Exhibit 2.1
-----------
ASSET PURCHASE AGREEMENT
by and among
PARK INFUSION SERVICES, L.P.
and
OPTION CARE ENTERPRISES, INC.
Dated: April 10, 2001
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
Section 1.1 "Accounts Receivable"..................... 1
Section 1.2 "Assets".................................. 1
Section 1.3 "Contracts"............................... 2
Section 1.4 "Equipment"............................... 2
Section 1.5 "Goodwill"................................ 2
Section 1.6 "Leases".................................. 2
Section 1.7 RESERVED.................................. 2
Section 1.8 "Prepaids"................................ 2
Section 1.9 "Records"................................. 2
Section 1.10 "Inventory"................................ 2
Section 1.11 "Telephone Numbers"........................ 2
Section 1.12 "Excluded Assets".......................... 2
Section 1.13 "Payables"................................. 2
ARTICLE II PURCHASE AND SALE OF ASSETS
Section 2.1 Purchase and Sale of the Assets ............ 3
Section 2.2 Initial Consideration ...................... 3
Section 2.3 Additional Consideration.................... 3
Section 2.4 Assumed Liabilities ........................ 3
Section 2.5 Liabilities Not Assumed..................... 3
Section 2.6 Allocation of Purchase Price................ 5
Section 2.7 Assignment of Purchase Price................ 5
Section 2.8 Post-Closing Financial Reconciliation
and Adjustment............................. 5
ARTICLE III TERMINATION
RESERVED
ARTICLE IV EXECUTION AND CLOSING
Section 4.1 Closing .................................... 6
Section 4.2 Closing Deliveries and Conditions........... 6
ARTICLE V CONDITIONS PRECEDENT TO CLOSING
Section 5.1 Conditions Precedent to the Obligation of
Purchaser to Close ......................... 6
Section 5.2 Conditions Precedent to the Obligation
of Seller and Selling Partners to Close..... 8
i
ARTICLE VI CLOSING DELIVERIES
Section 6.1 Seller's and Selling Partners' Obligations
at Closing ................................. 8
Section 6.2 Purchaser's Obligations at Closing ......... 10
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF SELLER AND
SELLING SHAREHOLDERS
Section 7.1 Corporate Organization....................... 10
Section 7.2 No Insolvency................................ 11
Section 7.3 Valid and Binding Agreement.................. 11
Section 7.4 Legal Authority.............................. 11
Section 7.5 RESERVED..................................... 11
Section 7.6 Accounting Matters........................... 11
Section 7.7 Title to Assets and Condition Thereof........ 12
Section 7.8 Inventory.................................... 12
Section 7.9 Medicare and Medicaid........................ 12
Section 7.10 Contracts and Other Agreements.............. 12
Section 7.11 Litigation.................................. 13
Section 7.12 Patients.................................... 13
Section 7.13 Disclosure.................................. 13
Section 7.14 Tax Returns and Tax Audits.................. 13
Section 7. 15 Financial Statements....................... 13
Section 7.16 Undisclosed Commitments or Liabilities...... 14
Section 7.17 Employees................................... 14
Section 7.18 Employment Experience....................... 14
Section 7.19 Labor Matters............................... 14
Section 7.20 Conduct Out of the Ordinary Course.......... 14
Section 7.21 No Notice of Termination: Best Efforts...... 15
Section 7.22 Existing Defaults........................... 15
Section 7.23 Execution Not Resulting in Default.......... 15
Section 7.24 Brokers, Agents............................. 16
Section 7.25 Warranties True and Correct................. 16
Section 7.26 Insurance................................... 16
Section 7.27 Patient Mix................................. 16
ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 8.1 Corporate Organization....................... 16
Section 8.2 Valid and Binding Agreement.................. 16
Section 8.3 Legal Authority.............................. 17
Section 8.4 No Insolvency................................ 17
Section 8.5 Warranties True and Correct.................. 17
ARTICLE IX SURVIVAL AND INDEMNIFICATION
Section 9.1 Survival..................................... 17
Section 9.2 General Indemnification...................... 17
Section 9.3 Notice of, and Procedures for, Collecting
Indemnification............................. 19
Section 9.4 Limitations on Seller's Indemnification
Obligations................................. 21
ii
ARTICLE X RESTRICTIVE COVENANT
Section 10.1 Restrictive Covenant........................ 21
Section 10.2 Definitions................................. 22
Section 10.3 Modification................................ 22
Section 10.4 Injunctive Relief; Other.................... 23
Section 10.5 Early Termination of Restrictive Covenant... 23
ARTICLE XI MISCELLANEOUS
Section 11.1 Entire Agreement............................ 23
Section 11.2 Survival ................................... 23
Section 11.3 Governing Law; Jurisdiction................. 24
Section 11.4 Notices .................................... 24
Section 11.5 Severability................................ 24
Section 11.6 Waiver...................................... 25
Section 11.7 Binding Effect; Assignment.................. 25
Section 11.8 Expenses.................................... 25
ARTICLE XII POST-CLOSING COVENANTS
Section 12.1 Cooperation................................. 26
Section 12.2 Counterparts................................ 26
iii
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
--------
Exhibit A Resolutions of Selling Partners
Exhibit B Resolutions of the Board of Directors of Purchaser
Exhibit C Resolutions of the Board of Directors of Purchaser's
Parent
Exhibit D Xxxx of Sale
Exhibit E Assignment and Assumption Agreement
Exhibit F Restricted Area
SCHEDULES
---------
Schedule 1.1 Accounts Receivable
Schedule 1.3 Contracts
Schedule 1.4 Equipment
Schedule 1.6 Leases
Schedule 1.8 Prepaids
Schedule 1.10 Inventory
Schedule 1.11 Telephone Numbers
Schedule 1.13 Payables
Schedule 2.5(f) Vacation Liability
Schedule 2.6 Purchase Price Allocation
Schedule 6.1(i) Patient List
Schedule 7.5(a) Seller's Ownership Interests
Schedule 7.6 Accounting Matters Exceptions
Schedule 7.7 Encumbrances on Title to Assets (Xxxxx)
Schedule 7.10 Other Agreements
Schedule 7.11 Litigation
Schedule 7.14 Tax Returns and Audits
Schedule 7.15 Financial Statements
Schedule 7.16 Undisclosed Commitments or Liabilities
Schedule 7.17 Employees, Overtime, Wages, Accrued Sick, Accrued
Vacation
Schedule 7.20 Conduct Out of the Ordinary Course
All of the above schedules and exhibits have been omitted from this
report in accordance with Item 601(b)(2) of Regulation S-K. The
Registrant hereby agrees to furnish supplementally to the Securities
and Exchange Commission a copy of any omitted schedule or exhibit
hereto upon request.
iv
ASSET PURCHASE AGREEMENT
(St. Petersburg Facility)
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered
into as of April 10, 2001 (the "Closing Date") to be effective as of
11:59 p.m. on March 31, 2001 (the "Effective Date") by and among
Option Care Enterprises, Inc., a Delaware corporation and a wholly
owned subsidiary of Option Care, Inc., ("Purchaser"), Park Infusion
Services, L.P. ("Seller"), and Park Operating GP, LLC, and Park LP
Holdings, Inc. (collectively referred to as the "Selling Partners" and
individually as the "Selling Partner").
RECITALS
--------
A. Seller owns an infusion pharmacy business located at 0000
Xxxxxxx Xxxxx, Xxxxx 000, Xx. Xxxxxxxxxx, Xxxxxxx, 00000 engaged in
the provision and compounding of pharmaceuticals prescribed by a
physician for administration via enteral, infusion and other
parenteral routes and the furnishing of services and supplies related
thereto (the "Business").
B. The Selling Partners collectively own 100% of the issued and
outstanding partnership interests of the Seller.
C. Seller desires to sell certain of its assets and the
Business to Purchaser, and Purchaser desires to acquire such assets
and the Business, upon the terms and conditions and for the price set
forth in this Agreement. Each Selling Partner desires to accommodate
the sale of the assets and the Business.
D. Capitalized terms used in this Agreement shall have the
meanings ascribed to them herein (including, without limitation,
Article I hereof).
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants, agreements, representations and warranties
hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply for purposes of the
Agreement:
Section 1.1 Accounts Receivable shall mean all of the accounts
receivable of the Business, both billed and unbilled, attributable to
goods and services provided by the Business prior to and including the
Effective Date.
Section 1.2 Assets shall mean the Equipment, Inventory,
Prepaids, Contracts, Leases, Records, Telephone Numbers and Goodwill
of the Business, provided that Assets shall not include the Excluded
Assets (as defined in Section 1.12 hereof).
Section 1.3 Contracts shall mean all of Seller's rights and
interests under or with respect to those contracts of the Business set
forth on attached Schedule 1.3 and all software licenses for software
utilized by the Business, set forth on attached Schedule 1.3.
Section 1.4 Equipment shall mean that equipment, furniture,
fixtures, automobiles and other operating assets owned by Seller and
used in the operation of the Business, set forth in Schedule 1.4.
Section 1.5 Goodwill shall mean the goodwill, if any, of the
Business.
Section 1.6 Leases shall mean all of Seller's rights and
interests under or with respect to those capital leases of the
Business set forth on attached Schedule 1.6, and the lease for the
premises known as 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xx. Xxxxxxxxxx,
Xxxxxxx, 00000.
Section l.7 Reserved.
Section l.8 Prepaids shall mean all prepaid expenses and
deposits of the Business as of the Effective Date identified on
attached Schedule 1.8.
Section 1.9 Records shall mean all invoices, purchase orders,
accounts payable records, delivery logs, pharmacy logs, patient
appointment books of the Business, and the medical and financial
records of patients of the Business.
Section 1.10 Inventory shall mean all of the inventory, stores
and supplies owned by Seller and used in the operation of the
Business, which are within outdate and of a quality, type and quantity
acceptable to Purchaser, all as set forth in attached Schedule 1.10.
Section 1.11 Telephone Numbers shall mean all of Seller's
rights and interest in and to those telephone numbers, facsimile
numbers and telephone listings of the Business, identified on attached
Schedule 1.11.
Section 1.12 Excluded Assets shall mean any and all assets of
Seller not included within the definition of Assets hereunder,
including without limitation the bank accounts (and cash therein),
licenses, Accounts Receivable, Medicare and Medicaid provider numbers,
e-mail addresses and Web sites of the Seller.
Section 1.13 Payables are those accounts payable and other
amounts payable by Seller to third parties which are either (i)
incurred by Seller through the Effective Date or (ii) incurred by
Seller after the Effective Date but prior to the Closing Date other
than in the ordinary course of Business, in each case which are
outstanding as of the Closing, whether or not identified on attached
Schedule 1.13.
2
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.1 Purchase and Sale of the Assets. Upon the terms
and subject to the conditions set forth in this Agreement, at the
Closing (as defined in Section 4.1) Seller shall sell, assign, convey,
transfer and deliver to Purchaser, free and clear of all liens,
claims, security interests, encumbrances and restrictions on transfer
(other than any restrictions on the assignability of any Contracts),
and Purchaser shall purchase and receive from Seller all of the
Assets. The maximum amount paid for the Assets (the "Purchase Price")
shall not exceed One Million Two Hundred Eighty Thousand Dollars
($1,280,000) and shall consist of the sum of (i) the Initial
Consideration, plus (ii) the Additional Consideration as determined in
accordance with Section 2.3 hereof.
Section 2.2 Initial Consideration. The Initial Consideration
shall be an amount equal to (a) Nine Hundred Thousand Dollars
($900,000) (minus) (b) the Vacation Liability. At the Closing, an
amount equal to the Initial Consideration shall be delivered to
Seller, or to such person or persons designated by Seller, via a
certified or cashier's check or a wire transfer of immediately
available funds.
Section 2.3 Additional Consideration. In addition to the
Initial Consideration, the Seller shall receive additional
consideration as set forth herein (the "Additional Consideration"), in
an amount not to exceed Three Hundred Eighty Thousand Dollars
($380,000), payable within five (5) business days following the 120-
day anniversary of the Closing (the "Second Payment Date"), subject to
Purchaser's right to withhold or offset all or a portion of the
Additional Consideration for either (i) an amount equal to any Bad
Debt Adjustment (as set forth in Section 2.8) or (ii) for amounts that
are the subject of an Initial Claim Notice (as set forth in Section
9.3); provided that if Seller elects, in its sole discretion, to
extend the Collection Period in accordance with Section 2.8(c), then
the Second Payment Date shall be extended until fifteen (15) days
following the expiration of the Collection Period.
Section 2.4 Assumed Liabilities. At the Closing, Purchaser
shall assume and agree to pay, perform and discharge in the ordinary
course of business the Assumed Liabilities, and Purchaser shall have
no obligation to make any payment of, perform or discharge (in the
ordinary course or otherwise) any liabilities other than the Assumed
Liabilities. For these purposes, the "Assumed Liabilities" shall be
limited to those obligations and liabilities of the Business
(i) arising from and after the Effective Date, other than any
liabilities arising other than in the ordinary course of business
between the Effective Date and the Closing Date or (ii) assumed by
Purchaser pursuant to Section 2.5(g).
Section 2.5 Liabilities Not Assumed. At the Closing, the
Purchaser shall not assume or become liable for, and the defined term
"Assumed Liabilities" shall not include, any debts, claims,
obligations, contracts or liabilities, of whatsoever kind, description
or nature, whether accrued, contingent or otherwise, either (i)
existing or arising prior to the Effective Date or (ii) arising other
than in the ordinary course of business between the Effective Date and
the Closing
3
Date (collectively, the "Excluded Liabilities"). The Excluded
Liabilities shall include, without limitation, the following:
(a) Any liability of Seller or any affiliate of Seller to
pay any federal, state, local or foreign income, property,
withholding, payroll, franchise, sales or use, or other tax (any
interest, fines or penalties with respect thereto), with respect
to any claim by any landlord or taxing authority or court or
administrative agency for any tax period (including, without
limitation, any such liability resulting from the transactions
contemplated in this Agreement);
(b) Any liability and other obligation of Seller by reason
of underpayments or overpayments of or submission of false, over-
stated or unauthorized or medically-unnecessary claims to
Medicare, Medicaid or any other third-party payors, whether known
or unknown as of the date of Closing, arising with respect to
periods prior to the Closing Date, including any fines, interest
and penalties thereon. Furthermore, Seller, its successors,
heirs and assigns shall be and remain solely responsible for
paying to Medicare, Medicaid and/or any other third party payor
all recoupments demanded with respect to goods and services
furnished pre-Closing by Seller or the Business and any
overpayments Seller or Business received from a third party
payor, together with any and all interest, fines and/or penalties
in any manner attributable thereto.
(c) Any legal and/or regulatory liabilities of Seller or
the Business, including without limitation, any liability of
Seller or the Business which in any manner relates to or arises
from operation of the Business as a Medicare and/or Medicaid
provider at any time prior to the Closing Date;
(d) All other liabilities of the Seller, unless such
liabilities are specifically stated to be an Assumed Liability
pursuant to this Agreement;
(e) Any and all other liabilities of Seller and/or the
Business, whether fixed, contingent, known, unknown, liquidated,
or unliquidated, of every kind, description and nature whatsoever
(including, without limitation, all liabilities related to or
arising from acts or omissions of Seller or by virtue of
operation of the Business prior to the Effective Date), legal and
regulatory issues not on the Business' balance sheet, trade
accounts, accounts payable, bank debt, other debt, and any and
all xxxxxxxx, claims, and costs relating to goods and services
provided by the Business up to the Effective Date which are
disallowed or adjusted by third parties);
(f) Any liability or other obligation of the Selling
Partners, the Seller or the Business for payments under buy-sell
or shareholder agreements, the payment of any and all severance
pay, accrued vacation, accrued sick time, overtime, wages and all
associated tax and withholding liabilities, and other benefits
accruing to employees of the Business up to the Effective Date,
and all such liabilities and obligations shall be paid in full by
Seller on or prior to the Effective Date, other than liability
for the accrued vacation set
4
forth in Schedule 2.5(f) (the "Vacation Liability"), which
liability shall be offset from the Initial Consideration and
assumed by Purchaser;
(g) Any fines, penalties, expenses, administrative fees,
liabilities and other obligations of whatever kind, description
and nature, whether accrued, contingent or otherwise, under
Seller's and/or Business' 401(k) plan and other profit sharing
and pension plans;
(h) All Medicare and Medicaid Participation Agreements and
Medicare and Medicaid provider numbers of the Business; and
Section 2.6 Allocation of Purchase Price. Upon the later of
(i) one hundred twenty (120) days following the Closing or (ii) the
Second Payment Date, the Purchase Price paid to Seller hereunder shall
be allocated for tax and accounting purposes among the Assets and the
non-competition/confidentiality covenants described in this Agreement
and such allocation shall be set forth on attached Schedule 2.6.
Section 2.7 Assignment of Purchase Price. Seller may, at its
option, assign to the Selling Partners, on a pro rata basis in
proportion to each Selling Shareholder's interest in Seller, the
Purchase Price payable to Seller hereunder, or any portion thereof.
Section 2.8 Post-Closing Financial Reconciliation and
Adjustment.
(a) Computation. Within sixty (60) days following the
Closing, Seller shall prepare and deliver to Purchaser (i) a
balance sheet of the Business as of the Effective Date, prepared
in accordance with historical accounting practices of the
Business, and (ii) an explanation of bad debt allowances for the
period August 1, 2000 through the Effective Date, and (iii) a
report in form satisfactory to Purchaser of the cash collections
of the Business for the period August 1, 2000 through the
Effective Date. Purchaser shall have sixty (60) days following
the date Seller makes such deliveries to independently verify
Seller's version of such balance sheet, to request additional
information and to object in writing to Seller to any amount set
forth in such items. If Purchaser so objects within such 60-day
period, then representatives of Purchaser and Seller shall confer
in good faith promptly thereafter to resolve such dispute. If
such dispute cannot be resolved within fifteen (15) days after
the date of Purchaser's objection, then such dispute shall be
submitted to the accounting firm mutually agreed upon by
Purchaser and Seller (the "Independent Accountants") for
resolution, and the determination of such firm, to be made in
accordance with the foregoing standards, shall be binding upon
the parties. The costs of any such determination by the
Independent Accountants shall be borne one-half by Purchaser and
one-half by Seller. The final balance sheet of the Business as
of the Effective Date, as so agreed or determined, shall be the
"Closing Balance Sheet."
(b) Access to Information. After the Closing, Purchaser
and Seller each shall timely furnish such documentation, data,
records and other information as any other party
5
hereto or the Independent Accountants shall request to prepare
and/or review the proposed Closing Balance Sheet and any
supporting calculations, referred to above.
(c) Bad Debt Adjustment. If Seller fails to collect at
least ninety-five percent (95%) of the revenues billed by the
Business during the period from August 1, 2000 through March 31,
2001 within one hundred twenty (120) days following the Closing
(the "Collection Period"), then any uncollected cash in excess of
a five percent (5%) bad debt allowance shall be deducted from the
earnings of the Business reported as of the Effective Date, and
the Purchase Price shall be reduced by $2.50 for each dollar of
uncollected cash in excess of a five percent (5%) bad debt
allowance (the "Bad Debt Adjustment"); provided that Seller may,
in its sole discretion, extend the Collection Period for up to an
additional sixty (60) days upon notice to Purchaser. Upon the
expiration of the Collection Period, Seller shall deliver to
Purchaser a report (the "Collection Report") showing in
reasonable detail the amounts collected to such amounts billed,
along with any back-up information reasonably requested by
Purchaser. Any Bad Debt Adjustment shall be offset first against
the Additional Consideration, and if the Bad Debt Adjustment
exceeds the Additional Consideration, then no Additional
Consideration shall be due hereunder and Seller shall deliver to
Purchaser an amount equal to such excess. Payment under this
paragraph shall be by wire transfer of immediately available
funds to such account as the recipient party shall direct in
writing, and shall occur contemporaneous with the delivery of the
Additional Consideration.
(d) Discharge of Payables. If Seller fails to satisfy any
Payable within sixty (60) days following the Closing, then
Purchaser shall have the right to withhold from the Additional
Consideration an amount equal to such undischarged Payable and,
upon five (5) days prior notice to Seller, may discharge such
Payable on Seller's behalf; provided that Purchaser shall not
discharge any Payable on Seller's behalf if Seller delivers to
Purchaser notice that Seller, in good faith, disputes the
existence or amount of such Payable prior to Purchaser's payment
of such amount. Any such disputed payables will result in
Purchaser withholding the amount thereof from the Additional
Consideration, if the dispute is not resolved by the date payment
of the Additional Consideration is due hereunder until the
resolution of such dispute.
ARTICLE III
[RESERVED]
ARTICLE IV
CLOSING
Section 4.1 Closing. The closing ("Closing") of the
transactions contemplated under this Agreement shall occur at the law
offices of Xxxxx & Xxxxxx in Dallas, Texas on the Closing Date, to be
effective as of 11:59 p.m. on the Effective Date.
Section 4.2 Closing Deliveries and Conditions. At the
Closing, Seller, Selling Partners and Purchaser shall deliver to each
other the documents referenced in Article VI hereof.
6
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
Section 5.1 Conditions Precedent to the Obligation of
Purchaser to Close. The obligation of Purchaser to consummate
the transactions contemplated under this Agreement is subject to
the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any of which may be waived by Purchaser):
(a) Purchaser shall be satisfied that all agreements,
certificates and other legal documents to be delivered to it
by Seller and the Selling Partners at the Closing, as
provided in this Agreement, have been duly executed and
delivered and are satisfactory to Purchaser in substance and
legal form;
(b) Seller and Selling Partners shall have full
authority to enter into the transactions contemplated in
this Agreement;
(c) The due diligence conducted by Purchaser prior to
Closing with respect to the Business shall confirm that the
operational condition and the financial condition of the
Business is acceptable to Purchaser and that Seller and the
Selling Partners have full authority to enter into the
transactions contemplated in this Agreement;
(d) Except as identified on attached Schedule 7.11, no
litigation, claim, investigation, creditor action, inquiry
or proceeding shall be pending or have been instituted or
threatened on or before the Closing which involves Seller,
the Business or the Selling Partners;
(e) Purchaser and its representatives shall have been
permitted to solicit employees of the Business for the
purpose of either (i) Purchaser hiring, post-Effective Date,
or (ii) Purchaser evaluating for employment with Purchaser
of, those employees selected by Purchaser in its sole
discretion;
(f) Seller shall deliver to Purchaser evidence of (i)
occurrence insurance, (ii) claims made insurance together
with a professional liability reporting endorsement policy
for the five-year period following the Closing (if claims
made insurance), or (iii) claims made insurance that will
continue to provide coverage for claims relating to the
operation of the Business prior to the Closing Date that are
made following the Closing Date, in each case in effect for
the Business to cover all periods prior to the Closing;
(g) Except as set forth in attached Schedule 7.7,
every creditor of Seller with a security interest perfected
by a Uniform Commercial Code (U.C.C.) filing shall have been
paid in full by Seller and shall have delivered to Purchaser
an executed U.C.C. Termination Statement and Lien Release
(if appropriate),
7
satisfactory to Purchaser, terminating that creditor's
security interest in any and all Assets;
(h) The Board of Directors of Purchaser, and its
parent Option Care, Inc., and each Selling Partner shall
each have authorized the transactions contemplated herein;
(i) Seller shall have delivered to Purchaser all
documents and instruments to be delivered pursuant to this
Agreement (including, without limitation, pursuant to
Article VI);
(j) There shall have been no material adverse changes
in the Business between the date of the Letter of Intent
between Purchaser and Seller and the Effective Date;
(k) Purchaser shall obtain from its lenders any and
all approvals of the transactions contemplated herein which
approvals are required to have been obtained;
(l) Seller shall have terminated all of employees of
the Business immediately prior to the Closing on the Closing
Date; and
(m) The landlord, and Amedisys if necessary, shall
have consented to the assignment of the Lease from Seller to
Purchaser of that premises commonly known as at 0000 Xxxxxxx
Xxxxx, Xxxxx 000, Xx. Xxxxxxxxxx, Xxxxxxx, 00000 and
Purchaser and Seller shall have executed the assignments for
each such premises.
Section 5.2 Conditions Precedent to the Obligations of
Seller and Selling Partners to Close. The obligation of Seller
and the Selling Partners to consummate the transactions
contemplated under this Agreement is subject to the fulfillment
prior to or on the Closing Date of each of the following
conditions (any of which may be waived by Seller and the Selling
Partners):
(a) Purchaser shall have full authority to enter into
the transactions contemplated in this Agreement;
(b) Seller shall be satisfied that all agreements,
certificates and other legal documents to be delivered to it
by Purchaser on the Closing Date as provided in this
Agreement have been duly executed and delivered and are
satisfactory to Seller in substance and legal form; and
(c) Purchaser shall have delivered the Initial
Consideration, pursuant to Section 2.2 hereof.
8
ARTICLE VI
CLOSING DELIVERIES
Section 6.1 Seller's and Selling Partners' Obligations at
Closing. At the Closing, Seller and the Selling Partners (as
applicable) shall deliver or cause to be delivered to Purchaser, in
form and substance satisfactory to legal counsel of Purchaser, the
following:
(a) Delivery of Transfer-Related Documents. A fully
executed Xxxx of Sale in the form and content of attached Exhibit
D, a fully executed Assignment and Assumption Agreement in the
form and content of attached Exhibit E, and such other
instruments and documents of transfer and conveyance as shall be
reasonably requested by Purchaser to vest in Purchaser all right,
title and interest in and to the Assets, free and clear of all
liens, claims, security interests, encumbrances, and restrictions
on transfer (other than any restrictions on the assignability of
any Contracts);
(b) Notification of Sale of Assets. Evidence that Seller
has timely delivered all appropriate and necessary notification
of sale of assets to the State Board of' Pharmacy, the State
Nursing Board, the Drug Enforcement Administration and the
accrediting body for the business;
(c) Uniform Commercial Code Form 3. The Uniform Commercial
Code Termination and Lien Releases (if appropriate) executed by
any creditors of Seller having liens on the Assets, other than
any liens or security interests set forth on Schedule 7.7;
(d) Provider Number/Professional Licenses. Applications for
Medicare Part B Participation Agreement, Medicaid Participation
Agreement, necessary state pharmacy licenses and nursing
licenses, and Drug Enforcement Administration numbers required by
Purchaser shall have been signed at Closing by Seller, when
necessary and required, by law.
(e) Equipment List. Schedule 1.4, the list of all
Equipment, including serial numbers, if any, as of the Closing;
(f) Inventory List. Schedule 1.10, the detailed list of
all Inventory as of the Closing, inclusive of lot numbers and
expiration dates, in form and content acceptable to Purchaser;
(g) Professional Liability Insurance. If the Business had
"claims made" insurance coverage, evidence that professional
liability insurance was in force for the period up to the
Closing, and either (i) that such policy will continue to provide
coverage for claims relating to the operation of the Business
prior to the Closing Date that are made following the Closing
Date, or (ii) a reporting endorsement policy for a period of five
(5) years following the Closing, in an amount acceptable to
Purchaser, for the Business has been purchased;
9
(h) Resolutions. A copy of resolutions of the duly elected
and incumbent authorized representatives of each Selling Partner,
each certified by the Secretary or an Assistant Secretary of
Seller, authorizing the execution, delivery and performance of
this Agreement and other related agreements by Seller (attached
hereto as Exhibit A);
(i) Patient List. A list of all patients of the Business,
current through the day immediately preceding the Closing, in
form and content acceptable to Purchaser, shall be attached
hereto as Schedule 6.1(i);
(j) Telephone Numbers. Evidence that all Telephone
Numbers, described at attached Schedule 1.11, shall remain in
effect and that all appropriate and necessary paperwork has been
completed and delivered to the proper entities to effect the
transfer of the same to the Purchaser on the Closing Date;
(k) Consents to Assignment. Consents to assignment,
executed by the lessor, licensor or contracting party, as the
case may be, to all Leases and Contracts listed on Schedule
6.1(k);
(l) Prepaids. A list of all Prepaids (attached hereto as
Schedule 1.8);
(m) Leases. A list of all Leases (attached hereto as
Schedule 1.6);
(n) Contracts. A list of all Contracts (attached hereto as
Schedule 1.3);
(o) Payables. A list of all Payables, in form prescribed by
Purchaser, and supporting documentation acceptable to Purchaser
identifying the Payable (attached hereto as Schedule 1.13); and
(p) Lease. Purchaser and the Company, and Amedisys if
necessary, shall have signed an assignment acceptable to
Purchaser for the premises commonly known as 0000 Xxxxxxx Xxxxx,
Xxxxx 000, Xx. Xxxxxxxxxx, Xxxxxxx, 00000. The landlord shall
have consented to such assignment.
Section 6.2 Purchaser's Obligations at Closing. On or prior to
the Closing Date, Purchaser shall deliver to Seller, the following:
(a) Resolutions. A copy of resolutions in form and
substance satisfactory to legal counsel of Seller, of the Board
of Directors of Purchaser and Purchaser's parent, Option Care,
Inc., each certified by the Secretary or an Assistant Secretary
of Purchaser or its parent, as the case may be, authorizing the
execution, delivery and performance of this Agreement and other
related agreements by Purchaser (attached hereto as Exhibit B and
Exhibit C, respectively); and
(b) Delivery of Initial Consideration. The Initial
Consideration, as adjusted pursuant to Article II.
10
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF
SELLER AND SELLING PARTNERS
Seller and each Selling Partner, jointly and severally,
represents and warrants to Purchaser, as of the Closing Date, as
follows:
Section 7.1 Corporate Organization. Seller is duly formed and
validly existing as a limited partnership under the laws of the State
of Texas; and has all necessary power to operate the Business as it is
now being operated in Florida and to own, lease and operate the Assets
as the same is now owned, leased or operated. Seller is qualified to
do business in all states and other foreign jurisdictions in which
such qualification is necessary or appropriate for the conduct of the
Business.
Section 7.2 No Insolvency. There is no action at law or in
equity or any other investigation or proceeding whatsoever now pending
or threatened, to institute insolvency proceedings of any character,
including, without limitation, bankruptcy, receivership or
reorganization, whether voluntary or involuntary, affecting Seller,
the Business or any of the Assets, nor has Seller made any assignment
for the benefit of creditors, or taken any action in contemplation
thereof, which would constitute the basis for the institution of any
insolvency proceeding.
Section 7.3 Valid and Binding Agreement. All actions required
to authorize and approve the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
herein have been taken by Seller and Selling Partners. Seller and the
Selling Partners have the full power, right and authority to enter
into this Agreement and all other agreements to be entered into by
them under the terms hereof and in connection herewith. Upon execution
and delivery of this Agreement and any other agreements required of
Seller and the Selling Partners hereunder, this Agreement and such
other agreements shall constitute valid, legal and binding obligations
of Seller and the Selling Partners, enforceable against Seller and the
Selling Partners in accordance with their terms, except as the
obligations of Seller or the Selling Partners may be limited by
bankruptcy, insolvency or other similar laws or principles of general
application or general principles of equity affecting the enforcement
of creditors' rights.
Section 7.4 Legal Authority. The execution, delivery and
performance of this Agreement by Seller and the Selling Partners shall
not: (a) conflict with, or result in the breach, violation or
termination of, or constitute a default under any lease, agreement,
contract, commitment or other instrument, trust, loan or bond
indenture, any license, permit or authorization, or any order,
judgment, injunction, award or decree, to which the Seller or any of
the Selling Partners are a party or by which the Seller or the
Business or the Selling Partners or the Assets are bound; (b)
constitute a violation of any law, rule or regulation binding upon
Seller or the Selling Partners; or (c) result in the creation of any
lien, charge or encumbrance upon any of the Assets.
11
Section 7.5 Reserved.
Section 7.6 Accounting Matters.
(a) All taxes associated with any accounts receivable
of Seller relating to the Business, and all penalties and fines
associated therewith (including, without limitation, any payments
of such taxes which Seller is otherwise permitted to defer or
make at a later time pursuant to applicable provisions of state
or federal tax laws) have been paid or are identified on Schedule
7.6 and will be paid by Seller when due;
(b) Except as set forth on Schedule 7.6, all of the
accounts receivable of the Business arising from August 1, 2000
through the Effective Date, and all accounts receivable arising
subsequent to the Effective Date but prior to the Closing Date,
(i) arose in bona fide sales or service transactions in the
ordinary course of business of the Business, (ii) are subject to
no prior assignment, charge or encumbrance of any nature
whatsoever, and (iii) are net of bad debt and contractual
adjustments known to Seller as of the Closing; and
(c) Except as set forth on Schedule 7.6, all of the
Prepaids, represent actual advance payments of ordinary operating
expenses of the Business, and can be utilized in full by the
Business following the Closing (to the extent not utilized prior
to Closing).
Section 7.7 Title to Assets and Condition Thereof. Except as
disclosed in Schedule 7.7 hereto, the Seller has good and marketable
title to all of the Assets to be conveyed hereunder, real and
personal, tangible and intangible, free and clear of all liens,
claims, security interests, restrictions on transfer (other than any
restrictions on the assignability of any Contracts) and encumbrances;
the Assets are and will be as of the Closing in good operating
condition and repair, reasonable wear and tear excepted; the condition
of the Assets and the Seller's method of doing business conform in all
material respects with all applicable statutes, laws, ordinances and
regulations, governmental or otherwise; there are no facts or
circumstances which would render the Assets or the Business materially
non-conforming with reference to any applicable statutes, laws,
ordinances and regulations. Except as set forth on Schedule 7.7, all
liens, claims, security interests, encumbrances, and restrictions on
transfer (other than any restrictions on the assignability of any
Contracts) on any and all of the Assets shall be fully released and
discharged at or prior to the Closing.
Section 7.8 Inventory. The Inventory is in good condition and
is within outdate and Seller reasonably believes that the amount of
Inventory on hand as of the Closing will be fully consumed prior to
its outdate in the operation of the Business in the ordinary course
based on the current levels of operation. No value is or will be
reflected on the Closing Balance Sheet for any item of Inventory which
is beyond expiration date, obsolete or unusable with respect to the
Business.
12
Section 7.9 Medicare and Medicaid. Neither the Business nor
Seller or anyone acting on behalf of Seller or the Business has
received and failed to timely return any Medicare or Medicaid
overpayments or knowingly filed any false claims. All Medicare,
Medicaid and third-party reports and claims filed or required to be
filed by or on behalf of either the Business or Seller have been
timely filed and are complete and accurate in all material respects.
Such reports and claims properly and truthfully claim and disclose all
goods and services provided and information and other items to be
disclosed for the periods covered thereby.
Section 7.10 Contracts and Other Agreements. Schedule 7.10,
together with Schedules 1.3, 1.6, 7.7 and 7.19 all attached hereto,
set forth a true and complete list of all the following to which the
Seller is a party that relate to the Business or to the Assets are
bound: all purchase orders, sales orders, loan agreements, security
agreements, notes, mortgages, licenses, authorizations, leases,
employment agreements, commission agreements, sales representative
agreements, contracts, leases, licenses, benefit plans, employee-
related agreements, collective bargaining agreements, and other
contracts or agreements made in the ordinary course of business for an
amount greater than One Thousand Dollars ($1,000.00) each, and all
other contracts or agreements not made in the ordinary course of
business, and true and correct copies or memoranda (describing in
detail each oral agreement or plan) of each of them have been provided
to Purchaser and its counsel; Seller is not a party to or bound by any
other contract or other instrument which relates to the Assets or the
Business, except those described on such attached Schedules.
Section 7.11 Litigation. Except as disclosed in Schedule 7.11
attached hereto, there is no litigation, proceeding or investigation
or other legal or administrative proceeding pending, or, to Seller's
knowledge threatened against Seller relating to or the Business, and
there is no basis for any litigation, proceeding or investigation
which may affect or result in damage to the Purchaser, the Assets or
the Business.
Section 7.12 Patients. Schedule 6.1(i) is a true and complete
list of all active patients of the Business as of the day prior to the
Closing Date.
Section 7.13 Disclosure. Seller has provided Purchaser with all
agreements, documents information and materials requested by Purchaser
in its due diligence investigation and all information furnished or to
be furnished by or on behalf of Seller to Purchaser and all documents
and schedules delivered to or to be delivered by or on behalf of
Seller to Purchaser in connection with this Agreement and the
transactions contemplated hereby are authentic, valid, true and
complete in all material respects.
Section 7.14 Tax Returns and Tax Audits. All federal, state,
local, franchise, sales, use, employment, occupation, property,
withholding, FICA, FUTA, excise and other taxes ("Taxes"), if any,
which are due from Seller for periods prior to the Effective Date
(regardless of whether reflected on Tax Returns, as defined below,
filed by Seller) with respect to which a statute of limitations has
not barred the assessment of deficiencies, have been fully paid or
adequately reserved for by Seller, and all tax returns and tax reports
("Tax Returns") required to be filed by Seller have been filed in a
timely manner with the appropriate governmental agencies, or written
13
extensions therefore from an agency with authority to grant such
extensions have been obtained. A list of any and all Tax Returns with
respect to which an extension has been filed or obtained is set forth
in Schedule 7.14.
Section 7.15 Financial Statements. The February 28, 2001
Balance Sheet of the Business and the Statement of Income of the
Business for the seven (7) months ended February 28, 2001, all which
are attached hereto as Schedule 7.15, are true, complete and correct
in all material respects, accurately and fairly present in all
material respects the financial condition of the Business or such
dates and the results of operations for the designated periods. These
financial statements were prepared on a basis consistent with the past
practices of Seller, subject to normal, recurring year-end audit
adjustments that would not in the aggregate adversely affect the
results of operations or the financial condition of the Business.
Except as set forth on Schedule 7.15, there has been no change in the
capitalization, assets, liabilities, business prospects or method of
doing business of the Business since March 1, 2001, other than changes
occurring the ordinary course of business (none of which have had a
materially adverse effect on the condition of the Business, financial
or otherwise).
Section 7.16 Undisclosed Commitments or Liabilities. Except as
described in Schedule 7.l6 attached hereto, there are no commitments
or liabilities, actual or contingent for which specific and adequate
provisions have not been made on the February 28, 2001 Balance Sheet,
except (i) those incurred in or as a result of the ordinary course of
business since February 28, 2001, which course of business has been
consistent with past practices of Seller, and none of which wil1 have
a materially adverse effect on the Business or financial condition of
the Seller and (ii) any liabilities arising from the failure to obtain
any required consents or waivers for the assignment of any Contracts
or Leases.
Section 7.17 Employees. The Seller and Selling Partners shall
use their best efforts to assist the Purchaser in hiring certain
employees of the Business who the Purchaser may elect to hire in
connection with the operation of the Business subsequent to the
Closing. There are no grievances pending or threatened against the
Seller by any employees. The employees of the Seller are not
represented by any union and there are not, and have not been, any
union organizational activities relating to the Seller. Seller
represents and warrants that Schedule 7.17 attached hereto is a true
and complete list of all of Seller's employees, together with their
social security numbers, job titles, job descriptions, rates of salary
or wages, vacations, bonuses, fringe benefits and other compensation
arrangements. Subject to Section 2.5(g), Seller, at its sole expense,
has paid to its employees on the Closing Date all wages and fringe
benefits attributable to all periods prior to 11:59 p.m. on the
Effective Date, as well as all accrued vacation and sick time. Seller
has terminated on or before the Closing Date all employment agreements
it has with employees of the Business.
Section 7.18 Employment Experience. Since December 31, 2000,
the Seller has not received notice of any material adverse change in
its contribution rate or its experience rating for Florida
Unemployment Compensation purposes; the unemployment account of the
Seller does not have a negative balance as of such date and shall not
have a negative balance.
14
Section 7.19 Labor Matters. Seller, to the best of its
knowledge, is in compliance with the Federal Occupational Safety and
Health Act, the regulations promulgated thereunder, and all other
applicable federal, state and local laws relating to the employment of
labor, including any provisions thereof relating to wages, bonuses,
collective bargaining, equal pay, and the payment of social security
and similar payroll taxes, in each case as such matters relate to the
Business. Except as set forth in Schedule 7.19, no proceedings are
pending before any court, governmental agency or instrumentality or
arbitrator relating to labor matters and there is no pending
investigation by any governmental agency or threatened claim by any
such agency or other person relating to labor or employment matters.
Section 7.20 Conduct Out of the Ordinary Course. Except as
disclosed in Schedule 7.20 attached hereto or in any other Schedule to
this Agreement, Seller has, since December 31, 2000, conducted the
Business in the normal and ordinary course and, with regard to the
Business, has not (i) incurred or agreed to incur any obligations or
liabilities, absolute, accrued, contingent or otherwise, whether due
or to become due, except current liabilities accrued in the ordinary
course of business, (ii) mortgaged, pledged or subjected to, or agreed
to mortgage, pledge or subject to, any lien, charge, security interest
or any other encumbrance or restriction, any property, business or
assets of the Business, tangible or intangible, (iii) sold,
transferred, leased to others or otherwise disposed of or agreed to
sell, transfer, lease or otherwise dispose of any assets except
inventory sold in the ordinary course of business, or canceled or
compromised, or agreed to cancel or compromise, any debt or claim or
waived or released, or agreed to waive or release any right of
substantial value relating to the Business, (iv) suffered any damage,
destruction or loss (whether or not covered by insurance) affecting
any of the Assets, or the Business, or the condition or prospects of
the Business, (v) encountered any labor union organizing activity or
had any actual or threatened employee strikes, work stoppages, slow
downs or lockouts, (vi) made or agreed to make any direct or indirect
change in the rate of compensation, bonus or other remuneration
payable, or paid or agreed to pay, conditionally or otherwise, any
bonus, compensation or severance pay to any of the officers,
directors, employees, or agents of the Seller, other than in the
ordinary course of business, (vii) discharged or satisfied, or agreed
to discharge or satisfy any lien, charge or encumbrance, or paid or
agreed to pay any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due, other than
trade accounts payable in the ordinary course of business, and tax
liabilities as the same shall become due, (viii) made or agreed to
make any material capital expenditures or capital additions or
betterment, except for machinery and equipment purchased in the
ordinary course of business; (ix) deferred, delayed or postponed or
agreed to defer, delay or postpone the payment of any liabilities or
the purchase of any inventory or supplies in a manner not consistent
with the method of historic payment or purchase or such items; (x)
made any changes to the manner and timing of payment of any amounts
payable by Seller to third parties (including, without limitation,
accounts payable); or (xi) made any distributions (including, without
limitation, dividends) to any partner of the Business.
Section 7.21 No Notice of Termination; Best Efforts. Seller
has, since December 31, 2000, made reasonable efforts to maintain and
increase the market position of the Business and has used reasonable
efforts to maintain, for the Business, satisfactory relations with all
persons or entities with whom the Business transacts any business;
except as disclosed at the Closing in
15
writing to Purchaser, Seller has not received any notice or knowledge
of the intention of any customer or supplier or referral source to
cease doing business with Seller or the Business or reduce their
business or terminate any agreements with Seller.
Section 7.22 Existing Defaults. Seller is not in default under
any agreement relating to the Assets or the Business to which it is a
party or by which it is bound or with respect to any statute,
regulation, order, writ, injunction or decree of any governmental
agency or any court, the effect of which would adversely affect Seller
or the Business.
Section 7.23 Execution Not Resulting in Default. The execution
of this Agreement and the consummation of the transactions
contemplated by this Agreement have been approved by Seller and the
Selling Partners and will not result in any breach, violation or
acceleration of, or default under, any material agreement or other
material instrument to which the Seller or the Selling Partners are a
party or by which any of them are bound (except to the extent arising
from any restrictions of the assignability of any Contracts).
Section 7.24 Brokers, Agents. Except as set forth on Schedule
7.24, neither Seller nor any Selling Partner has dealt with any agent,
finder, broker or other representative in any manner that could result
in Purchaser or Seller being liable for any fee or commission in the
nature of a finder's fee or originator's fee in connection with the
subject matter of this Agreement.
Section 7.25 Warranties True and Correct. No warranty or
representation by the Seller or any Selling Partner contained in this
Agreement or in any writing to be furnished pursuant hereto or
previously furnished pursuant hereto to the Purchaser by the Seller or
the Selling Partners contains any untrue statement of a material fact
or omits to state any material fact required to make the statements
therein contained not misleading.
Section 7.26 Insurance. Seller has maintained in place during
the entire term of the Business, types and levels of insurance
standard for the industry; and, if Seller's insurance was "claims
made," Seller shall either (i) maintain for a period of five (5) years
following the Closing Date policies of insurance that will continue to
provide coverage for claims relating to the operation of the Business
prior to the Closing Date that are made following the Closing Date, or
(ii) obtain prior to Closing a reporting endorsement policy in force
for the five-year period following the Closing in an amount acceptable
to Purchaser.
Section 7.27 Patient Mix. No more than one percent (1%) of the
patients of the Business reside outside of the Tampa/St. Petersburg,
Florida metropolitan area.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller, as of the Closing
Date, as follows:
16
Section 8.1 Corporate Organization. Purchaser is duly
organized, validly existing and in good standing under the laws of the
State of Delaware, has all necessary corporate power to operate its
businesses as the same is now being operated and to own, lease and
operate its assets as the same are now owned, leased or operated.
Section 8.2 Valid and Binding Agreement. All corporate actions
required to authorize and approve the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein have been taken by Purchaser. Purchaser has the
full power, right and authority to enter into this Agreement and all
other agreements to be entered into by it under the terms hereof and
in connection herewith. Upon execution and delivery of this Agreement
and any other agreements required of Purchaser hereunder, and upon
consent of the Board of Directors of Option Care, Inc., this Agreement
and such other agreements shall constitute valid, legal and binding
obligations of Purchaser enforceable against it in accordance with
their terms, except as the obligations of Purchaser may be limited by
bankruptcy insolvency or other similar laws or principles of general
application affecting the enforcement of creditors' rights.
Section 8.3 Legal Authority. The execution, delivery and
performance of this Agreement by Purchaser will not: (a) conflict with
the Certificate of Incorporation or Bylaws of Purchaser or Option
Care, Inc.; (b) conflict with, or result in the breach, violation or
termination of, or constitute a default under, any lease, agreement,
contract, commitment or other instrument, trust, loan or bond
indenture any license, permit or authorization, or any order,
judgment, injunction, award or decree, to which Purchaser or Option
Care, Inc. is a party or by which either of them is bound; or (c)
constitute a violation of any law, rule or regulation binding upon
Purchaser.
Section 8.4 No Insolvency. There is no action at law or in
equity or any other proceeding whatsoever now pending or, to the best
of Purchaser's knowledge, threatened, to institute insolvency
proceedings of any character, including without limitation,
bankruptcy, receivership, or reorganization, whether voluntary or
involuntary, affecting Purchaser's business or any of its assets, nor
has Purchaser made any assignment for the benefit of creditors, or
taken any action in contemplation thereof which would constitute the
basis for the institution of any insolvency proceeding.
Section 8.5 Warranties True and Correct. No warranty or
representation by the Purchaser contained in this Agreement or in any
writing to be furnished pursuant hereto or previously furnished
pursuant hereto the Selling Partners by Purchaser contains any untrue
statement of a material fact or omits to state any material fact
required to make the statements therein contained not misleading or
false.
ARTICLE IX
SURVIVAL AND INDEMNIFICATION
Section 9.1 Survival. The representations and warranties set
forth in this Agreement and the Schedules and Exhibits hereto shall
survive the Closing and the consummation of the
17
transactions contemplated hereby, for the period during which a claim
for indemnity may be brought with respect to the applicable
representation and warranty under Article VII, above.
Section 9.2 General Indemnification.
(a) By Seller. By execution of this Agreement, Seller and
each Selling Partner jointly and severally agree to indemnify
Purchaser and its successors and assigns, and hold them harmless
from and after the Closing against and in respect of:
(i) any and all loss, liability, cost, expense or
damage (including judgments and settlement payments)
incurred incident to, arising in connection with or
resulting from any misrepresentation, breach, nonperformance
or inaccuracy of any representation, warranty or covenant by
the Business or Seller or any Selling Partner made or
contained in this Agreement and the Schedules and Exhibits
hereto;
(ii) any and all loss, liability, cost, expense or
damage (including judgments and settlement payments)
incident to, arising in connection with or resulting from
any failure by Seller or the Selling Partners to transfer
title to all Assets to the Purchaser free and clear of
liens, security interests, encumbrances, claims and transfer
restrictions (other than any restriction on the
assignability of any Contracts);
(iii) any and all loss, liability, cost, expense or
damage (A) arising out of any Taxes of Seller or any Selling
Partner or the Business (1) with respect to any Tax period
(or part of a Tax period) ending on or before the Effective
Date, or (2) resulting, directly or indirectly, from any
transaction contemplated in this Agreement, or (3)
resulting, directly and indirectly, from a breach of any
representation, warranty or covenant set forth in Section
7.14; or (B) attributable to costs, expenses and
professional fees incurred in connection with any
examination or investigation by a taxing authority or any
administrative or judicial proceeding involving a Tax period
(or part of a Tax period) ending on or before the Effective
Date (except to the extent Section 7.14 provides for
Purchaser to bear its own costs in connection therewith);
(iv) any and all loss, liability, cost, expense or
damage (including judgments and settlement payments)
incident to, arising in connection with or resulting from
the operation or conduct of the Business or the ownership or
use of the Assets at any time prior to the Effective Date,
or any incident, occurrence, condition or claims existing,
arising or accruing prior to the Effective Date and relating
to the operation or conduct of the Business or the ownership
or use of the Assets, including, but not limited to (A) any
environmental matter relating to any facility now or
formerly owned or operated by the Business or its
predecessor; (B) any violation or noncompliance by the
Business or Seller with any law, statute, regulation,
ordinance, decree, judgment or other mandate of any federal,
state,
18
local or other governmental authority, including but not
limited to matters relating to Medicare, Medicaid, Champus
and ERISA; and (C) any third-party litigation against or
affecting the Business or the Assets; in each case
regardless of whether the Sellers have knowledge of any such
matter as of the Closing;
(v) any and all costs, expenses and all other actual
damages incurred by them in claiming, contesting or
remedying any breach, misrepresentation, non-performance or
inaccuracy of the Seller or the Selling Partners or any
other indemnifiable matter described above (collectively,
"Enforcement Costs"), including, by way of illustration and
not limitation, all reasonable legal and accounting fees,
other professional expenses and all filing fees and
collection costs incident thereto and all such fees, costs
and expenses incurred in defending claims which, if
successfully prosecuted, would have resulted in Damages (as
defined herein); and
(vi) any Excluded Liability.
(b) By Purchaser. By execution of this Agreement,
Purchaser agrees to indemnify each Selling Partner and Seller and
their respective heirs, personal representatives, successors and
assigns and hold them harmless from and after the Closing against
and in respect of:
(i) any and all loss, liability, cost, expense or
damage (including judgments and settlement payments)
incurred by any of them incident to, arising in connection
with or resulting from any misrepresentation, breach, non-
performance or inaccuracy of any representation, warranty or
covenant by the Purchaser made or contained in this
Agreement and the Schedules and Exhibits hereto;
(ii) any and all loss, liability, cost, expense or
damage (including judgments and settlement payments)
incurred by any of them incident to, arising in connection
with or resulting from the operation or conduct of the
Business or the ownership or use of the Assets following the
Effective Date (to the extent such matters are not among the
liabilities to be indemnified by Seller and the Selling
Partners pursuant to Article VII hereof);
(iii) any and all costs, expenses and all other
actual damages incurred by any of them in claiming,
contesting or remedying any breach, misrepresentation, non-
performance or inaccuracy of Purchaser described above,
including, by way of illustration and not limitation, all
reasonable legal and accounting fees, other professional
expenses and all filing fees and collection costs incident
thereto and all such fees, costs and expenses incurred in
defending claims which, if successfully prosecuted would
have resulted in Damages (as defined herein);
19
(iv) any violation by Purchaser or its employees post-
Closing of the patient confidentiality laws pertinent to the
Business; and
(v) any Assumed Liability.
(c) Damages. Any and all of the items set forth in Section
9.2(a) or 9.2(b) for which a party is entitled to be indemnified
hereunder are collectively called "Damages."
Section 9.3 Notice of, and Procedures for, Collecting
Indemnification.
(a) Initial Claim Notice. When a party becomes aware of a
situation which may result in Damages for which it would be
entitled to be indemnified hereunder, such party (the
"Indemnitee") shall submit a written notice (the "Initial Claim
Notice") to the other party (the "Indemnitor") to such effect
with reasonable promptness after it first becomes aware of such
matter and shall furnish the Indemnitor with reasonably detailed
information demonstrating its right or possible right to receive
indemnity. If the potential claim is predicated on, or later
results in, the filing by a third party of any action at law or
in equity (a "Third-Party Claim"), the Indemnitee shall provide
the Indemnitor with a supplemental Initial Claim Notice not later
than ten (10) days prior to the date on which a responsive
pleading must be filed, and shall also furnish a copy of such
claim (if made in writing) and of all documents received from the
third party in support of such claim. Each Initial Claim Notice
shall name, when known, the person or persons making the
assertions which are the basis for such claim. Failure by the
Indemnitee to deliver an Initial Claim Notice or an update
thereof in a timely manner or otherwise in the manner described
herein shall not relieve the Indemnitor of any of its obligations
under this Agreement except to the extent that the Indemnitor can
demonstrate actual prejudice resulting from such delay.
(b) Rights of Indemnitor. Subject to Section 9.4, if,
prior to the expiration of fifteen (15) days from the giving of
notice of an Initial Claim Notice (the "Claim Answer Period"),
the Indemnitor shall request in writing that such claim not be
paid, the same shall not be paid, and the Indemnitor shall
settle, compromise or litigate in good faith such claim, and
employ attorneys of its choice to do so; provided, however, that
Indemnitee shall not be required to refrain from paying any claim
which has matured by court judgment or decree, unless appeal is
taken therefrom and proper appeal bond posted by the Indemnitor,
nor shall it be required to refrain from paying any claim where
such action would result in the foreclosure of a lien upon any of
its assets or a default in a lease or other contract, except a
lease or other contract which is the subject of the dispute.
Indemnitee shall cooperate fully to make available to the
Indemnitor and its attorneys, representatives and agents, all
pertinent information under its control, including information
with respect to insurance or other potential sources of recovery
from third parties. Indemnitee shall have the right to elect to
litigate, settle or compromise all claims with respect to which
the Indemnitor has not, within the Claim Answer Period,
(i) acknowledged in writing (A) liability therefor (should such
claim, to the extent Indemnitor is ultimately determined to be
liable for such indemnification under this
20
Agreement, ultimately be resolved against Indemnitee), and
(B) its election to assume full responsibility for the
settlement, compromise, litigation and payment of such claim, and
(ii) furnished Indemnitee with evidence, reasonably satisfactory
to Indemnitee, of Indemnitor's financial wherewithal to satisfy
its obligations hereunder.
(c) Final Claims Statement; Right of Offset. Within a
reasonable time after Damages for which the Indemnitor is liable
hereunder are incurred by Indemnitee by actual payment thereof or
by entry of a final judgment, Indemnitee shall forward a Final
Claims Statement to the Indemnitor setting forth the amount of
such Damages in reasonable detail on an itemized basis. All
amounts reflected on Final Claims Statements shall be paid
promptly by Indemnitor to Indemnitee, and if not paid in full
within thirty (30) days after delivery of the Final Claims
Statement relating thereto, shall bear interest at the rate of
twelve percent (12%) per annum until paid, compounded annually.
If Seller is the Indemnitor under the circumstances, Purchaser
shall be entitled to offset the amount of indemnification due
(whether to the Purchaser, the Business or another Indemnitee
affiliated with the Purchaser) against any payment otherwise
required to be made to or for the benefit of such Seller under
Section 2.3. Prior to the delivery of a Final Claims Statement,
the Purchaser may withhold its reasonable estimate of the
probable damages associated with any indemnifiable matter for
which an Initial Claim Notice has been delivered from the amount
otherwise due such Seller under Section 2.3.
Section 9.4 Limitations on Seller's Indemnification
Obligations. Seller and Selling Partners' obligations to indemnify
Purchaser pursuant to Section 9.2(a) hereof shall be subject to the
following limitations:
(a) Basket. The Purchaser shall not be entitled to be
indemnified with respect to any Damages or related Enforcement
Costs until the aggregate of all otherwise indemnifiable Damages
under such Sections exceeds Fifteen Thousand Dollars ($15,000)
(the "Basket").
(b) Indemnification Time Limits. The Seller and Selling
Partner's obligation to indemnify the Purchaser and the Business
with respect to Damages shall survive the Closing for the longer
of four (4) years, or the applicable statute of limitation. No
claim for recovery of Damages and related Enforcement Costs may
be asserted by the Purchaser or the Business after the expiration
of the applicable time period described above; provided, however,
that any claim first asserted by the giving of an Initial Claim
Notice within the applicable time period shall neither be abated
nor barred.
(c) Exclusive Remedy. The provisions of this Article IX
shall be the sole remedy, exclusive of all other remedies, causes
of action, or claims, of Purchaser for any monetary relief or
recovery against Seller and the Selling Partners, and of Sellers
for any monetary relief or recovery against Purchaser, in
connection with any claim for Damages arising out of the breach
of a representation or warranty made by Seller, the Selling
Partners and Purchaser pursuant to this Agreement.
21
ARTICLE X
RESTRICTIVE COVENANT
Section 10.1 Restrictive Covenant. Subject to Section 10.5
hereof, Seller and each Selling Partner and each owner of a Selling
Partner jointly and severally agree that none of them shall, directly
or indirectly, alone or in association with each other or others
(other than Purchaser) in any capacity, whether as an agent, advisor,
employee, consultant, sole proprietor, owner, partner, manager,
shareholder, joint venturer, investor or otherwise (other than as an
owner of five percent (5%) or less of any publicly traded company),
for a period of three (3) years following the Closing Date (such
period not to include any period of violation of, or any period of
litigation to enforce, the covenants herein):
(a) participate within the "Restricted Area" (as defined
below), other than as an employee or duly authorized agent of
Option Care, Inc., in the ownership, establishment, start-up,
management, sales, marketing, product development, business
development, clinical operations, strategic planning, operation
or control of any enterprise which provides or offers to provide
or otherwise engages in the provision of any goods or any
services related to the compounding, or delivery of
pharmaceuticals for administration to patients via infusion
routes;
(b) influence or attempt to influence any of the "Patients
of the Business" (as defined below) to transfer their patronage
from the Business to any other business or enterprise;
(c) influence or attempt to influence "Referral Sources of
the Business" (as defined below) to refer any Patients of the
Business to any other business or enterprise;
(d) influence or attempt to influence any of the suppliers
or employees of Purchaser or the Business to alter, not renew or
terminate their relationship with Purchaser or the Business;
(e) in any other manner interfere with, disrupt or attempt
to interfere with or disrupt the relationship between the
Purchaser and/or the Business and any Patients of the Business,
Referral Sources of the Business, suppliers or employees;
(f) disclose, directly or indirectly, to any party, or
utilize for their own account or the account of another, any
payor contract, request-for-proposal opportunity, pricing,
purchasing information, patient lists, referral source lists,
formularies, employee names, wages or benefits, trade secrets,
policies, procedures, outcomes data, business strategies,
strategic plans, marketing materials, contract terms, or
confidential or proprietary information gained, disclosed or
acquired by it, him or her on or prior to the Closing Date
regarding the Business; or
(g) solicit, induce or cause any employee of Purchaser or
the Business to disclose to Seller, the Selling Partners or any
third party any of the items or information
22
included within subsection 10.1(f) hereof, gained, disclosed or
acquired during such employee's employment with Seller, Purchaser
or the Business.
Section 10.2Definitions. For purposes hereof the following
definitions shall apply:
(a) "Patients of the Business" shall mean any and all
persons who, at any time during the one-year period preceding the
Effective Date, received goods or services from or through the
Business for so long as they reside in the Restricted Area;
(b) "Referral Sources of the Business" shall mean for
purposes of this Section any person or entity (including without
limitation, physicians, discharge planners, case managers and
managed care entities) who or which, during the two-year period
preceding the Effective Date, referred, directed, encouraged or
arranged for any Patient of the Business to receive services from
or through the Business; and
(c) "Restricted Area" shall mean all of the area described
on attached Exhibit F.
Section 10.3 Modification. If a court of competent
jurisdiction should declare the covenant contained in this Article X
unenforceable because of any unreasonable restriction of activities,
duration and/or geographical area, then the parties hereby acknowledge
and agree that such court shall have the express authority to reform
the covenants to provide for reasonable restrictions and/or grant
Purchaser such other relief at law or in equity reasonably necessary
to protect the interests of Purchaser.
Section 10.4 Injunctive Relief; Other. Seller and each Selling
Partner and each owner of a Selling Partner (collectively, the
"Owners") jointly and severally specifically agree and acknowledge
that the restrictions contained in this Article X are necessary to
prevent harm to Purchaser and that the restrictions contained therein
will not result in unreasonable harm to any of them. Seller and the
Owners further acknowledge that a breach of any provision of Article X
by Seller or Owners or any of them would cause Purchaser to suffer
immediate and irreparable harm, which could not be remedied by the
payment of money. In the event of a breach or threatened breach by
Seller or any Owners of the provisions of the covenants contained in
Article X, Purchaser shall be entitled to injunctive relief to prevent
or end such breach, without the requirement to post bond. Nothing
herein shall be construed as prohibiting Purchaser from pursuing any
other remedies available to it for such breach or such threatened
breach, including the recovery of damages.
Section 10.5 Early Termination of Restrictive Covenant. The
restrictive covenant set forth at Section 10.1 hereof shall terminate
prior to the expiration of its term upon the occurrence of any of the
following:
(a) a voluntary or involuntary proceeding in bankruptcy is
filed by or against Purchaser, which proceeding or receivership
is not dismissed within ninety (90) days of filing; or
23
(b) Purchaser fails to make or fails to notify Seller of
the reasons it believes no payment or only a partial payment is
due within twenty (20) days of it becoming due and payable under
Section 2.3 hereof and such failure continues for a period of ten
(10) days following the date Purchaser receives written
notification from Seller stating the payment was due and payable
and citing this Section 10.5(b) specifically. Disputes as to the
amount of any such payment shall not trigger this Section,
provided that Purchaser timely pays any uncontested portion of
such payment.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Entire Agreement. This Agreement (with its
Schedules and Exhibits) contains, and is intended as, a complete
statement of all of the terms of the agreement between the parties
with respect to the matters provided for herein, supersedes any
previous agreements and understandings (whether written or oral)
between the parties with respect to those matters and cannot be
amended or changed except by a written instrument duly executed by or
on behalf of all of the parties hereto.
Section 11.2 Survival. The representations, warranties,
covenants and agreements contained in this Agreement or in any
Schedule, Exhibit, agreement, document or instrument delivered
pursuant to the terms hereof or in connection with the transactions
contemplated hereby shall survive the Closing Date and remain in full
force and effect for the longer of the time period set forth herein or
applicable statute of limitations.
Section 11.3 Governing Law; Jurisdiction. The parties
specifically agree that, notwithstanding that Seller and the Selling
Partners reside in the states other than Illinois, this Agreement
shall in all respects be interpreted, read construed and governed by
the internal laws of the State of Illinois, exclusive of its conflicts
of law rules. Any party hereto shall be entitled to bring an action
to enforce any provision of, or based on any right arising out of,
relating to or in connection with, this Agreement, in law or at equity
for specific performance, or for any other remedy or damages, in the
Circuit Court of Xxxx County, Illinois, or the United States District
Court for the Eastern District of Illinois or the United States
District Court serving the Tampa/St. Petesburg, Florida metropolitan
area. Each party hereto expressly agrees to waive any challenge to
either jurisdiction or venue in any of the aforementioned courts. The
prevailing party in any such action shall be entitled to recover all
costs and expenses, including reasonable attorney's fees, of pursuing
or defending an action under this Agreement.
Section 11.4 Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed given (a)
when delivered personally (either by hand delivery or overnight
courier), (b) when deposited in the U.S. mail, postage prepaid, sent
registered or certified mail, return receipt requested, or (c) when
sent by facsimile transmission (with confirmation of transmission) to
the parties at the following addresses or facsimile numbers (or to
such other address or numbers as a party may have specified by notice
duly given to the other party in accordance with this provision):
24
If to Purchaser: Option Care, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attn: General Counsel
Facsimile: 000-000-0000
If to Seller or Selling
Partner: Park Infusion Services,
L.P.
000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Attn: Xxx Xxxxxxxx
and a copy to: Xxxx Xxxxxx, Esq.
Xxxxx & Xxxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Section 11.5 Severability. If any part or provision of this
Agreement or any other agreement document or writing delivered
pursuant to or in connection with this Agreement shall be declared
invalid or unenforceable under the applicable law by a court of
competent jurisdiction, said provision or part shall be ineffective to
the extent of such invalidity or unenforceability only, without in any
way affecting the remaining parts or provisions of this Agreement or
said other agreement, document or writing.
Section 11.6 Waiver. Any party may waive compliance by
another party with any of the provisions of this Agreement. No waiver
of any provision shall be construed as a waiver of any other
provision. Any waiver must be in writing.
Section 11.7 Binding Effect; Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties and their
respective successors, heirs and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third-party
beneficiary rights in any person or entity (including the employees of
a party hereto) not a party to this Agreement. No assignment of this
Agreement or of any rights or obligations hereunder may be made by a
party (by operation of law or otherwise) without the prior written
consent of the other party and any attempted assignment without the
required consent shall be void.
Section 11.8 Expenses. Each of the parties hereto shall pay
its own taxes, expenses and costs (including, without limitation, the
fees, disbursements and expenses of its attorneys, accountants and
consultants), incurred by it in negotiating, preparing, closing and
carrying out this Agreement and the transactions contemplated hereby.
25
ARTICLE XII
POST-CLOSING COVENANTS
Section 12.1 Cooperation. Seller and each Selling Partner
jointly and severally covenant that, following the Closing, each
shall, at the request of Purchaser, but without further consideration
from Purchaser, execute and deliver such other and further instruments
of sale, transfer and conveyance and take such other and further
action as Purchaser may reasonably request in order more effectively
to vest title to the Assets in Purchaser, put Purchaser in possession
of the Assets, transfer to Purchaser any of the Assets and assure to
Purchaser the benefits of the Assets.
Section 12.2 Counterparts. This Agreement, the Exhibits and
deliveries made thereunder may be executed in two or more
counterparts, all of which shall be read and construed as but one and
the same document.
(Signature Page Follows)
26
IN WITNESS WHEREOF, the undersigned have caused this Agreement to
be duly executed as of the day, date and year set forth below.
OPTION CARE ENTERPRISES, INC. PARK INFUSION SERVICES, L.P.
By: /s/ Xxxxx Xxxxxxxxxxx By: Park Operating GP, LLC,
--------------------- Its: General Partner
Name: Xxxxx Xxxxxxxxxxx
Its: Secretary
Date: April 10, 2001 By: /s/ Xxxxxx X. Xxxxx
--------------------
Its: President
SELLING PARTNERS:
PARK OPERATING GP, LLC
By: /s/ Xxxxxx X. Xxxxx
--------------------
Its: President
PARK LP HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------
Its: President
Date: April 10, 2001
27
