EXHIBIT 10.13
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made and entered into
as of June 18, 1997 by and among PHARMASYSTEMS COST CONTAINMENT CORP., a Florida
corporation (the "BUYER"), XXXX X. XXXXXXXXX, M.D., XXXXX XXXXXXXXX and XXXXXX
X. XXXXX (collectively, the "SELLERS").
RECITALS:
WHEREAS, Advanced Respiratory Care, Inc., a Florida corporation (the
"COMPANY"), is currently engaged in the sale and leasing of durable medical
equipment (the "BUSINESS"); and
WHEREAS, Xxxx X. Xxxxxxxxx, M.D. owns 30,000 Shares (as defined herein),
Xxxxx Xxxxxxxxx owns 10,000 Shares and Xxxxxx Xxxxx owns 10,000 Shares, which
together equals one hundred percent (100%) of the issued and outstanding common
stock of the Company (the "SHARES"); and
WHEREAS, the Sellers have been involved with the business operations of
the Company and have knowledge regarding the Company's business operations; and
WHEREAS, the Sellers desire to sell and Buyer desires to purchase the
Shares on the terms and subject to the provisions of this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants, agreements and recitals contained herein, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE I.
THE TRANSACTION
1.1. SALE AND PURCHASE OF THE PURCHASED SHARES. Upon the terms and subject
to the conditions of this Agreement and in consideration of the Purchase Price
(as defined herein), the Sellers shall sell, assign, transfer and deliver the
Shares to Buyer, and Buyer shall purchase from Sellers and take delivery of the
Shares pursuant to the terms of Section 1.3 hereto.
1.2. PURCHASE PRICE. The purchase price (the "PURCHASE PRICE") for
the Shares shall consist solely of 936,329.58 shares (the "PSCCC SHARES") of
the $0.001 par value per share common stock of the Buyer.
1.3. SHARES ESCROWED AT CLOSING.
(a) At the Closing the PSCCC Shares (the "ESCROWED SHARES") shall be
placed in escrow with Xxxxxxxxxxx & Xxxxxxxx LLP (the "ESCROW Agent"). The terms
of this escrow shall provide that, subject to the release provisions described
in Section 1.3(b) hereto, the Escrowed Shares shall be held in escrow for one
(1) year to insure the financial performance of the Company. The form of the
Escrow Agreement is attached hereto as EXHIBIT "A."
(b) PSCCC hereby agrees to release the lesser of (i) 250,000
Escrowed Shares, or (ii) any remaining Escrowed Shares within ten (10) days
after the end of each three month period following the Closing Date (as defined
herein) during which the Company fully satisfies the performance parameters as
prescribed by the Buyer's board of directors for the applicable period. The
Escrowed Shares shall be delivered to the Sellers by the Escrow Agent in
accordance with their ownership interest in the Company as set forth in the
recitals.
1.4. CLOSING. Provided that all applicable conditions precedent are fully
satisfied or waived by the appropriate party, the consummation of the purchase
and sale of the Shares and the other transactions contemplated hereby (the
"CLOSING") shall take place at 10:00 a.m., local time, on June __, 1997 and
shall be effective as of 11:59 p.m. local time on that date at the offices of
Xxxxxxxxxxx & Xxxxxxxx LLP, Miami Center, Suite 2000, 201 South Biscayne Blvd.,
Miami, Florida, or at such other time, date or place as the parties agree (the
"CLOSING DATE").
1.5. TERMINATION. Any party hereto may terminate this Agreement and the
transactions contemplated herein, and have no obligations or liabilities to the
other parties hereto other than the provisions of Sections 6.3, 6.10 and 6.13
hereof, which shall survive such termination, if the Closing does not occur on
or before June 30, 1997. Notwithstanding any other provision hereof, the Buyer
may, at its sole option, terminate this Agreement and the transactions
contemplated herein, and have no obligations or liabilities to the Sellers
(except for the provisions of Sections 6.3, 6.10 and 6.13 hereof), if the Buyer
is not, in its sole discretion, completely satisfied with the results of the due
diligence investigation described in Section 4.1(a) hereof.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLERS
As a material inducement to the Buyer to enter into this Agreement and
consummate the transactions contemplated hereby, the Sellers hereby jointly and
severally represent and warrant to the Buyer as follows:
2.1. ORGANIZATION; STANDING; CORPORATE POWER. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida. The Company has the full corporate power to own or lease and
operate its properties and to carry on the Business. The Company is duly
qualified to transact business and is in good standing as a foreign corporation
in each jurisdiction identified on Schedule 2.1. Attached hereto as EXHIBIT "C"
are true and correct copies of the Company's Articles of Incorporation and
Bylaws.
2.2. POWER AND AUTHORITY. Each of the Sellers has the power, legal
capacity and authority to execute and deliver this Agreement and the other
agreements and instruments for which provision is made herein to be executed and
delivered by Sellers and to perform their obligations under this Agreement and
such other agreements and instruments to which each of them will be a party.
This Agreement and such other agreements and instruments constitute legally
valid and binding obligations of the Sellers enforceable against each of them in
accordance with their respective terms. All actions on the part of the Sellers
necessary for the authorization, execution, delivery and performance of this
Agreement by each of them will be performed on or prior to the Closing Date.
2.3. SHARES; CAPITALIZATION. The authorized capital stock of the Company
consists solely of 50,000 shares of common stock, $0.01 par value per share, of
which 50,000 shares are issued and outstanding. All of the Shares are owned of
record, legally and beneficially by the Sellers. The Shares are free and clear
of any and all security interests, liens, claims, encumbrances, and rights of
any kind or nature whatsoever (collectively, "ENCUMBRANCES"), and upon delivery
of the Shares hereunder, Buyer will acquire good and marketable title thereto,
free and clear of any and all Encumbrances. Other than voting rights, redemption
rights and such other rights conferred by the Company's charter documents and by
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applicable statutes, there exist no Securities Rights (as defined herein) with
respect to the Shares. All rights and powers to vote the Shares are held
exclusively by the Sellers. All of the Shares are validly issued, fully paid and
nonassessable, were not issued in violation of the terms of any agreement or
other understanding, and were issued in compliance with all applicable laws and
regulations. The certificates representing the Shares to be delivered to the
Escrow Agent at the Closing are, and the signatures and endorsements thereof or
stock powers relating thereto will be, valid and genuine. For the purposes of
this section, "SECURITIES RIGHTS" means, with respect to the Shares, any
options, warrants, subscription rights, conversion rights (including, without
limitation, rights associated with convertible debt), rights of first refusal,
other rights, proxies, puts, calls, demands, plans, commitments, agreements,
understandings or arrangements of any kind relating to the Shares (whether
issued or unissued) or any other securities convertible into or exchangeable for
Shares, and includes all written or unwritten contractual rights relating to the
issuance, sale, assignment, transfer, purchase, redemption, conversion,
exchange, registration or voting of the Shares and all rights conferred by the
Company's governing documents and by any applicable agreement.
2.4. SUBSIDIARIES AND INVESTMENTS. Except as otherwise listed on Schedule
2.4, the Company does not own or control (directly or indirectly) nor has the
Company ever owned or controlled (directly or indirectly) any shares of capital
stock of or other equity interest in any corporation, partnership, joint venture
or other entity.
2.5. FINANCIAL STATEMENTS. The balance sheet (the "BALANCE SHEET") of the
Company as of March 31, 1997 (the "BALANCE SHEET DATE") and the related
statements of income for the twelve month period then ended (the Balance Sheet
and the related statements of income are referred to herein as the "FINANCIAL
STATEMENTS") are set forth on Schedule 2.5. The Financial Statements accurately
present, in accordance with generally accepted accounting principles
consistently applied ("GAAP"), the financial position of the Company on the
Balance Sheet Date and the results of its operations for such twelve month
periods.
2.6. LIABILITIES AND OBLIGATIONS. The Company has no debt, obligation or
liability, absolute, fixed, contingent or otherwise, of any nature whatsoever,
whether due or to become due, including any unasserted claim, whether incurred
directly or by any predecessor thereto, and whether arising out of any act,
omission, transaction, circumstance, sale of goods or services, state of facts
or other condition, which individually or in the aggregate would have a material
adverse effect on the Company's financial condition, except (a) those reflected
or reserved against on the Balance Sheet in the amounts shown therein; and (b)
those that have arisen in the ordinary course of business of the Company after
the Balance Sheet Date through the Closing Date, none of which, individually or
in the aggregate, has had or will have a material adverse effect on the Business
or financial condition of the Company.
2.7. NO CHANGES. Since the Balance Sheet Date the Company has conducted
its business only in the ordinary course, and there has not been any change in
any applicable set of circumstances or conditions that would have a material
adverse effect on the Company's financial condition.
2.8. REAL PROPERTY. Schedule 2.8 sets forth a complete and accurate list
of all the real property owned or leased by the Company (the "REAL PROPERTY").
There are no claims, actions, suits or other proceedings pending or threatened
which involve any part of the Real Property, and the Real Property is not in
violation of any Laws (as defined herein).
2.9. TITLE. The Company has good title to all of the assets (the
"ASSETS") used in the operation of the Business, and all of such Assets are
reflected on the Balance Sheet or, under GAAP, are not required to be
reflected thereon.
2.10. CONTRACTS. Schedule 2.10 sets forth a complete and accurate list
of all the Contracts (as defined herein) of the Company. "CONTRACT" shall
mean any formal or informal agreement, whether written or unwritten, to which
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the Company is a party or by which the Company or the Shares are bound and
which by its terms obligates the Company to pay a total of more than
$10,000.00.
2.11. PERMITS. The Company holds all material permits, certificates,
licenses, franchises, privileges, approvals, registrations and authorizations
required under any applicable Law in connection with the Business (collectively,
"PERMITS"). Each Permit is in effect, and the Company is in compliance with and
has fulfilled and performed its obligations under each Permit.
2.12. LABOR RELATIONS. Except as otherwise listed on Schedule 2.12 hereto,
(a) the Company has complied in all material respects with all applicable Laws,
rules and regulations which relate to wages, hours and discrimination in
employment and no penalties could be assessed for failure to comply with any of
the foregoing; (b) no condition or state of facts or circumstances exists in
connection with or involving any of the Company's employees or former employees
which could have a material adverse effect on the Company's financial condition;
(c) the Company is not a party to any collective bargaining agreement; (d) the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not trigger any obligation on the part
of the Company to make any payment to any past or current officer, director,
employee of agent of the Company; and (e) the Company's relations with its
employees are good.
2.13. INTELLECTUAL PROPERTY RIGHTS. The name "Advanced Respiratory Care,
Inc." is valid and is not the subject of any interference, opposition,
reexamination or cancellation. No person is infringing upon, or intends to
infringe upon, this name, and the Company's use of this name is not infringing
upon the intellectual property rights of any other person.
2.14. CUSTOMERS AND SUPPLIERS. No condition or state of facts or
circumstances exists in connection with or involving the Company's customers,
former customers, suppliers or former suppliers which could have a material
adverse effect on the Company's Business or financial condition.
2.15. NO VIOLATION OF LAW; LITIGATION.
(a) The execution and delivery of this Agreement by the Sellers, the
performance by the Sellers of their respective obligations hereunder and the
consummation of the transactions contemplated hereunder will not result in (i) a
violation of any applicable law, statute, rule, regulation, writ, order,
judgment or decree (each, a "LAW") of any domestic or foreign court or
governmental, administrative or regulatory authority, agency or instrumentality
(each, a "GOVERNMENTAL AUTHORITY") applicable to the Company, the Shares or the
Sellers; or (ii) the breach of, or constitute a default under, any agreement or
instrument to which any of the Sellers is a party or by which the Sellers, the
Company, or the Shares are bound.
(b) Schedule 2.15(b) sets forth all Litigation (as defined herein)
which is pending or threatened against the Company, the Shares or the Sellers.
No Litigation is pending or threatened that seeks to prevent, delay or challenge
the consummation of the transactions contemplated by this Agreement.
"LITIGATION" means any claim, action, suit, proceeding or investigation at law
or in equity or otherwise in, before or by any Governmental Authority or before
any public or private arbitrator or arbitration board or panel.
2.16. BROKERS. The Sellers have not directly or indirectly, in connection
with this Agreement or the transactions contemplated hereby (a) employed any
broker, finder or agent; or (b) agreed to pay or incurred any obligation to pay
any broker's or finder's fee, commission or any other similar form of
compensation.
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2.17. NO CONSENTS. No consent, approval, authorization or other action by,
or filing with, any Governmental Authority (each, a "GOVERNMENTAL Approval") or
other third party is required to be obtained or made by the Sellers in
connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby.
2.18. NO CONFLICTS. The execution, delivery, performance and compliance
with the terms of this Agreement by the Sellers do not and will not, and
consummation of the transactions contemplated by this Agreement will not: (a)
result in the violation of the by-laws or any other governing documents of the
Company; (b) result in the breach of, or constitute a default under, or permit
the acceleration of any obligation under, any Contract to which the Company or
the Sellers are a party or by which the Company, the Sellers or the Shares are
bound; (c) result in the mandatory acceleration, redemption, payment or
prepayment of any material obligation of the Company or the Sellers under any
such agreement or instrument or afford the holder of any such obligation the
right to require the Company or the Sellers to purchase, redeem or otherwise
acquire, reacquire or repay any such obligation; or (d) constitute an event
which, after notice or lapse of time or both, would result in any of the
foregoing.
2.19. TAXES.
(a) The Sellers and the Company have filed when due all federal,
foreign, state and local Tax (as defined herein) returns, information returns,
reports and estimates required to be filed by the Company or on its behalf by
Sellers on or before the Closing Date. Except as described on Schedule 2.19, all
such returns, reports and estimates (i) were prepared by one of the Sellers, or
the Company, as applicable, in the manner required by all applicable Laws, (ii)
are correct and complete, and (iii) accurately reflect the Company's liability
for Taxes.
(b) The Company has paid or has, in accordance with GAAP, provided a
sufficient reserve on the Balance Sheet for the payment of all federal, foreign,
state and local Taxes with respect to all periods, or portions thereof, ending
on or prior to the Balance Sheet Date and such Taxes paid or provided for
include those for which the Company may be liable in its own right or as the
transferee of the assets of, or as successor to, any other corporation,
association, partnership, joint venture or other entity. The Company has no
liability for any Taxes not reflected on the Balance Sheet.
(c) The Company has, in compliance with the applicable provisions of
the Internal Revenue Code of 1986, as amended (the "CODE") and all other
applicable Laws, (i) withheld amounts from its employees; (ii) filed all
federal, foreign, state and local returns and reports and paid all Taxes with
respect to employee income Tax withholding and social security and unemployment
Taxes for all periods (or portions thereof) ending before the Closing Date; and
(iii) made all required deposits of Taxes.
(d) Except as set forth on Schedule 2.19, there are no examinations,
investigations or claims by any taxing authority of competent jurisdiction
pending or threatened against the Sellers or the Company, for any Taxes due
before the Closing Date, and there has been no waiver of any applicable statute
of limitations or extension of the time for the assessment of any Tax against
any of the Sellers or the Company.
(e) Neither the Company nor any of the Sellers is a party to
any Tax allocation or sharing agreement.
(f) "TAXES" or "TAX" means all net income, capital gains, gross
income, gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, intangible or windfall profit taxes, customs duties or other taxes of
any kind whatsoever applicable to the Company, together with any interest and
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any penalties, additions to tax, or additional amounts imposed with respect to
Taxes by any Governmental Authority upon the Company.
2.20. ENVIRONMENTAL MATTERS.
(a) Except as set forth on Schedule 2.20, in connection with
all Environmental Laws (as defined herein):
(i) neither the Company, nor any of the Sellers, have received
written notice of any claim from any Governmental Authority or any third party
that the operation of the Business of the Company violates or has violated any
applicable Environmental Laws;
(ii) neither the Company nor any of the Sellers have received
from any Governmental Authority or any third party any written request for
information seeking to determine whether, or any notification to the effect
that, the Company may be responsible for damages, investigation, removal or
remediation relating to the Release (as defined herein) or threatened Release of
any Regulated Substance (as defined herein) at any property currently or
previously owned or operated by the Company or at any other site;
(iii) the Company and the Business are in compliance in all
material respects with all applicable Environmental Laws, and the Company and
the Business have been in compliance in all material respects with all
applicable Environmental Laws.
(iv) no Regulated Substances have been or are being Released
on or to any property owned or operated by the Company, except Releases that
were specifically authorized by and made in compliance with a Governmental
Approval;
(v) no Regulated Substances have been or are being Released on
or to any property owned or operated by the Company creating an Environmental
Condition (as defined herein) on such property that under any Environmental Law
currently in effect (a) imposes or could reasonably be expected to impose
liability for removal, remediation, or other cleanup, or damages, (b) could have
a material adverse effect on the value of the property, the Company or the
Business, or (c) could result in the imposition of a lien on the property of the
Company.
(vi) no Regulated Substances are stored or located on the
properties owned or operated by the Company except for inventories of raw
materials and supplies used or to be used in the ordinary course of business of
the Company and intermediate and finished goods, each of which are managed in
compliance with applicable Environmental Laws;
(vii) there are no polychlorinated biphenyls or asbestos which
are located on, contained in, or otherwise form a part of, the assets or
properties of the Company.
(b) The Company has obtained and holds all Governmental Approvals
required under applicable Environmental Laws for the ownership, use, occupation,
and operation of the Business, the Real Property, any other properties owned or
leased by the Company and all other business activities of the Company. The
Company has made all filings, reports, registrations, or other submissions
required under Environmental Laws with respect to the ownership, use,
occupation, and operation of the Business, the Real Property or any other
properties owned or leased by the Company, and all other business activities of
the Company.
(c) All Governmental Approvals which are necessary under existing
Environmental Laws for the ownership, use, occupation, and operation of the
Business, the Real Property or any other properties owned or leased by the
Company are set forth in Schedule 2.20(c) hereto. Each of the Governmental
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Approvals set forth in Schedule 2.20(c) is in full force and effect and is
final, any fixed period for appeal or review having elapsed (other than as to
ongoing compliance or modification during the term of such Governmental Approval
as otherwise provided by law). No such Governmental Approval is subject to any
pending suit, action, inquiry, investigation, proceeding or appeal.
(d) Except as provided in Schedule 2.20(d):
(i) the Company, its Predecessors (as defined herein) have
complied with, and are in compliance with: (a) the terms and conditions of all
Governmental Approvals issued or required pursuant to any Environmental Law, and
(b) all other limitations, restrictions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any Environmental Law, or in
any notice, order, or demand letter issued, entered, promulgated, or approved
pursuant to any Environmental Law;
(ii) none of the Company, its Predecessors nor any of the
Sellers have received any notice of violation or other notification from any
Governmental Authority alleging that the Company or its Predecessors, or the
Real Property or any other property owned or leased by the Company or its
Predecessors is in violation of any Environmental Law; and
(iii) none of the Company, its Predecessors, the Real Property
or any other property owned or leased by the Company or its Predecessors are
subject to, or have been subject to, any administrative or judicial proceedings
or investigations pursuant to any Environmental Law.
(e) Except as set forth on Schedule 2.20(e), there are not now, and
there have not been previously, any underground storage tanks on or at any
property owned, leased or operated by the Company, the Sellers or its
Predecessors.
(f) None of the Company, its Predecessors, nor any of the
Sellers;
(i) disposed, discharged, or released any Regulated
Substance at;
(ii) arranged for the disposal of any Regulated Substance at;
(iii) transported any Regulated Substance to; or
(iv) owned or operated
any site or facility that is listed or proposed for listing on the National
Priority List under CERCLA, or that is listed or proposed for listing or has
otherwise been identified as a hazardous substances release site by any state
regulating authority.
(g) All sites, facilities, or other business operations at which or
with whom the Company or its Predecessors disposed or arranged for treatment or
disposal or for transportation for treatment or disposal of any Regulated
Substance are set forth in Schedule 2.20(g) hereto. All sites, facilities, or
other business operations at which the Company or its Predecessors treated or
disposed or arranged for treatment or disposal or for transportation for
treatment or disposal of such Regulated Substances held at the time of treatment
or disposal or arrangement for transportation for treatment or disposal all
Government Approvals necessary to accept, transport, and/or dispose of such
Regulated Substances, and none of such sites, facilities or other business
operation is or could reasonably be expected to be the subject of an action for
removal, remediation or other cleanup, damage to natural resources, or violation
of any Environmental Law.
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(h) For purposes of this Agreement, the following terms shall have
the following meanings:
(i) "ENVIRONMENTAL CONDITION" means the presence of a
Regulated Substance (other than a naturally-occurring substance) on or at a
property (including, but not limited to, the presence in surface water,
groundwater, soils or subsurface strata).
(ii) "ENVIRONMENTAL LAWS" means any federal, state or local
statute, law, rule, regulation, ordinance, code, or policy having the force of
law relating to protection of the environment, natural resources, or public or
employee health and safety, or relating to the production, generation, use,
storage, treatment, processing, transportation or disposal of Regulated
Substances, including, without limitation: the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 ET SEQ.; the
Superfund Amendments and Reauthorization Act, Public Law 99-499, 100 Stat. 1613;
Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901, ET SEQ.; the
National Environmental Policy Act, 42 U.S.C. ss. 4321; the Safe Drinking Water
Act, 42 U.S.C. ss. 300f ET SEQ.; the Toxic Substances Control Act, 15 U.S.C. ss.
2601 ET SEQ.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
ss. 136, ET SEQ.; the Hazardous MaterialS Transportation Act, 49 U.S.C. ss.
1801; the Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 ET SEQ.; the
Oil Pollution Act of 1990, 33 U.S.C. ss. 2701, ET SEQ.; the Clean Air Act, 42
U.S.C. ss. 7401 ET SEQ., The Occupational Safety and Health Act, 29 U.S.C. ss.
651 ET SEQ., and counterpart state and local laws, and regulations adopted
thereunder.
(iii) "PREDECESSOR" means a predecessor entity which has been
merged with the Company, or the predecessor owner or operator of any of the
property or assets owned or operated by the Company, where the Company is liable
(whether by reason of the contractual assumption of liabilities, indemnification
obligations or by other operation of law) for the actions or inactions of such
predecessor.
(iv) "REGULATED SUBSTANCE" means any pollutant, contaminant,
hazardous substance, hazardous material, toxic substance, toxic pollutant, solid
waste, municipal waste, industrial waste, or hazardous waste, that is defined as
such and is subject to regulation under any applicable Environmental Law.
(v) "RELEASE" means the spilling, leaking, pumping, pouring,
emitting, discharging, injecting, escaping, leaching, dumping or disposal of any
Regulated Substance into surface water, groundwater, soil, the land surface or
subsurface, or ambient air. Release does not include a release of solids or
liquids onto an impervious surface that is promptly contained and cleaned up,
and that does not come into contact with soil, stormwater, surface water or
groundwater.
2.21. EMPLOYEE BENEFIT PLANS; LABOR RELATIONS. "EMPLOYEE PLAN" means any
pension, retirement, profit-sharing, deferred compensation, bonus, severance or
other incentive plan, medical, vision, dental or other health plan, life
insurance plan or other employee benefit plan, arrangement, program or practice,
including, without limitation, any "EMPLOYEE BENEFIT plan" as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), covering any Employees ("EMPLOYEES") of the Company, and under which
Employees of the Company are eligible to participate or derive a benefit, except
any government-sponsored program or legally or governmentally required benefit.
The Company has no liability under any Employee Plan, including, without
limitation, an Employee Plan which is an "employee benefit plan" as defined in
Section 3(3) of ERISA.
2.22. LEASEHOLD PROPERTY. The Company has valid leasehold interests in all
leased personal property that is material to the conduct of the Business, and
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there is not under any related lease any default (or event that, with the giving
of notice or the passage of time or both, would constitute a default) by the
Company.
2.23. BOOKS AND RECORDS. The stock record books and other corporate
records of the Company, all of which have been made available to Buyer, are
complete and correct in all material respects and have been substantially
maintained in accordance with sound business practices and all applicable Laws.
2.24. INVESTMENT INTENT. The Sellers are acquiring the PSCCC Shares
for investment only and not with an intent to distribute them in violation of
any applicable Federal or state securities laws.
2.25. DISCLOSURE. All written information that on or prior to the Closing
Date has been made available to Buyer by the Sellers or the Company in
connection with this Agreement or the transactions contemplated hereby,
including, without limitation, the Schedules and Exhibits attached hereto, does
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make such information not materially misleading in
light of the circumstances under which such information was made.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to Sellers as follows:
3.1. ORGANIZATION; POWER AND CORPORATE AUTHORITY. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida. Buyer has the power, legal capacity and corporate
authority to execute and deliver this Agreement and the other agreements and
instruments for which provision is made herein to be executed and delivered by
Buyer and to perform its obligations under this Agreement and the other
agreements and instruments to which Buyer will be a party. This Agreement and
such other agreements and instruments shall constitute valid and binding
obligations of the Buyer enforceable against the Buyer in accordance with their
respective terms. All corporate and other action on the part of the Buyer
necessary for the authorization, execution, delivery and performance by the
Buyer of this Agreement shall be performed on or prior to the Closing Date.
3.2. NO VIOLATION. Neither the execution and delivery of this Agreement by
Buyer nor the performance by Buyer of its obligations in such capacity under
this Agreement, will (a) result in the violation of the Articles of
Incorporation or Bylaws of the Buyer as in effect on the Closing Date or (b)
result in the breach of, or constitute a default under, any material agreement
or instrument to which Buyer is a party or by which Buyer is bound or constitute
an event which, after notice or lapse of time or both, would result in any of
the foregoing.
3.3. BROKERS. Buyer has not, directly or indirectly, in connection with
this Agreement or the transactions contemplated hereby (a) employed any broker,
finder or agent or (b) agreed to pay or incurred any obligation to pay any
broker's or finder's fee, any commission or any other similar form of
compensation.
ARTICLE IV.
CONDITIONS TO CLOSING
4.1. CONDITIONS TO THE OBLIGATION OF BUYER. The obligation of Buyer to
proceed with the Closing is subject to the satisfaction on or prior to the
Closing Date of all the following conditions, any one or more of which may be
waived in whole or in part by the Buyer:
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(a) The Buyer shall have conducted a full and complete due diligence
investigation of the Company and shall be satisfied, in its sole discretion,
with the results of such due diligence investigation. Notwithstanding any other
provision of this Agreement, the Sellers shall cause the Company to fully
cooperate with the Buyer and its representatives, including, without limitation,
its attorneys and accountants, in connection with this due diligence
investigation, and shall give the Buyer and such representatives full and
complete access to the Company and its books, records, properties, contracts and
other information and documents in connection therewith.
(b) The Sellers shall have complied with all of their respective
covenants and agreements contained herein, and the representations and
warranties of the Sellers contained in this Agreement shall be true on and as of
the Closing Date as if made on and as of the Closing Date.
(c) Buyer shall have received the following documents, in each case
in form and substance reasonably satisfactory to Buyer and its counsel:
(i) Certificates representing the Shares duly endorsed in
negotiable form or accompanied by stock powers duly executed in blank with all
transfer taxes, if any, paid in full.
(ii) A certificate signed by the Sellers which certifies that
the conditions specified in Section 4.1(b) hereof have been satisfied;
(iii) The minute books, stock ledgers and corporate seal of
the Company.
(iv) Specimen signature certificates signed by the Sellers.
(v) Such other agreements and documents as Buyer or its
counsel may reasonably request.
(d) No Litigation shall be pending or threatened and no order,
injunction or decree shall have been entered by any Governmental Authority
against the Sellers, the Company, the Shares or the Buyer which would prohibit,
restrict or delay consummation of the transactions contemplated by this
Agreement.
(e) All consents and approvals of third parties which are required
to consummate the transactions contemplated herein shall have been obtained and
delivered to the Buyer.
4.2. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligation(s) of
Sellers to proceed with the Closing is subject to the satisfaction on or prior
to the Closing Date of all the following conditions, any one or more of which
may be waived in whole or in part by the Sellers:
(a) Buyer shall have complied with all of its respective covenants
and agreements contained herein, and the representations and warranties of Buyer
contained in this Agreement shall be true on and as of the Closing Date as if
made on and as of the Closing Date.
(b) The Sellers or the Escrow Agent, as applicable, shall have
received the following documents or items, in each case in form and substance
satisfactory to the Sellers, and their respective counsel:
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(i) Certificates representing the PSCCC Shares with all
transfer taxes, if any, paid in full.
(ii) A certificate signed by an authorized representative of
the Buyer which certifies that the conditions specified in Section 4.2(a) hereof
have been satisfied.
(iii) Incumbency and specimen signature certificates signed by
the officers of Buyer and certified by the Secretary of Buyer.
(iv) Such other agreements and documents as the Sellers or
their counsel may reasonably request.
ARTICLE V.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
5.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of the parties made in this Agreement shall survive the
Closing Date for a period equal to the applicable statute of limitations.
5.2. INDEMNIFICATION BY SELLERS.
(a) The Sellers shall jointly and severally indemnify, defend, and
hold Buyer, and its officers, directors, employees, and shareholders and their
respective successors and permitted assigns (each, a "BUYER'S INDEMNIFIED
PARTY"), harmless from and against all demands, suits, claims, actions or causes
of action, assessments, losses, damages, liabilities, settlements, penalties,
and forfeitures, and reasonable costs and expenses (including court costs and
any other litigation related expenses incident thereto) (each, an "INDEMNITY
LOSS") asserted against, suffered, or incurred by any Buyer's Indemnified Party
arising out of or in any way related to any misrepresentation in or breach of
the representations and warranties of the Sellers or the failure of the Sellers
to perform any of their covenants or obligations contained in this Agreement or
in any Exhibit or Schedule hereto;
(b) INDEMNIFICATION PROCEDURES:
(i) The Sellers shall be obligated to indemnify the Buyer
Indemnified Party only for those claims as to which the Buyer Indemnified Party
has given the Sellers written notice no later than two (2) years after the Buyer
Indemnified Party's discovery of the facts giving rise to any such claim. Any
written notice delivered pursuant to this clause shall set forth with
specificity the basis of the claim and an estimate of the amount thereof.
5.3. INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend, and hold
each of the Sellers (and its respective successors and assigns) (each, a
"SELLERS' INDEMNIFIED PARTY"), harmless from and against any Indemnity Loss
asserted against, suffered or incurred by any Sellers' Indemnified Party arising
out of or in any way related to any misrepresentation in or breach of the
representations and warranties of Buyer or the failure of Buyer to perform any
of its covenants or obligations contained in this Agreement or in any Exhibit or
Schedule hereto.
5.4. NOTICE. If any person believes that it has suffered or incurred any
Indemnity Loss, that person shall so notify the indemnifying party promptly in
writing describing such loss or expense, the amount thereof, if known, and the
method of computation of such Indemnity Loss, all with reasonable particularity.
If any action at law, suit in equity or administrative action is instituted by
or against a third party with respect to which any person intends to claim any
11
liability or expense as an Indemnity Loss under this Article V, such person
shall promptly notify the indemnifying party of such action.
5.5. DEFENSE OF CLAIMS. The indemnifying party shall have ten (10)
business days after receipt of either notice referred to in Section 5.4 hereof
to notify the indemnified party that it elects to conduct and control any legal
or administrative action or suit with respect to an indemnifiable claim. If the
indemnifying party does not give such notice, the indemnified person shall have
the right to defend, contest, settle or compromise such action or suit in the
exercise of its exclusive discretion, and the indemnifying party shall, upon
request from the indemnified person promptly pay the indemnified person in
accordance with the other terms and conditions of this Article V the amount of
any Indemnity Loss resulting from its liability to the third party claimant. If
the indemnifying party gives such notice, it shall have the right to undertake,
conduct and control, through counsel of its own choosing and its sole expense,
the conduct and settlement of such action or suit, and the indemnified person
shall cooperate with the indemnifying party in connection therewith; provided,
however, that: (i) the indemnifying party shall not thereby permit to exist any
lien, encumbrance or other adverse charge securing the claims indemnified
hereunder upon any asset of the indemnified person, (ii) the indemnifying party
shall not thereby consent to the imposition of any injunction against the
indemnified person without the written consent of the indemnified person, (iii)
the indemnifying party shall permit the indemnified person to participate in
such conduct or settlement through counsel chosen by the indemnified person, but
the fees and expenses of such counsel shall be borne by the indemnified person,
and (iv) upon a final determination of such action or suit, the indemnifying
party shall agree promptly to reimburse to the extent required under this
Article V the indemnified person for the full amount of any Indemnity Loss
resulting from such action or suit and all reasonable and related expenses
incurred by the indemnified person, except fees and expenses of counsel for the
indemnified person incurred after the assumption of the conduct and control of
such action or suit by the indemnifying party. So long as the indemnifying party
is contesting any such action in good faith, the indemnified person shall not
pay or settle any such action or suit.
5.6. COOPERATION. If requested by the indemnifying party, the indemnified
person shall cooperate with the indemnifying party and its counsel in contesting
any claim which the indemnifying party elects to contest or, if appropriate, in
making any counterclaim against the person asserting the claim, or any
cross-complaint against any person, and further agrees to take such other action
as reasonably may be requested by an indemnifying party to reduce or eliminate
any loss or expense for which the indemnifying party would have responsibility,
but the indemnifying party will reimburse the indemnified person for any
expenses incurred by it in so cooperating or acting at the request of the
indemnifying party. Notwithstanding any other provision of this Agreement, no
party hereto shall be required to cooperate under this Section 5.6 if such
cooperation would require that party to (a) incur any monetary obligation or
liability; or (b) independently commence litigation.
5.7. RIGHT TO PARTICIPATE. The indemnified person shall afford the
indemnifying party and its counsel (at the indemnifying party's own expense) the
opportunity to be present at, and to participate in, conferences with all
persons, including governmental authorities, asserting any claim against the
indemnified person or conferences with representatives of or counsel for such
persons.
5.8. PAYMENT OF LOSSES; ESCROWED SHARES AS COLLATERAL.
(a) The indemnifying party shall promptly pay to the indemnified
person in cash the amount of any Indemnity Loss to which the indemnified person
is entitled by reason of the provisions of this Agreement. Any claim for which
indemnification occurs under this Agreement shall be assigned (without recourse)
12
to the indemnifying party. The parties covenant that any payment made pursuant
to this Article V will be treated by the parties on their respective tax returns
as an adjustment to the Purchase Price. All amounts recoverable by an
indemnified person shall be net of tax benefits actually received by such
indemnified person in the tax year in which the Indemnity Loss occurred.
(b) Notwithstanding any other provision hereof, the Escrowed Shares
shall secure the payment of any indemnification obligations that arise under
Section 5.2 of this Agreement subject to the terms of Section 1.3 hereof. The
Sellers agree that any such payments not promptly made in cash pursuant to
Section 5.8(a) hereof shall be made by the prompt return of an appropriate
number of the Escrowed Shares to PSCCC. The appropriate number of Escrowed
Shares shall be calculated based on a price of $3.50 for each Escrowed Share.
5.9. SUBROGATION. In the event of any payment by an indemnifying party to
an indemnified party in connection with any Indemnity Loss, the indemnifying
party shall be subrogated to and shall stand in the place of the indemnified
party as to any events or circumstances in respect of which the indemnified
party may have any right or claim against any third party relating to such event
of indemnification. The indemnified party shall cooperate with the indemnifying
party in any reasonable manner in prosecuting any subrogated claim.
5.10. LIMITATIONS ON ACTIONS. Notwithstanding anything to the contrary in
this Agreement, neither party hereto shall be liable to the other party hereto
(or any Buyer's Indemnified Party or Sellers' Indemnified Party, as applicable)
for any Indemnity Losses until the aggregate amount of such Indemnity Losses
exceeds Five Thousand Dollars ($5,000); provided, however, that once this amount
is exceeded the responsible party shall be responsible for the full payment of
all such Indemnity Losses without any deduction.
ARTICLE VI.
CERTAIN COVENANTS; MISCELLANEOUS
6.1. FURTHER ASSURANCES. The Sellers shall, from time to time after the
Closing, upon the request of Buyer, promptly execute, acknowledge and deliver
all such further deeds, assignments, transfers, conveyances, assurances and
other documents as may be required to transfer to and to vest in Buyer all
right, title and interest of the Company in and to the Shares and to protect the
right, title and interest of Buyer in and to all of the Shares.
6.2. NOTICES. Notices hereunder will be effective if delivered by
hand delivery or recognized overnight courier to the address given below:
(a) If to the Buyer:
PharmaSystems Cost Containment Corp.
0000 X.X. 0xx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Chief Financial Officer
13
With a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
Miami Center, 20th Floor
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
(b) If to Sellers:
Xx. Xxxx X. and Xxxxx Xxxxxxxxx
-------------------------------
-------------------------------
-------------------------------
Xxxxxx Xxxxx
-------------------------------
-------------------------------
-------------------------------
All notices delivered hereunder shall be marked "PERSONAL AND CONFIDENTIAL." Any
party may change the address or number to which notices are to be addressed by
giving the other parties notice in the manner herein set forth. Any notice given
in accordance with the requirements of this Section 6.2 shall be deemed to have
been given when delivered.
6.3. PUBLIC ANNOUNCEMENTS AND RELEASES. Except to the extent required by
applicable Law, no disclosure of (a) this Agreement, the other agreements and
instruments to be executed in connection herewith, any of the provisions hereof
or thereof, or any of the transactions contemplated hereby or thereby; or (b)
any confidential information concerning the Company, shall be made by any party
hereto to any person or entity not a party hereto, and the respective employees,
directors, officers, representatives and advisors of such parties (as
applicable) who need to know such information. The parties hereto shall consult
with each other before any party issues any press release or otherwise makes any
public statements with respect to this Agreement or the transactions
contemplated hereby, and, except as may be required by Law, any such press
release or public statement shall be approved in advance by all parties.
6.4. NO REGISTRATION OR REGISTRATION RIGHTS. The Sellers each (a) hereby
acknowledge and agree that the PSCCC Shares have not been registered under the
Securities Act of 1933, as amended (the "ACT"), or the securities laws of any
state or other jurisdiction in reliance upon applicable exemptions from such
registration, and that the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby do not grant, provide or
confer any registration rights on the Sellers with regard to the PSCCC Shares,
and (b) shall not sell, transfer or assign the PSCCC Shares unless such sale,
transfer or assignment complies with the requirements of the Act and the
securities laws of such State or other jurisdiction.
6.5. GOVERNING LAW; VENUE. The validity, interpretation and performance of
this Agreement shall be determined in accordance with the laws of the State of
Florida applicable to contracts made and to be performed wholly within that
state except to the extent that federal law applies. The parties hereto agree
that any disputes, claims, disagreements, lawsuits, actions or controversies of
any type or nature whatsoever that, directly or indirectly, arise from or relate
to this Agreement, including, without limitation, claims relating to the
14
inducement, construction, performance or termination of this Agreement, shall be
brought in the state and federal courts located in Dade County, Florida, and the
parties hereto agree not to challenge the selection of that venue in any such
proceeding for any reason, including, without limitation, on the grounds that
such venue is an inconvenient forum.
6.6. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one instrument.
6.7. HEADINGS; GENDER; REFERENCES. The headings, subheadings and captions
in this Agreement and in any appendix, exhibit or schedule hereto are for
reference purposes only and are not intended to affect the meaning or
interpretation of this Agreement. For purposes of this Agreement, the use of
masculine pronouns shall be deemed to include feminine and neuter pronouns, as
appropriate. References in this Agreement to sections, subsections, schedules or
exhibits are to sections, subsections, schedules or exhibits in or to this
Agreement unless otherwise stated.
6.8. SCHEDULES, EXHIBITS AND RECITALS. The schedules and exhibits
attached hereto and the recitals contained herein are hereby incorporated by
reference and made a part of this Agreement as if set forth in full herein.
6.9. ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior negotiations, discussions, agreements, arrangements and
understandings, written or oral, relating to the subject matter of this
Agreement. No amendment or modification of, or any waiver of any provision of,
this Agreement shall be effective unless set forth in a writing signed by all
parties hereto.
6.10. ATTORNEYS' FEES. In the event any suit or other legal proceeding is
brought for the enforcement of any of the provisions of this Agreement, the
prevailing party or parties shall be entitled to recover from the other party or
parties upon final judgment on the merits, reasonable attorneys' fees including
attorneys' fees for any appeal and costs incurred in bringing such suit or
proceeding. Each party hereto shall be responsible for its own legal fees
incurred in connection with the negotiation and preparation of this Agreement,
even if this Agreement is terminated prior to the consummation of the
transactions contemplated herein.
6.11. SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARIES; Assignment.
This Agreement will be binding upon the parties hereto and their respective
successors and permitted assigns. Except as otherwise provided herein, this
Agreement is not intended to, and shall not be construed to, create any rights
as a third-party beneficiary or otherwise in favor of any person or entity who
is not a party to this Agreement or a successor or permitted assign of a party
to this Agreement. No party hereto shall assign this Agreement or its rights and
obligations hereunder without the other parties' prior written consent.
6.12. SEVERABILITY. If any provision of this Agreement is held to be
unenforceable, invalid or void to any extent for any reason, that provision
shall remain in force and effect to the maximum extent allowable, if any, and
the enforceability and validity of the remaining provisions of this Agreement or
other rights and obligations hereunder shall not be affected thereby.
6.13. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN
15
CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING. STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR EACH PARTY'S ACCEPTANCE AND EXECUTION OF THIS AGREEMENT.
IN WITNESS WHEREOF, each of the parties hereto has caused this Stock
Purchase Agreement to be duly executed and delivered as of the date first above
written.
PHARMASYSTEMS COST CONTAINMENT CORP.
By: /s/ Xxxx X. Xxxxxxxxx
---------------------
Name: Xxxx X. Xxxxxxxxxx
Title:President
/s/ Xxxx X. Xxxxxxxxx, M.d.
---------------------------
Xxxx X. Xxxxxxxxx, M.D.
/s/ Xxxxx Xxxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx
