ASSET PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of the 27th day of July
2001, by and between Prescripticare, L.L.C. (the "Seller"), a Kansas limited
liability company and Allion Healthcare, Inc., a Delaware corporation (the
"Buyer").
W I T N E S S E T H:
WHEREAS, the Seller operates a retail pharmacy business within the
State of New York within an office at 000X Xxxx Xxxxxx, Xxxxxxxxxxx Xxx Xxxx (
the "Business") and another retail pharmacy serving areas within Kansas and
Missouri from an office in Kansas City, Missouri;
WHEREAS, the Buyer desires to purchase certain assets of the Business;
and
WHEREAS, the Seller is willing to sell certain assets of the Business
to the Buyer, all as more fully set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
ARTICLE I
Definitions
Section 1.1 DEFINITIONS. Defined terms used in this Agreement are
defined in the following locations within the Agreement:
DEFINED TERM PARAGRAPH PAGE
------------ --------- ----
Acquired Assets Section 1.2 2
Affiliate Section 1.2 2
Agreement Section 1.2 3
Assignment Section 2.6(a)(ii) 5
Assumed Contracts Section 1.2 3
Business Recitations 1
Business Day Section 1.2 3
Buyer Preamble 1
Cash Section 1.2 3
Code Section 1.2 3
Conditions Recitations 1
Dispute Notice Section 7.16 15
Encumbrances Section 1.2 3
Excluded Assets Section 1.2 3
Financial Statements Section 3.5 7
Governmental Authority Section 1.2 3
Indemnified Losses Section 6.1(a) 10
Inventory Section 1.2 3
Lease Agreement Section 2.6(d)(i) 5
Ordinary Course or Ordinary
Course of Business Section 1.2 3
Party Section 1.2 3
Permitted Encumbrances Section 1.2 3
Person Section 1.2 3
Receivables Section 1.2 3
Related Agreements Section 2.6 5
Required Releases Section 1.2 4
Seller Preamble 1
Third Party Claim Section 6.2(a) 11
Section 1.2 GENERAL DEFINED TERMS. As used herein, the following terms
shall each have the meaning indicated:
"ACQUIRED ASSETS" means the assets of Seller arising from, used, or held
by Seller solely in connection with the conduct of the Business, other than the
Excluded Assets. The "Acquired Assets" constitute the following assets:
(a) the Inventory;
(b) Copies of all patient or customer files, including both treatment
and billing records of the Seller subject to any limitations of law or
this Agreement;
(c) to the extent transferable, all permits, licenses, goodwill,
customer lists, patents, patent applications, service marks, trademarks,
trademark registrations and applications, logos, know-how, proprietary
rights, telephone and facsimile numbers, domain name registrations and
websites, books, records, and other intangible assets used by the Seller
in the conduct of the Business;
(d) all of the Seller's right, title, benefit, and interest in the
Assumed Contracts;
(e) all of Seller's choses in action, claims, causes, and rights of
action arising from or concerning the Business and, to the extent
transferable, restrictive covenants, confidentiality obligations, and
similar obligations of Seller's present and former directors, officers,
and employees with respect to the Business;
(f) the Equipment;
(g) the right to hire all of the Seller's employees; and
(h) any other assets arising from, used, or held by Seller solely in
connection with the conduct of the Business in New York other than the
Excluded Assets.
"AFFILIATE" means any Person controlling, controlled by, or under common
control with another Person.
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"AGREEMENT," "HERETO," "HEREUNDER," and similar expressions refer to
this Agreement, as amended from time to time.
"ASSUMED CONTRACTS" means the agreements listed on EXHIBIT A attached
hereto.
"BUSINESS DAY" means any day other than a Saturday, Sunday, or bank
holiday in the State of New York.
"CASH" means all cash held in the name, on behalf, or for the benefit
of the Seller solely with respect to the Business.
"CODE" means the Internal Revenue Code of 1986, as amended.
"ENCUMBRANCES" means mortgages, charges, pledges, security interests,
liens, encumbrances, actions, claims, demands, and equities of any nature
whatsoever and howsoever arising and any rights or privileges capable of
becoming any of the foregoing.
"EQUIPMENT" means all manufacturing equipment, leasehold
improvements, furniture, office furnishings, computer equipment (including all
hardware and software), communications equipment, spare and replacement parts,
and other tangible assets used in connection with the Business set forth on the
attached EXHIBIT B hereto.
"EXCLUDED ASSETS" means the assets of the Seller used in the Business
described on EXHIBIT C attached hereto.
"GOVERNMENTAL AUTHORITY" means any agency, department, court, or any
other administrative, legislative, or regulatory authority of any foreign,
federal, state, or local governmental body.
"INVENTORY" means all inventory of the Business, including as set
forth on the attached EXHIBIT D.
"ORDINARY COURSE" or "ORDINARY COURSE OF BUSINESS" means the ordinary
course of the Seller's conduct of the Business consistent with past custom and
practice (including with respect to quantity and frequency).
"PARTY" means either of the Buyer or the Seller and "PARTIES" means
collectively the Buyer and the Seller.
"PERMITTED ENCUMBRANCES" means, as to a particular Encumbrance
respecting an Acquired Asset, such Encumbrance as is acceptable to the Buyer, as
set forth on EXHIBIT E attached hereto.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a Governmental Authority.
"RECEIVABLES" means the accounts receivable of the Business.
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"REQUIRED RELEASES" means the releases of the Seller from those
liabilities to third parties under the Assumed Contracts or otherwise listed on
EXHIBIT F attached hereto.
"SELLER MEMBERS" means each of ABAN, Inc., Creative Medical Solutions,
Inc. and Xxxxxxx Enterprises, Inc.
ARTICLE II
Purchase and Sale
Section 2.1 PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to the Buyer free and
clear of Encumbrances (other than Permitted Encumbrances), all of the Acquired
Assets for the Purchase Price.
Section 2.2 EXCLUDED ASSETS. Seller shall not sell or transfer and the
Buyer shall not purchase or accept any Excluded Assets including, but not
limited to, all contracts, commitments and agreements of Seller which Buyer
shall not assume; all cash, cash equivalents and certificates of deposit held by
the Seller; all patient accounts receivable held by Seller; all note receivables
held by Seller; and those items belonging to the Seller as set forth on EXHIBIT
C attached hereto and incorporated herein.
Section 2.3 NO ASSUMPTION OF LIABILITIES. Buyer hereby agrees to assume,
pay, perform, discharge and otherwise satisfy promptly when due, and to
indemnify and hold harmless the Seller from and against, only under the Assumed
Contracts to the extent arising with respect to the period on or after the date
hereof and to the extent such liabilities would be the liabilities of the Seller
but for the assignment of the Assumed Contract (collectively, the "Assumed
Liabilities"). Except as provided in this Agreement, Buyer shall not assume or
become liable or obligated for or on any contract or agreement of the Seller or
for any of any debt, liability or obligation of the Seller, whatsoever, whether
known or unknown, direct, contingent or otherwise, however or whenever arising
or asserted, including any liability or obligation (i) of the Seller to its
employees, customers, creditors or brokers, or to any Governmental Authority,
(ii) in respect of the Excluded Assets, or (iii) relating to the use of the
Acquired Assets prior to the date hereof (all such liabilities and obligations
of the Seller, herein referred to as the "Excluded Liabilities"). Buyer shall be
solely responsible for satisfying all of the Assumed Liabilities and the Seller
shall have no liability whatsoever with respect thereto. The Seller shall be
solely responsible for satisfying all of the Excluded Liabilities and Buyer
shall have no liability whatsoever with respect thereto.
Section 2.4 PURCHASE PRICE. The Purchase Price shall be equal to the sum
of (a) $600,000 (the "Initial Payment") PLUS (b) $100,000 in each month for the
three (3) months following the date hereof (the "Deferred Payments"); provided,
however that in the event of any material misrepresentation, breach of warranty,
covenant or agreement by Seller, Buyer shall be entitled to set-off against the
Deferred Payments to the extent of any Indemnified Loss, subject to the
provisions of Article VI. Each Deferred Payment shall be due on the 27th day of
the month for each of the three months following the date hereof. If any
Deferred Payment is not paid within five (5) days after its due date, Seller
shall have the option to accelerate the remaining Deferred Payments, in which
case such Deferred Payments shall become immediately due and payable.
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Section 2.5 PAYMENT. Simultaneously with the execution of this Agreement
(a) the Buyer shall pay to XxXxxxxxx, Will & Xxxxx (the "Escrow Agent") the
Initial Payment by wire transfer of immediately available funds. The Escrow
Agent shall hold the Escrow Amount in escrow until Buyer receives evidence of
release of all Encumbrances relating to the Acquired Assets other than the
Permitted Encumbrances pursuant to the Escrow Agreement attached hereto as
EXHIBIT G.
(b) The Buyer shall pay to the Escrow Agent $30,000 (the "Escrow
Amount") to secure the Buyer's obligations under Section 5.2 hereof. The
Escrow Agent shall hold the Escrow Amount in escrow pursuant to the
Escrow Agreement attached hereto as EXHIBIT H.
Section 2.6 DELIVERIES. Simultaneously with the execution of this
Agreement:
(a) the Seller shall deliver to Buyer the following documents:
(i) a xxxx of sale and such other instruments of assignment and
conveyance as may be requested by the Buyer in order to effectively
transfer to Buyer good and marketable title to the Acquired Assets
all in form reasonably requested by the Buyer;
(ii) an assignment of contracts (the "ASSIGNMENT"), pursuant to
which the Seller assigns to the Buyer, and the Buyer accepts the
assignment and assumes, the Assumed Contracts;
(iii) any required third party consents and Required Releases as
set forth on Exhibit F attached hereto.
(b) the Buyer shall deliver to the Escrow Agent, the Initial payment
and the Escrow Amount in accordance with Section 2.5(b) above.
(c) Simultaneously with the execution of this Agreement, the
following documents will be executed:
(i) non-competition agreements in the form attached hereto as
EXHIBIT I by and between the Buyer and each of [Employee 1] and
[Employee 2]; and
(ii) the Escrow Agreement.
The "RELATED AGREEMENTS" shall mean the documents listed in Sections
2.6(d)(i) and 2.6(d)(ii) above.
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Section 2.7 ALLOCATION. The Purchase Price shall be allocated among the
Acquired Assets in the manner required by Section 1060 of the Code as mutually
determined by Buyer and Seller. Such allocation shall be completed and set forth
on Schedule 2.7 which shall be attached hereto no more than thirty (30) days
following the Closing. Such allocation shall be binding upon the Buyer and the
Seller and each agrees to file all tax returns and forms (whether federal,
state, or local), including, without limitation, Internal Revenue Service Form
8594, in accordance with said allocation. The Buyer and the Seller each agrees
to provide the other promptly with any other information required for each to
complete Internal Revenue Service Form 8594.
ARTICLE III
Representations and Warranties of the Seller
The Seller and each of the Seller Members, jointly and severally,
hereby represent and warrant to the Buyer that the statements contained in this
ARTICLE III are correct and complete as of the date hereof.
Section 3.1 ORGANIZATION OF THE SELLER. The Seller is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Kansas.
Section 3.2 AUTHORIZATION OF TRANSACTION. The Seller has full legal
power and authority to execute and deliver this Agreement and the Related
Agreement to which it is a party, and to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereunder and
thereunder. This Agreement and each Related Agreement has been duly executed and
delivered a duly authorized officer on behalf of the Seller and constitutes the
valid and legally binding obligations of the Seller, enforceable against the
Seller in accordance with their respective terms and conditions.
Section 3.3 NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement or the Related Agreements nor the consummation of the
transactions contemplated hereby and thereby will
(a) violate any (i) law, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
Governmental Authority to which the Seller or its Affiliates is subject,
or (ii) provision of the certificate of formation or operating agreement
or similar instruments of the Seller,
(b) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel or require any notice or
consent under any agreement, contract, lease, license, instrument, or
other arrangement to which the Seller is a party or by which it is bound
or to which any of the Acquired Assets is or may be bound or affected
(or result in the imposition of any Encumbrance upon any of its assets,
including the Acquired Assets), or
Section 3.4 CONSENTS. The Seller is not required to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
Governmental Authority or other Person in order for the Parties to consummate
the transactions contemplated by this Agreement, other than the consents of
third parties as set forth on Exhibit F attached hereto.
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Section 3.5 FINANCIAL STATEMENTS. Copies of the Seller's unaudited
financial statements for the Business as of and for the year ended December 31,
2000 and for the period January 1, 2001 through March 31, 2001 (the "FINANCIAL
STATEMENTS"), have previously been provided to Buyer and are attached hereto as
Schedule 3.5. The Financial Statements, including the notes to the Financial
Statements, if any, present fairly Seller's financial position as of the
respective dates indicated and results of operations and changes in cash flows
for the respective periods then ended.
Section 3.6 TITLE. Except for the Inventory, legal title to which is
held by Ekvin Pharmacy Corp., the Seller has good and marketable title to and is
hereby transferring good and marketable title to the Buyer all of the Acquired
Assets, free and clear of all Encumbrances other than the Permitted
Encumbrances. All personal property included in the Acquired Assets will be in
the possession of Seller on the date hereof.
Section 3.7 SUFFICIENCY OF ASSETS. The Acquired Assets are all of the
assets necessary for the conduct of the Business in substantially the same
manner as currently conducted.
Section 3.8 EXHIBIT D sets forth a complete, accurate and true list of
Seller's Inventory as of the date hereof. Each item of the Inventory is of a
quality and quantity usable and salable after the date hereof in the Ordinary
Course of Business.
Section 3.9 LITIGATION. There is no suit, action, proceeding (legal,
administrative, or otherwise), claim, investigation, or inquiry (by an
administrative agency, Governmental Authority, or otherwise) pending or, to
Seller's knowledge, threatened by, against, or otherwise affecting Seller or any
of the properties, assets, or business prospects of Seller with respect to the
Business or the transactions contemplated by this Agreement at law or in equity
or before or by any Governmental Authority or to which Seller is or may become a
party and, there is no factual basis upon which any suit, action, proceeding,
claim, investigation, or inquiry could be asserted or based. There is no
outstanding judgment, order, writ, injunction, or decree of any court or
Governmental Authority against or affecting Seller or any of the properties,
assets, or business prospects of Seller with respect to the Business.
Section 3.10 EMPLOYEE BENEFITS. The Seller has no unfunded liabilities
under any pension or other employee benefit plan.
Section 3.11 BROKERS. The Seller has not retained or employed any
broker, finder, investment banker, or other person or taken any action or
entered into any agreement or understanding that would give any broker, finder,
investment banker, or other person any valid claim against Buyer or Seller for a
commission, brokerage fee, or other compensation with respect to the
transactions contemplated by this Agreement.
Section 3.12 CONDUCT OF THE BUSINESS. Since January 1, 2001, and except
as set forth on Schedule 3.12 attached hereto, the Seller has: (i) conducted the
Business only in the Ordinary Course and in all respects in a manner consistent
with past practices (including, without limitation, the timely payment of
accounts payable and other obligations of the Business); (ii) maintained in
reasonable repair consistent with past practices, at the Seller's expense, all
of Seller's tangible personal property; (iii) complied in all material respects
with all laws, regulations, policies, guidelines, orders, judgments or decrees
of any federal, state, local or foreign court or Governmental Authority; and
(iv) kept available (in the Ordinary Course of Business) the services of the
employees of the Business and sought to preserve contracts and other business
relationships with licensors, suppliers, dealers, customers, patients and others
having contracts or business relationships with the Business.
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Section 3.13 FORBEARANCE BY THE SELLER. The Seller has not, since
January 1, 2001, without the prior written consent of the Buyer: (i) sold or
disposed of any material asset of the Seller other than the sale of Inventory in
the Ordinary Course of Business; (ii) permitted any new Encumbrance to encumber
any of the assets of the Seller; (iii) issued or agreed to issue any securities
of the Seller; (iv) amended, modified or cancelled, or waived any right of the
Seller under any contract other than in the Ordinary Course of the Business; (v)
entered into any new contract or agreement other than in the Ordinary Course of
the Business; (vi) altered in any way the manner in which the Seller has
regularly and customarily maintained the books of account and records of the
Business; or (vii) increased the compensation payable to employees employed in
the Business other than compensation increases made in the Ordinary Course of
business, consistent with past practices and existing policies.
ARTICLE IV
Representations, Warranties and Acknowledgments of the Buyer
The Buyer represents, warrants and acknowledges to the Seller that
the statements contained in this ARTICLE IV are correct and complete as of the
date of this Agreement.
Section 4.1 ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its organization.
Section 4.2 AUTHORIZATION OF TRANSACTION. The Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and all other agreements to be delivered by it pursuant to
Section 2.6 above, and to perform its obligations hereunder and thereunder. This
Agreement and each Related Agreement to which it is a party have been, duly
executed and delivered by a duly authorized officer or representative on behalf
of the Buyer and constitute the valid and legally binding obligations of the
Buyer, enforceable against the Buyer in accordance with their respective terms
and conditions.
Section 4.3 NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement and the Related Agreements nor the consummation of the
transactions contemplated hereby will violate any (i) law, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any Governmental Authority to which the Buyer is subject; (ii) provision of
the charter or bylaws of the Buyer, or (iii) any other agreement by which the
Buyer is bound.
Section 4.4 CONSENTS. The Buyer is not required to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
Governmental Authority or any other Person in order for the Parties to
consummate the transactions contemplated by this Agreement.
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Section 4.5 BROKERS. The Buyer has not retained or employed any broker,
finder, investment banker, or other person or taken any action or entered into
any agreement or understanding that would give any broker, finder, investment
banker, or other person any valid claim against Buyer or Seller for a
commission, brokerage fee, or other compensation with respect to the
transactions contemplated by this Agreement.
ARTICLE V
Covenants of the Parties
Section 5.1 FURTHER ASSURANCES. Subject to the terms and conditions of
this Agreement, each Party will use all reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things reasonably
requested by a Party to consummate or implement expeditiously the intent of the
Parties hereto, namely, without limiting the generality of the foregoing, to
transfer the Acquired Assets to the Buyer free and clear of any Encumbrances
(other than Permitted Encumbrances).
Section 5.2 ADMINISTRATION OF ACCOUNTS. All payments and reimbursements
made in the Ordinary Course by any third party in the name of or to the Seller
in connection with or arising out of the Acquired Assets or the Business after
the date hereof and accruing on or after the date hereof shall be held by the
Seller in trust for the benefit of the Buyer and, immediately upon receipt by
the Seller of any such payment or reimbursement, the Seller shall pay, or cause
to be paid, over to the Buyer the amount of such payment or reimbursement
without right of setoff. Subject to the terms of the Escrow Agreement, for a
period of six (6) months following the date hereof the Buyer shall use its best
efforts to assist the Seller in billing customers for services rendered by the
Seller prior to the date hereof (the "Billing Obligation").
Section 5.3 LEASE AGREEMENT. The Parties hereto hereby agree to use all
reasonable efforts to enter into a lease assumption agreement by and between
Harbor Equipment Leasing and the Buyer for the rental of the [medicine on time
pill dispensing machine]within thirty (30) days after the date hereof.
Section 5.4 RELEASES. The Seller hereby agrees to use all reasonable
efforts to obtain the Required Releases.
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ARTICLE VI
Indemnification
Section 6.1 INDEMNITY.
(a) Each of Seller and [three members of the Seller] Seller shall
defend, indemnify, and hold harmless Buyer, Buyer's successors, and
Buyer's Affiliates, and their respective members, managers, directors,
officers, employees, shareholders, representatives, and agents
(collectively, "BUYER'S INDEMNITEES"), against and with respect to any
and all loss, cost, damage, assessment, administrative fine or penalty,
decrease in value, liability, obligation, claim, expense (including
professional fees and similar expenses), or deficiency (collectively,
the "INDEMNIFIED LOSSES") from, resulting by reason of, or arising in
connection with:
(i) any breach by the Seller of any representation or warranty of
the Seller set forth in this Agreement for which a written claim of
indemnification is made prior to the expiration of any survival
period applicable thereto;
(ii) the non-fulfillment by the Seller of any covenant or
agreement to be performed or complied with by the Seller under or
pursuant to this Agreement;
(iii) any one or more of the Excluded Assets;
(iv) the ownership or use of any of the Acquired Assets and/or
the operations, business or activities of the Seller prior to the
date hereof; and
(v) any actions, suits, proceedings, judgments, costs and
expenses, including reasonable attorneys' fees, incident to any of
the foregoing, or incurred in enforcing any of the obligations under
this Section 6.1(a).
(b) The Buyer shall defend, indemnify, and hold harmless Seller,
Seller's successors, and Seller's Affiliates, and their respective
members, managers, directors, officers, employees, shareholders,
representatives and agents (collectively, the "Seller Indemnitees"),
against and with respect to any Indemnified Losses from, resulting by
reason of, or arising in connection with:
(i) any breach by the Buyer of any representation or warranty of
the Buyer set forth in this Agreement;
(ii) the non-fulfillment by the Buyer of any covenant or
agreement to be performed or complied with by the Buyer under or
pursuant to this Agreement;
(iii) the ownership or use of any of the Acquired Assets and/or
the operations, business or activities of the Buyer after the date
hereof; and
(iv) any actions, suits, proceedings, judgments, costs and
expenses, including reasonable attorneys' fees, incident to any of
the foregoing, or incurred in enforcing any of the obligations under
this Section 6.1(b);
PROVIDED, HOWEVER, that the maximum amount recoverable by the Seller for Buyer's
breach of the Billing Obligation shall be the Escrow Amount.
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(c) The Buyer shall not have any obligation to indemnify any Seller
Indemnitee with respect to any Indemnified Loss on account of a breach
of a representation and warranty of the Buyer if the Seller had
knowledge of such breach as of the date hereof. The Seller shall not
have any obligation to indemnify any Buyer Indemnitee with respect to
any Indemnified Loss on account of a breach of a representation and
warranty of the Seller if the Buyer had knowledge of such breach as of
the date hereof.
Section 6.2 THIRD-PARTY CLAIMS.
(a) NOTICE OF THIRD-PARTY CLAIMS. If any action, suit, or proceeding
by a third party (including claims by federal, state, local, or foreign
tax authorities) shall be threatened or commenced against Buyer in
respect of which Buyer may demand indemnification under this Agreement
(a "Third Party Claim"), Buyer shall promptly notify Seller in writing
to that effect after receiving written notice of the action, suit, or
proceeding.
(b) DEFENSE OF THIRD-PARTY CLAIMS.
(i) Seller shall have the opportunity at any time (provided
Seller shall have acknowledged in writing that Seller is obligated
under the terms of this Agreement to indemnify Buyer) to assume
complete control of the defense of the Third Party Claim at Seller's
sole expense. In such case, Seller shall control all aspects of the
defense of any such Third Party Claim. The Seller shall, however,
keep Buyer fully informed of the status of such Third-Party Claim
(including the prompt delivery to Buyer of copies of all pleadings,
responsive pleadings, motions, and other similar legal documents and
papers received in connection with the Third Party Claim) and shall,
to the extent practicable, confer with Buyer from time to time on the
positions to be taken by the Seller in defending such Third-Party
Claim, but Buyer shall have no other rights of participation therein.
Buyer may retain separate counsel at its sole cost and expense and
participate in the defense of the Third Party Claim unless the Seller
acknowledges writing that the Seller is obligated under the terms of
this Agreement to indemnify the Buyer.
(ii) If Seller does not assume the defense of the Third Party
Claim, as aforesaid, Buyer shall be responsible for such defense,
subject to (iii) below.
(iii) If Buyer becomes responsible for the defense of the Third
Party Claim, as provided in (ii) above, the following shall apply:
(A) Under no circumstances may Buyer compromise or settle a
Third Party Claim without the written consent of the Seller,
which consent, solely in the case of the proposed payment of
money damages in compromise or settlement, shall not be
unreasonably withheld, conditioned, or delayed.
(B) Buyer shall keep Seller fully informed of the Third
Party Claim at all stages of the matter.
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(C) Buyer shall promptly submit to the Seller copies of all
pleadings, responsive pleadings, motions, and other similar legal
documents and papers received in connection with the Third Party
Claim,
(D) Buyer shall permit the Seller and its counsel, to the
extent practicable, to confer on the conduct of the defense of
the Third Party Claim,
(E) Buyer shall, to the extent practicable, permit Buyer and
its counsel an opportunity to review all legal papers to be
submitted before the submission.
Section 6.3 CLAIMS BY BUYER. Buyer shall notify Seller in writing
promptly after the discovery of any claim upon which Buyer will demand
indemnification from Seller under this Agreement. To the extent possible, the
notice shall describe in reasonable detail the basis for the claim, include an
itemized accounting of the claim, and provide a good faith estimate of the
amount of the Indemnified Loss. Within fifteen (15) days after receipt of the
notice, Seller shall either reimburse Buyer for the amount of the claim or
notify Buyer of Seller's intent to dispute the claim. The foregoing
notwithstanding, if Buyer would otherwise be entitled to indemnification under
this Agreement but for the failure of Buyer to timely deliver a notice, Buyer
shall nevertheless be entitled to be indemnified under this Article unless
Seller can establish that Seller has been materially prejudiced by any time
elapsed or by any intervening payment, settlement, or other disposition of the
claim.
Section 6.4 REMEDIES CUMULATIVE. The remedies provided in this Article
are cumulative and shall not prevent the assertion by a Party of any other
rights or the seeking of any other remedies against the other Party.
Section 6.5 CLAIMS BY SELLER. The procedures and requirements of
Sections 6.2 and 6.3 shall apply MUTATIS MUTANDIS to any claims by Seller for
indemnification pursuant to Section 6.1 hereof.
ARTICLE VII
Miscellaneous
Section 7.1 ACCESS TO BOOKS AND RECORDS. The Buyer recognizes that the
Seller, and the Seller recognizes that the Buyer, may require access to the
books and records of the Business after the date hereof in order to facilitate
the preparation of tax or other returns or, in connection with any audit,
investigation, litigation, amended return, claim for refund, or any proceeding
in connection therewith or to comply with rules and regulations of the Internal
Revenue Service, the Securities and Exchange Commission, or another Governmental
Authority or for other proper purposes. The Buyer shall render reasonable
cooperation and assistance and shall allow access during normal business hours
to all books, records, data, and personnel concerning use and ownership of the
Acquired Assets and the conduct of the Seller's Business, with respect to
periods prior to the date hereof, to the Seller and to its auditors,
accountants, counsel, or other authorized representatives for such purpose. The
Seller shall render reasonable cooperation and assistance to the Buyer and its
auditors, accountants, counsel, and other authorized representatives and shall
allow access to Buyer and such representatives during normal business hours to
all books, records, data, and personnel of Seller for such purpose. Such
assistance by the Buyer and the Seller and access shall be subject to compliance
by the requesting party with reasonable regulations regarding confidentiality.
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Section 7.2 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
Section 7.3 ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties written or oral, to the extent they are related in any way
to the subject matter hereof.
Section 7.4 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party.
Section 7.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
Section 7.6 HEADINGS. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 7.7 NOTICES. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if it is sent by registered
or certified mail, return receipt requested, postage prepaid, by overnight
express service, or by facsimile and addressed to the intended recipient as set
forth below:
If to the Buyer: Allion Healthcare, Inc.
00 Xxxx Xxxxxxx Xx,
Xxxxx 000X
Xxxxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
With a copy to: XxXxxxxxx, Will & Xxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
If to the Seller: Prescripticare, L.L.C.
0000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxxx Xxxx Xxxxx & Xxxxxx LLP
0000 Xxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
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or to such other address or addresses as any party may designate to the others
by like notice as hereinabove set forth. Any notice given hereunder shall be
deemed given and received on the date of hand delivery or transmission by
facsimile or three days after deposit with the United States Postal Service or
one day after delivery to an overnight express service for next day delivery, as
the case may be.
Section 7.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 7.9 AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
the Buyer and the Seller. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
Section 7.10 SEVERABILITY. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
Section 7.11 EXPENSES. Each of the Buyer and the Seller will bear its
own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
Section 7.12 CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
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Section 7.13 BULK TRANSFER LAWS. The Buyer acknowledges that the Seller
will not comply with the provisions of any bulk transfer laws of any
jurisdiction in connection with the transactions contemplated by this Agreement.
Section 7.14 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties, covenants, and agreements of the parties hereto
shall survive the execution and delivery hereof except that all representations
and warranties contained in Articles III and IV of this Agreement (other than
those in Sections 3.1, 3.2, 4.1 and 4.2) shall survive for a period of twenty
four (24) months after the date hereof..
Section 7.15 SUBMISSION TO JURISDICTION. Each of the parties hereto
submits to the jurisdiction of any state or federal court sitting in the State
of New York in any action or proceeding arising out of or relating to this
Agreement and agrees that, subject to Section 7.16 below, all claims in respect
of the actions or proceedings may be heard and determined in any such courts.
Each party waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety, or other security
that might be required of any other party thereto. Each party agrees that a
final judgment in any action or proceeding so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by law
or in equity. Process in any action or proceeding arising out of or relating to
this Agreement may be served on any party anywhere in the world.
Section 7.16 ARBITRATION. Except with respect to a contest of a claim
for indemnity (as to which the provisions of Article VI of this Agreement shall
govern), no party shall commence an action to enforce or resolve an issue
relating to this Agreement in any court unless such party shall first (a) give a
notice (a "DISPUTE NOTICE") to the other parties setting forth the nature of the
dispute and (b) submit such dispute to mediation as hereinafter provided. The
Dispute Notice shall be provided in the manner specified for the giving of
notices in this Agreement. The parties shall attempt in good faith to resolve
the dispute by mediation in New York, New York, under the Commercial Mediation
Rules of the American Arbitration Association in effect on the date of this
Agreement. If the dispute has not been resolved by mediation as provided above
within sixty (60) days after the delivery of the Dispute Notice, then the
dispute may proceed to litigation.
Section 7.17 CONFIDENTIALITY. Unless otherwise required by law, the
parties to this Agreement shall not make any disclosure of the existence or
terms of this Agreement or the transactions contemplated by this Agreement
without the prior written consent of the other party or parties, except that
each party may disclose the transactions contemplated by this Agreement to that
party's professional advisers, to that party's commercial lenders, and to that
party's management employees, to the extent that any of those persons or
entities needs to know of the transactions in connection with the person's or
entity's relationship with the disclosing party.
* * * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
on the date first above written.
SELLER:
PRESCRIPTICARE, L.L.C.
By:_________________________________
Name: Xxxxx X. Xxxxxx
Title: President
BUYER:
ALLION HEALTHCARE, INC.
By:_________________________________
Name:
Title:
ABAN, INC.
By:_________________________________
Name: Xxxxx X. Xxxxxx
Title: President
CREATIVE MEDICAL SOLUTIONS, INC.,
By:_________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: President
XXXXXXX ENTERPRISES, INC.
By:_________________________________
Name: Xxxxxx Xxxxxxx
Title: President
-16-
SCHEDULE 2.6
REQUIRED RELEASES
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SCHEDULE 2.7
ALLOCATION
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SCHEDULE 3.4
CONSENTS
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SCHEDULE 3.5
FINANCIAL STATEMENTS
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SCHEDULE 3.8
INVENTORY
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SCHEDULE 3.12
The Seller has been unable to timely pay providers of products and
services and may be in default under certain contractual obligations
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EXHIBIT A
ASSUMED CONTRACTS
1. Pharmacy Services Agreement between the Seller and Daytop Village Inc.
with commencement date of September 29, 2000.
2. Pharmacy Services Agreement between the Seller and Samaritan Village,
Inc. with commencement date of December 1, 1999.
3. Pharmacy Services Agreement between the Seller and Project Return
Foundation with commencement date of April 1, 2000.
4. Commercial Lease between the Seller as Lessee and Harbor Leasing as
Lessor with respect to the medicine on time dispensing system.
5. License Agreement with Multi-Comp, Inc., trading as Medicine-on-Time
relating the medicine on time dispensing system.
6. Agreement with Xxxxx & Xxxxx to provide pharmacy services.
7. Agreement with Verizon for wireless pager.
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EXHIBIT B
EQUIPMENT
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EXHIBIT C
EXCLUDED ASSETS
1. Cash on hand or in bank accounts, any other cash equivalents, including,
without limitation, certificates of deposit, commercial paper, money
market accounts and such similar accounts or investments.
2. Any and all securities owned or held by the Seller.
3. All accounts receivable of the Seller.
4. All tangible personal property of the Seller used in connection with the
KC Business unless listed on Exhibit B.
5. All of the Seller's rights under any contracts of insurance.
6. All organizational records and financial statements of the Seller.
7. The name "PrescriptiCare."
8. Any and all claims of the Seller with respect to the Business.
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EXHIBIT D
INVENTORY
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EXHIBIT E
PERMITTED ENCUMBRANCES
1. Security interest in favor of Madison Capital, LLC d/b/a Harbor Leasing
with respect to the lease of the medicine on time dispensing system.
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EXHIBIT F
REQUIRED RELEASES
1. Under the Assumed Contracts.
2. From Ekvin Pharmacy Corp. with respect to certain obligations under
Pharmacy Management Agreement made March 25, 1999.
3. McKesson
4. Gold Bank
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EXHIBIT G
ESCROW AGREEMENT
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EXHIBIT H
ESCROW AGREEMENT
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EXHIBIT I
NON-COMPETITION AGREEMENT
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