
limitation or restriction (including any restriction on the right to vote
or
otherwise dispose of such Interests), other than restrictions under the
Securities Act of 1933, as amended (the “Securities Act”);
(iii) neither Seller is subject to any agreements, arrangements, options,
warrants, calls, rights, commitments or other restrictions relating to the
sale,
transfer, purchase, redemption or voting of its equity interests of the Company;
and (iv) neither Seller has granted to any Person any right of first refusal,
preemptive right, subscription right or similar right with respect to such
Seller’s Interests.
-15-
Section
3.4. Consents
and Approvals.
Except
as set forth on Schedule 3.4, no consent, approval, order or
authorization of, or registration, declaration or filing with, or notice
of, any
multi-national, national, state, provincial, local, governmental, judicial,
public, quasi-public, administrative or self-regulatory authority, agency,
commission, organization or any arbitrator or arbitrators (collectively,
“Governmental Authority”) or other Person is required to be
made or obtained in connection with the authorization, execution, delivery
and
performance of this Agreement and the Transaction Documents, or the consummation
of the transactions contemplated hereby and thereby.
Section
3.5. No
Violation.
Except
as set forth on Schedule 3.5, the execution, delivery and
performance by of this Agreement and the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby will
not:
(a) result
in the breach of any of the terms or conditions of, or constitute a default
under, or accelerate any rights or obligations under, or in any manner release
any party thereto from any obligation under, or otherwise affect any rights
of
any Selling Party or any Park Company under, any mortgage, note, bond,
indenture, contract, agreement, license or other instrument or obligation
of any
kind or nature, in any case whether written or oral, by which any Selling
Party
or any Park Company may be bound or affected;
(b) violate
or conflict with any law, order, permit, writ, injunction, judgment, rule,
regulation, statute, ordinance, treaty, constitution, directive, code, order,
decree or other decision of any court, administrative agency, or Governmental
Authority (collectively, “Laws”);
(c) violate
any provision of the charter or governing documents of any Selling Party
or any
Park Company; or
(d) result
in the creation or imposition of any Lien upon any of the assets of any Park
Company.
Section
3.6. No
Brokers or Finders.
No
Selling Party, nor any Affiliate of a Selling Party, has retained any broker
or
finder, or made any statement or representation to any Person that would
entitle
such Person to, or agreed to pay, any broker’s, finder’s or similar fees or
commissions in connection with the transactions contemplated by this
Agreement.
-16-
Section
3.7. Financial
Statements and Financial Data.
(a) Schedule 3.7(a)
contains the true, correct and complete unaudited consolidated balance sheets
and statements of income of the Park Companies as of, and for the annual
periods
ended, December 31, 2004, 2005 and 2006 and for the nine (9) month period
ended September 30, 2007 (the “Financial
Statements”). Each of the Financial Statements is consistent
with the books and records of the Park Companies (which, in turn, accurately
and
fairly reflect in all respects all the transactions of, acquisitions and
dispositions of assets by, and incurrence of liabilities by the Park Companies),
do not include or omit to state any material fact which would render them
misleading, and fairly and accurately presents the financial condition, assets
and liabilities as of the respective dates and the results of operations,
retained earnings, cash flows and changes in financial position of the Park
Companies as of the dates thereof and for the periods covered thereby, and
has
been prepared in accordance with GAAP consistently applied throughout the
periods covered thereby. Other than the Park Companies, there are no
other entities or individuals that should be consolidated in the Financial
Statements in order to fully reflect the operations and financial performance
of
the Business.
(b) Schedule
3.7(b) contains a true, correct and complete list of all fixed assets
used in connection with the operation of the Business as of October 31, 2007,
including the value at which each such item is currently carried on the Park
Companies’ books.
(c) Schedule
3.7(c) contains a true, correct and complete list of all inventory
related to the operation of the Business as of October 31, 2007, including
the
original purchase price thereof and the value at which each such item is
currently carried on the Park Companies’ books. The inventory
reflected in the Estimated Net Working Capital Schedule is of good, useable
and
merchantable quality in all material respects and is saleable in the ordinary
course of business except to the extent written down or reserved against
in the
Estimated Net Working Capital Schedule.
-17-
(d) Schedule
3.7(d) contains a list of all accounts receivable of the Park Companies
as of October 31, 2007. Such accounts receivable: (i) arose from bona
fide transactions in the ordinary course of business and are payable on ordinary
trade terms, (ii) are legal, valid and binding obligations of the respective
debtors enforceable in accordance with their terms, (iii) are not subject
to any
set-off, counterclaim or other defense, (iv) are collectible in the ordinary
course of business, consistent with past practice, in the aggregate recorded
amounts thereof (net of reserves), (v) are not the subject of any Proceedings
brought by or on behalf of any Park Company and (vi) do not represent
obligations which are conditional on an occurrence or event, or the absence
of
an occurrence or event. Schedule 3.7(d) sets forth a
description of historical write-off experiences of the Park Companies during
each of the years ended December 31, 2004, 2005 and 2006 and the ten (10)
month
period ended October 31, 2007. Schedule 3.7(d) lists
all reserves established with respect to the accounts receivable as of October
31, 2007.
(e) Schedule
3.7(e) contains a list of all accounts payable and accruals of the Park
Companies as of October 31, 2007. Such accounts payable and accruals
have arisen in bona fide arm’s-length transactions in the ordinary course of
business, and, prior to the Closing, the Park Companies have been paying
their
accounts payable in a commercially reasonable manner. There are no
unpaid invoices or bills representing amounts alleged to be owed by any Park
Company, or other alleged obligations of any Park Company, which any Park
Company has disputed or determined to dispute or refuse to pay.
Section
3.8. Absence
of Undisclosed Liabilities.
No
Selling Party nor any Park Company has any debts, liabilities or obligations
of
any nature affecting the Business, the Interests or the assets of any Park
Company (whether accrued or unaccrued, absolute or contingent, direct or
indirect, asserted or unasserted, known or unknown, xxxxxx or inchoate,
perfected or unperfected, liquidated or unliquidated, or otherwise, and whether
due or to become due) arising out any transaction, series of transactions,
action or inaction entered into or occurring on or prior to the date hereof,
or
any state of facts or condition existing on or prior to the date hereof
(regardless of when such liability or obligation is asserted), except
(a) as and to the extent reflected and accrued for or reserved against in
the balance sheet dated as of December 31, 2006 (the “Latest Balance
Sheet Date”) and included in the Financial Statements; (b) for
liabilities and obligations which have arisen after the Latest Balance Sheet
Date in the ordinary course of business consistent with past custom and practice
(none of which results from, arises out of, relates to, is in the nature
of, or
was caused by any breach of contract, breach of warranty, tort, infringement
or
violation of law by any Selling Party or any Park Company); (c) for
liabilities specifically delineated on Schedule 3.8, and
(d) for any executory obligations arising under any Material Contract that
does not arise from a pre-Closing breach of such Material Contract and does
not
relate to any act or omission on or before the date hereof which, with the
giving of notice, the passage of time or both, could constitute a pre-closing
breach of such Material Contract.
-18-
Section
3.9. Absence
of Changes or Events.
Except
as set forth on Schedule 3.9, since the Latest Balance
Sheet Date, each Selling Party and each Park Company has conducted the Business
in the ordinary course of business. Without limiting the generality
of the foregoing, since the Latest Balance Sheet Date, except as disclosed
on
Schedule 3.9, there has not been:
(a) one
or more events, occurrences, developments or states of circumstances or facts
which, individually or in the aggregate, has had, or could reasonably be
expected to result in, a material adverse effect on any Park Company or the
Business;
(b) any
declaration, setting aside or payment of any dividend, or other distribution
with respect to the Interests or any equity securities of any Subsidiary
of the
Company (whether in cash or in kind);
(c) any
collection, attempt to collect or write-off as uncollectible of any notes
or
accounts receivable or other cash obligations owed to any Park Company other
than in the ordinary course of business consistent with past
practices;
(d) any
acquisition or disposition by any Park Company of any business or line of
business or the disposition of a significant amount of assets, whether by
merger, purchase or sale of stock, purchase or sale of assets or
otherwise;
(e) any
damage, destruction or other casualty loss (whether or not covered by insurance)
materially affecting any Park Company or the Business;
(f) any
Tax election or amendment of any Tax Return by any Park Company;
(g) any
delay or postponement of any payment of any accounts payable or any other
liability or obligation of any Park Company, or any extension or agreement
to
extend the payment date of any such accounts payable or other liability or
obligation of any Park Company, in any case, other than in the ordinary course
of business consistent with past practices;
(h) any
acceleration of the collection of any accounts receivables of any Park Company
or any other amounts owed to any Park Company;
(i) any
change by any Park Company in its method of accounting or accounting practice,
other than changes required under applicable Law, or any failure by any Park
Company to maintain its books, accounts and records in the ordinary course
of
business consistent with past practices; or
(j) any
commitment by any Selling Party or any Park Company to do any of the
foregoing.
-19-
Section
3.10. Assets.
(a) Except
as set forth on Schedule 3.10(a), the Park Companies own
good and marketable title to all of their respective assets (the
“Assets”), free and clear of any and all Liens other than
Permitted Exceptions, and the Assets constitute all of the assets necessary
to
operate the Business as currently conducted.
(b) Except
as set forth on Schedule 3.10(b), the Assets are sufficient to
enable the Business to be conducted immediately after the Closing in the
same
manner as Selling Parties presently conduct it. All material items of
tangible personal property owned or leased by the Park Companies are in good
operating condition and repair, ordinary wear and tear excepted, and are
suitable for the purposes for which they are presently being used.
Section
3.11. Proprietary
Rights.
(a) Schedule
3.11(a) contains a complete list of all (i) patented or registered
Intellectual Property, pending patent applications, and other applications
for
registration of Intellectual Property, owned by any Park Company and used
in or
held for use in the operation of the Business (specifying the owner thereof
and
the patent, registration or application number and issuance, registration
or
filing date, if applicable); (ii) unregistered Trademarks used in and material
to the operation of the Business; and (iii) Software owned by any Park Company
and used in the operation of the Business. Except as set forth on
Schedule 3.11(a), no Person other than a Park Company has any
right, title or interest in or to, including any right to use, any of such
Intellectual Property used in the operation of the Business.
(b) Schedule
3.11(b) contains a complete list (including the owner thereof, the
patent, registration or application number if applicable, the termination
or
expiration dates thereof and any license or other agreement relating thereto),
of all Intellectual Property licensed to any Park Company or otherwise owned
by
a Person other than a Park Company and used in connection with the operation
of
the Business (excluding generally commercially available, off the shelf Software
licensed pursuant to non-negotiated shrink-wrap or “click to accept” agreements
with a replacement cost and/or aggregate acquisition or license cost of less
than Ten Thousand Dollars ($10,000)).
-20-
(c) The
Park Companies own all rights, title and interest in and to, free and clear
of
Liens, or have the right to use in the manner used in the Business pursuant
to a
valid and enforceable license set forth on Schedule 3.11(b),
all Intellectual Property necessary for, or used in or held for use in the
operation of the Business (collectively, the “Company Intellectual
Property”). Except as set forth on Schedule
3.11(c), none of the Intellectual Property owned by any Park Company
and used in connection with the operation of the Business is invalid or
unenforceable in whole or in part. No loss or expiration of any of
the Company Intellectual Property is pending, or, to the knowledge of the
Selling Parties, threatened. In the Selling Parties’ reasonable
business judgment, the Park Companies have taken all action necessary, performed
all customary acts, and paid all fees and taxes (to the extent applicable),
required to protect and maintain in full force and effect the Company
Intellectual Property. Each item of Company Intellectual Property
will, immediately subsequent to the Closing hereunder, be owned or available
for
use by the Park Companies on such terms as are identical to those pursuant
to
which any Park Company, immediately prior to the Closing, owns or has the
right
to use such item.
(d) Except
as set forth on Schedule 3.11(d), (i) no claim, demand, suit,
complaint, dispute, proceeding or investigation contesting the validity,
use or
enforceability of the Company Intellectual Property, or otherwise challenging
the rights of any Park Company in, or use by any Park Company of, any of
the
Company Intellectual Property, is presently pending or was pending during
the
previous three (3) years and, to the knowledge of the Selling Parties, no
such
action is threatened; (ii) neither the use by any Park Company of any
Intellectual Property nor the operation of the Business as currently conducted,
has infringed, misappropriated, or otherwise violated, or is infringing,
misappropriating or otherwise violating the Intellectual Property of any
other
Person, and none of the Selling Parties nor any Park Company has received
any
notices regarding any of the foregoing (including any cease-and-desist letters
or demands or offers to license any Intellectual Property from any other
Person); and (iii) to the knowledge of the Selling Parties, no other Person
is
infringing, misappropriating or otherwise violating any Company Intellectual
Property.
-21-
(e) The
computer systems, networks, and other technology, including the Software,
hardware and communications devices (collectively, the
“Systems”) currently used in the conduct of the Business are
sufficient for the current needs of the Business, including as to capacity
and
ability to process current peak volumes in a timely manner. Except as
set forth in Schedule 3.11(e)(i), all Systems, other than
Software, used in the Business are owned and operated by and are under the
control of the Park Companies, and are not dependent, in whole or in part,
on
any facilities which are not under the ownership, operation or control of
a Park
Company. Schedule 3.11(e)(ii) lists and sets forth a
brief description of each material disruption, degradation, shutdown or
interruption of the use of such Systems by any Park Company or of the conduct
of
the Business experienced in the twelve (12) months prior to the date hereof.
For
purposes hereof, a material disruption, degradation, shutdown or interruption
of
use of a System shall mean any such disruption having a duration of at least
6
hours, but not including any routine maintenance performed outside the Business’
normal operating hours.
Section
3.12. Material
Contracts»
.Schedule 3.12
is a true, correct and complete list of each Contract that:
(a) provides
for future receipt of, or payment by, any Park Company of more than Twenty
Five
Thousand Dollars ($25,000) annually, including, without limitation, all such
Contracts that are (i) Contracts for capital expenditures and (ii) employment,
consulting or severance Contracts;
(b) provides
for future receipt of, or payment by, any Park Company of more than Twenty
Five
Thousand Dollars ($25,000) annually and is with one or more of the customers
or
suppliers of the Business;
(c) is
with a physician or one or more of the payors of the Business;
(d) prohibits
any Park Company from freely engaging in any business or competing anywhere
in
the world, including any contract containing any nondisclosure or
confidentiality provision, any non-competition, settlement, co-existence
or
similar provision that restricts the geographic or operational scope of the
Business or the ability of any Park Company to enter into any new line of
business, any right of first offer or first refusal with respect to the sale,
license or other disposition of any asset, any division or any business of
any
Park Company, or any provision prohibiting any Park Company from granting
any
rights or conducting any business or that otherwise restricts any Park Company’s
activities or the use of any Intellectual Property;
(e) relates
to any Indebtedness;
-22-
(f) is
a license (whether as a licensor or licensee) or similar agreement permitting
the use of any Intellectual Property (other than generally commercially
available, off the shelf Software licensed pursuant to non-negotiated
shrink-wrap or “click to accept” agreements with a replacement cost and/or
aggregate acquisition or license cost of less than Fifteen Thousand Dollars
($15,000));
(g) involves
the sharing of profits, losses, costs or liabilities by any Park Company
with
any other Person in a joint venture, partnership or similar
agreement;
(h) involves
hedging or similar transactions;
(i) grants
a power of attorney on behalf of any Park Company;
(j) involves
any investment or capital contribution in any Person or advance or loan to
any
Person by any Park Company or requires or obligates any Park Company to make
any
investment in, or advance, loan or capital contribution to, any
Person;
(k) is
an agreement pursuant to which any Park Company leases (either as lessor
or
sublessee), subleases (either as sublessor or sublessee), occupies or otherwise
uses any real property (the “Real Property
Leases”);
(l) is
an agreement pursuant to which (i) any Park Company leases, holds or otherwise
uses any machinery, equipment, vehicle or other tangible personal property
owned
by any third Person or (ii) any Park Company is the lessor of, or makes
available for use by any third Person, any tangible personal property owned
by
it;
(m) provides
for the supply of goods or services to a Governmental Authority;
(n) is
a sales representative, distributor, dealer, advertising, consultant,
independent contractor, lobbying, manufacturer’s representative, franchise,
agency or similar agreement, in each case, which provides for future receipt
of,
or payment by, any Park Company of more than Twenty Five Thousand Dollars
($25,000) annually;
(o) relates
to the employment of any officer, individual employee or other Person on
a
full-time, part-time, consulting or other basis;
(p) relates
to the acquisition or disposition of any business (whether by merger, sale
of
membership interests, sale of assets or otherwise); or
(q) is
not of the foregoing type and is material to the conduct of the
Business
-23-
(collectively,
the “Material Contracts”). The Selling Parties have
provided Buyers with true and correct copies of all Material Contracts,
including all amendments, waivers and other modifications
thereof. None of the Park Companies is in material default, nor has
any event occurred which with the giving of notice or passage of time or
both
would constitute a default, under any Material Contract or any other obligation
owed by any Park Company thereunder. To the knowledge of the Selling
Parties, no other party to any Material Contract is in default thereunder
nor,
to the knowledge of the Selling Parties, has any event occurred which with
the
giving of notice or the passage of time or both would constitute a default
by
any other party to any such Material Contract. Except as set forth on
Schedule 3.12, each of such Material Contracts is in full
force and effect, is valid and enforceable against the Park Company party
thereto in accordance with its terms and, to the knowledge of the Selling
Parties, is not subject to any claims, charges, set-offs or
defenses.
Section
3.13. Litigation.
Except
as set forth on Schedule 3.13, since March 24, 2004 there
has been no, and there is currently no, suit, action, proceeding, investigation,
grievance, claim or order (collectively, “Proceedings”) pending
or, to the knowledge of the Selling Parties, threatened against any Selling
Party or any Park Company or any of the current or former officers, directors
or
employees of any Selling Party or any Park Company with respect to the Business,
the Interests or the Assets, before any court, or before any Governmental
Authority; nor, to the knowledge of the Selling Parties, is there any reasonable
basis for any such action, proceeding or investigation. None of the
Selling Parties, the Park Companies or any Affiliate thereof, with respect
to
the Business, (a) is subject to any judgment, order or decree of any court
or Governmental Authority; (b) has received any opinion or memorandum or
legal advice from legal counsel to the effect that it is exposed from a legal
standpoint, to any liability that may be material to its business; or
(c) is engaged in any legal action to recover monies due it or for damages
sustained by it or to cause a third party to act or refrain from acting in
a
certain manner.
Section
3.14. Compliance
with Applicable Laws.
Except
as set forth on Schedule 3.14, the Selling Parties and the
Park Companies are, and have been since March 24, 2004, in material compliance
with all Laws and requirements in connection with the conduct, ownership,
use,
occupancy or operation of the Interests, the Business and the Assets, and
none
of the Selling Parties nor any Park Company has received notice (written
or
oral) at any time since March 24, 2004 of any violation of any Law or
requirement in connection with the conduct, ownership, use, occupancy or
operation of the Interests, the Business or the Assets.
-24-
Section
3.15. Licenses
and Permits.
The
Park Companies hold, and at all times since March 24, 2004 have held, all
Permits necessary or desirable for the conduct, ownership, use, occupancy
or
operation of the Business or the Assets, all of which are identified on
Schedule 3.15. The Park Companies are, and at
all times since March 24, 2004 have been, in material compliance with such
Permits, all of which are in full force and effect, and none of the Selling
Parties nor any Park Company have received any notices (written or oral)
to the
contrary.
Section
3.16. Health,
Safety and Environment.
(a) Except
as set forth on Schedule 3.16(a), since March 24, 2004,
each Park Company has complied with, and is currently in compliance with,
all
Environmental and Safety Requirements.
(b) Since
March 24, 2004, none of the Park Companies has been subject to, or received
any
written notice of, any private, administrative, or judicial action, or written
notice of any intended private, administrative, or judicial action related
to
the presence or alleged presence of Hazardous Materials in, under, or upon
any
real property currently or formerly owned, leased, or used by (i) any
Selling Party, Park Company or any of their predecessors, or (ii) any
Person that has, at any time, transported, treated, or disposed of Hazardous
Material on behalf of any Selling Party, Park Company or any of their
predecessors; and there are no pending or, to the knowledge of the Selling
Parties, threatened actions or proceedings (or notices of potential actions
or
proceedings) from any Governmental Authority or any other Person regarding
any
matter relating to Environmental and Safety Requirements.
(c) Except
as set forth on Schedule 3.16(c), to the knowledge of the
Selling Parties, (i) there are no present events, conditions,
circumstances, activities, practices, incidents, or actions, (ii) with
respect to any period of time during which any Selling Party or Park Company
owned or occupied any real property, there have been no past events, conditions,
circumstances, activities, practices, incidents, or actions, and (iii)
with respect to any period of time during which none of the Selling Parties
or
Park Companies owned or occupied any real property, there have been no past
events, conditions, circumstances, activities, practices, incidents, or actions,
that might be expected to interfere with or prevent continued compliance
with
any Environmental and Safety Requirements, give rise to any legal obligation
or
liability, or otherwise form the basis of any Proceeding against or involving
any Selling Party, Park Company or any real property presently or previously
owned or used by any Selling Party, Park Company or any of their predecessors,
or any off-site disposal or treatment site used by any Selling Party, Park
Company or any of their predecessors under any Environmental and Safety
Requirements or related common law theories.
-25-
Section
3.17. Taxes.
All
Taxes due and payable by any Selling Party or any Park Company have been
timely
paid in full. Each Selling Party and Park Company has timely filed
all federal, state, county, local and foreign Tax Returns that it is required
to
have filed, and such returns are complete and correct in all material
respects. Any deficiencies proposed as a result of any audits or
investigations of or claims against any Selling Party or any Park Company
by any
Governmental Authority have been fully paid or settled, and there are no
present
or pending disputes, audits, investigations or claims as to Taxes payable
by any
Selling Party or any Park Company. There are no unexpired waivers or
extensions of any statute of limitations with respect to any Taxes of any
Selling Party or any Park Company and no Selling Party nor any Park Company
is a
party to any action or proceedings by any Governmental Authority for the
collection or assessment of Taxes against it. No claim has ever been
made by an authority in a jurisdiction where the Selling Parties or Park
Companies do not file Tax Returns that any Selling Party or any Park Company
may
be subject to taxation by that jurisdiction. There are no Liens on
any of the Assets that arose in connection with any failure (or alleged failure)
to pay any Tax. Each Selling Party and Park Company has timely
withheld and paid all Taxes required to have been withheld and paid in
connection with any amounts paid or owing to any employee, independent
contractor, stockholder, or other third party, and all IRS Forms W-2 and
1099
required with respect thereto have been properly completed and timely
filed. No Selling Party nor any Park Company has any liability for
Taxes of another Person under Treasury Regulation Section 1.1502-6, as a
transferee or successor, by contract, or otherwise. No Selling Party
nor any Park Company is a party to any agreement, contract, arrangement,
or plan
that has resulted or could result, separately, or in the aggregate, in the
payment of any “excess parachute payment” within the meaning of Section 280G of
the Code. No Selling Party nor any Park Company has been a member of
an Affiliated Group. No Selling Party nor any Park Company has
engaged in any reportable transaction within the meaning of Sections 6111
and
6112 of the Code. No Selling Party nor any Park Company has requested
or received a ruling from any Governmental Authority or signed any binding
agreement with any Governmental Authority that might impact any tax attribute
of
or the amount of Tax due from any Selling Party or any Park Company after
the
Closing Date. Each Selling Party (other than the Owner) and Park Company
is
disregarded as an entity separate from the Owner within the meaning of Treasury
Regulation Section 301.7701-3 (and any comparable provision of state or local
law).
Section
3.18. Insurance
Policies.
Schedule 3.18
sets forth a description of all insurance policies necessary to or used in
the
Business, including those which are owned by the Selling Parties (including
the
insurer, the policy holder, the type of policy and the policy
limits). Each of the Park Companies is named as an insured on the
policies described on Schedule 3.18. None of the
Selling Parties or Park Companies has received any notice of cancellation
or
intent to cancel with respect to any such insurance policies. All
premiums on all such policies have been paid to date and the Selling Parties
or
Park Companies, as applicable, have complied in all material respects with
all
conditions of its policies. None of the Selling Parties or Park
Companies is in default with respect to its obligations under any material
insurance policy maintained by it.
-26-
Section
3.19. Healthcare
Matters.
(a) Except
as set forth on Schedule 3.19(a), the Park Companies are and
during the last three (3) years have been in compliance, in all material
respects, with all federal and state healthcare Laws applicable to the operation
of the Park Companies, including, but not limited to, the federal Anti-kickback
Statute (42 U.S.C. § 1320a-7b(b)), the Xxxxx Anti-Self-Referral Law (42 U.S.C.
§§ 1395nn), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the
administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), the Anti-Inducement
Law (42 U.S.C. § 1320a-7a(a)(5)), the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. § 1320d et seq.), the regulations
promulgated pursuant to such Laws and comparable state Laws, all Laws applicable
to the holders of Health Care Licenses held by any Park Company during the
last
three (3) years and all Laws applicable to the Programs in which any Park
Company participate or participated during the last three (3) years
(collectively, “Healthcare Laws”).
(b) Except
as set forth on Schedule 3.19(b): (i) all material reports,
documents, claims and notices required to be filed, maintained, or furnished
to
any Governmental Authority by any Park Company in connection with any Healthcare
Law have been so filed, maintained or furnished; and (ii) all such reports,
documents, claims and notices were complete and correct in all material respects
on the date filed (or were corrected in or supplemented by a subsequent
filing).
(c) Each
Park Company holds or possesses, and during the last three (3) years has
held or
possessed, each of the licenses, franchises, registrations, qualifications,
approvals, authorizations and other permits by, of or with any Governmental
Authority necessary under any Healthcare Law to (i) own or lease, operate
and
use its assets (ii) to carry on and conduct its business substantially as
currently conducted and as proposed to be conducted and (iii) obtain
reimbursement under Medicare and Medicaid Programs and under all contracts,
programs and other arrangements with third-party payors, insurers or fiscal
intermediaries (each, an “Entity Health Care
License”). Each director, officer, member and manager
of each of the Park Companies and, to the knowledge of the Selling Parties,
each
employee and agent of the Park Companies, has, and during the last three
(3)
years has had, all licenses, franchises, registrations, qualifications,
approvals, authorizations and other permits by, of or with any Governmental
Authority necessary under any Healthcare Law for the performance of his or
her
duties (each, an “Individual Health Care License” and together
with the Entity Health Care Licenses, the “Health Care
Licenses”). Schedule 3.19(c) contains a
list of all Health Care Licenses. No Health Care License was revoked,
cancelled, suspended or materially and adversely modified during the last
three
(3) years. All Health Care Licenses are in full force and
effect and there are no Actions pending or, to the knowledge of the Selling
Parties, threatened that seek or, if determined in a manner adverse to the
Park
Companies would result in, the revocation, cancellation, suspension or adverse
modification thereof. The Park Companies are and during the last
three (3) years have been in compliance, in all material respects, with all
of
the terms and requirements of each such Health Care License.
-27-
(d) Each
Park Company meets and during the last three (3) years or since the beginning
of
its participation, whichever is shorter, has met, in all material respects,
all
of the applicable requirements of Medicare, Medicaid and any other state
or
federal healthcare programs and private third party payor programs in which
it
participates (collectively, “Programs”), all of which are set
forth on Schedule 3.19(d), and is a party to valid
participation agreements for payment by such Programs to the extent that
it
bills a particular Program for services or procedures or is otherwise required
to meet such requirements. There is no Action pending or, to the
knowledge of the Selling Parties, threatened against any Park Company which
relates to compliance with all of the applicable requirements of any
Program. Each Park Company has no outstanding overpayments or refunds
due to any Program in excess of $10,000.
(e) No
Park Company nor any directors, members, officers or managers of any Park
Company and, to the knowledge of the Selling Parties, none of any Park Company’s
employees or agents or any other party to any contract who furnishes services
or
supplies that may be reimbursed in whole or in part under any
Program: (i) has been convicted of or charged with any violation of
any Law related to any Program; (ii) has been convicted of, charged with,
or
investigated for any violation of Law related to fraud, theft, embezzlement,
breach of fiduciary responsibility, financial misconduct, obstruction of
an
investigation or controlled substances; or (iii) is excluded, suspended or
debarred from participation, or is otherwise ineligible to participate, in
any
Program or has committed any violation of Law that is reasonably expected
to
serve as the basis for any such exclusion, suspension, debarment or other
ineligibility.
(f) Each
Park Company is duly accredited with no material contingencies by the
accrediting agencies set forth on Schedule 3.19(f) (each an “Accrediting
Agency”). The Selling Parties have made available to Buyers
copies of the most recent of each such Accrediting Agency’s survey report and
deficiency list, if any, and each Park Company’s most recent statement of
deficiencies and plan of correction, if any.
Section
3.20. Employee
Benefit Plans.
(a) Schedule 3.20(a)
lists each Employee Benefit Plan.
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(b) The
Selling Parties have delivered complete copies to Buyers of (i) each
written Employee Benefit Plan (other than those Employee Benefit Plans sponsored
by Administaff), as amended through the Closing, together with all required
audited or unaudited financial statements, as applicable, and actuarial reports
for the three (3) most recent plan years, if any; (ii) each funding
vehicle and any amendments thereto with respect to each such plan;
(iii) the most recent and any other material determination letter, ruling
or notice issued by any Governmental Authority with respect to such plan;
(iv) the Form 5500 Annual Report and all schedules and attachments (or
evidence of any applicable exemption) and any PBGC Form 1 and all schedules
and attachments for the three (3) most recent plan years to the extent such
forms are required for such plan; (v) the most recent summary plan
description and any summary of material modifications thereto which relates
to
any such plan; and (vi) each other document, explanation or communication
which describes any relevant aspect of any such plan that is not disclosed
in
previously delivered materials. A description of any unwritten
Employee Benefit Plans, including a description of any material terms of
such
plan, is set forth on Schedule 3.20(a).
(c) Except
to the extent a violation could not reasonably be expected to result in material
liability, each Employee Benefit Plan has been in compliance and currently
complies in form and in operation in all material respects, with all applicable
requirements of ERISA, the Code or any other applicable Law, and has been
and is
operated in accordance with its terms. Each Employee Benefit Plan has
been and is operated and funded in such a manner as to qualify, where
appropriate, for both federal and state purposes, for income tax exclusions
to
its participants, tax-exempt income for its funding vehicle, and the allowance
of deductions and credits with respect to contributions thereto.
(d) Except
as set forth on Schedule 3.20(d), no Selling Party or any
ERISA Affiliate has at any time participated in or made contributions to
or had
any other liability with respect to, any “employee benefit plan” (as defined in
Section 3(3) of ERISA) that is (i) a “multiemployer plan” as defined in
Section 3(37) or 4001 of ERISA, (ii) a “multiple employer plan” within the
meaning of Code Section 413(c), (iii) a “multiple employer welfare
arrangement” within the meaning of Section 3(40) of ERISA or (iv) subject
to Section 302 or Title IV of ERISA or Section 412 of the Code.
(e) Except
as could not reasonably be expected to result in material liability, there
are
no Proceedings pending or, to the knowledge of the Selling Parties, threatened
with respect to any Employee Benefit Plan, or the assets thereof (other than
routine claims for benefits), and there are no facts that could reasonably
give
rise to any liability, or Proceeding against any Employee Benefit Plan, any
fiduciary or plan administrator or other Person dealing with any Employee
Benefit Plan or the assets thereof.
-29-
(f) Except
as could not reasonably be expected to result in material liability, no Person
has: (i) entered into any nonexempt “prohibited transaction,” as
such term is defined in ERISA and the Code, with respect to any Employee
Benefit
Plan; (ii) breached a fiduciary obligation with respect to any Employee
Benefit Plan; or (iii) any liability for any failure to act or comply in
connection with the administration or investment of the assets of any such
plan.
(g) Except
as could not reasonably be expected to result in material liability, no Employee
Benefit Plan provides medical, health, life insurance or other welfare-type
benefits to retirees or former employees or individuals who terminate (or
have
terminated) employment with any Selling Party or any ERISA Affiliate, or
the
spouses or dependents of any of the foregoing (except for limited continued
medical benefit coverage for former employees, their spouses and other
dependents as required to be provided under Section 4980B of the Code or
Part 6 of Subtitle B of Title I of ERISA
(“COBRA”) or applicable similar state law).
(h) With
respect to all periods prior to the Effective Time, the requirements of COBRA
and the Health Insurance Portability and Accountability Act of 1996, as amended,
have been satisfied with respect to each Employee Benefit Plan, except as
could
not reasonably be expected to result in material liability.
(i) With
respect to each Employee Benefit Plan, all contributions, payments, premiums,
expenses, reimbursements or accruals for all periods ending prior to or as
of
the Closing (including periods from the first day of the then current plan
year
to the Closing) shall have been made or accrued on the appropriate Financial
Statements and each such plan has no unfunded liability that is not reflected
on
the appropriate Financial Statements.
(j) To
the knowledge of the Selling Parties, no communication or disclosure has
been
made that, at the time made, did not accurately reflect the terms and operations
of any Employee Benefit Plan.
(k) No
Employee Benefit Plan or any other agreement, program, policy or other
arrangement by or to which any Selling Party or any ERISA Affiliate is bound
or
otherwise liable, by its terms or in effect, could reasonably be expected
to
require any payment or transfer of money, property or other consideration
on
account of or in connection with the transactions contemplated by this Agreement
or any subsequent termination of employment, which payment could constitute
an
“excess parachute payment” within the meaning of Section 280G of the
Code.
-30-
(l) Each
Employee Benefit Plan that is a “non-qualified deferred compensation plan” (as
such term is defined in Section 409A(d)(1) of the Code) (i) has, at all times,
since the adoption of Section 409(A) of the Code, been administered in
compliance with the requirements of Section 409A of the Code and applicable
guidance issued thereunder, so that the additional tax described in Section
409A(a)(1)(B) of the Code will not be assessed against the individuals
participating in any such non-qualified deferred compensation plan with respect
to benefits due or accruing thereunder.
Section
3.21. Labor
Relations.
Set
forth on Schedule 3.21(a) is a list of employees and
consultants of the Park Companies whose compensation with respect to the
year
ended December 31, 2006 was greater than Forty Thousand Dollars ($40,000)
or
whose current annual base rate of pay is greater than Forty Thousand Dollars
($40,000), setting forth each such person’s name, title, employment (or
consultant, as the case may be) commencement date, current annual rate of
compensation and total compensation (including bonuses) for the year ended
December 31, 2006. None of the Park Companies has agreed in
writing to increase the current compensation level of any of their respective
officers, directors or employees. None of the Park Companies is a
party to or obligated with respect to any collective bargaining agreements
or
contracts with any labor union or other representative of employees or any
employee benefits provided for by any such agreement. No strike or union
organizational activity has occurred at any time since March 24, 2004 or
is
pending or, to the knowledge of the Selling Parties, threatened against any
Park
Company. Except as set forth on Schedule 3.21(b),
there is not currently pending against any Park Company, nor has there been
pending against any Park Company at any time since March 24, 2004, any unfair
labor practice charge, allegation or complaint or any allegation, charge
or
complaint of employment discrimination or any form of harassment nor, to
the
knowledge of the Selling Parties, is there any basis for any such charge,
allegation or complaint. To the knowledge of the Selling Parties, no
employee or consultant has breached any restrictive covenant or any other
obligation that he or she owes to any third party. Except as set
forth on Schedule 3.21(a), no employee of any Park Company
is currently on short-term disability or long-term disability or on any other
leave of absence.
-31-
Section
3.22. Transactions
With Affiliates.
Except
as set forth on Schedule 3.22, since March 24, 2004, the
Park Companies have not engaged in any Affiliate Transactions. An
“Affiliate Transaction” is any contract, agreement,
arrangement, commitment or transaction between any Park Company, on the one
hand, and any Owner Party, on the other hand. “Owner
Party” includes (i) the Owner, (ii) the Owner’s Affiliates,
(iii) any officer, director or employee of the Owner, any family member of
any officer, director or employee of the Owner or any trust for the benefit
of
the foregoing persons and (iv) any entity controlled by any Person or
Persons identified in (i) through (iii) or any entity in which any Person
or
Persons identified in (i) through (iii) own, collectively, ten percent (10%)
or
more. All obligations
of the Park Companies with respect to all Affiliate Transactions, including
but
not limited to any outstanding accounts payable or receivable, have been
satisfied, discharged and terminated and the Park Companies have no further
liability or benefit in respect on any Affiliate Transaction.
Section
3.23. Real
Property.
None
of the Park Companies owns, has agreed to own, has an option to purchase
or
sell, or is obligated to purchase or sell, any real
property. Schedule 3.23 lists all real property
occupied by the Park Companies. None of the Park Companies has any
past due obligation as lessee under any Real Property Lease. The real
property and improvements leased by the Park Companies shall be referred
to
herein as the “Leased Real Property.” The Leased
Real Property is in good order and repair. All build-out work and
other improvements to be made under any of the Real Property Leases have
been
completed in a manner acceptable to the Selling Parties. No Selling
Party nor any Park Company has received any notice from any insurance company,
board of fire underwriters or Governmental Authority of any defects or
inadequacies that could adversely affect the insurability of any Leased Real
Property or requesting the performance of any material work or alteration
with
respect to any Leased Real Property that could adversely affect insurability
that has not been complied with. To the knowledge of the Selling
Parties, there is no pending or threatened condemnation or other governmental
taking of any Leased Real Property or any part thereof. To the
knowledge of the Selling Parties, the Leased Real Property is in compliance
with
all zoning requirements. To the knowledge of the Selling Parties, no
fact or condition exists that could result in the termination or impairment
of
presently available access to any portion of any Leased Real Property from
adjoining public or private streets or ways or in the discontinuation of
presently available and otherwise necessary sewer, water, electric, gas,
telephone or other utilities or services. To the knowledge of the
Selling Parties, there are no special, general or other assessments pending
or
threatened against any Park Company or affecting any Leased Real Property
that
would be payable by the lessee thereof. None of the Selling Parties
or Park Companies has entered into any brokerage arrangement with respect
to any
Real Property Lease. No security deposit or portion thereof deposited
with respect to any Real Property Lease has been applied in respect of a
breach
or default under such Real Property Lease which has not been redeposited
in
full.
-32-
Section
3.24. Warranties.
Except
as listed on Schedule 3.24, (i) none of the Park Companies has
provided any product or service warranties or guaranties with respect to
goods
or services sold or provided by it and (ii) since March 24, 2004, no claims
have
been made or, to the Selling Parties’ knowledge, threatened, against any Park
Company with respect to any product or service warranties or guarantees related
to goods or services sold or provided by it.
Section
3.25. Product
Liability.
Except
as listed on Schedule 3.25, no product liability or other tort
claims have been made, or to the Selling Parties’ knowledge threatened, against
any Park Company. To the knowledge of the Selling Parties, there are
no defects in the design or manufacture of products sold by any Park Company
in
connection with the Business that could form the basis for a cause of action
for
product liability against any Park Company.
Section
3.26. Bank
Accounts.
Schedule 3.26
is a complete and correct list of each bank or financial institution in which
any Park Company has an account, safe deposit box or lockbox, or maintains
a
banking, custodial, trading or similar relationship, the number of each such
account or box, and the names of all persons authorized to draw thereon or
to
having signatory power or access thereto.
Section
3.27. Books
and Records.
The
books of account, minute books, stock record books and other records of the
Park
Companies, all of which have been made available to Buyers, are complete
and
correct in all material respects and have been maintained in accordance with
sound business practices.
Section
3.28. Patients,
Vendors and Payors.
(a) Schedule
3.28(a) is a complete and correct list of the twenty (20) largest
vendors to the Park Companies, in terms of aggregate dollar value of purchases
from vendors to the Park Companies, taken as a whole, year to date through
August 31, 2007. No such vendor has canceled or otherwise terminated
or materially and adversely modified, or threatened in writing to cancel
or
terminate, its relationship with any Park Company. No Selling Party nor any
Park
Company has received any notice, nor does any Selling Party have knowledge,
that
any such vendor (i) intends to cancel or otherwise terminate or materially
and
adversely modify its relationship with the Business, or (ii) is threatened
with
bankruptcy or insolvency. No Selling Party nor any Park Company has
received any premium or other benefit from any vendor as a result of any
financial accommodation provided by any Selling Party or any Affiliate of
any
Selling Party, to such vendor.
-33-
(b) Schedule
3.28(b) is a complete and correct list, excluding names, of the twenty
(20) largest patients of the Park Companies, taken as a whole (the “Top
Patients”), in terms of aggregate revenue year to date through August
31, 2007. No Top Patient has canceled or otherwise terminated or
materially and adversely modified its relationship with any Park
Company. No Selling Party nor any Park Company has received any
notice, nor does any Selling Party have knowledge, that any Top Patient (i)
intends to cancel or otherwise terminate or materially and adversely modify
its
relationship with any Park Company, or (ii) is threatened with bankruptcy
or
insolvency.
(c) Schedule
3.28(c) is a complete and correct list of the twenty (20) largest
payors of the Park Companies, taken as a whole (the “Top
Payors”), in terms of aggregate revenue year to date through August 31,
2007. No Top Payor has canceled or otherwise terminated or materially
and adversely modified its relationship with any Park Company. No
Selling Party nor any Park Company has received any notice, nor does any
Selling
Party have knowledge, that any Top Payor (i) intends to cancel or otherwise
terminate or materially and adversely modify its relationship with any Park
Company, or (ii) is threatened with bankruptcy or insolvency.
Section
3.29. Trade
Names; Business Locations.
During
the past five (5) years (but with respect to periods prior to March 24, 2004,
only to the Selling Parties’ knowledge), (a) except as set forth on
Schedule 3.29, none of the Park Companies has been known as or
used any fictitious or trade names, and (b) none of the Park Companies has
had
offices or places of business other than as set forth in Schedule
3.29. None of the Park Companies is the surviving
corporation of a merger or consolidation other than as set forth in
Schedule 3.29.
Section
3.30. Workers
Compensation.
Schedule
3.30 sets forth all expenses, obligations, duties and liabilities
relating to any claims by employees and former employees (including dependents
and spouses) of any Park Company or any ERISA Affiliate made since March
24,
2004 and the extent of any specific accrual on or reserve therefor set forth
on
the Financial Statements for (a) costs, expenses and other liabilities under
any
workers compensation Laws and (b) any other medical costs and
expenses. To the knowledge of the Selling Parties, except as set
forth on Schedule 3.30, no claim, injury, fact, event or
condition exists which would give rise to a material claim (individually
or in
the aggregate) by employees or former employees (including dependents and
spouses) of any Park Company or ERISA Affiliate under any Laws or for any
other
medical costs and expenses.
-34-
Section
3.31. Disclosure
Schedules.
Notwithstanding
anything to the contrary contained herein, nothing in any of the Disclosure
Schedules shall be deemed adequate to disclose an exception to a representation
or warranty made by the Selling Parties herein unless such Disclosure Schedules
disclose the relevant facts in reasonable detail. Without limiting
the generality of the foregoing, the mere listing or inclusion of a copy
of a
document on any of the Disclosure Schedules shall not be deemed adequate
to
disclose an exception to a representation or warranty made herein except
where
the representation or warranty calls for the listing or provision of the
document or where a reasonable buyer would infer such disclosure. Any
reference to a section or subsection in the Disclosure Schedules refers to
that
section or subsection of this Agreement, unless the context requires otherwise;
provided, however, a particular matter disclosed in any section or
subsection of the Disclosure Schedules shall be deemed to be incorporated
by
reference into such other Disclosure Schedules (if not otherwise explicitly
so
incorporated) where a reasonable buyer would, based on the nature of such
disclosure, infer that such particular matter qualifies the representation
or
warranty corresponding to such other section of the Disclosure
Schedules.
Section
3.32. No
Other Representations.
Each
Seller Party acknowledges and agrees that, except as expressly set forth
in
Article 4, Buyers are not making any express or implied
warranty of any kind whatsoever, and that the representations and warranties
of
the Buyers set forth in Article 4 constitute the sole and
exclusive representations and warranties to such Seller Party in connection
with
the transactions contemplated hereby, and all other representations and
warranties of any kind or nature, express or implied are specifically disclaimed
by Buyers. Notwithstanding anything set forth in this Section
3.32, this Section 3.32 shall in no manner restrict
any Seller Indemnified Party’s remedies with respect to fraud.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF BUYERS
Each
Buyer hereby represents, warrants and covenants to each Selling Party
that:
Section
4.1. Buyer
Organization.
Maverick
is a limited liability company duly organized and validly existing under
the
laws of the State of Arizona. GP Buyer is a limited liability company
duly organized and validly existing under the laws of the State of
Delaware. Such Buyer has the power and authority to own all of its
properties and assets and to conduct its business, except where the failure
to
have such power would not have a material adverse effect on its
business.
-35-
Section
4.2. Authorization.
The
execution and delivery of this Agreement and the Transaction Documents to
which
such Buyer is a party, the performance by such Buyer of its obligations
hereunder and thereunder and the consummation by such Buyer of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
organizational action and no other act or proceeding on the part of such
Buyer
is necessary. Such Buyer has all requisite power and authority to
enter into, execute and deliver this Agreement and the Transaction Documents
to
which such Buyer is a party and to perform its obligations hereunder and
thereunder. Assuming the due authorization, execution and delivery
hereof by each Selling Party, this Agreement and the Transaction Documents
to
which such Buyer is a party constitute the valid and legally binding obligations
of such Buyer, enforceable in accordance with their terms, except as enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the rights of creditors generally, and the
availability of equitable remedies.
Section
4.3. No
Violation.
Except
as set forth on Schedule 4.3, the execution, delivery and
performance by such Buyer of this Agreement and the Transaction Documents
to
which such Buyer is a party and the consummation of the transactions
contemplated herein and therein do not and will not:
(a) result
in the breach of any of the terms or conditions of, or constitute a default
under, or accelerate any rights or obligations under, or in any manner release
any party thereto from any obligation under, any mortgage, note, bond,
indenture, contract, agreement, license or other instrument or obligation
of any
kind or nature by which Buyer may be bound or affected;
(b) violate
any Laws of any court, administrative agency, or Governmental Authority;
or
(c) violate
any provision of the certificate of formation or operating agreement of such
Buyer.
Section
4.4. Consents
and Approvals.
Except
as set forth on Schedule 4.4, no consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Authority is required to be made or obtained by such Buyer, and such Buyer
has
made all filings required by Legal Requirements to be made, in connection
with
such Buyer’s authorization, execution and delivery of this Agreement or the
Transaction Documents to which such Buyer is a party, the performance by
such
Buyer of its obligations hereunder and thereunder, and the consummation by
such
Buyer of the transactions contemplated hereby and thereby.
-36-
Section
4.5. No
Brokers or Finders.
Neither
such Buyer nor any Affiliate thereof has retained any broker or finder, made
any
statement or representation to any Person that would entitle such Person
to, or
agreed to pay, any broker’s, finder’s or similar fees or commissions in
connection with the transactions contemplated by this Agreement.
Section
4.6. No
Other Representations.
Such
Buyer acknowledges and agrees that, except as expressly set forth in
Article 3, the Selling Parties are not making any express or
implied warranty of any kind whatsoever, and that the representations and
warranties of the Selling Parties set forth in Article 3
constitute the sole and exclusive representations and warranties to such
Buyer
in connection with the transactions contemplated hereby, and all other
representations and warranties of any kind or nature, express or implied
are
specifically disclaimed by the Selling Parties. Notwithstanding
anything set forth in this Section 4.6, this Section
4.6 shall in no manner restrict any Buyer Indemnified Party’s remedies
with respect to fraud.
ARTICLE
5
INDEMNIFICATION
Section
5.1. Survival.
The
representations and warranties made herein shall survive the Closing for
a
period of twelve (12) months following the Closing Date; provided,
however, that (a) the representations and warranties set forth in
Sections 3.1, 3.2, 3.3, 3.4, 3.6,
3.10(a), 4.1, 4.2, 4.3, 4.4 and 4.5
shall survive indefinitely;
and (b) the representations and
warranties set forth in Sections 3.16, 3.17 and
3.20 shall survive until sixty (60) days following
the
expiration of the period of limitations applicable to the liabilities in
question (giving effect to any waiver, mitigation or extension
thereof). Unless a specified period is set forth in this Agreement or
in a Transaction Document (in which event such specified period will control),
all agreements and covenants contained in this Agreement and in any Transaction
Documents will survive the Closing and remain in effect
indefinitely. If written notice of a claim has been given prior to
the expiration of the applicable representations and warranties, the relevant
representations and warranties shall survive as to such claim, until such
claim
is finally resolved; provided, however, that only such portion of the
applicable representation and warranty that is the subject of such claim
shall
be deemed to survive.
-37-
Section
5.2. Indemnification
by the Selling Parties.
Notwithstanding
any examination made by, for, or on behalf of, Buyers, the knowledge of either
Buyer’s officers, directors, stockholders, employees or agents, or the
acceptance of any certificate or opinion in connection with this Agreement,
and
regardless of whether such liability has been disclosed to or discovered
by
Buyers in connection with their due diligence investigation on the Business
or
otherwise or is otherwise known by either Buyer or any of its officers,
directors, employees or agents, each Selling Party agrees, jointly and severally
to indemnify, defend and save each Buyer, its Affiliates (including, after
Closing, the Park Companies) and their respective stockholders, officers,
directors, members, managers, partners, employees, agents and representatives
(each, a “Buyer Indemnified Party” and collectively, the
“Buyer Indemnified Parties”) harmless from and against any and
all liabilities, obligations, deficiencies, demands, diminution in value
(provided that the Buyer Indemnified Party can prove the existence of such
a
Loss and the amount thereof), claims, Proceedings, causes of action,
assessments, losses, costs, expenses, interest, fines, penalties and damages
(including reasonable fees and expenses of attorneys, accountants and other
experts, and reasonable costs of investigation) (individually and collectively,
the “Losses”) suffered, sustained or incurred by any Buyer
Indemnified Party arising out of or otherwise related directly
to: (i) any inaccuracy in any of the representations or warranties of
the Selling Parties contained in Article 3 of this Agreement or
in the Transaction Documents, provided that for purposes of this Section
5.2, all “material adverse effect,” “material” or similar qualifiers
contained herein or therein shall not be given any effect; (ii) the failure
of
any Selling Party to perform any of its covenants or obligations contained
in
this Agreement, the Transaction Documents or in any exhibit or schedule hereto
or thereto that are required to be performed at or prior to the Closing;
(iii)
any Indebtedness; (iv) any Seller Transferred Employee Obligations; (v) any
Employee Benefit Plan of any Selling Party; (vi) any Indemnified Liabilities;
(vii) any Selling Parties’ Taxes; (viii) any Seller Closing Costs; (ix) any
failure by any Selling Party or Park Company to comply with any applicable
Legal
Requirement prior to the Closing; (x) any delay or inability to xxxx or receive
reimbursement for services rendered by any Park Company on behalf of
beneficiaries under any Programs related to Medicaid (collectively, the
"Texas Medicaid Programs") during the period from and including
the Closing Date through the date on which any Enrollment Applications submitted
by the Park Companies for participation in such Texas Medicaid Programs are
deemed completed by such Programs, and enrollment or participation in such
Programs is effective; and (xi) Buyer's reliance on that certain email from
Xxxx
Xxxxxxxxx of the Texas Department of Aging and Disabilities attached hereto
as
Schedule 5.2.
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Section
5.3. Indemnification
by Buyers.
From
and after the Closing, each Buyer agrees to indemnify, defend and save the
Selling Parties and their respective officers, directors, employees, agents
and
representatives (each, a “Seller Indemnified Party” and
collectively the “Seller Indemnified Parties”) harmless from
and against any and all Losses sustained or incurred by any Seller Indemnified
Party arising out of or otherwise related to: (a) any inaccuracy in any of
the representations and warranties of a Buyer contained in Article
4 of this Agreement or the Transaction Documents, provided that for
purposes of this Section 5.3, all “material adverse effect,”
“material” or similar qualifiers contained herein or therein shall
not be given
any effect, or (b) the failure of a Buyer to perform any of its covenants
or obligations contained in this Agreement or the Transaction
Documents.
Section
5.4. Indemnification
Procedure.
(a) If
a Buyer Indemnified Party or a Seller Indemnified Party seeks indemnification
under this Article 5, such party (the “Indemnified
Party”) shall give written notice to the other party (the
“Indemnifying Party”) of the facts and circumstances giving
rise to the claim. In that regard, if any Proceeding, liability or
obligation shall be brought or asserted by any third party which, if adversely
determined, would entitle the Indemnified Party to indemnity pursuant to
this
Article 5 (a “Third Party Claim”), the
Indemnified Party shall promptly notify the Indemnifying Party of such Third
Party Claim in writing, specifying the basis of such claim and the facts
pertaining thereto and the Indemnifying Party, if the Indemnifying Party
so
elects, shall assume and control the defense thereof (and shall consult with
the
Indemnified Party with respect thereto), including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all
necessary expenses; provided that, as a condition precedent to the
Indemnifying Party’s right to assume control of such defense, the Indemnifying
Party must first: (a) enter into an agreement with the
Indemnified Party (in form and substance reasonably satisfactory to the
Indemnified Party) pursuant to which the Indemnifying Party agrees to be
fully
responsible for all Losses relating to such claim and unconditionally guarantees
the payment and performance of any liability or obligation that may arise
with
respect to such claim or the facts giving rise to such claim for indemnification
and (b) furnish the Indemnified Party with reasonable evidence that the
Indemnifying Party is and will be able to satisfy any such liability; and
providedfurther that the Indemnifying Party shall not have the
right to assume control of such defense if the claim which the Indemnifying
Party seeks to assume control of (i) seeks non-monetary relief,
(ii) involves criminal or quasi-criminal allegations, or (iii) involves
Taxes, which shall be governed exclusively by Section
7.2.
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If
the Indemnifying Party is permitted to assume and control the defense of
a Third
Party Claim and elects to do so, the Indemnified Party shall have the right
to
employ counsel separate from counsel employed by the Indemnifying Party in
any
such action and to participate in the defense thereof, but the fees and expenses
of such counsel employed by the Indemnified Party shall be at the expense
of the
Indemnified Party unless (A) the employment thereof has been specifically
authorized by the Indemnifying Party in writing, (B) the Indemnified Party
has been advised by counsel that a reasonable likelihood exists of a conflict
of
interest between the Indemnifying Party and the Indemnified Party, or
(C) the Indemnifying Party has failed to assume the defense and employ
counsel; in which case the fees and expenses of the Indemnified Party’s counsel
shall be paid by the Indemnifying Party.
(b) The
Indemnifying Party may enter into a settlement or consent to any judgment
without the prior written consent of the Indemnified Party so long as (i)
such
settlement or judgment involves monetary damages only, all of which will
be
paid, without limitation, by the Indemnifying Party and (ii) a term of the
settlement or judgment is that the Person or Persons asserting such claim
unconditionally release all Indemnified Parties from all liability with respect
to such claim; otherwise the consent of the Indemnified Party shall be required
in order to enter into any settlement of, or consent to the entry of a judgment
with respect to, any claim, which consent shall not be unreasonably withheld
or
delayed.
Section
5.5. Failure
to Give Timely Notice.
A
failure by an Indemnified Party to promptly provide notice as provided in
Section 5.4 will not affect the rights or obligations of
any party hereunder except and only to the extent that, as a result of such
failure, any party entitled to receive such notice was deprived of its right
to
recover any payment under its applicable insurance coverage or was otherwise
directly and materially damaged as a result of such failure to give timely
notice.
Section
5.6. Certain
Limitations.
(a) Basket
on Losses of Buyer Indemnified Parties. Notwithstanding anything
to the contrary set forth in this Agreement (but subject to the proviso set
forth in this sentence), no Selling Party shall be liable to any Buyer
Indemnified Party under Section 5.2(i) unless the aggregate
Losses incurred by the Buyer Indemnified Parties with respect to which
indemnification is to be provided under Section 5.2(i) exceed
Thirty-Five Thousand Dollars ($35,000) (the “Basket
Threshold”), in which case the Selling Parties shall be liable to Buyer
Indemnified Parties under Section 5.2(i) for the full amount of
all Losses; provided, however, that the limitations set forth in
this Section 5.6(a) and application of the Basket Threshold
shall not apply to any Losses incurred by any Buyer Indemnified Party arising
out of or otherwise by virtue of (i) any inaccuracy in any of the
representations and warranties contained in Sections 3.1, 3.2, 3.3, 3.4,
3.6, 3.10(a), 3.16, 3.17, or 3.20 of this Agreement or
(ii) any inaccuracy in any of the representations or warranties of the Selling
Parties of which the Selling Parties had knowledge at any time prior to the
date
on which such representation or warranty was made.
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(b) Cap
on Losses of Buyer Indemnified Parties. The aggregate amount
required to be paid by the Selling Parties under
Sections 5.2(i) shall not exceed an amount equal to the
Base Purchase Price plus the Earn-Out Consideration, if any.
(c) Losses
Net of Insurance Proceeds. Notwithstanding any provision in this
Agreement to the contrary, all Losses for which any Indemnified Party would
otherwise be entitled to indemnification under this Article 5
shall be reduced by the amount of insurance proceeds actually received by
such
Indemnified Party in respect of any Losses incurred by such Indemnified Party,
net of all attorney’s fees and other out-of-pocket fees, costs and expenses
incurred in connection with collecting such proceeds and any deductible payment,
reimbursement obligation, retrospective payments or additional premiums incurred
by the Indemnified Party as a result of such collection as estimated in good
faith by an independent insurance consultant selected by the Indemnified
Party
(such net amounts, a “Net Recovery”). In the
event that a Net Recovery is actually received by an Indemnified Party
subsequent to receipt by such Indemnified Party of any indemnification payment
hereunder in respect of the claims to which such Net Recovery relates,
appropriate refunds in the amount of such Net Recovery (or if less, in the
amount of applicable indemnification payments previously made) shall be made
promptly. No obligation of an Indemnified Party under this
Section 5.6(c) shall limit, delay or otherwise affect the
rights of such Indemnified Party to recover from an Indemnifying Party pursuant
to this Article 5 and nothing in this Section
5.6(c) shall be deemed to require any Indemnified Party to pursue
recovery under any insurance policy.
Section
5.7. Indemnification
as Sole Remedy.
Subject
to the provisions of Section 5.8, the indemnification provided
for in this Article 5 shall be the sole and exclusive
remedy and recourse for any breach by any party of the representations and
warranties contained in Article 3 and
Article 4 of this Agreement.
Section
5.8. Special
Rule for Fraud.
Notwithstanding
anything in this Article 5 to the contrary, in the event
of any breach of a representation or warranty by any party hereto that involves
fraud, the representation or warranty that has been breached will survive
the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby (regardless of any investigation made by
any
other party or on its behalf) and will continue in full force and effect
for the
period of the applicable statute of limitations; and the limitations set
forth
in Section 5.6 shall not apply to any Losses that any
Buyer Indemnified Party or Seller Indemnified Party, respectively, may suffer,
sustain or become subject to, as a result of, arising out of, relating to,
or in
connection with, any such breach that is intentional or involves
fraud.
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Section
5.9. Payments.
(a) Within
five (5) business days after the resolution of any indemnification claim
by any
Buyer Indemnified Party hereunder pursuant to which such Buyer Indemnified
Party
is entitled to any payment, (i) if there are funds remaining in the Escrow
Account, the Selling Parties and Buyers shall execute and cause a joint written
direction to be delivered pursuant to the Escrow Agreement within five (5)
days
of such resolution, which joint written direction shall direct the Escrow
Agent
to make such payment out of the Escrow Account, and (ii) if the Escrow Account
contains insufficient funds to satisfy in full any claim or portion thereof
to
be paid to any Buyer Indemnified Party or if no Escrow Account exists, such
payment shall be made by the Selling Parties within five (5) business days
of
such resolution; provided, however, that in addition to the
foregoing, Buyers shall have those rights of setoff set forth in
Sections 2.4(d)(i) and
5.10(a). Notwithstanding the foregoing, in the
event
that any Selling Party is required to make any Tax payments required pursuant
to
Section 7.2, the Selling Parties, jointly and severally, shall
be required to make such payment directly to Buyers and such amount shall
not be
made from the Escrow Amount, unless Buyers so elect should the Selling Parties
continue to fail to make such payment following thirty (30) days prior written
notice from Buyers.
(b) Within
five (5) business days after the resolution of any indemnification claim
by any
Seller Indemnified Party hereunder pursuant to which such Seller Indemnified
Party is entitled to any payment, such payment shall be made by
Buyers.
(c) In
the event that Buyers obtain indemnification from the Selling Parties in
relation to any Account Receivable subsequently collected by Buyers, Buyers
shall promptly reimburse the Selling Parties for the amount of such
indemnification, solely to the extent of such collection, net of collection
costs incurred.
Section
5.10. Set-off.
(a) To
the extent that the Selling Parties fail to satisfy an indemnification
obligation pursuant to this Article 5 within the time
periods and pursuant to the procedures prescribed in
Section 5.9(a), Buyers may in their sole discretion set
off the amount of such indemnification obligation against any amounts then
due
and payable to the Selling Parties, including the Earn-Out Consideration,
if
any.
(b) To
the extent that Buyers fail to satisfy an indemnification obligation pursuant
to
this Article 5 within the time period prescribed in
Section 5.9(a), the Seller Indemnified Party may in
his,
her or its sole discretion set off the amount of such indemnification obligation
against any amounts then due and payable by such Seller Indemnified Party
to
Buyers.
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Section
5.11. Purchase
Price Adjustment.
Any
indemnification received under this Article 5 shall be
treated by Buyers, the Selling Parties and their respective Affiliates, to
the
extent permitted by Law, as an adjustment to the Purchase Price unless a
Final
Determination (defined below) causes any such amount not to constitute an
adjustment to the Purchase Price for Federal tax purposes. The term
“Final Determination” shall mean (i) any final
determination of liability in respect of a Tax that, under applicable Law,
is
not subject to further appeal, review or modification through proceedings
or
otherwise (including the expiration of a statute of limitations or a period
for
the filing of claims for refunds, amended returns or appeals from adverse
determinations) or (ii) the payment of Tax by Buyers or any Selling Party,
whichever is responsible for payment of such Tax under applicable Law, with
respect to any item disallowed or adjusted by a taxing authority,
provided that such responsible party or parties determine(s) that no
action should be taken to recoup such payment and the other party agrees
in
writing.
ARTICLE
6
CLOSING
Section
6.1. Closing.
Subject
to the terms and conditions set forth herein, the transactions that are the
subject of this Agreement shall be consummated at a closing (the
“Closing”), which shall take place at 10:00 a.m., Chicago
time, at the offices of Xxxxxx Xxxxxx Xxxxxxxx LLP, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx on the date of this Agreement or such other date as may
be
agreed to in writing by the parties hereto (the “Closing
Date”). The Closing shall be deemed effective at the close
of business on the Closing Date (the “Effective
Time”).
Section
6.2. Deliveries
by the Selling Parties.
At
the Closing, the Selling Parties shall deliver or cause to be delivered to
Buyers:
(a) good
and sufficient instruments of conveyance and transfer, as are effective to
vest
(i) GP Buyer with full, complete and marketable right, title and interest
in and
to the GP Interests and (ii) Maverick with full, complete and marketable
right,
title and interest in and to the LP Interests, free and clear of all Liens
and
Other Encumbrances, in form and substance satisfactory to Buyers;
(b) Assignments
of Company Intellectual Property in form and substance satisfactory to
Buyers;
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(c) a
certificate executed and delivered by the Secretary of each Selling Party,
attesting and certifying as to: (i) the organizational documents of such
Selling Party and each Park Company (as also certified as of a recent date
by
the applicable Government Authority in each such Person’s jurisdiction of
formation); (ii) copies of resolutions of the board of directors, board of
managers or general partner, as applicable, and stockholders, members or
partners, as applicable, of each Selling Party adopting and authorizing the
transactions contemplated by this Agreement and the Transaction Documents
to
which such Selling Party is a party; and (iii) incumbency and specimen
signature certificates with respect to the officers, if any, of each Selling
Party;
(d) certificates
of good standing of each Selling Party and Park Company issued not earlier
than
ten (10) days prior to the Closing Date by the applicable Government Authority
in each such Person’s jurisdiction of formation and each other jurisdiction
where any such Person is qualified to do business;
(e) documentation
setting forth the amount of and the procedures for making the Indebtedness
Payments, if any, as well as the agreement of each creditor that, upon receipt
of a specified amount, its Indebtedness shall be paid in full and the agreement
of each applicable creditor to release all of its Liens upon the Assets upon
such creditor’s receipt of its portion of the Indebtedness
Payments;
(f) UCC,
tax lien, bankruptcy and judgment searches with respect to each Park Company
from the appropriate jurisdictions dated not more than ten (10) days prior
to
the Closing Date and evidence satisfactory to Buyers that all Liens on the
Assets have been released;
(g) all
Required Consents;
(h) the
legal opinion of Xxxxxxxx PC dated as of the Closing Date and addressed to
Buyers and Buyers’ financing sources;
(i) the
Estimated Post-Closing Adjustment Schedule;
(j) a
non-foreign affidavit dated as of the Closing Date from each of the Selling
Parties, sworn under penalty of perjury and in form and substance required
under
the Treasury Regulations issued pursuant to Section 1445 of the Code stating
that such Selling Party is not a “foreign person” as defined in Section 1445 of
the Code;
(k) releases,
from the Owner and each Park Company, of all pre-Closing obligations of each
Park Company to any Seller Party and other documentation reasonably satisfactory
to Owner and each Park Company that all inter-company accounts to and from
the
Company have been extinguished prior to the open of business on the Closing
Date;
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(l) a
joint written direction, executed by each of Park InfusionCare of Dallas,
L.P.,
Park InfusionCare of Houston, L.P. and Park InfusionCare of San Antonio,
L.P.
(the “Direction”), directing Xxxxxxxx PC to distribute the
Deposit (as such term is defined in the Letter of Intent) to Beecken Xxxxx
X’Xxxxx & Company, LLC, by wire transfer of immediately available funds to
an account specified by the Beecken Xxxxx X’Xxxxx and Company, LLC in writing;
and
(m) such
other documents and instruments as Buyers may reasonably require in order
to
effectuate the transactions that are the subject of this Agreement.
All
documents and instruments delivered to Buyers shall be in form and substance
reasonably satisfactory to Buyers.
Section
6.3. Deliveries
by Buyers.
At
the Closing, Buyers shall deliver or cause to be delivered the Selling
Parties:
(a) federal
funds wire transfer(s) in accordance with
Section 2.2;
(b) certificates,
executed and delivered by the Secretary of each Buyer in form and substance
reasonably satisfactory to the Selling Parties, attesting and certifying
as to:
(i) copies of resolutions of the board of managers of such Buyer adopting
and authorizing the transactions contemplated by this Agreement and the
Transaction Documents to which such Buyer is a party and (ii) incumbency
and specimen signature certificates with respect to an officer of such
Buyer;
(c) a
certificate of good standing of Maverick and GP Buyer issued not earlier
than
ten (10) days prior to the Closing Date from the Secretary of State of Arizona
and Delaware, respectively;
(d) the
Direction, executed by Beecken Xxxxx X’Xxxxx & Company, LLC;
and
(e) such
other documents and instruments as the Selling Parties may reasonably require
in
order to effectuate the transactions that are the subject of this
Agreement.
All
documents and instruments delivered to the Selling Parties shall be in form
and
substance reasonably satisfactory to the Selling Parties.
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ARTICLE
7
COVENANTS
AND OTHER AGREEMENTS
Section
7.1. Non-Competition;
Confidentiality.
The
parties agree that Buyers are relying on the covenants and agreements set
forth
in this section, that without such covenants Buyers would not enter into
this
Agreement or the transactions contemplated hereby, and that the Purchase
Price
is sufficient consideration to make the covenants and agreements set forth
herein enforceable.
(a) Noncompetition. In
furtherance of the purchase and sale of the Interests to Buyers by virtue
of the
transactions contemplated hereby, to more effectively protect the value of
the
Business, and to induce Buyers to consummate the transactions contemplated
hereby, each Selling Party covenants and agrees that, during the Term (as
defined below), no Selling Party will, nor will any Selling Party permit
any of
its Affiliates to, invest, engage or participate, directly or indirectly,
individually or as an investor, owner, securityholder, partner, member,
director, manager, officer, employee, consultant, sales representative,
manufacturer’s representative, customer or agent of any other Person, in or
receive any discount, revenue or other compensation or economic benefit in
connection with, any business that is or may reasonably be considered to
be
competitive with the Business or any portion thereof as conducted by the
Selling
Parties as of the Closing Date (including any presently contemplated expansions
or extensions thereof), anywhere in Texas (any of the foregoing as the usage
may
require, “Compete,” “Competitive” or
“Competition”); provided, that if any
Selling Party as
of the date hereof Competes with the Business, such Selling Party may continue
such existing Competition, but may not, directly or indirectly, increase
or
permit any increase in the degree to which such business is Competitive with
the
Business, whether by geographic expansion, expansion of product or service
offerings or otherwise. Notwithstanding the foregoing, nothing
contained in this Section 7.1(a) shall (i) prohibit any
Selling Party or any of its Affiliates from owning less than five percent
(5%)
of any class of stock listed on a national securities exchange or traded
in the
over-the-counter market or (ii) prohibit or restrict any Selling Party or
any of
its Affiliates from owning and operating retail pharmacies and performing
compounding services at such pharmacies for retail customers of such
pharmacies. The “Term” shall mean the period
beginning on the Closing Date and ending upon the fifth (5th) anniversary
of the
Closing Date; provided, however, that in the event of a breach or
violation by any Selling Party of this Section 7.1, the
Term shall be tolled until such breach or violation has been duly
cured.
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(b) Non-Solicitation.
Without limiting the generality of the provisions of
Section 7.1(a) above, each Selling Party hereby agrees
that during the Term, no Selling Party will, directly or indirectly, disrupt
or
seek to disrupt the business relationship between any Person that is or was
a
supplier or customer of, or payor to, the Business during the two (2)-year
period preceding the date of such solicitation, or from any successor in
interest to any such Person, in any case for the purpose of securing business
or
contracts competitive with the Business. Buyers acknowledge that
following the Closing Affiliates of the Selling Parties will continue to
conduct
business operations with suppliers and payors who are suppliers and payors
of
Buyers but which do not Compete with the Business. Buyers agree that
such activities by Affiliates of the Selling Parties will not be deemed to
be a
violation of this Article 7.
(c) Confidentiality. The
Selling Parties recognize and acknowledge that as of the Closing, they have
knowledge of confidential and proprietary information concerning the Business
(“Confidential Information”). In light of the
foregoing, from and after the Closing, each Selling Party shall maintain
the
confidentiality of, and refrain from using or disclosing to any Person, all
Confidential Information, except to the extent disclosure of any such
information is required by Law or is in the public domain through no wrongful
act on the part of any Selling Party, any of its Affiliates or any of its
agents. In the event that any such party reasonably believes after
consultation with counsel that it is required by Law to disclose any
Confidential Information, such party will (A) provide Buyers with prompt
notice before such disclosure in order that Buyers may attempt to obtain
a
protective order or other assurance that confidential treatment will be accorded
to such Confidential Information and (B) cooperate with Buyers in
attempting to obtain such order or assurance.
(d) Interference
with Relationships. During the Term, no Selling Party or any
Affiliate thereof shall directly or indirectly, employ, engage or recruit,
solicit, contact or approach for employment or engagement, or recommend that
that a third party employ, engage, recruit, solicit, contact or approach
for
employment or engagement, any Person who served as an employee or independent
contractor of any Selling Party who provided services to, or on behalf of,
any
Park Company within the six (6) months immediately preceding the date hereof,
or
otherwise seek or attempt to interfere with, influence or alter any such
Person’s relationship or potential relationship with any Park
Company.
(e) Publicity. During
the Term, none of the Selling Parties or any of their Affiliates or any of
their
respective officers, directors or employees, shall make any statement or
any
other expressions on television, radio, the internet or other media or to
any
third party, including, without limitation, in communications with any
customers, vendors, prospects, sales representatives or distributors, which
are
in any way disparaging of any Park Company, any of its Affiliates or the
Business, or the products and services of any Park Company, any of its
Affiliates or the Business.
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(f) Blue-Pencil. If
any court of competent jurisdiction shall at any time deem the term of any
particular restrictive covenant contained in this
Section 7.1 too lengthy or the geographic area covered too
extensive, the other provisions of this Section 7.1 shall
nevertheless stand, the Term shall be deemed to be the longest period
permissible by Law under the circumstances and geographic area covered shall
be
deemed to comprise the largest territory permissible by Law under the
circumstances. The court in each case shall reduce the Term and/or
geographic area covered to permissible duration or size.
(g) Property
of the Business. All memoranda, lists, records and other
documentation or papers (and all copies thereof), including such items stored
in
computer memories, or microfiche or by any other means that are included
in the
Assets are and shall be the Buyers’ property and shall be delivered to the
Buyers or destroyed promptly on the request of Buyers.
(h) Remedies. The
Selling Parties acknowledge and agree that the covenants set forth in this
Section 7.1 hereof are reasonable and necessary for the
protection of Buyers’ business interests, that irreparable injury will result to
Buyers if any Selling Party breaches any of the terms of this
Section 7.1, and that in the event of an actual or
threatened breach by any Selling Party of any of the provisions contained
in
this Section 7.1, Buyers will have no adequate remedy at
Law. The Selling Parties accordingly agree that in the event of any actual
or
threatened breach by any Selling Party of any of the provisions contained
in
this Section 7.1, Buyers shall be entitled to such
injunctive and other equitable relief, without (i) the posting of any bond
or other security, (ii) the necessity of showing actual damages or
(iii) showing that monetary damages are an inadequate
remedy. Nothing contained herein shall be construed as prohibiting
Buyers from pursuing any other remedies available to them for such breach
or
threatened breach, including the recovery of any damages that they are able
to
prove.
Section
7.2. Agreements
Regarding Tax Matters.
(a) After
the Closing, the Selling Parties and Buyers (i) will each provide the other
party with such assistance as may reasonably be requested in connection with
the
preparation of any Tax Return, audit or other examination by any taxing
authority or judicial or administrative proceeding relating to liability
for
taxes, (ii) will each retain and provide to the other party all records and
other information that may be relevant to any such Tax Return, audit or
examination, proceeding or determination and (iii) will each provide the
other
party with any final determination of any such audit or examination, proceeding
or determination that affects any amount required to be shown on any Tax
Return
of the other party for any period. Without limiting the generality of
the foregoing, each of Buyers and the Selling Parties will retain, until
the
expiration of the applicable statutes of limitation (including any extensions
thereof), copies of all Tax Returns, supporting work schedules and other
records
relating to the Park Companies for tax periods or portions thereof ending
on or
prior to the Closing Date.
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(b) For
all purposes under this Agreement involving the determination of Taxes
(including the determination of Selling Parties’ Taxes), in the case of Taxes
that are payable with respect to any period that includes but does not end
on
the Closing Date, the portion of any such Tax that is allocable to the portion
of the period ending on the close of the Closing Date shall be (i) in the
case
of Taxes that are (x) based upon or related to income or receipts, (y) imposed
in connection with the sale or other transfer or assignment of property (real
or
personal, tangible or intangible), or (z) employment, social security or
other
similar taxes, deemed equal to the amount which would be payable if the taxable
year ended on the close of the Closing Date; and (ii) in the case of Taxes
imposed on a periodic basis with respect to any assets or otherwise measured
by
the level of any item, deemed to be the amount of such Taxes for the entire
period (or, in the case of such Taxes determined on an arrears basis, the
amount
of such Taxes for the immediately preceding period) multiplied by a fraction
the
numerator of which is the number of calendar days in the period ending on
the
close of the Closing Date and the denominator of which is the number of calendar
days in the entire period.
Section
7.3. Payment
Of Indemnified Liabilities; Protection of
Relationships.
After
the Closing, the Selling Parties shall reimburse and indemnify, or make adequate
provision for the timely reimbursement and indemnification, in full all of
payments of the Indemnified Liabilities by any Park Company (irrespective
of the
indemnification limits and caps in Article 5). For a
period of ninety (90) days after the Closing, the Selling Parties will cooperate
with the Park Companies in their efforts to continue and maintain for their
benefit those business relationships of the Selling Parties existing prior
to
the Closing and relating to the Business to be operated by the Park Companies
after the Closing, including relationships with lessors, employees, regulatory
authorities, licensors, payors, customers, suppliers and others. The
Selling Parties will refer to Buyers all inquiries relating to the
Business. Each Selling Party acknowledges the importance of these
relationships and none of the Selling Parties or any of their respective
officers, employees, agents or equityholders shall take any action that would
tend to diminish the value of the Assets after the Closing or that would
interfere with the business of the Park Companies to be engaged in after
the
Closing. Except as expressly set forth herein, Buyers acknowledge
that the Selling Parties have no continuing obligation following the Closing
to
assist the Park Companies in any aspect of the Business.
Section
7.4. Further
Assurances.
Each
of the parties hereto agrees that subsequent to the Closing Date, upon the
reasonable request of any other party hereto, it shall execute and deliver,
or
cause to be executed and delivered, such further reasonable instruments and
take
such other commercially reasonable actions as may be necessary to carry out
the
transactions contemplated by this Agreement and the Transaction Documents
or to
vest, perfect or confirm ownership of the Interests in Buyers.
-49-
Section
7.5. Names.
From
and after the Effective Time, each Selling Party agrees that it will not
use the
name “Park InfusionCare” or any derivations or variations thereof.
Section
7.6. Accounts
Receivable.
Buyers
shall and shall cause the Park Companies to use their commercially reasonable
efforts following the Closing to collect all accounts receivable of the Park
Companies outstanding as of Closing and reflected on the final Post Closing
Adjustment Schedule (the “Closing Receivables”), without any
requirement to initiate any suit, engage counsel or incur any out-of-pocket
expenses in connection therewith. For each calendar quarter through
December 31, 2008, within thirty (30) days following the end of each such
calendar quarter, Buyers shall cause the Park Companies to deliver to Owner
a
report (each, a “Receivables Report”) which sets forth the
amount of Closing Receivables which were collected during such calendar quarter
and the amount of Closing Receivables which were written off as not collectible
during such calendar quarter. The Selling Parties agree
that: (a) none of Buyers nor any Park Company shall make any
representations or warranties regarding the accuracy of any such Receivables
Report and (b) none of Buyers nor any Park Company shall have any liability
or
obligation with regard to any inaccuracy in, or omission from, any Receivables
Report.
Section
7.7. Employees.
Set
forth on Schedule 7.7(a) is a list of all individuals to whom
Buyers shall cause the Park Companies to offer employment immediately following
the Closing (the “Retained Employees”). The Selling
Parties shall cause the service to any Park Company of each individual who
has
primarily provided services to a Park Company but is not listed on
Schedule 7.7(a) (the “Terminated Employees”),
to be terminated prior to the Closing, and the Buyers and Park Companies
shall
have no liability whatsoever in respect of any Terminated Employee, including
with respect to COBRA obligations. Notwithstanding any other
provision of this Agreement, following the Closing Date, nothing in this
Agreement shall limit any Park Company’s ability to terminate the employment of
any Retained Employee at any time and for any reason or for no reason, including
without cause.
-50-
Section
7.8. Insurance.
(a) The
Selling Parties shall, on or within three (3) business days after the date
hereof, purchase two year tail coverage under the E&O Medical Professional
(Infusion Therapists) insurance policy, Policy No. LHM713010, issued by Landmark
American Insurance Company, for each of the Park Companies as named insureds
thereunder (the “Tail Policy”). The Tail Policy
shall have the same terms and provisions (including the same deductions,
coverage and policy limits) as are currently in effect with respect to such
underlying policy. Within three (3) business days following delivery
by the Owner of a full and complete copy of the executed, in-force policy
binder
for the Tail Policy, Maverick shall, or shall cause one or more of the Park
Companies to, pay to the Owner an amount equal to Fifty Eight Thousand Four
Hundred Sixty Three Dollars ($58,463) by wire transfer of immediately available
funds.
(b) With
respect to each insurance policy maintained at any time prior to the date
hereof
for the benefit of any Park Company or pursuant to which any Park Company
has
any rights or benefits whether as a loss payee, an additional insured or
otherwise, including those listed on Schedule 3.18 (the
“Pre-Closing Insurance Policies”), the Selling Parties hereby
agree after the Closing (i) to prosecute diligently and in good faith any
claim
arising out of or relating to any pre-Closing event, act, omission or other
matter involving any Park Company for which such Park Company is not an
additional insured; (ii) to cooperate fully with the prosecution of any claim
by
any Park Company arising out of or relating to any pre-Closing event, act,
omission or other matter involving any Park Company for which such Park Company
is an additional insured, including without limitation, providing access
to
employees and records of the Selling Parties as may be reasonably requested
in
connection with the prosecution of such claim; (iii) to cause any and all
benefits under such Pre-Closing Insurance Policies paid or payable with respect
to the business, operations, employees or assets and properties of any Park
Company to be paid to such Park Company; and (iv) not to breach any Pre-Closing
Insurance Policy or take or omit to take any other action which could reasonably
be expected to result in the loss by any Park Company of any rights or benefits
under any Pre-Closing Insurance Policy.
-51-
Section
7.9. Access
to Books and Records.
From
and after the Closing, the Selling Parties covenant and agree to: (i)
provide Buyers and the Park Companies, from time to time upon reasonable
notice
during reasonable business hours, with access to and/or copies of the Books
and
Records (as defined below), in each case in such form or medium as the
requesting party has reasonably requested, and to personnel of the Selling
Parties with knowledge or information regarding the Books and Records, and
(ii)
assist and cooperate with, and cause such personnel to assist and cooperate
with, Buyers and the Park Companies in connection with the access to and
use by
Buyers and the Park Companies of the Books and
Records. “Books and Records” shall mean all books
and records relating to the operation of the Business in the possession or
under
the control of a Selling Party or any Affiliate thereof, including, without
limitation, all records, files, papers, sales and purchase correspondence,
accounting records and financial records, in each case whether in soft (digital)
or hard copy form, including those items set forth on Schedule
3.22.
Section
7.10. Transition
Services.
In
order to promote the orderly transition of the Business from the Selling
Parties
to Buyers, the Selling Parties covenant and agree to provide and to cause
their
personnel to provide, for a period of sixty (60) days from and after the
Closing, such accounting, human resources and purchasing services as either
Buyer or any Park Company shall reasonably request in connection with the
transition of the Business from the Selling Parties to Buyers, free of any
charge, expense or other liability to Buyers or the Park Companies;
provided that the aggregate number of hours that Selling Party personnel
shall be required to spend on such transition services shall not exceed twenty
(20) hours per week. If the Park Companies shall require transition
services which are in excess of those contemplated herein, the parties will
negotiate in good faith the terms of compensation to be provided therefor
by
Buyers or the Park Companies; provided, that the Selling Parties shall
obtain the prior written approval of a Buyer or a Park Company for any such
excess services.
Section
7.11. Purchases
of Supplies.
To
the extent necessary and if such drugs are not reasonably available from
Maverick's primary wholesaler, from and after the Closing, at the election
of
any Park Company, the Selling Parties shall order supplies for the Park
Companies’ use under the terms and conditions of the Prime Vendor Agreement,
dated as of March 24, 2004 (as the same may be amended, modified or replaced)
(the “Supply Agreement”), by and among AmerisourceBergen Drug
Corporation (“AmerisourceBergen”) and Owner, which supplies
(including quantities thereof) and the location to which such supplies are
to be
delivered shall be identified by such Park Company in writing (a
“Purchase Request”). Promptly (but in any event no
later than three (3) business days) following receipt of any Purchase Request,
the Selling Parties shall in accordance with the Supply Agreement order the
supplies identified in the Purchase Request in the quantities and for delivery
at the location indicated therein. The Park Company delivering such
Purchase Request shall either directly pay any invoice therefor or pay the
Selling Parties the amount shown on any invoice therefor, in either case
prior
to the date that payment under any such invoice is due.
-52-
ARTICLE
8
MISCELLANEOUS
Section
8.1. Notices.
All
notices, reports, records or other communications that are required or permitted
to be given to the parties under this Agreement shall be sufficient in all
respects if given in writing and delivered in person, by facsimile, by overnight
courier or by registered or certified mail, postage prepaid, return receipt
requested, to the receiving party at the following address:
If
to Sellers:
|
Xxxxxxxxx’x
Holdings, Inc.
|
|
00000
Xxxxxx Xxxxxxx
|
Xxxxx
000
|
Xxxxxx,
XX 00000
|
|
Facsimile:
000-000-0000
|
|
Attention: Xxxxx
X. Xxxx
|
|
with
a copy to:
|
Xxxxxxxx
PC
|
|
5400
Renaissance Tower
|
|
0000
Xxx Xxxxxx
|
|
Xxxxxx,
XX 00000
|
|
Facsimile: (000)
000-0000
|
|
Attention: Xxx
X. Xxxxxxxxxxxx, Esq.
|
If
to Buyers:
|
c/o
Beecken Xxxxx X’Xxxxx & Company
|
|
000
X. Xxxxxxxx
|
|
Xxxxx
0000
|
|
Xxxxxxx,
Xxxxxxxx 00000
|
|
Facsimile: (000)
000-0000
|
|
Attention: Xxxxxxx
X. Xxxxxxxxx
|
|
with
a copy to:
|
Xxxxxx
Xxxxxx Rosenman LLP
|
|
000
Xxxx Xxxxxx Xxxxxx
|
|
Xxxxxxx,
Xxxxxxxx 00000-0000
|
|
Facsimile: (000)
000-0000
|
|
Attention: Xxxxx
X. Xxxxxxxx, Esq.
|
or
such other address as such party may have given to the other parties by notice
pursuant to this Section 8.1. Notice shall be
deemed given on (i) the date such notice is personally delivered,
(ii) three (3) days after the mailing if sent by certified or registered
mail, (iii) one (1) business day after the date of delivery to the
overnight courier if sent by overnight courier, or (iv) the next succeeding
business day after transmission by facsimile.
-53-
Section
8.2. General
Definitions.
For
the purposes of this Agreement, the following terms have the meaning set
forth
below:
“Administaff”
means Administaff, Inc. or one of its Subsidiaries.
“Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with such Person, and
any
officer, director or executive employee of such Person and includes any past
or
present Affiliate of any such Person.
“Affiliated
Group” means an affiliated group as defined in Section 1504 of the
Code (or analogous combined, consolidated or unitary group defined under
state,
local or foreign income Tax law).
“Bonus
Obligations” means all severance, incentive, stay bonus or change of
control obligations (whether payable prior to, on or after the Closing Date)
that arose or may arise under any Employee Benefit Plan of any Park Company
or
other contract in whole or in part as a result of the consummation of the
transactions contemplated by this Agreement.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Company”
means Park InfusionCare, LP, a Texas limited partnership.
“Contract”
means any contract, agreement, license, commitment, obligation and
understanding, in any case whether written or oral, by which any Asset is
bound,
or which is related to the operation of the Business and to which any Park
Company is party.
“Employee
Benefit Plan” means any of the following (whether written, unwritten or
terminated) with respect to which any Park Company has maintained, made
contributions or has or had any liability or potential liability at any
time: (a) any “employee welfare benefit plan,” as defined in
Section 3(1) of ERISA, including, but not limited to, any medical plan,
life insurance plan, short-term or long-term disability plan, dental plan,
and
sick leave; (b) any “employee pension benefit plan,” as defined in
Section 3(2) of ERISA, including, but not limited to, any excess benefit,
top hat or deferred compensation plan or any nonqualified deferred compensation
or retirement plan or arrangement or any qualified defined contribution or
defined benefit plan; or (c) any other plan, policy, program, arrangement
or agreement that provides employee benefits or benefits to any current or
former employee, dependent, beneficiary, director, independent contractor
or
like person, including, but not limited to, any severance agreement or plan,
personnel policy, vacation time, holiday pay, service award, moving expense
reimbursement programs, tool allowance, safety equipment allowance, material
fringe benefit plan or program, bonus or incentive plan, stock option,
restricted stock, stock bonus or deferred bonus plan, salary reduction,
change-of-control or employment agreement (or consulting agreement with a
former
employee).
-54-
"Enrollment
Application" shall mean such enrollment packets, applications, provider
agreements, and other documents as are required for enrollment or participation
in any Texas Medicaid Program.
“Environmental
and Safety Requirements” means all multi-national, federal, state and
local laws, rules, regulations, ordinances, orders, statutes, actions, policies
and requirements relating to public health and safety, worker health and
safety,
pollution or protection of the environment, all as amended or hereafter
amended.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and
the
regulations in effect thereunder.
“ERISA
Affiliate” means any Park Company and predecessor of any of them and
any other Person who constitutes or has constituted all or part of a controlled
group or had been or is under common control with, or whose employees were
or
are treated as employed by, any Park Company and/or any predecessor of any
of
them, under Section 414 of the Code.
“GAAP”
means generally accepted accounting principles set forth in the opinions
and
pronouncements of the Accounting Principles Board of the American Institute
of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity
as
may be approved by a significant segment of the accounting profession that
are
applicable to the circumstances from time to time.
“Governmental
Authorizations” means all approvals, consents, licenses,
permits, waivers and other authorizations required to comply with all Legal
Requirements, including, without limitation, (i) zoning permits, variances,
exceptions, special use permits, conditional use permits, and consents; and
(ii)
the licenses, permits, provider agreements and approvals required for licensure
and operation of each Infusion Center in accordance with the Park Companies’
uses thereof and, if applicable, certified as a provider under the federal
Medicare and state Medicaid programs.
“Guarantee”
means any obligation, contingent or otherwise, pursuant to which any Park
Company has directly or indirectly guaranteed any obligation of any other
Person
or pursuant to which any Park Company has agreed (contingently or otherwise)
to
purchase or otherwise acquire or in respect of which it has otherwise assumed
a
creditor’s obligations under any agreement. The term “guarantee” used
as a verb has a corresponding meaning.
-55-
“Hazardous
Materials” means (a) hazardous materials, hazardous substances,
extremely hazardous substances, hazardous wastes, infectious wastes, acute
hazardous wastes, toxic substances, toxic contaminants or pollutants, as
those
terms are defined by the Comprehensive Environmental Response, Compensation
and
Liability Act, 42 U.S.C. § 9601 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.,
and any other Environmental and Safety Requirements; (b) petroleum,
including crude oil or any fraction thereof that is liquid at standard
conditions of temperature and pressure (60 degrees Fahrenheit and
14.7 pounds per square inch absolute); (c) any radioactive material,
including any source, special nuclear, or by-product material as defined
in
42 U.S.C. § 2011 et seq.; (d) asbestos in any form
or condition; and (e) any substance that contains regulated levels of
polychlorinated biphenyls.
"HIPAA"
means the Health Insurance Portability and Accountability Act of 1996, as
amended.
“Holtmyer
Agreement” means that certain Employment Agreement, dated as of May 18,
2006, by and between the Company and Xxxxx X. Xxxxxxxx.
“Indebtedness”
means, without duplication: (a) all indebtedness for borrowed money or funded
debt owed by any Park Company, (b) Guarantees, (c) all liabilities of any
Park
Company evidenced by notes, bonds or debentures, (d) all liabilities of any
Park
Company secured by any Liens on any of the Assets, (e) all obligations of
any
Park Company under leases which shall have been or should be, in accordance
with
GAAP, recorded as capital leases, except for obligations under the BBraun
Leases, such obligations not to exceed an aggregate amount of $42,094.27,
(f)
all liabilities of any Park Company arising from installment purchases of
property or representing the deferred purchase price of property or services
in
respect of which any Park Company is liable, contingently or otherwise, as
obligor or otherwise (other than trade payables and other current liabilities
incurred in the ordinary course), (g) any Bonus Obligations and (h) any
interest, principal, prepayment penalty, fees, or expenses, to the extent
due or
owing in respect of those items listed in clauses (a) through (g)
above.
“Indemnified
Liabilities” means any and all liabilities and obligations of the
Business, the Park Companies or the Selling Parties of any kind or nature
whatsoever, whether fixed or unfixed, known or unknown, absolute or contingent,
asserted or unasserted, xxxxxx or inchoate, liquidated or unliquidated, or
secured or unsecured, other than (a) obligations of the Park Companies with
respect to accounts payable incurred in the ordinary course of conducting
the
Business, including outstanding balances pursuant to SB 418, provided that
with
respect to each such account payable (i) the invoice related thereto was
first
received by a Park Company within the ninety (90) day period immediately
prior
to Closing and (ii) such payable is clearly identified (including the payee
and
the amount) on Schedule 3.7(e); provided,
however, that Indemnified Liabilities includes
all obligations with
respect to accounts payable to the Owner or any entity directly or indirectly
controlling, controlled by, or under common control with the Owner, other
than a
Park Company;
-56-
(b)
obligations of the Park Companies to vendors and suppliers arising in the
ordinary course of conducting the Business with respect to which the Park
Companies have not yet received an invoice, provided that the Selling Parties
provide Buyers with a copy of such invoice and all related correspondence
promptly upon receipt thereof; provided, however, that Indemnified
Liabilities includes all obligations with respect to accounts payable to
the
Owner or any entity directly or indirectly controlling, controlled by, or
under
common control with the Owner, other than a Park Company; (c) current
liabilities of any Park Company which are accrued on such Park Company’s books
and records and/or financial statements; (d) obligations arising under the
Contracts other than any liability or obligation relating to or arising from
any
breach by any Park Company, on or before the date hereof, of any of its
obligations thereunder or any act or omission on or before the date hereof
which, with the giving of notice or the passage of time or both would constitute
a breach by the Park Companies; and (e) all obligations arising under those
certain BBraun capital leases dated October 18, 2002, November 25, 2002 and
October 2, 2003 (the “BBraun Leases”), such obligations not to
exceed an aggregate amount of $42,094.27; provided, further,
however, that Indemnified Liabilities shall include all obligations of the
Park
Companies with respect to Bonus Obligations and all obligations of the Park
Companies with respect to any Equity Bonus (as defined in the Holtmyer
Agreement) payable in connection with the Holtmyer Agreement. Without
limiting the generality of the foregoing, Indemnified Liabilities shall include
any liability or obligation to any Terminated Employee, any Indebtedness
of any
Park Company as of the open of business on the Closing Date (other than as
described in clause (e) above), amounts due to any entity directly or indirectly
controlling, controlled by, or under common control with the Selling Parties,
employee compensation (including severance, non-compete payments, change
in
control payments, parachute payments, incentive payments, vacation, benefits
and
deferred compensation), litigation, environmental issues or taxes imposed
on the
Selling Parties or Park Companies with respect to the Business or the Interests
for any period (or portion thereof) ending on or before the Closing Date,
or on
any transaction contemplated by this agreement, or any other liabilities
associated with the shareholder(s), member(s) or partners of the Selling
Parties
or operation of the Business or ownership of the Interests on or prior to
Closing.
“Infusion
Centers” means the three infusion centers operated in connection with
the Business and located at the following addresses: (i) 00000 Xxxxxx Xxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000; (ii) 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx X, Xxxxxxx,
Xxxxx 00000; and (iii) 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxx
00000.
“Intellectual
Property” means, collectively, in the United States and all
jurisdictions foreign thereto, and in any medium: (i) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all Patents; (ii) all Trademarks and all goodwill
associated therewith; (iii) all moral rights and copyrights in any work of
authorship (including but not limited to databases, software, and mask works)
and all applications, registrations, and renewals in connection therewith;
(iv)
all trade secrets and confidential information (including confidential ideas,
research and development, know-how, methods, formulas, compositions,
manufacturing and production processes and techniques, technical and other
data,
designs, drawings, specifications, customer and supplier lists, lists of
prospective customers and suppliers, pricing and cost information, and business
and marketing plans and proposals); (v) Software; (vi) all other proprietary
and
intellectual property rights;
-57-
(vii)
all copies and tangible embodiments of any of the foregoing (in whatever
form or
medium); and (viii) all rights, income, royalties, damages, settlements and
payments related to any of the foregoing (including damages and payments
for
past, present or future infringements, misappropriations or other conflicts
with
any intellectual property), and the right to prosecute and recover for past,
present or future infringements or other violations thereof.
“IRS”
means the Internal Revenue Service.
"Legal
Requirements" means all Laws, certificates, requirements,
agreements, conditions of participation, and standards of any Governmental
Authority, insurance underwriting board, architectural control board, private
third-party payor, accreditation organization, or any restrictive covenants
applicable to the development, construction, condition and operation of the
real
property occupied by any Selling Party in connection with the operation of
the
Infusion Centers, including, without limitation, (i) zoning, building,
fire, health, safety, sign, and subdivision regulations and codes; (ii)
certificate of need laws, if applicable; (iii) licensure to operate each
Infusion Center in accordance with the Selling Parties' uses thereof; (iv)
Medicare and Medicaid certification requirements, if applicable; (v) the
Americans with Disabilities Act of 1990, as amended; and (vi) requirements,
conditions and standards for participation in third-party payor insurance
programs, if applicable.
“Letter
of Intent” means the letter of intent entered into by Beecken Xxxxx
X’Xxxxx & Company, LLC, Park InfusionCare of Dallas, L.P., Park InfusionCare
of Houston, L.P. and Park InfusionCare of San Antonio, L.P., dated October
18,
2007.
“Park
Companies” means, collectively, the Company and each of its direct and
indirect Subsidiaries, including without limitation Park InfusionCare of
Dallas
GP, LLC, Park InfusionCare of Houston GP, LLC, Park InfusionCare of San Antonio
GP, LLC, Park InfusionCare of Dallas, LP, Park InfusionCare of Houston, LP
and
Park InfusionCare of San Antonio, LP, and “Park Company” means
each of the foregoing individually.
“Patents”
means all United States and foreign letters patent and pending applications
for
patents, including all re-issuances, reexaminations, divisions, continuations,
continuations-in-part, revisions, and extensions thereof.
“Permits”
means all rights of the Park Companies in and to permits, licenses,
registrations, qualifications, approvals and authorizations by or of
Governmental Authorities or third parties needed for or used in connection
with
its operation of the Business, including without limitation, those set forth
on
Schedule 3.15.
-58-
“Permitted
Exceptions” means (a) any Lien for Taxes or assessments not yet due or
payable or being contested in good faith by appropriate proceedings (including
any interest, penalties or additions to any such Taxes or assessments); (b)
any
statutory Lien arising in the ordinary course of business by operation of
Law
with respect to a liability that is not yet due or delinquent; (c) landlord
liens for rent not yet due and payable under the Real Property Leases; (d)
with
respect to any Asset which consists of a leasehold estate or possessory interest
in real property, all ground leases, mortgages, deeds of trust or other
encumbrances (collectively, the “Encumbrances”) to which the
underlying fee estate in such real property is subject provided (i) the holder
of such Encumbrance would not be entitled, based upon facts and circumstances
existing as of the date hereof, to foreclose upon or otherwise terminate
such
leasehold estate or possessory interest in the event of a foreclosure upon,
or a
termination of a ground lease relating to, the underlying fee estate, (ii)
an
effective non-disturbance agreement exists, or (iii) Selling Parties, at
their
option, agree to indemnify Buyers against such Encumbrance; and (e) all
mechanics’, carriers’ workers’, repairers’ and similar liens (provided that any
such liens shall constitute Indebtedness).
“Person”
means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, unincorporated association, corporation or
other
entity or any Governmental Authority.
“Seller
Closing Costs” means all fees, costs and expenses (including
all fees and expenses of any Park Company’s legal, accounting, consulting and
other professional advisors) that are directly related to the transactions
contemplated by this Agreement to the extent incurred by any Park Company,
including (a) all payments required to obtain third party consents and all
expenses incurred by any Park Company in connection with transactions
contemplated thereby and (b) all assignment payments due by any Park Company
to
any Person under any plan, agreement or arrangement of any Park Company,
which
liability, in each case, is payable or becomes due as a result of the
consummation of the transactions contemplated hereby, including all Taxes
which
are payable by any Park Company in connection with the payment of such
liability.
“Selling
Parties’ Taxes” means any Taxes (a) imposed on any Selling
Party for any period, (b) imposed on any Park Company or with respect to
the
Business or the Assets for any period (or portion of any period) ending on
or
before the close of the Closing Date, (c) imposed in connection with the
transactions contemplated by this Agreement, or (d) imposed on Buyers or
their
respective Affiliates as a transferee of any Selling Party.
“Software”
means computer programs, applications, routines, algorithms and other software
and firmware, including source code, executable code, data, databases, user
interfaces and related documentation.
-59-
“Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
partnership, association, or business entity of which (i) if a corporation,
a
majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers, or trustees thereof is at the time owned or controlled, directly
or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a limited liability company,
partnership, association, or other business entity (other than a corporation),
a
majority of limited liability company, partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly,
by
that Person or one or more Subsidiaries of that Person or a combination
thereof. For purposes hereof, a Person or Persons shall be deemed to
have a majority ownership interest in a limited liability company, partnership,
association, or other business entity (other than a corporation) if such
Person
or Persons shall be allocated a majority of limited liability company,
partnership, association, or other business entity gains or losses or shall
be
or control any managing director or general partner of such limited liability
company, partnership, association, or other business entity.
“Tax”
means any multi-national, Federal, state, local or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales,
use,
transfer, registration, value added, excise, natural resources, entertainment,
amusement, severance, stamp, occupation, premium, windfall profit,
environmental, customs, duties, real property, personal property,
ad valorem, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax,
of
any kind whatsoever, including any interest, penalties or additions to Tax
or
additional amounts in respect of the foregoing; the foregoing shall include
any
transferee, contractual or secondary liability for a Tax and any liability
assumed by agreement or arising as a result of being (or ceasing to be) a
member
of any Affiliated Group (or being included (or required to be included) in
any
Tax Return relating thereto).
“Tax
Returns” means returns, declarations, reports, claims for refund,
information returns or other documents (including any related or supporting
schedules, statements or information) filed or required to be filed in
connection with the determination, assessment or collection of any Tax of
any
party or the administration of any laws, regulations or administrative
requirements relating to any Tax.
“Trademarks”
means all United States and foreign trademarks, service marks, trade dress,
logos, slogans, trade names, corporate names, Internet domain names, rights
in
telephone numbers, and other indicia of origin, together with all translations,
adaptations, derivations, and combinations thereof, and all registrations,
registration applications, and renewals in connection therewith.
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Section
8.3. Entire
Agreement; Amendment.
This
Agreement, including the exhibits and schedules hereto, the Transactions
Documents and the instruments and agreements executed in connection herewith
and
therewith contain all of the terms, conditions and representations and
warranties agreed upon by the parties relating to the subject matter of this
Agreement and supersede all prior and contemporaneous agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting such subject matter, including the Letter of Intent. This
Agreement shall not be amended or modified except by an agreement in writing
duly executed by Buyers and the Selling Parties.
Section
8.4. Counterparts;
Deliveries.
This
Agreement may be executed simultaneously in counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the
same
instrument. This Agreement, the Transaction Documents and each other agreement
or instrument entered into in connection herewith or therewith or contemplated
hereby or thereby, and any amendments hereto or thereto, to the extent signed
and delivered by means of a facsimile machine, e-mail of a “pdf” signature or
other electronic transmission, shall be treated in all manner and respects
and
for all purposes as an original agreement or instrument and shall be considered
to have the same binding legal effect as if it were the original signed version
thereof delivered in person. At the request of any party hereto or to
any such agreement or instrument, each other party hereto or thereto shall
re-execute original forms thereof and deliver them to all other parties,
except
that the failure of any party to comply with such a request shall not render
this Agreement invalid or unenforceable. No party hereto or to any
such agreement or instrument shall raise the use of a facsimile machine,
e-mail
of a “pdf” signature or other electronic transmission to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine or other electronic
transmission as a defense to the formation or enforceability of a contract
and
each such party forever waives any such defense.
Section
8.5. Third
Parties.
Nothing
in this Agreement, express or implied, is intended to confer any right or
remedy
under or by reason of this Agreement on any Person other than the parties
signatory hereto, the Buyer Indemnified Parties, the Seller Indemnified Parties
and their respective heirs, representatives, successors and assigns, nor
is
anything set forth herein intended to affect or discharge the obligation
or
liability of any third Persons to any party to this Agreement, nor shall
any
provision give any third party any right of subrogation or action over against
any party to this Agreement.
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Section
8.6. Expenses.
Each
of the parties shall pay all costs and expenses incurred or to be incurred
by it
in negotiating and preparing this Agreement and all documents executed in
connection herewith and in closing and carrying out the transactions
contemplated hereunder and thereunder including, but not limited to, legal
and
accounting fees and expenses (collectively, the “Expenses”);
provided, however, that the Selling Parties shall be solely
responsible for all Seller Closing Costs. The Selling Parties shall
be solely responsible for any broker fees or finder’s fees incurred in
connection with the transactions contemplated by this Agreement and the
Transaction Documents. The Selling Parties shall be solely
responsible for all sales, transfer, documentary, stamp, recording and similar
taxes due with regard to the transactions contemplated by this
Agreement.
Section
8.7. Waiver.
No
failure of any party to exercise any right or remedy given to such party
under
this Agreement or otherwise available to such party or to insist upon strict
compliance by any other party with its obligations hereunder, and no custom
or
practice of the parties in variance with the terms hereof, shall constitute
a
waiver of any party’s right to demand exact compliance with the terms hereof,
unless such waiver is set forth in writing and executed by such
party. Any such written waiver shall be limited to those items
specifically waived therein and shall not be deemed to waive any future breaches
or violations or other non-specified breaches or violations unless, and to
the
extent, set forth therein.
Section
8.8. Governing
Law.
This
Agreement shall be construed and governed in accordance with the internal
laws
of the State of Texas without regard to the principles of conflicting
laws.
Section
8.9. Assignments.
This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted
assigns. Notwithstanding the foregoing, nothing in this Agreement is
intended to limit either Buyer’s ability to assign its rights or delegate its
responsibilities, liabilities and obligations under this Agreement to
(a) any Affiliate of either Buyer, (b) any purchaser of all or
substantially all of the assets of either Buyer or (c) to lenders to either
Buyer or their respective Affiliates as security for borrowings, at any time
whether prior to or following the Closing Date without
consent. Notwithstanding anything to the contrary contained herein,
no Selling Party may assign any of their rights or delegate any of its
responsibilities, liabilities or obligations under this Agreement, without
the
written consent of Buyers.
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Section
8.10. Headings.
The
subject headings of articles and sections of this Agreement are included
for
purposes of convenience of reference only and shall not affect the construction
or interpretation of any of its provisions.
Section
8.11. Jurisdiction
of Courts.
Any
Proceeding initiated over any dispute arising out of or relating to this
Agreement or any of the transactions contemplated hereby shall be initiated
in
any federal or state court located within the County of Xxxx, State of Illinois,
and the parties further agree that venue for all such matters shall lie
exclusively in those courts. The parties hereby irrevocably waive, to
the fullest extent permitted by applicable Law, any objection that they may
now
or hereafter have, including, but not limited to, any claim of forum non
conveniens, to venue in the courts located in Xxxx County,
Illinois. The parties agree that a judgment in any such dispute may
be enforced in other jurisdictions by Proceedings on the judgment or in any
other manner provided by Law.
Section
8.12. Waiver
of Jury Trial.
Each
of the parties hereto hereby irrevocably waives any and all right to trial
by
jury of any claim or cause of action in any legal proceeding arising out
of or
related to this Agreement or the transactions or events contemplated hereby
or
any course of conduct, course of dealing, statements (whether verbal or written)
or actions of any party hereto. The parties hereto each agree that
any and all such claims and causes of action shall be tried by the court
without
a jury. Each of the parties hereto further waives any right to seek
to consolidate any such legal proceeding in which a jury trial has been waived
with any other legal proceeding in which a jury trial cannot or has not been
waived.
Section
8.13. Construction.
Where
specific language is used to clarify by example a general statement contained
herein, such specific language shall not be deemed to modify, limit or restrict
in any manner the construction of the general statement to which it
relates. The language used in this Agreement shall be deemed to be
the language chosen by the parties to express their mutual intent, and no
rule
of strict construction shall be applied against any party. Use of the
word “including” in this Agreement, shall mean, in all cases, “including without
limitation” and the items specified thereafter shall not be deemed to be
exclusive.
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Section
8.14. Knowledge
of the Selling Parties.
For
purposes of this Agreement and the Transaction Documents, “knowledge of the
Selling Parties” and each phrase having equivalent meaning (e.g.,“known
to the Selling Parties” or “to the Selling Parties’ knowledge”) shall mean the
facts or other information known by Xxxxx X. Xxxxxxxx, Xxxxx X. Xxxx, or
Xxxxxxx
Xxxxxxxx. Each of the foregoing individuals shall be deemed to know a
particular fact or other information if such individual is actually aware
of
such fact or matter after due inquiry or, in the absence of such inquiry,
if a
reasonably prudent person would have known such fact or other information
after
due inquiry.
Section
8.15. Public
Announcements.
No
party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior written consent of Buyers
and
the Selling Parties, unless otherwise required by Law and then only to the
extent required by Law.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE
PAGES FOLLOW.]
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IN
WITNESS WHEREOF, the parties have executed this Partnership Interest
Purchase Agreement as of the date first above written.
SELLERS:
XXXXXXXXX’X
OPERATING GP, LLC
/s/Xxxxx
X. Xxxx
By:Xxxxx
X. Xxxx
Its:Chairman
|
|
XXXXXXXXX’X
XX HOLDINGS, INC.
/s/Xxxxx
X. Xxxx
By:Xxxxx
X. Xxxx
Its:Chairman
|
|
OWNER:
XXXXXXXXX’X
HOLDINGS, INC.
/s/Xxxxx
X. Xxxx
By:Xxxxx
X. Xxxx
Its:Chairman
|
|
BUYERS:
PARK
INFUSIONCARE GP, LLC
/s/Xxxxxxx
Xxxxx
By: Xxxxxxx
Xxxxx
Its: Vice
President, Chief Financial Officer, Secretary &
Treasurer
|
|
MAVERICK
HEALTHCARE GROUP, L.L.C.
/s/Xxxxxxx
Xxxxx
By: Xxxxxxx
Xxxxx
Its: Vice
President, Chief Financial Officer, Secretary &
Treasurer
|
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