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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
CURAFLEX HEALTH SERVICES, INC.,
CORAM HEALTHCARE CORPORATION, AS SELLER GUARANTOR
CURASCRIPT PHARMACY, INC.,
CURASCRIPT PBM SERVICES, INC.,
AND
GTCR FUND VI, L.P., AS BUYERS' GUARANTOR
DATED June 9, 2000
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TABLE OF CONTENTS
Section Page
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Recitals .....................................................................1
1 Definitions; Interpretation..........................................1
1.1 Definitions.................................................1
1.2 Interpretation..............................................6
2 Purchase and Sale of Businesses......................................6
2.1 Purchase and Sale...........................................6
2.2 Assumed Liabilities.........................................7
2.3 Excluded Liabilities........................................7
3 Payment..............................................................8
3.1 Purchase Price; Payment on the Closing Date.................8
3.2 Allocation of Purchase Price................................8
4 The Closing..........................................................8
4.1 The Closing.................................................8
4.2 Seller's Deliveries.........................................8
4.3 Buyer's Deliveries..........................................9
4.4 Further Assurances.........................................10
5 Representations and Warranties of Seller............................10
5.1 Corporate Status...........................................10
5.2 Corporate Authority........................................10
5.3 Non-Contravention; Approvals and Consents..................10
5.4 Title to Transferred Assets................................11
5.5 Change in Condition........................................11
5.6 Taxes......................................................11
5.7 Employee Benefit Plans.....................................11
5.8 Litigation.................................................11
5.9 Brokers....................................................12
5.10 Intellectual Property; Software............................12
5.11 Assumed Contracts..........................................12
5.12 Seller's Health Care Licenses; Compliance with Health Care
Laws; Other Licenses.....................................13
5.13 Leases; Other Real Property................................13
5.14 Financial Statements.......................................14
5.15 Subsidiaries, Investments..................................14
5.16 Sufficiency of Transferred Assets..........................14
5.17 Compliance with Laws.......................................14
5.18 Employees..................................................14
5.19 Affiliate Transactions.....................................14
5.20 Inventory..................................................15
5.21 Notes and Accounts Receivable..............................15
5.22 Customers and Suppliers....................................15
5.23 Absence of Developments....................................15
5.24 Closing Date...............................................16
5.25 Limitations on Representations and Warranties..............16
6 Representations and Warranties of Buyers............................16
6.1 Corporate Status...........................................16
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6.2 Corporate Authority........................................16
6.3 Non-Contravention..........................................17
6.4 Brokers....................................................17
6.5 Litigation.................................................17
6.6 Licenses, Approvals and Consents...........................17
6.7 No Knowledge of Violations.................................17
6.8 Limitation on Representations and Warranties...............17
7 Interim Covenants of Seller.........................................17
7.1 Operation of the Business..................................18
7.2 Access to Facilities, Files and Records....................18
7.3 Notice of Proceedings......................................18
7.4 Xxxx-Xxxxx-Xxxxxx Filing...................................18
7.5 Reasonable Commercial Efforts..............................18
7.6 Notification of Certain Matters............................19
7.7 Transfers..................................................19
7.8 Consents Under Contractual Arrangements....................19
7.9 Acquisition Proposals......................................19
8 Interim Covenants of Buyer..........................................20
8.1 Application for Regulatory Consent and Licenses............20
8.2 Notice of Proceedings......................................20
8.3 Xxxx-Xxxxx-Xxxxxx Filing...................................20
8.4 Reasonable Commercial Efforts..............................20
8.5 Notification of Certain Matters............................20
8.6 Transition of Business.....................................21
9 Conditions Precedent to Buyer's Obligations.........................21
9.1 Representations, Warranties and Covenants..................21
9.2 Proceedings................................................21
9.3 Regulatory Approvals.......................................21
9.4 Xxxx-Xxxxx-Xxxxxx..........................................22
9.5 Deliveries.................................................22
9.6 Consents to Assignment of Leases; Sublease Arrangements....22
9.7 Sublease Arrangements......................................22
9.8 NABP/NCPDP.................................................22
9.9 Certain Assumed Contracts..................................22
9.10 Other Consents.............................................22
10 Conditions Precedent to Sellers' Obligations........................22
10.1 Representations, Warranties and Covenants..................22
10.2 Proceedings................................................23
10.3 Xxxx-Xxxxx-Xxxxxx..........................................23
10.4 Deliveries.................................................23
11 Certain Post-Closing Matters........................................23
11.1 Access to Records, Information and Personnel...............23
11.2 Insurance..................................................23
11.3 Books and Records..........................................24
11.4 Taxes......................................................24
11.5 Employee and Employee Benefits.............................25
11.6 Reserved Names.............................................26
11.7 Authorization to Operate Under Seller's Health Care
Licenses.................................................26
11.8 Lease Guaranties...........................................27
11.9 Guarantees.................................................27
12 Indemnification.....................................................27
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12.1 By Seller..................................................27
12.2 By Buyers..................................................28
12.3 Entitlement to Indemnification, Exclusivity................29
12.4 Arbitration Procedure......................................29
12.5 Notice and Defense of Claims...............................30
12.6 Survival of Representations and Warranties.................32
12.7 Limitations on Indemnified Buyers Parties' Right to
Indemnification..........................................32
12.8 Adjustment of Purchase Price...............................32
13 Non-Competition; Non-Solicit........................................32
14 Termination.........................................................33
14.1 Termination................................................33
14.2 Effect of Termination......................................33
14.3 Liquidated Damages.........................................33
15 Miscellaneous.......................................................34
15.1 Amendment and Modification; Waiver of Provisions...........34
15.2 Expenses...................................................34
15.3 Successors and Assigns; Assignments........................34
15.4 Confidentiality; Public Announcement.......................35
15.5 Notices....................................................35
15.6 No Third Parties Benefited.................................36
15.7 Law Governing..............................................36
15.8 Counterparts...............................................36
15.9 Severability...............................................36
15.10 Entire Agreement...........................................36
15.11 Time is of the Essence.....................................37
15.12 Construction...............................................37
15.13 Consent to Jurisdiction....................................37
15.14 Waiver of Jury Trial.......................................37
SCHEDULES
Payor Contracts (PBM Services)/Section 1.1
Provider Contracts (PBM Services/Section 1.1
Drug Card Contracts/Section 1.1
Direct Payor Contracts (Mail Order Services)/Section 1.1
Addenda (Home Infusion)/Section 1.1
Letter Agreements (Home Infusion)/Section 1.1
Fee Reimbursement Schedule References (Home Infusion)/Section 1.1
Miscellaneous Contracts/Section 1.1
Employees/Section 1.1 Excluded Assets/Section 1.1
Financial Statements/Section 1.1
Intellectual Property/Section 1.1
Leases/Section 1.1
Personal Property/Section 1.1
Litigation/Section 5.8
Allocation/Section 3.2
Seller's Consents (Part A)/Section 5.3(a)
Seller's Consents (Part B)/Section 5.3(a)
Seller's Consents (Part C)/Section 5.3(b)
Changes/Section 5.5 Employee Benefit Plans/Section 5.7(a)
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Health Care Licenses/Section 5.12(a)
Payment Programs/Section 5.12(b)
Other Licenses/Section 5.12(f)
Affiliate Transactions/Section 5.19
Customers/Section 5.23
Developments/Section 5.24
Buyer's Consents/Section 6.3 Litigation (Buyer)/Section 6.5
EXHIBITS
Exhibit - Assignment and Assumption Agreement
Exhibit - Xxxx of Sale
Exhibit - Marketing Services Agreement
Exhibit - Transition Services Agreement
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Execution Version
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of
this 9th day of June, 2000 by and among CURAFLEX HEALTH SERVICES, INC., a
Delaware corporation ("Seller"), Coram Healthcare Corporation, a Delaware
corporation, solely for purposes of Sections 7.9 and 11.9(a) (the "Seller
Guarantor"), CURASCRIPT PHARMACY, INC., a Delaware corporation, CURASCRIPT PBM
SERVICES, INC., a Delaware corporation (each a "Buyer" and collectively, the
"Buyers"), and GTCR FUND VI, L.P., a Delaware limited partnership, solely for
purposes of Section 14.3 (the "Buyers' Guarantor").
Background Provisions
A. Seller is engaged in the mail order pharmacy business and
pharmacy benefit management business.
B. CuraScript Pharmacy, Inc. wishes to purchase from Seller
and Seller wishes to sell to CuraScript Pharmacy, Inc., the Mail Order Services
Business in accordance with the provisions set forth herein, and CuraScript PBM
Services, Inc. wishes to purchase from Seller and Seller wishes to sell to
CuraScript PBM Services, Inc. the PBM Services Business in accordance with the
provisions set forth herein.
NOW THEREFORE, in consideration of and subject to the terms
and conditions hereof, and intending to be legally bound hereby, Seller and
Buyers hereby agree as follows:
1. DEFINITIONS; INTERPRETATION.
1.1. Definitions. The following terms, as used herein, have
the following meanings:
"Accountants" shall mean a "big-five" accounting firm (other
than Ernst & Young) mutually agreed upon by Buyers and Seller or, in the absence
of such agreement, selected by lot.
"Acquisition Proposal" shall have the meaning set forth in
Section 7.9(a).
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common control
with such other Person. For purposes of this definition, "control" (including
with correlative meaning, the terms "controlled by" and "under common control
with") as used with respect to any Person shall mean (a) the ownership of 50% or
more of the voting securities or other voting interests of any Person, or (b)
the possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of such Person, whether through ownership
of voting securities, by contract or otherwise; provided however, that the
following Persons (or any of their respective successors or assigns) shall not
be deemed to be Affiliates of Seller, other than for purposes of Section 7.9:
Xxxxxxx Xxxxx Credit Partners L.P.; Cerberus Partners L.P. (or any fund or
account managed by Xxxxxxx X. Xxxxxxxx); Foothill Capital Corporation; and
Foothill Income Trust L.P.
"Agreement" shall mean this Asset Purchase Agreement and all
exhibits and schedules attached hereto, as the same may be amended from time to
time in accordance with the provisions hereof.
"Asserting Party" shall have the meaning set forth in Section
12.5(a).
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement between a Buyer and Seller in substantially
the form of Exhibit - Assignment and Assumption Agreement attached hereto.
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"Assumed Contracts" shall mean, as of the date hereof, the
following contracts relating to the Business to which Seller is a party: (a) the
contracts set forth on Schedule - Payor Contracts (PBM Services); (b) the
contracts referred to on Schedule - Provider Contracts (PBM Services); (c) the
contracts set forth on Schedule - Drug Card Contracts; (d) the contracts set
forth on Schedule - Direct Payor Contracts (Mail Order Services); (e) the
contracts set forth on Schedule - Addenda (Home Infusion); and (f) the contracts
set forth on Schedule - Miscellaneous Contracts.
"Assumed Liabilities" shall mean the following, in each case
whether arising, accruing or occurring before, on or after the Closing Date,
unless otherwise specifically stated in this Agreement:
(a) all liabilities and obligations of Seller reflected on the
face of the Most Recent Balance Sheet (rather than in any notes thereto) other
than indebtedness for borrowed money (including any accrued interest, prepayment
penalties or premiums to be paid in connection therewith and cash overdrafts),
capitalized leases, notes payable to shareholders and accrued dividends;
(b) all liabilities of Seller which have arisen after the date
of the Most Recent Balance Sheet in the ordinary course of business (other than
any liability resulting from, arising out of, relating to, in the nature of, or
caused by any breach of contract, breach of warranty, tort, infringement,
violation of law, or environmental matter, including without limitation those
arising under environmental, health, and safety laws);
(c) all obligations of Seller under the agreements, contracts,
leases and licenses referred to in the definition of Transferred Assets or
referred to on Schedule - Letter Agreements (Home Infusion) or on Schedule - Fee
Reimbursement Schedule References (Home Infusion), in each case either (i) to
furnish goods, services, and other non-cash benefits to another party after the
Closing or (ii) to pay for goods, services, and other non-cash benefits that
another party will furnish to it after the Closing; and
(d) all accrued paid time off liability of Employees as of the
Closing Date (the "PTO Liability").
"Xxxx of Sale" shall mean the Xxxx of Sale from Seller to a
Buyer, in substantially the form of Exhibit - Xxxx of Sale attached hereto.
"Books and Records" shall mean all Seller's books and records
relating to the Transferred Assets, whether in documentary form or on microfilm,
microfiche, magnetic tape, computer disk or other form.
"Business" shall mean the PBM Services Business and Mail Order
Services Business.
"Business Day" shall mean any day other than a day on which
the New York Stock Exchange is closed.
"Buyer 401(k) Plan" shall have the meaning set forth in
Section 11.5(g).
"Buyers' Arbitrator" shall have the meaning set forth in
Section 12.4(c).
"Buyers' Notice" shall have the meaning set forth in Section
8.5(b).
"Buyer's Essential Health Care Licenses" shall have the
meaning set forth in Section 11.7.
"Closing" and "Closing Date" shall have the meanings set forth
in Section 4.1.
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"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"Continuation Coverage" shall have the meaning set forth in
Section 11.5(f).
"Defending Party" shall have the meaning set forth in Section
12.5(a).
"Disputes" shall have the meaning set forth in Section
12.4(a).
"Disputing Party" shall have the meaning set forth in Section
12.4(b).
"Employee Benefit Plans" shall include pension and profit
sharing plans, retirement and post retirement welfare benefits, health insurance
benefits (medical and dental), disability, life and accident insurance, sickness
benefits, vacation, employee loans and banking privileges and any bonus,
incentive, deferred compensation, stock purchase, stock option, severance,
employment, change of control or fringe benefit plan, program or agreement.
"Employees" shall mean the individuals employed by Seller who
are engaged in the Business (including those individuals who are on temporary
leave for medical, family, military, personal or other reasons but excluding any
individual who is eligible to receive long-term disability benefits). The
Schedule - Employees lists the Employees as of May 23, 2000, and identifies
whether they are on leave.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Excluded Assets" shall mean the assets of Seller specified on
Schedule - Excluded Assets.
"Excluded Liabilities" shall have the meaning set forth in
Section 2.3.
"Final" shall mean action by the applicable Regulatory
Authority (including action duly taken by such agency's staff, pursuant to
delegated authority), which shall not have been reversed, stayed, enjoined, set
aside, annulled or suspended, with respect to which no timely request for stay,
petition for rehearing, appeal or certiorari or sua sponte action of the
applicable Regulatory Authority with comparable effect shall be pending; and as
to which the time for filing any such request, petition, appeal, certiorari or
for the taking of any such sua sponte action by such Regulatory Authority shall
have expired.
"Final Determination" shall have the meaning set forth in
Section 12.4(e).
"Financial Statements" shall mean the unaudited profit and
loss statements of "Coram Prescription Services" for the four months ended April
30, 2000, and related balance sheet as of such date (the "Most Recent Balance
Sheet"), and for the twelve months ended December 31, 1999, copies of which are
attached hereto as Schedule - Financial Statements.
"GAAP" shall mean United States generally accepted accounting
principles, as in effect from time to time.
"Hired Employee" shall have the meaning set forth in Section
11.5(a).
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.
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"Indemnified Buyers' Claims" shall have the meaning set forth
in Section 12.1.
"Indemnified Buyers' Party" shall have the meaning set forth
in Section 12.1.
"Indemnified Seller Claims" shall have the meaning set forth
in Section 12.2.
"Indemnified Seller Party" shall have the meaning set forth in
Section 12.2.
"Intellectual Property" shall mean the software and
intellectual property rights set forth on Schedule - Intellectual Property.
"Knowledge" shall mean, with respect to Seller, the actual
knowledge of the President of the Business and each of his direct reports (the
same being Xxx Xxxxxx, Xxx Xxxxxxx, Xxx Xxxxxx and Xxxxxxxx XxXxxxxxx).
"Leased Premises" shall mean the land, building, structures,
improvements, fixtures, offices and other facilities leased by Seller pursuant
to the Leases and used in connection with the Business.
"Leases" shall mean the leases and rental agreements
(including subleases), as amended, entered into with respect to the Leased
Premises, as set forth on Part A of Schedule -Leases.
"Lien" shall mean any lien, pledge, charge, encumbrance,
security interest, mortgage, deed of trust, lease, option or other adverse claim
of any kind or description.
"Mail Order Services" shall mean the distribution by Seller of
prescription drugs, vitamins and over-the-counter supplies to individuals
through the U.S. Mail, common carrier or other method of delivery and related
pharmacy services (including drug utilization review and patient counseling) in
the same manner as currently conducted by Seller and the delivery of such
services as currently conducted by Seller, the "Mail Order Services Business".
"Marketing Services Agreement" shall mean the Marketing
Services Agreement between Coram Healthcare Corporation and Coram, Inc., on the
one hand, and CuraScript Pharmacy, Inc., on the other hand, in substantially the
form of Exhibit - Marketing Services Agreement attached hereto.
"Material Adverse Effect" shall mean, with respect to Seller
or the Business, a material adverse effect on the business, assets, liabilities,
financial condition or results of operations of the Business taken as a whole,
other than any effect resulting from changes in law or applicable regulations.
"Material Adverse Effect" shall mean, with respect to Buyers, a material adverse
effect on Buyers' ability to consummate the transactions contemplated by this
Agreement and the other Transaction Documents.
"Most Recent Balance Sheet" shall have the meaning set forth
in the definition of Financial Statements.
"Non-Third Party Claims" shall have the meaning set forth in
Section 12.5(c).
"Notice of Arbitration" shall have the meaning set forth in
Section 12.4(b).
"Payment Programs" shall have the meaning set forth in Section
5.12(b).
"PBM Services" shall mean the integrated delivery by Seller,
under agreements with health benefit plans, third party administrators, and
other payors, of pharmacy benefits claims processing, formulary management
(including rebate contracting), pharmacy network development, and disease
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management services, in the same manner as currently conducted by Seller and the
delivery by Seller of such services as currently conducted, the "PBM Services
Business".
"Permitted Liens" shall mean (a) any Liens for Taxes not yet
due and payable or being contested by Seller or an Affiliate of Seller in good
faith by appropriate proceedings, (b) Liens resulting from a filing by a lessor
as a precautionary filing for a true lease, (c) landlord's Liens under Leases
and (d) any other encumbrance excluding those arising in connection with
indebtedness for borrowed money affecting an asset which does not materially
impede or impair the ownership, use, operation or value of such asset.
"Person" shall mean any individual, corporation, partnership,
joint venture, association, joint stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Personal Property" shall mean all tangible personal property
and leasehold improvements leased by or owned by Seller as part of the Business
as of the date hereof, less any items sold or otherwise disposed of plus new
items acquired, leased or obtained solely by Seller in the ordinary course of
the Business through the close of business on the Closing Date. To the Knowledge
of Seller, Schedule - Personal Property lists all Personal Property relating to
the Business as of May 23, 2000. Prior to Closing, Seller and Buyers shall work
together in good faith to (a) identify Personal Property subject to master lease
arrangements and establish reasonable arrangements for the transfer of such
Personal Property at Closing and (b) determine which tangible personal property
(if any) located in space utilized by Seller in Houston, Texas, Las Vegas,
Nevada, and Hayward, California is deemed to be "Personal Property" hereunder.
"Prime Lease" shall have the meaning set forth in Section
5.13(a).
"Proscribed Activities" shall have the meaning set forth in
Section 13(a).
"PTO Liability" shall have the meaning set forth in the
definition of Assumed Liabilities.
"Regulatory Authority" shall mean any federal, state, local or
other government authority or instrumentality, domestic or foreign.
"Reserved Names" shall mean any names, trade names or marks
including the words "Coram", "Curaflex" or "Stratogen".
"Seller 401(k) Plan" shall have the meaning set forth in
Section 11.5(g).
"Seller Notice" shall have the meaning set forth in Section
8.5(b).
"Seller Representatives" shall have the meaning set forth in
Section 7.9(a).
"Seller's Arbitrator" shall have the meaning set forth in
Section 12.4(c).
"Seller's Health Care Licenses" shall have the meaning set
forth in Section 5.12(a).
"Software" shall mean the following, in each case owned by
Seller and used solely in the Business: (a) computer software and subsequent
versions thereof developed or currently being developed, manufactured, sold or
marketed by Seller or acquired from third parties, including without limitation,
source code, object code, objects, comments, screens, user interfaces, report
formats, templates, menus, buttons and icons; and (b) all file, data materials,
manuals, design notes and other items and documentation related thereto or
associated therewith; provided that Software shall not include readily available
commercial products such as off-the-shelf or publicly vended software programs.
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"Supplies" shall mean all supplies and inventory owned by
Seller as part of the Business as of the date hereof, less any items sold or
consumed plus new items acquired or obtained in the ordinary course of the
Business through the close of business on the Closing Date.
"Tax" shall mean all taxes, charges, fees, levies or other
assessments (including without limitation, income, gross receipts, gains, ad
valorem, value added, excise, property, sales, use, production, recording,
license, payroll, transfer, net worth, capital, business and occupation,
disability, employment severance, franchise or withholding taxes), imposed
(whether directly or by withholding) by any Regulatory Authority and includes
any estimated tax, assessment interest and penalties (civil or criminal) or
additions to tax. It shall include any obligations of a Person in connection
with or related to any tax sharing or similar arrangements between such Person
and any other Person.
"Tax Returns" shall mean any report, return or other
information (including any exhibits and attachments thereto and any amendments
thereto) supplied or, required to be supplied to a Regulatory Authority by a
Person in connection with Taxes including, where permitted or required, combined
or consolidated returns for any group of entities that includes such Person or
any Affiliate of such Person.
"Third Party Claim" shall have the meaning set forth in
Section 12.5(a).
"Transaction Documents" shall mean this Agreement, the
Assignment and Assumption Agreements, the Bills of Sale, the Transition Services
Agreement, the Marketing Services Agreement and any other document required to
give effect to the transactions contemplated hereby.
"Transfer Taxes" shall have the meaning set forth in Section
11.4(a).
"Transition Services Agreement" shall mean the Transition
Services Agreement among Seller, Coram Healthcare Corporation and Coram, Inc.,
on the one hand, and Buyers, on the other hand, in substantially the form of
Exhibit - Transition Services Agreement attached hereto.
"Transferred Assets" shall have the meaning set forth in
Section 2.1.
1.2. Interpretation. The headings preceding the text of
Articles, Sections, subsections, Exhibits and Schedules included in this
Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
terms "including" or "include" shall, in all cases, mean "including, without
limitation," and "include, without limitation," respectively. The use of the
masculine, feminine or neuter gender herein shall, as applicable, also refer to
the other gender(s). Except as the context otherwise requires, the use of the
singular form of any term shall also refer to the plural, and vice versa. Unless
the context otherwise requires, whenever the terms "hereto," "hereunder,"
"herein" or "hereof"' are used in this Agreement, such terms shall be construed
as referring to this Agreement and references to "Articles," "Sections,"
"subsections," "paragraphs," "subparagraphs," "clauses," "Schedules," "Exhibits"
and "Recitals" shall be construed as referring to those of this Agreement.
2. PURCHASE AND SALE OF BUSINESSES.
2.1. Purchase and Sale. Seller agrees to sell, assign,
transfer and convey to Buyers, and Buyers agree to purchase, acquire and accept
from Seller, at the Closing, all of the assets of every kind and description
owned by Seller and used by it solely in the Business as the same exist as of
the date hereof together with assets of the same nature acquired in the ordinary
course of the Business prior to the Closing, less those assets disposed of in
the ordinary course of business prior to the Closing and less the Excluded
Assets (the "Transferred Assets"). The Transferred Assets shall include the
following:
(a) all of Seller's rights and interests in and to the
Personal Property;
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(b) all assignable rights and interests of Seller in and to
the Assumed Contracts (including the Intershop Professional Services web
development contract);
(c) all assignable rights and interests of Seller in and to
the Leases and the right to all security deposits and other amounts and
instruments deposited by or on behalf of Seller;
(d) the Books and Records;
(e) all assignable rights and interests of Seller in and to
the Intellectual Property (including to Seller's internet web site,
xxx.xxxxxxxxxxxxx.xxx, except for the domain name);
(f) all assignable rights and interests of Seller in and to
the Software;
(g) all of Seller's rights and interests in and to the
Supplies;
(h) all of Seller's rights and interests in and to the
accounts receivable of the Business, together with the accounts receivable
collection lockbox applicable to the Business; and
(i) all deposits set forth on the Most Recent Balance Sheet
made in the ordinary course of business since the date thereof, other than the
deposits relating to the Excluded Assets.
2.2. Assumed Liabilities. From and after the Closing Date,
Buyers shall assume and agree to pay, perform and discharge the Assumed
Liabilities.
2.3. Excluded Liabilities. Notwithstanding anything to the
contrary set forth in this Agreement, Buyers shall assume, pay or discharge,
when due, only the Assumed Liabilities. All liabilities of Seller not so assumed
by Buyers shall be retained by Seller and shall be hereinafter referred to as
the "Excluded Liabilities" and shall include the following:
(a) all liabilities of Seller relating to or incurred in
connection with the Excluded Assets;
(b) all liabilities of Seller to its employees existing prior
to the Closing, except for the PTO Liability;
(c) all liabilities relating to the claims set forth on
Schedule - Litigation (Seller);
(d) all liabilities of Seller arising in connection with its
operations unrelated to the Business;
(e) all liabilities of Seller for Taxes relating to any
taxable period or portion thereof ending on or before the Closing Date;
(f) all liabilities of Seller for transfer, sales, use, and
other taxes arising in connection with the consummation of the transactions
contemplated hereby (subject to the provisions of Section 11.4 hereof);
(g) all obligations of Seller to indemnify any Person by
reason of the fact that such Person was a director, officer, employee, or agent
of any of Seller and its Subsidiaries or was serving at the request of any such
entity as a partner, trustee, director, officer, employee, or agent of another
entity (whether such indemnification is for judgments, damages, penalties,
fines, costs, amounts paid in settlement, losses, expenses, or otherwise and
whether such indemnification is pursuant to any statute, charter document,
bylaw, agreement, or otherwise);
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(h) all liabilities of Seller (under contract or otherwise) to
any former owners of the Business for royalties, earn-outs or other similar
arrangements;
(i) all liabilities of Seller for costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby;
(j) all liabilities or obligations of Seller under this
Agreement; and
(k) all liabilities of Seller arising under or pertaining to
any Employee Benefit Plan.
3. PAYMENT.
3.1. Purchase Price; Payment on the Closing Date. On the
Closing Date Buyers shall pay to Seller $41,300,000 less the PTO Liability (the
amount of which PTO Liability shall be certified by Seller to Buyers at Closing)
to an account designated by Seller, by fedwire transfer in immediately available
U.S. dollars (the "Purchase Price").
3.2. Allocation of Purchase Price. The Purchase Price for the
Transferred Assets and the Assumed Liabilities shall be allocated, for Tax
purposes, as set forth on Schedule - Allocation hereto. Buyers shall prepare an
initial Schedule - Allocation for Seller's review within ninety (90) days after
Closing. Seller shall either accept the initial Schedule - Allocation or notify
Buyers of its objections to the initial Schedule - Allocation within fifteen
(15) days following delivery of the initial Schedule - Allocation to Seller. If
Seller accepts the initial Schedule - Allocation as prepared by Buyers, such
Schedule - Allocation shall become final and be attached to this Agreement. If
Seller does not accept the initial Schedule - Allocation as prepared by Buyers,
Seller and Buyers shall attempt in good faith to resolve any disputed items. If
Seller and Buyers are unable to resolve any disputed items within thirty (30)
days, such items shall be referred to the Accountants for resolution. Buyers and
Seller shall share equally the fees and expenses of the Accountants in
connection with such arbitration. The decision of the Accountants as to
allocation of the Purchase Price for the Transferred Assets and the Assumed
Liabilities with respect to any disputed item will be final and binding upon
both parties. Neither Buyers nor Seller shall file any Tax Returns or, in a
judicial or administrative proceeding, assert or maintain any Tax reporting
position that is inconsistent with this Agreement or the allocation agreed to in
accordance with this Agreement, unless required to do so by applicable law.
4. THE CLOSING.
4.1. The Closing. The consummation of the transactions
provided for in this Agreement (the "Closing") shall take place (a) at the
offices of Seller's counsel, Xxxx Xxxxx Xxxx & XxXxxx LLP, 000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000, at 9:00 a.m., Eastern time, on the last Business
Day of the month in which the last of the conditions required to be satisfied or
waived pursuant to Articles 9 and 10 is either satisfied or waived, or (b) at
such other place, time or date as the parties shall agree upon in writing. The
date on which the Closing is to occur is referred to herein as the "Closing
Date." The Closing shall be deemed effective as of the close of business on the
Closing Date.
4.2. Seller's Deliveries.
At the Closing, Seller shall deliver to Buyers the following:
(a) duly executed Bills of Sale;
(b) duly executed Assignment and Assumption Agreements;
(c) a duly executed Transition Services Agreement;
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(d) a duly executed Marketing Services Agreement;
(e) a duly executed assignment and assumption of each Lease in
form and substance satisfactory to Buyer;
(f) duly executed subleases as contemplated by Section 9.7;
(g) duly executed consents and approvals contemplated by
Sections 9.6, 9.9 and 9.10 hereof;
(h) certified copies of resolutions, duly adopted by the Board
of Directors of Seller, which shall be in full force and effect at the time of
the Closing, authorizing the execution, delivery and performance by Seller of
this Agreement and the consummation of the transactions contemplated hereby;
(i) the officer's certificate referred to in Section 9.1(c);
(h) UCC termination statements or partial release statements,
as appropriate and necessary to release the Transferred Assets from the Lien of
the credit facilities to which Seller and the Transferred Assets are bound;
(j) such other documents as are reasonably required to be
delivered by Seller to effectuate the transfer of the Transferred Assets to, and
the assumption of the Assumed Liabilities by, Buyers;
(k) legal opinion of counsel to Seller as to customary items;
and
(l) a certification pursuant to Treasury Regulation Section
1.1445-2(b)(2) that Seller is not a foreign person.
4.3. Buyer's Deliveries.
At the Closing, Buyers shall deliver to Seller the following:
(a) the Purchase Price;
(b) duly executed Assignment and Assumption Agreements;
(c) a duly executed Assignment and Assumption of each Lease in
form and substance satisfactory to Seller;
(d) duly executed subleases as contemplated by Section 9.7;
(e) a duly executed Transition Services Agreement;
(f) a duly executed Marketing Services Agreement;
(g) certified copies of resolutions, duly adopted by Buyers'
Boards of Directors, which shall be in full force and effect at the time of the
Closing, authorizing the execution, delivery and performance by Buyers of this
Agreement and the consummation of the transactions contemplated hereby,
including without limitation the issuance of the Shares;
(h) the officer's certificate referred to in Section 10.1(c);
(i) legal opinion of counsel to Buyers as to customary items;
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(j) resale exemption certificates relating to the Inventory;
and
(k) such other documents or payments as are reasonably
required to be delivered or paid by Buyers to effectuate the transfer of the
Transferred Assets to, and the assumption of the Assumed Liabilities by, Buyers.
4.4. Further Assurances.
After the Closing Date, each of Seller and Buyers shall use
reasonable commercial efforts from time to time to execute and deliver at the
request of the other party such additional documents and instruments as may be
reasonably required to carry out the intent of this Agreement and the
transactions contemplated hereby, to provide whatever documents or other
evidence of title as may be reasonably requested by Buyers to confirm Buyer's
ownership of the Transferred Assets and to provide whatever documents or other
evidence as may be reasonably requested by Seller to confirm Buyer's assumption
of the Assumed Liabilities.
5. REPRESENTATIONS AND WARRANTIES OF SELLER.
In order to induce Buyers to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller represents and warrants
to Buyers as follows:
5.1. Corporate Status. Seller is duly organized, validly
existing and in good standing as a corporation under the laws of Delaware.
Seller has the requisite corporate power and authority to own or lease all of
its properties and assets and to conduct its businesses as they are now being
conducted, except where the failure to have such corporate power or to conduct
its business has not had and would not reasonably be expected to have a Material
Adverse Effect.
5.2. Corporate Authority. Seller or the Affiliate of Seller,
as applicable, has the corporate power and authority to execute and deliver this
Agreement and the other Transaction Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby. All corporate
actions and proceedings necessary to be taken by or on the part of Seller or the
Affiliate of Seller, as applicable, in connection with this Agreement and the
other Transaction Documents and the transactions contemplated hereby and thereby
have been or will prior to the Closing be duly and validly taken. This Agreement
has been, and at the Closing the other Transaction Documents will be, duly and
validly executed and delivered by Seller or the Affiliate of Seller, as
applicable, and constitute the legal, valid and binding obligation of such
Person, enforceable against it in accordance with and subject to their terms,
except as such enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws from time to time
in effect affecting creditors' rights generally or by principles governing the
availability of equitable remedies.
5.3. Non-Contravention; Approvals and Consents.
(a) Neither the execution and delivery by Seller or the
Affiliate of Seller, as applicable, of this Agreement and the other Transaction
Documents to which it is a party nor the consummation by such Person of the
transactions contemplated hereby and thereby is an event that, of itself or with
the giving of notice or the passage of time or both, will (i) conflict with the
charter or bylaws of such Person, (ii) assuming that the consents and approvals
described in Part A of Schedule - Seller's Consents are obtained, constitute a
violation of, or conflict with or result in any breach of or any default under,
or constitute grounds for termination or acceleration of, any material agreement
or instrument to which such Person is a party or by which such Person is bound,
or result in the creation of any material Liens upon any of the Transferred
Assets or (iii) assuming receipt of the consents and approvals described in Part
B of Schedule - Seller's Consents, violate any material judgment, decree or
order or statute, rule or regulation applicable to Seller or the Business,
except in the case of clauses (ii)
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and (iii) above, for violations, conflicts, breaches, defaults or Liens which,
either individually or in the aggregate would not have a Material Adverse
Effect.
(b) Except as set forth on Part C of Schedule - Seller's
Consents, neither Seller nor any of its Affiliates nor any of their respective
officers, directors or managing employees is required to obtain any license,
approval or consent from, or give any notice or make any other filing with
respect to, any Regulatory Authority in connection with the consummation of the
transactions contemplated by this Agreement and the other Transaction Documents,
except for licenses, approvals, consents, notices or filings the absence or
failure to obtain of which, either individually or in the aggregate, would not
have a Material Adverse Effect.
5.4. Title to Transferred Assets. At Closing, Seller will have
good and marketable title to or a valid leasehold interest in all of the
Transferred Assets, free and clear of all Liens, except for Permitted Liens.
Except as set forth on a schedule hereto, the Leased Premises and Personal
Property which are a part of the Transferred Assets are in good operating
condition (subject to normal wear and tear) and are fit for use in the ordinary
course of the Business as presently conducted.
5.5. Change in Condition. Except as set forth in Schedule -
Changes, since April 30, 2000, (a) Seller has conducted the Business in the
ordinary course of business and consistent with past practices and (b) to the
Knowledge of Seller, there has not been any change in the Business which has had
a Material Adverse Effect.
5.6. Taxes. All Tax Returns with respect to the Transferred
Assets that are required to be filed on or prior to Closing have been duly filed
on a timely basis. There are no Liens for Taxes (other than for current Taxes
not yet due and payable) upon any of the Transferred Assets.
5.7. Employee Benefit Plans.
(a) Schedule - Employee Benefit Plans lists each Employee
Benefit Plan of Seller and its Affiliates in which Employees are eligible to
participate. Except as otherwise provided in Section 11.5, none of the Employee
Benefit Plans of Seller or its Affiliates is being assumed by Buyers nor will
any such Plans remain in effect after the Closing Date with respect to any
Employee who accepts employment with Buyers. Except as otherwise provided
herein, Seller shall remain responsible for the administration and payment of
benefits under the terms of Seller's Employee Benefit Plans with respect to all
Employees.
(b) Buyer shall have no liability under, with respect to, or
in connection with any Employee Benefit Plan of Seller, including any liability
under Title IV of ERISA or Section 4980B of the Code.
(c) Except for retention bonuses, change of control bonuses,
severance and relocation bonuses due to members of the management team of the
Business (which shall be rescinded prior to Closing as a condition to Seller's
obligation to close hereunder) or as otherwise provided in Section 11.5 or in
the definition of Assumed Liabilities, the consummation of the transactions
contemplated by this Agreement will not accelerate the time of payment or
vesting under any Employee Benefit Plan nor obligate Buyers to provide any
current or former officer, director or employee of Seller, including, but not
limited to, Employees with severance pay, unemployment compensation or similar
payment.
(d) None of the Seller and its Affiliates has incurred any
liability under Title IV of ERISA or Section 4980B of the Code which is or could
become a liability of the Business.
5.8. Litigation. Except as set forth on Schedule - Litigation
(Seller), as of the date of this Agreement, there is no action, suit, order,
litigation, proceeding or investigation pending or, to
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Seller's Knowledge, threatened (a) against Seller or any Affiliate involving the
Business or (b) pending or threatened by such Persons against any third Person
involving the Business. Neither Seller nor its Affiliates are subject to any
arbitration proceedings under collective bargaining agreements or otherwise or,
to Seller's Knowledge, any governmental investigations or inquiries relating to
the Business. Neither Seller nor any of its Affiliates is subject to any
judgment, order or decree of any court or other governmental agency relating to
the Business.
5.9. Brokers. Except for Deutsche Bank Securities, Inc., whose
fees shall be paid by Seller, there is no investment banker, broker or finder or
other Person retained by Seller or any Affiliate thereof who would have a valid
claim against Seller or Buyers for a commission or brokerage fee in connection
with this Agreement or the transactions contemplated hereby. Seller shall pay,
and hold Buyers harmless against, any liability, loss or expense arising in
connection with any such claims.
5.10. Intellectual Property; Software.
(a) The Schedule- Intellectual Property sets forth a complete
and correct list of all of the following that are owned by, used by, or entered
into by the Seller or its Affiliates and used in the Business: (i) patents or
pending patent applications; (ii) registered trademarks, service marks, trade
names and corporate names; (iii) material unregistered trademarks, material
unregistered service marks, trade dress, trade names, corporate names, logos,
slogans and Internet domain names; (iv) copyrights and copyrightable works; (v)
non-confidential descriptions of material trade secrets and material
confidential information; (vi) Software; and (vii) all licenses or similar
agreements or arrangements covering intellectual property rights to which the
Seller or its Affiliates is a party, either as licensee or licensor, or a
third-party beneficiary.
(b) Except as set forth on the Schedule- Intellectual
Property: (i) Seller owns and possesses all right, title and interest in and to,
or has a valid and enforceable license to use, free and clear of all Liens
(other than Permitted Liens), all of the Intellectual Property set forth on the
Schedule- Intellectual Property; (ii) all of the rights in and to such
Intellectual Property Rights are valid and enforceable; (iii) no claim by any
third Person contesting the validity, enforceability, use or ownership of any of
such Intellectual Property has been made, is currently outstanding or, to the
Knowledge of Seller, is threatened; (iv) to the Knowledge of Seller, no loss or
expiration of any of such Intellectual Property is threatened, pending or
reasonably foreseeable, except for patents expiring at the end of their
statutory terms (and not as a result of any act or omission by the Seller); and
(v) to the Knowledge of Seller, no third Person has infringed, misappropriated
or otherwise conflicted with any of such Intellectual Property.
5.11. Assumed Contracts. Except for such matters as would not
result in a Material Adverse Effect, each Assumed Contract is the legal, valid
and binding obligation of the signatories thereto, and each is enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other similar
laws from time to time in effect affecting creditors' rights generally or by
principles governing the availability of equitable remedies. Except for such
matters as would not result in a Material Adverse Effect, Seller has performed
all obligations required to be performed by it under the Assumed Contracts and
is not in default thereunder, and no event has occurred which, with the lapse of
time or action by a third party, could result in a default by Seller, or, to
Seller's Knowledge, by any other party thereto, under any Assumed Contract.
Except for the Assumed Contracts and the Leases, Seller (as it relates to the
Business) is not a party to or bound by any written or oral agreement which is
material to the current operations of the Business.
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5.12 Seller's Health Care Licenses; Compliance with Health
Care Laws; Other Licenses.
(a) Health Care Licenses. Schedule - Health Care Licenses
lists the health care licenses, permits, and registrations ("Seller's Health
Care Licenses") which, to Seller's Knowledge, have been issued in connection
with the operation of the Business. All of such Seller's Health Care Licenses
are in full force and effect except for those which, if not in full force and
effect, would not, either individually or in the aggregate, result in a Material
Adverse Effect. Except as set forth on Schedule - Health Care Licenses, neither
Seller nor Seller Guarantor has received any notice (written in the case of
Seller and written or oral in the case of Seller Guarantor) from any Regulatory
Authority that Seller's ownership or use of the Transferred Assets or Seller's
operation of the Business violates or is not in compliance in any material
respect with any law or regulation relating to the operations of the Business.
(b) Seller is a participating supplier in Medicare, Medicaid
and other government payment programs listed on Schedule - Payment Programs (the
"Payment Programs"). All necessary registrations and contracts required for
participation in the Payment Programs are in full force and effect except for
those which, if not in full force and effect, would not, either individually or
in the aggregate, result in a Material Adverse Effect. To Seller's Knowledge,
Seller is not subject to any non-routine pre-payment utilization review or other
nonroutine utilization review by any Payment Program, and Seller has received no
written notice that a Payment Program has requested or threatened any material
recoupment, refund or set-off from Seller, or imposed any material fine, penalty
or other sanction on Seller nor has Seller been excluded from participation in
any Payment Program. Seller has not submitted to any Payment Program any
material false or fraudulent claim for payment, nor has Seller at any time
violated any material condition for participation, or any published rule,
regulation, policy or standard of any Payment Program.
(c) Fraud and Abuse. In connection with the Business, Seller
has not, to its Knowledge, engaged in any activities that are prohibited under
Federal Medicare and Medicaid statutes, 42 U.S.C. Sections 1320a-7, 1320a-7a,
and 1320a-7b, and the Federal False Claims Act, 31 U.S.C. Section 3729 et seq.
-- ---
(d) Physician Self-Referrals. To Seller's Knowledge, the
operations of Seller relating to the Business are in compliance with and do not
otherwise violate the Federal Medicare and Medicaid statutes regarding physician
self-referrals, 42 U.S.C. Sections 1395nn and 1396b(s), or the regulations
promulgated pursuant to such statute.
(e) Controlled Substances. Seller has not engaged in any
activities in connection with the Business which are prohibited under the
Federal Controlled Substances Art, 21 U.S.C. Section 801 et -- seq., or the
regulations promulgated pursuant to such statute or any related state or local
statutes or regulations concerning the dispensing and sale of controlled
substances.
(f) Other Licenses. The Schedule - Other Licenses contains, to
Seller's Knowledge, a complete listing and summary description of all licenses
or permits used by Seller in the conduct of the Business, other than Seller's
Healthcare Licenses. To Seller's Knowledge, all of such licenses and permits are
in full force and effect except for those which, if not in full force and
effect, would not, either individually or in the aggregate, result in a Material
Adverse Effect.
5.13. Leases; Other Real Property.
(a) Sellers do not own any real property in fee. No real
property, or interest in real property, is used in the operation of the Business
except for (i) the leasehold estates under the Leases and (ii) space utilized by
Seller in Houston, Texas, Las Vegas, Nevada, and Hayward, California, pursuant
to informal occupancy arrangements with Affiliates of Seller, which Affiliates
have valid leasehold estates in such properties pursuant to the lease agreements
set forth on Part B of Schedule - Leases (the "Prime
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Leases"). Seller has delivered to Buyers a true and complete copy of each Lease
and Prime Lease (including all amendments, extensions, renewals, guarantees, and
other Agreements with respect thereto) for each of the Leased Premises.
(b) Each Lease and Prime Lease is the legal, valid and binding
obligation of the signatories thereto, and each is enforceable in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws from
time to time in effect affecting creditors' rights generally or by principles
governing the availability of equitable remedies. Except for such matters as
would not result in a Material Adverse Effect, Seller (or its Affiliate, as
applicable) has performed all obligations required to be performed by it under
the Leases and Prime Leases and is not in default thereunder, and no event has
occurred which, with the lapse of time or action by a third party, could result
in a default by Seller (or such Affiliate), or, to Seller's Knowledge, by any
other party thereto, under any Lease or Prime Lease. Except for such matters as
would not result in a Material Adverse Effect, Seller's possession and quiet
enjoyment of the leased real property under such Lease and Prime Lease has not
been disturbed, and to Seller's Knowledge, there are no disputes with respect to
such Lease and Prime Lease. No security deposit or portion thereof deposited
with respect to such Lease has been applied in respect of a breach or default
under such Lease or Prime Lease which has not been redeposited in full. Seller
does not, and will not in the future, owe any brokerage commissions or finder's
fees with respect to such Lease or Prime Lease. The other party to such Lease
and Prime Lease is not an Affiliate of Seller. Except as set forth in Schedule -
Leases, Seller has not subleased, licensed or otherwise granted any Person the
right to use or occupy such Leased Real Property or the property subject to the
sublease arrangements contemplated by Section 9.7 hereof or any portion thereof,
Seller has not collaterally assigned or granted any security interest in such
Lease or any interest therein and there are no Liens on the estate or interest
created by such Lease.
5.14. Financial Statements. A true and complete copy of the
Financial Statements is attached hereto as Schedule - Financial Statements. The
Financial Statements are derived from the Books and Records of Seller and its
Affiliates. The Financial Statements (a) have been prepared in accordance with
GAAP consistently applied throughout the periods covered thereby and (b) fairly
present in all material respects the results of operations of the Business for
the periods covered thereby, except for lack of footnote disclosure and, with
respect to interim financial statements, year-end adjustments (none of which is
expected to be material individually or in the aggregate).
5.15. Subsidiaries, Investments. The Transferred Assets do not
include any rights to acquire any shares of stock or any other security or
interest in any other Person, and Seller has not within the last three years had
any Subsidiary engaged in the Business.
5.16. Sufficiency of Transferred Assets. Seller owns, or has a
valid leasehold interest under the Leases in, and the Transferred Assets
(together with the rights afforded to Buyers under the Transition Services
Agreement) include, all the assets necessary for or used in the conduct of the
Business as presently conducted.
5.17. Compliance with Laws. Seller in respect of the Business
has complied in all material respects with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof).
5.18. Employees. Except as set forth on the attached Schedule
- Employees, neither Seller, nor to Seller's Knowledge, any of its Employees, is
subject to a noncompete, nondisclosure, confidentiality, employment or
consulting agreements relating to, affecting or in conflict with the present
business activities of the Business, except for agreements with Seller as a
counterparty.
5.19. Affiliate Transactions. Except as set forth on the
attached Schedule - Affiliated Transactions, no officer, director, employee,
stockholder or Affiliate of Seller or any individual related
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by blood, marriage or adoption to any such individual or any entity in which any
such Person or individual owns any beneficial interest, is a party to any
agreement, contract, commitment or transaction with the Business or has any
material interest in the Transferred Assets or any material property used by the
Business.
5.20. Inventory. The inventory of Seller related to the
Business is merchantable and fit for the purpose for which it was procured or
manufactured, and not damaged, or defective, subject only to the reserve for
inventory writedown set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of the Seller.
5.21. Notes and Accounts Receivable. All notes and accounts
receivable of Seller are reflected properly on their books and records and are
valid receivables, subject only to the reserve for bad debts set forth on the
face of the Most Recent Balance Sheet (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of Seller; provided however, that no representation is
made regarding accounts receivable from Coram Resource Network, Inc. or Coram
Independent Practice, Inc.
5.22. Customers and Suppliers. The Schedule - Customers sets
forth Seller's (a) top twenty (20) Mail-Order Services Business customers, and
(b) top ten (10) PBM Services Business customers, in each case measured in terms
of gross revenues to the Business over the three (3) month period ended March
31, 2000. Except as set forth on the Schedule - Customers, Seller has not
received written notice that any of such customers intends to terminate or
materially reduce its business with Seller.
5.23. Absence of Developments. Except as set forth in the
attached Schedule - Developments, since April 30, 2000, Seller (as it relates to
the Business) has not:
(a) borrowed any amount or incurred or become subject to any
liabilities, except current liabilities incurred in the ordinary course of
business and liabilities under contracts entered into in the ordinary course of
business;
(b) discharged or satisfied any material Lien or paid any
obligation or liability, other than current liabilities paid in the ordinary
course of business;
(c) mortgaged or pledged any of its properties or assets or
subjected them to any material Lien;
(d) sold, assigned or transferred any of its tangible assets,
except for inventory, in the ordinary course of business, or canceled any
material debts or claims;
(e) (i) suffered any extraordinary losses, or (ii) waived any
rights of material value, whether or not in the ordinary course of business or
consistent with past practice;.
(f) made capital expenditures or commitments that aggregate in
excess of $50,000;
(g) made any loans or advances to, guarantees for the benefit
of, or any investments in, any Persons in excess of $50,000 in the aggregate;
(h) suffered any damage, destruction or casualty loss
exceeding in the aggregate $50,000, whether or not covered by insurance;
(i) entered into any other material transaction, whether or
not in the ordinary course of business;
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(j) made any political contributions or made any bribes,
kickback payments or other illegal payments; and
(k) made or granted any increase in, or amended or terminated,
any existing Employee Benefit Plan, or adopted any new Employee Benefit Plan, or
amended or renegotiated any existing collective bargaining agreement or entered
into any new collective bargaining agreement or relationship or multiemployer
plan.
5.24. Closing Date. All of the representations and warranties
of Seller contained in this Article 5 shall be true and correct on the Closing
Date as though then made, except to the extent that Seller has advised Buyers
otherwise in writing prior to the Closing. Further, the certification on the
Closing Date by Seller of the PTO Liability shall constitute a representation
and warranty by Seller under this Article 5, which shall be true and correct on
the Closing Date.
5.25. Limitation on Representations and Warranties. Except as
otherwise set forth herein, Seller makes no representations or warranties as to
the Transferred Assets, the Assumed Liabilities or the Business. Without
limiting the generality of the foregoing, Seller makes no representation or
warranty to Buyers with respect to (a) any projections, estimates or budgets
heretofore delivered to or made available to Buyers of future revenues, expenses
or expenditures, future results of operations (or any component thereof), future
cash flows or future financial condition (or any component thereof) of the
Business; or (b) any other information or documents made available to Buyers or
its counsel, accountants or advisors with respect to the Business or the
business or operations of the Business, except as expressly covered by a
representation and warranty contained in Sections 5.1 through 5.25. EXCEPT AS
EXPRESSLY STATED HEREIN, ALL WARRANTIES AND REPRESENTATIONS OF SELLER ARE
EXCLUDED. EXCEPT AS EXPRESSLY STATED HEREIN, SELLER HAS MADE NO REPRESENTATION
OR WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE REGARDING ANY
OF THE TRANSFERRED ASSETS.
6. REPRESENTATIONS AND WARRANTIES OF BUYERS.
Buyers hereby represent and warrant to Seller as follows:
6.1. Corporate Status. Each Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
Buyers have the requisite power and authority to own or lease all of its
properties and assets and to conduct its business as it is now being conducted,
except where the failure to have such corporate power or to conduct its business
has not had and would not reasonably be expected to have a Material Adverse
Effect.
6.2. Corporate Authority. Each Buyer has the power and
authority to execute and deliver this Agreement and the other Transaction
Documents to which it is a party and to consummate the transactions contemplated
hereby and thereby. All actions and proceedings necessary to be taken on the
part of Buyers in connection with this Agreement and the other Transaction
Documents and the transactions contemplated hereby and thereby have been or will
prior to the Closing be duly and validly taken. This Agreement has been, and at
the Closing the other Transaction Documents to which it is a party will be, duly
and validly executed and delivered by Buyers and constitute the legal, valid and
binding obligation of Buyer, enforceable against Buyers in accordance with and
subject to their terms, except as such enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other similar
laws from time to time in effect affecting creditors' rights generally or by
principles governing the availability of equitable remedies.
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6.3. Non-Contravention. Neither the execution and delivery by
Buyers of this Agreement and the other Transaction Documents to which it is a
party nor the consummation by a Buyer of the transactions contemplated hereby
and thereby is an event that, of itself or with the giving of notice or the
passage of time or both, will (a) conflict with the charter or bylaws (or
similar governing instruments with different names) of Buyer, (b) assuming that
the consents and approvals described in Schedule - Buyer's Consents are
obtained, constitute a violation of, or conflict with or result in any breach of
or any default under, or constitute grounds for termination or acceleration of,
any material mortgage, indenture, lease, contract, agreement or instrument to
which such Buyer is a party or by such Buyer is bound, or result in the creation
of any material Liens upon any of such Buyer's assets, or (c) assuming receipt
of the consents and approvals described in Schedule - Buyers' Consents, violate
any material judgment, decree or order or statute, rule or regulation applicable
to such Buyer, except in the case of clauses (b) and (c) above, for violations,
conflicts, breaches, defaults or Liens which, either individually or in the
aggregate would not have a Material Adverse Effect.
6.4. Brokers. Except for GTCR Xxxxxx Xxxxxx, L.L.C., whose
fees shall be paid by Buyers, there is no investment banker, broker or finder or
other Person retained by Buyers or any Affiliate thereof who would have a valid
claim against or Seller for a commission or brokerage fee in connection with
this Agreement or the transactions contemplated hereby. Buyers shall pay, and
hold Seller harmless against, any liability, loss or expense arising in
connection with any such claims.
6.5. Litigation. Except as set forth on Schedule - Litigation
(Buyers), as of the date of this Agreement, there is no litigation, proceeding
or investigation pending or, to the knowledge of a Buyer, threatened, against
Buyers or any Affiliate.
6.6. Licenses, Approvals and Consents. Except as set forth on
Schedule - Buyers' Consents, no approval or consent of, or notice to or filing
with, any Person is legally or contractually required to be obtained or made by
a Buyer or any of its Affiliates or any of their respective officers, directors
or managing employees in connection with the transactions contemplated by this
Agreement and the other Transaction Documents or to permit a Buyer or its
Affiliates to conduct the Business from and after the Closing Date, except for
approvals, consents, notices or filings the absence or failure to obtain of
which, either individually or in the aggregate, would not have a Material
Adverse Effect. Except as set forth on Schedule - Buyers' Consents, neither a
Buyer nor any of its Affiliates nor any of their respective officers, directors
or managing employees is required to obtain any license, approval or consent
from, or give any notice or make any other filing with respect to, any
Regulatory Authority in connection with the consummation of the transactions
contemplated by this Agreement and the other Transaction Documents, except for
approvals, consents, notices or filings the absence or failure to obtain of
which, either individually or in the aggregate, would not have a Material
Adverse Effect. Neither Buyer knows of any reason specifically related to the
business or operations of it or any of its Affiliates which could cause any of
the licenses, consents or approvals listed in Schedule - Seller's Consents and
Schedule - Buyers' Consents not to be obtained in a timely manner.
6.7. No Knowledge of Violations. As of the date of this
Agreement, Buyers are not aware of any breach of any representation or warranty
made by Seller hereunder.
6.8. Limitation on Representations and Warranties. Except as
otherwise set forth herein, Buyers make no representations or warranties to
Seller under this Agreement or with respect to the transactions contemplated
hereby.
7. INTERIM COVENANTS OF SELLER.
From the date of this Agreement until the completion of the
Closing, subject to the requirements of applicable law and Regulatory
Authorities, Seller (and Buyers, as specified) shall comply with the covenants
set forth in this Article 7.
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7.1. Operation of the Business. The Business will continue to
be carried on in the ordinary course and consistent with past practices in
compliance in all material respects with all applicable laws, rules and
regulations, including, with respect to the current PBM Business payment cycle
in effect on the Closing Date, the making of (or the provision for the making
of) timely remittance of amounts due to pharmacies related to periods prior to
the Closing Date; and reasonable commercial efforts will be used to preserve the
Business, its operations and employees and the goodwill of its customers and
others having business relations with it. As appropriate, the Business will
enter into new contractual arrangements as well as amend or terminate existing
contractual arrangements (including any of the Assumed Contracts); provided
that, between the date hereof and the Closing Date, except as otherwise provided
herein, Seller will not (as it relates to the Business) without the prior
approval of Buyers:
(a) except as disclosed on the Schedule - Developments,
voluntarily take any action that would require disclosure under Xxxxxxx 0.00(x),
(x), (x), (x), (x)(xx), (x), (x), (x), (x) or (k) hereof; or
(b) amend, modify, extend, renew or terminate any of the
Leases.
7.2. Access to Facilities, Files and Records. Upon the
reasonable request of Buyers and upon reasonable prior notice, Seller and its
Affiliates will give or cause to be given to the officers, employees,
accountants, counsel and authorized representatives of Buyers (a) reasonable
access during normal business hours to the management personnel, property,
copies of the Assumed Contracts, Leases and other records and files relating to
the Business except for any of the foregoing relating to the Excluded Assets or
Excluded Liabilities, and (b) all such other information solely relating to the
transactions contemplated by this Agreement as Buyers may reasonably request;
provided, however, that neither Seller nor its Affiliates shall be required to
permit such access or provide such information to the extent it would jeopardize
any attorney-client privilege of Seller or any of its Affiliates or contravene
any law, rule, regulation, order, judgment, decree applicable to, or binding
agreement entered into by, Seller or any of its Affiliates.
7.3. Notice of Proceedings. Seller will promptly notify Buyers
in writing upon (a) becoming aware of any order or decree or any complaint
praying for an order or decree restraining or enjoining the execution of this
Agreement or the consummation of the transactions contemplated hereunder, or (b)
receiving any notice from any court or any Regulatory Authority of its intention
(i) to institute a suit or proceeding to restrain or enjoin the execution of
this Agreement or the consummation of the transactions contemplated hereunder,
or (ii) to nullify or render ineffective this Agreement if executed or such
transactions if consummated.
7.4. Xxxx-Xxxxx-Xxxxxx Filing. As promptly as practicable
after the date of this Agreement (but in no event later than ten (10) days after
the date of this Agreement), Seller shall prepare and file all documents and
notifications with the Federal Trade Commission and the United States Department
of Justice as are required to comply with the HSR Act, requesting early
termination of the waiting period thereunder. Seller will furnish promptly all
materials thereafter requested by any Regulatory Authority having jurisdiction
over such filings. Seller will cooperate with Buyers in the preparation of all
such filings and responses.
7.5. Reasonable Commercial Efforts. Subject to the terms of
this Agreement, Seller agrees to use its reasonable commercial efforts in good
faith to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary under applicable laws to permit consummation of the
transactions contemplated hereby and by the other Transaction Documents as
promptly as practicable and otherwise enable consummation of the transactions
contemplated hereby on or before July 31, 2000, including satisfaction of the
conditions set forth in Articles 9 and 10 hereof, and shall cooperate fully with
Buyers to that end. Without limitation of the foregoing, Seller will comply, in
a timely manner, with any notice provisions of the Payment Programs, regarding
provision of notice of the transactions contemplated by this Agreement.
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7.6. Notification of Certain Matters. Seller shall give prompt
notice to Buyers of any fact, event or circumstance known to it that (a) is
reasonably likely, individually or taken together with all other facts, events
and circumstances known to it, to result in any Material Adverse Effect or (b)
would cause or constitute a material breach of any of its representations,
warranties, covenants or agreements contained herein.
7.7. Transfers. Prior to the Closing, Seller shall cause all
of its Affiliates to transfer to Seller all right, title and interest in and to
all assets used solely in connection with the Business (other than assets which
would comprise Excluded Assets), for transfer to Buyers at the Closing.
7.8. Consents Under Contractual Arrangements.
(a) With respect to obtaining the consents or approvals
contemplated by the conditions specified in Sections 9.6, 9.9 and 9.10, Seller
shall use reasonable commercial efforts to obtain such consents or approvals on
or prior to the Closing Date. Upon the request of Seller, Buyers will provide
reasonable assistance to Seller, including providing such financial and other
information as shall reasonably be requested by the counterparties, in order to
obtain any required consents and/or approvals.
(b) If any consent or approval under any contractual
arrangement is not obtained on or prior to the Closing Date, Seller shall have
the right to secure a subleasing or subcontracting arrangement reasonably
satisfactory to Buyers whereby a Buyer will receive the benefits under such
contractual arrangement following the Closing and such Buyer will undertake to
pay or satisfy the corresponding liabilities for the enjoyment of such benefits.
In such circumstances, Buyers and Seller shall enter into such arrangement(s)
and remain obligated to consummate the transactions contemplated herein. For the
avoidance of doubt, absent waiver by Buyers, the foregoing undertakings shall
not obviate the closing conditions specified in Sections 9.6, 9.9 and 9.10 nor
obviate the requirement (if applicable) for a landlord consent to a subleasing
arrangement. Seller shall assist in reasonable ways during the year following
the Closing Date to assist Buyers to secure a consent to assignment of a
contractual arrangement in respect of which the consent or approval to
assignment was not obtained on or prior to the Closing Date.
7.9. Acquisition Proposals.
(a) Until the earlier to occur of the Closing or the
termination of this Agreement in accordance with Section 14.1, neither Seller,
Seller Guarantor or any of their Affiliates nor any of their respective
officers, directors, employees, agents or representatives (including, without
limitation, any investment banker, attorney or accountant retained by any of
them) (collectively, "Seller Representatives") shall, with respect to the
Business, initiate, solicit or encourage, directly or indirectly, any inquiries
or the making of any proposal or offer with respect to a purchase and sale
transaction involving the stock of Seller or all or any substantial portion of
the assets of the Business, or, with respect to the Business, a transaction
structured as a merger, consolidation, combination, joint venture or similar
transaction (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal") or engage in any negotiations concerning or provide any
confidential information or data to or have any discussions with, any Person
relating to an Acquisition Proposal or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal.
(b) Seller will take the necessary steps to inform the Seller
Representatives of the obligations undertaken in Section 7.9(a).
(c) Seller and Seller Guarantor will promptly notify Buyers of
the receipt of any Acquisition Proposal. Seller, Seller Guarantor and their
Affiliates shall immediately cease and cause any
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Seller Representatives to cease any and all existing activities, discussions or
negotiations with any parties (other than Buyers) conducted heretofore with
respect to any of the foregoing.
8. INTERIM COVENANTS OF BUYER.
From the date of this Agreement until the completion of the
Closing, subject to the requirements of applicable law and Regulatory
Authorities, Buyers (and Seller, as specified) shall comply with the covenants
set forth in this Article 8.
8.1. Application for Regulatory Consent and Licenses. To the
extent that a Buyer or its Affiliates requires any licenses or other approvals,
consents or authorizations from, or is required to give or make any notices to
or filings with respect to, any Regulatory Authority in connection with the
consummation of the transactions contemplated by this Agreement or the other
Transaction Documents or to permit such Buyer or its Affiliates to conduct the
Business from and after the Closing Date, as promptly as practicable after the
date of this Agreement, and in no event later than thirty (30) days after the
date of this Agreement, such Buyer will file all requisite applications and make
all other requisite filings with the appropriate Regulatory Authorities (as
listed on Schedule - Buyers' Consents). Buyers will use commercially reasonable
efforts to expedite the preparation of such regulatory and license applications
and filings and their prosecution to a favorable conclusion. Buyers will
promptly provide Seller with copies of any application, amendment, pleading,
notice, order, request for additional information or other document filed by it
or served on it relating to such applications. Seller shall cooperate with
Buyers and provide to Buyers all information regarding the Business reasonably
required by Buyers for use in connection with such applications and filings.
8.2. Notice of Proceedings. Buyers will promptly notify Seller
in writing upon (a) becoming aware of any order or decree or any complaint
praying for an order or decree restraining or enjoining the execution of this
Agreement or the consummation of the transactions contemplated hereunder, or (b)
receiving any notice from any court or Regulatory Authority of its intention (i)
to institute a suit or proceeding to restrain or enjoin the execution of this
Agreement or the consummation of the transactions contemplated hereby, or (ii)
to nullify or render ineffective this Agreement if executed or such transactions
if consummated.
8.3. Xxxx-Xxxxx-Xxxxxx Filing. As promptly as practicable
after the date of this Agreement (but in no event later than ten (10) days after
the date of this Agreement), Buyers shall prepare and file all documents and
notifications with the Federal Trade Commission and the United States Department
of Justice as are required to comply with the HSR Act, requesting early
termination of the waiting period thereunder. Buyers shall promptly furnish all
materials thereafter requested by any Regulatory Authority having jurisdiction
over such filings. Buyers will cooperate with Seller in the preparation of all
such filings and responses.
8.4. Reasonable Commercial Efforts. Subject to the terms of
this Agreement, Buyers agree to use their reasonable commercial efforts in good
faith to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary under applicable laws to permit consummation of the
transactions contemplated hereby and by the Transaction Documents as promptly as
practicable and otherwise enable consummation of the transactions contemplated
hereby on or before July 31, 2000, including satisfaction of the conditions set
forth in Articles 9 and 10 hereof, and shall cooperate fully with Seller to that
end.
8.5. Notification of Certain Matters.
(a) Each Buyer shall give prompt notice to Seller of any fact,
event or circumstance known to it that (i) is reasonably likely, individually or
taken together with all other facts, events and circumstances known to it, to
result in any Material Adverse Effect to Buyers or (ii) would cause or
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constitute a material breach of any of its representations, warranties,
covenants or agreements contained herein.
(b) If Seller provides Buyers notice pursuant to Section
7.6(b) ("Seller Notice") that a fact, event or circumstance known to it would
cause or constitute a material breach by Seller of a representation and warranty
of Seller herein, Buyers shall provide Seller notice ("Buyers' Notice") within
fifteen (15) days of the Seller Notice if Buyers intend to terminate this
Agreement pursuant to Section 14.1(b) hereof as a result of the matters set
forth in the Seller Notice. If Buyers shall not deliver a Buyers Notice, each
representation and warranty specified in the Seller Notice shall be deemed
modified to the extent necessary such that each fact, event or circumstance set
forth in the Seller Notice shall not violate or breach such representation and
warranty.
8.6. Transition of Business. Buyers shall cooperate with
Seller to effect an orderly transition of the Business.
9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS.
The obligations of Buyers under this Agreement are, at Buyers'
option, subject to the fulfillment (or waiver by Buyers) of the following
conditions prior to or at the Closing Date:
9.1. Representations, Warranties and Covenants.
(a) The representations and warranties of Seller contained in
this Agreement (as modified as contemplated by Section 8.5(b)) which are
qualified by a materiality standard shall have been true and correct as of the
date when made and shall be deemed to be made again on and as of the Closing
Date and shall then be true and correct and the representations and warranties
of Seller contained in this Agreement (as modified as contemplated by Section
8.5(b)) which are not qualified by a materiality standard shall have been true
and correct in all material respects as of the date when made and shall be
deemed to be made again on and as of the Closing Date and shall then be true and
correct in all material respects, in each case except to the extent that (i)
such representations and warranties speak as of the date of this Agreement or as
of a specific date, in which case they shall be deemed to have been made again
on and as of the Closing Date but speaking only as of the date of this Agreement
or such specific date, as the case may be, and (ii) changes are permitted
pursuant to this Agreement;
(b) Seller shall have performed and complied in all material
respects with the covenants and agreements required by this Agreement to be
performed or complied with by it prior to or on the Closing Date; and
(c) Seller shall have furnished Buyers with certificate(s),
dated the Closing Date and duly executed by an officer of Seller authorized to
give such a certificate, to the effect that the conditions set forth in
subparagraphs (a) and (b) of this Section 9.1 have been satisfied.
9.2. Proceedings Neither a Buyer nor any of its Affiliates
shall be subject to any restraining order or injunction restraining or
prohibiting such Buyer's performance of the transactions contemplated hereby.
9.3. Regulatory Approvals. All approvals, consents and
licenses of any Regulatory Authority that are listed on Schedule - Seller's
Consents or Schedule - Buyer's Consents or otherwise required with respect to
Seller or Buyers or their respective Affiliates in connection with the
transactions contemplated by this Agreement or to permit Buyers to conduct the
Business from and after the Closing Date shall have been granted and shall have
become Final, and all notices and filings required by any Regulatory Authority
with respect to such matters shall have been given or made: (a) except to the
extent that the failure to (i) obtain such an approval, consent or license, or
(ii) give such notice or make such filing, has not had and would not reasonably
be expected to have a Material Adverse Effect; (b) except
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for approvals, consents or licenses of a Regulatory Authority which are
obtainable or issuable only on a post-Closing basis; and (c) except for such
approvals, consents and licenses under which a Buyer is permitted to operate the
applicable portion of the Business as provided under Section 11.7 hereof.
9.4. Xxxx-Xxxxx-Xxxxxx. The waiting period under the HSR Act
shall have expired or been terminated.
9.5. Deliveries. Buyers shall have received the items to be
delivered by Seller pursuant to Section 4.2.
9.6. Consents to Assignment of Leases; Sublease Arrangements.
The landlords under the Leases shall have furnished consents to the assignments
of the Leases to the applicable Buyer and the landlords under the Prime Leases
shall have consented to the sublease arrangements contemplated by Section 9.7,
in each case in form and substance reasonably satisfactory to Buyers.
9.7. Sublease Arrangements. With respect to space currently
occupied by the Business in the property occupied under the Prime Leases, Buyers
shall have been offered sublease arrangements by Seller or one of its Affiliates
(a) with rental and other financial obligations in all material respects
consistent with those to which the Business are bound on the date hereof, (b)
having a term co-terminous with the term of the Prime Lease (unless otherwise
agreed by the parties to such arrangement) and (c) pursuant to reasonable and
customary documentation.
9.8. NABP/NCPDP. Seller shall have transferred all of its
NABP/NCPDP numbers applicable to the Business to the applicable Buyer.
9.9. Certain Assumed Contracts. Seller shall have delivered to
Buyers written consents to the assignment of contracts identified on the
following schedules: (a) Schedule - Direct Payor Contracts (Mail Order); (b)
Schedule - Addenda (Home Infusion); (c) Schedule - Letter Agreement (Home
Infusion); (d) Schedule - Fee Reimbursement Schedule References (Home Infusion);
(e) Schedule - Payor Contracts (PBM Services); (f) Schedule - Provider Contracts
(PBM Services); and (g) Schedule Drug Card Contracts, the revenues of which,
when taken together with the revenues of the Business not related to any
contract (whether or not on such schedules), constituted 80% of the revenues of
the Business during the first quarter of 2000. The parties agree that, with
respect to a contractual arrangement under item (c) or (d) above, a written
consent will be deemed to be delivered if the customer with respect to such Mail
Order Services furnishes written evidence (including a letter of intent) that
such customer intends to have a contractual relationship with a Buyer after the
Closing on substantially the same terms and conditions that had applied to such
Mail Order Services prior to Closing. The parties agree that, with respect to a
contractual arrangement under item (c) above, Seller will assign its rights
under such arrangement to a Buyer and shall cause its applicable Affiliate
(performing as counterparty to such contractual arrangement) to consent to such
assignment.
9.10. Other Consents. Seller shall have delivered to Buyers
the consents and approvals described in Schedule - Seller's Consents (Part A),
other than with respect to the contractual arrangements described in Section 9.9
(the closing condition for which is embodied in said Section).
10. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS.
The obligations of Seller under this Agreement are, at
Seller's option, subject to the fulfillment (or waiver by Seller) of the
following conditions prior to or at the Closing Date:
10.1. Representations, Warranties and Covenants.
(a) The representations and warranties of Buyers contained in
this Agreement which are qualified by a materiality standard shall have been
true and correct as of the date when made and
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shall be deemed to be made again on and as of the Closing Date and shall then be
true and correct and the representations and warranties of Buyers contained in
this which are not qualified by a materiality standard shall have been true and
correct in all material respects as of the date when made and shall be deemed to
be made again on and as of the Closing Date and shall then be true and correct
in all material respects, in each case except to the extent that (i) such
representations and warranties speak as of the date of this Agreement or as of a
specific date, in which case they shall be deemed to have been made again on and
as of the Closing Date but speaking only as of the date of this Agreement or
such specific date, as the case may be, and (ii) changes are permitted or
contemplated pursuant to this Agreement;
(b) Buyers shall have performed and complied in all material
respects with the covenants and agreements required by this Agreement to be
performed or complied with by them prior to or at the Closing Date; and
(c) Buyers shall have furnished Seller with certificate(s)
dated the Closing Date and duly executed by officers of Buyers authorized on
behalf of Buyers to give such a certificate, to the effect that the conditions
set forth in subsections (a) and (b) of this Section 10.1 have been satisfied.
10.2. Proceedings. Neither Seller nor any of its Affiliates
shall be subject to any restraining order or injunction restraining or
prohibiting Seller's performance of the transactions contemplated hereby.
10.3. Xxxx-Xxxxx-Xxxxxx. The waiting period under the HSR Act
shall have expired or been terminated.
10.4. Deliveries. Seller shall have received the items to be
delivered by Buyers pursuant to Section 4.3.
11. CERTAIN POST-CLOSING MATTERS.
11.1. Access to Records, Information and Personnel.
(a) Information and Records. Buyers agree to provide Seller
and Seller agrees to provide Buyers with reasonable access to all relevant
documents and other information (including the Books and Records) that may be
reasonably needed by Seller or Buyers (as applicable) for purposes of responding
to any audits, investigations or other proceedings by any Regulatory Authority,
court or arbitrator(s) or for any other reasonable purpose (including the
defense or prosecution against a third party of any Excluded Liability or other
Indemnified Buyers' Claim). Such access will be during normal business hours,
upon reasonable prior notice and without unreasonable interference with normal
business operations.
(b) Personnel. If, after the Closing Date, Seller shall
require the participation of officers and employees formerly employed by Seller
for purposes of responding to any audits, investigations or other proceedings by
any Regulatory Authority, court or arbitrator(s) or for any other reasonable
purpose (including the defense or prosecution of any Excluded Liability or other
Indemnified Buyers' Claim), and so long as there exists no conflict of interest
between the parties, Buyers shall make such officers and employees reasonably
available to Seller to participate in such defense or prosecution; provided, the
participation of such employees shall not materially interfere with the conduct
of Buyers' Business; and provided further, that Seller shall pay all reasonable
out-of-pocket costs, charges and expenses arising from such participation.
11.2. Insurance.
(a) Effective at 12:01 am on the Closing Date, the Business
shall cease to be covered by Seller's and its Affiliates' insurance policies.
Prior to Closing, Seller will put each insurance
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carrier on written notice in regard to known incidents and claims and will
provide Buyers with written documentation stating there are no known claims that
have not been reported to the appropriate carrier.
(b) Effective at 12:01 am on the first day after Closing Date
or at Closing, Seller will provide written evidence of notice of cancellation to
any bonding and/or to every insurance company who have issued bonds or insurance
policies on behalf of or providing coverage to the Business under which the
Seller or an Affiliate of Seller might be liable.
11.3. Books and Records.
(a) For a period of five (5) years after the Closing Date, or
such longer period as required by law, if Buyers desire to dispose of any of the
Books and Records acquired from Seller pursuant to this Agreement that relate to
the Business conducted prior to the Closing Date, notice to such effect shall be
given by Buyers to Seller and Seller shall be given an opportunity prior to any
such disposition, at its cost and expense, to remove and retain all or any part
of such Books and Records as it may select. During the period such Books and
Records are preserved and kept by Buyers, duly authorized representatives or
third party designees of Seller shall, on reasonable prior notice and for any
valid purpose (which must be disclosed to Buyers), have access thereto during
normal business hours to examine, inspect and copy such Books and Records at
Seller's expense; provided that such Person will give appropriate assurances
that they will maintain the confidentiality of such Books and Records so
inspected. Further, during such period, at the reasonable request(s) of duly
authorized representatives or third party designees of Seller, Buyers shall,
within a reasonable period of time and for any valid purpose, furnish to such
Persons information relating to pre-Closing matters of the Business; in
connection therewith, Buyers shall be compensated for such services at
reasonable rates to be agreed upon by the parties.
(b) For a period of five (5) years after the Closing Date, or
such longer period as required by law, if Seller desires to dispose of any of
the Books and Records in its possession on the Closing Date that relate to the
Business conducted prior to the Closing Date, notice to such effect shall be
given by Seller to Buyers and Buyers shall be given an opportunity prior to any
such disposition, at their cost and expense, to remove and retain all or any
part of such Books and Records as a Buyer may select. During the period such
Books and Records are preserved and kept by Seller, duly authorized
representatives of Buyers shall, on reasonable prior notice, have access thereto
during normal business hours to examine, inspect and copy such Books and Records
at Buyers' expense.
11.4. Taxes.
(a) Buyers and Seller shall each be responsible for paying
one-half of any and all transfer, conveyance, recording and similar fees or
Taxes (including, without limitation, sales, use and real and personal property
transfer Taxes) arising from the sale of the Transferred Assets pursuant to this
Agreement (collectively "Transfer Taxes"). Seller shall compute the amount of
any such Transfer Taxes and shall prepare and file the appropriate Tax Returns,
if any, required in connection therewith. Seller shall deliver to Buyers a
notice that sets forth its calculation of the amount of the Transfer Taxes and
requests a payment of one-half of the amount due. The notice shall be delivered
to Buyers not more than ten (10) Business Days prior to the due date of the Tax
Return and Buyers shall remit to Seller the amount requested therein within five
(5) Business Days of receipt of such notice. If any amounts are refunded to
Buyers or Seller with respect to the Transfer Taxes, then the receiving party
shall remit one-half of such amounts within ten (10) Business Days of receipt of
such amounts. If any additional amounts are paid by Buyers or Seller with
respect to the Transfer Taxes, then the paying party shall send a written notice
to the other party within ten (10) Business Days of making such payment. The
other party shall pay one-half of such additional amounts within ten (10)
Business Days of receipt of such written notice. Buyers shall be responsible
for: (i) paying any and all payroll and other employee taxes associated with
Hired Employees incurred in connection with periods after the Closing Date (and
Seller
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shall be responsible for such costs arising at or prior to the Closing Date);
and (ii) preparing and filing any Tax Returns in connection therewith for
periods after the Closing.
(b) Except as provided in Section 11.4(a), Seller shall be
liable for all Taxes relating to or incurred in connection with the operation of
the Business, the liability of Seller or payments in respect thereof, or any
other Taxes of Seller for any taxable period or portion thereof that ends on or
before the Closing Date. Buyers shall be liable for all Taxes imposed on the
Transferred Assets or the operation of the Business or the income therefrom for
any taxable year or period or portion thereof that begins after the Closing
Date. For purposes of Section 2.3(e) and this Section 11.4(b), in the case of
any taxable period beginning before and ending after the Closing Date, the Taxes
attributable to the portion of such taxable period ending on the Closing Date
shall be (i) in the case of any Taxes other than Taxes based upon or related to
receipts or income, the amount of such Tax for the entire taxable period
multiplied by a fraction the numerator of which is the number of days in the
taxable period ending on the Closing Date and the denominator of which is the
number of days in the entire taxable period, and (ii) in the case of any Tax
based upon or related to receipts or income, the amount of such Tax which would
have been payable if the relevant taxable period ended on the Closing Date.
(c) From time to time after the Closing, the parties shall
deliver to each other such information and data as any party may reasonably
request, including that required in order to enable such party to complete and
file all Federal, state and local forms that may be required to be filed by it
and to complete all customary Tax and accounting procedures and otherwise to
enable such party to satisfy its internal accounting, Tax and other
requirements.
11.5. Employee and Employee Benefits.
(a) Buyers shall make offers of employment at the Closing to
all Employees who remain employed by Seller or any Affiliate of Seller as of the
Closing. Immediately after the Closing, each Employee who accepts such offer of
employment (a "Hired Employee") shall be employed at base wages, incentive
compensation, employee benefits and salaries which in the aggregate are no less
favorable than the aggregate wages, incentive compensation, employee benefits
and salaries currently being paid by Seller or such Affiliate to such Hired
Employee, in a position with comparable responsibilities and at a location
within a thirty (30) mile radius of the location where such Hired Employee is
employed immediately prior to the Closing.
(b) All Hired Employees shall be eligible to participate in
the Employee Benefit Plans of Buyer on the same basis as such Employee Benefit
Plans are offered to employees having comparable positions with such Buyer.
Buyers shall credit such Hired Employees for their length of service with Seller
and its Affiliates for purposes of participation and vesting but not for
purposes of benefit accrual under each Employee Benefit Plan to be provided by
Buyers to such Hired Employees, to the same extent such service was recognized
under a similar Employee Benefit Plan of Seller or its Affiliates, based on
information provided by Seller.
(c) Except as provided herein, Seller and the applicable
Affiliates shall remain responsible for the payment of all benefits accrued
under the terms of the retirement plans of Seller and such Affiliates as of the
Closing with respect to any Employee, including each Hired Employee. Except as
provided herein, Buyers shall not at any time assume any liability for the
benefits of any active or any terminated, vested or retired participants in the
retirement plans of Seller and its Affiliates.
(d) Any pre-Closing workers' compensation claims shall
continue to be handled by the insurance carrier of Seller and the applicable
Affiliates of Seller.
(e) Seller and the applicable Affiliates of Seller shall
retain the responsibility for payment of all medical, dental, health and
disability claims, including workers' compensation claims, incurred by any
Employee prior to the Closing and Buyers shall not assume any liability with
respect to
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such claims. Buyers agree that any pre-existing condition clause in any of a
Buyer's health or disability insurance policies shall not be applicable to Hired
Employees; provided such Hired Employee is enrolled in the health and disability
plans of Seller and its Affiliates as of the Closing. At or after the Closing,
all medical, dental, health and disability claims, including workers'
compensation claims, incurred by Hired Employees shall be determined under the
Buyers' Employee Benefit Plans.
(f) Seller shall be responsible for providing any Employee
whose "qualifying event", within the meaning of Section 4980B(f)(3) of the Code,
occurs prior to the Closing Date (and such Employee's "qualified beneficiaries"
within the meaning of Code Section 4980B(g)(1)) with continuation of group
health coverage required by Code Section 4980B(f) ("Continuation Coverage")
under the terms of the applicable group health plan maintained by Seller and to
the extent required by law. Buyers shall be responsible for Continuation
Coverage to any Hired Employee (and such Hired Employee's qualified
beneficiaries) whose qualifying event occurs on or after the Closing Date to the
extent required by law.
(g) Within 120 days following the Closing Date, Buyers shall
establish or cause to be established a defined contribution plan intended to be
qualified under Section 401(a) of the Code (the "Buyer 401(k) Plan") which shall
contain such provisions as are necessary to accept a rollover (as defined in
Code Section 402) of assets (including participant loans) from the 401(k) plan
currently maintained by Seller (the "Seller 401(k) Plan").
(h) From the Closing Date until December 31, 2000, Seller
shall permit Hired Employees to participate in the Employee Benefit Plans
sponsored by Seller (other than the Seller 401(k) Plan) in which employees of
the Business participated immediately prior to the Closing Date, provided that
Buyers pay to Seller the reasonable and necessary cost to Seller of
administering such Employee Benefit Plans with respect to Hired Employees,
together with the premium costs of such Employee Benefit Plans applicable to
such Hired Employees or the amount of claims with respect to Employee Benefit
Plans which are self-insured, as the case may be.
(i) Neither Buyers nor Seller intend this Agreement to create
any rights or interests, except as between Buyers and Seller, and no present,
former or future employee of a Buyer or Seller shall be treated as a third party
beneficiary by, in or under this Agreement.
11.6. Reserved Names.
(a) Rights Reserved By Seller. It is expressly agreed that
Buyers are not acquiring any right, title or interest in the Reserved Names or
the name of Seller or any Affiliate of Seller or any trade names, trademarks,
logos or service marks of Seller or any Affiliate of Seller. Neither a Buyer nor
any Affiliate of a Buyer shall make use of the Reserved Names or any other name
of Seller or any Affiliate of Seller, or of any tradenames, trademarks, logos or
service marks of Seller or any Affiliate of Seller, without Seller's prior
written consent.
(b) Specific Performance. Seller and each of its Affiliates
shall be entitled to specific performance of the provisions of this Section 11.6
in addition to any other remedies which it may have at law or in equity.
11.7. Authorization to Operate Under Seller's Health Care
Licenses. If, notwithstanding Buyers' performance of their obligations under
Section 8.1 of this Agreement, a Buyer has been unable to obtain such health
care licenses, permits, and registrations as are essential in order for it to
operate the applicable portion of the Business ("Buyer's Essential Health Care
Licenses"), then Seller shall take all reasonable actions necessary to authorize
such Buyer, to the extent permitted under applicable law and subject to such
other requirements as may pertain under applicable law, to operate such portion
of the Business under Seller's Health Care Licenses until such time as the
applicable
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Regulatory Authorities grant the relevant Buyer's Essential Health Care Licenses
to Buyer in its own name. In such circumstances, such Buyer shall enter into
such arrangement(s) and remain obligated to consummate the transactions
contemplated herein. Nothing herein, however, shall authorize or permit a Buyer
to submit claims utilizing Seller's Medicare or Medicaid provider numbers.
11.8. Lease Guaranties. Buyers shall use commercially
reasonable efforts to cause the Seller Guarantor to be released from its
guarantee obligations on leases which are being assigned to a Buyer under this
Agreement. In the absence of release, Buyers will indemnify and defend Seller
Guarantor for any liabilities thereunder arising on or after the Closing Date
and for which Seller Guarantor actually pays amounts thereunder.
11.9. Guarantees.
(a) Seller Guarantor hereby unconditionally and irrevocably
guarantees to Buyers the full performance and compliance of Seller's obligation
under this Agreement, the Transition Services Agreement and the Marketing
Services Agreement (including any payment required to be made by Seller
hereunder or thereunder).
(b) Buyers' Guarantor hereby unconditionally and irrevocably
guarantees to Seller the full performance and compliance of Buyers' obligations
to make payments pursuant to Section 14.3.
12. INDEMNIFICATION.
12.1. By Seller. From and after the Closing and subject to the
limitations of this Article 12, Seller will indemnify and hold harmless Buyers,
their Affiliates and any director, shareholder, employee or officer of a Buyer
or any of its Affiliates (an "Indemnified Buyers' Party") from and against the
following (referred to herein as the "Indemnified Buyers' Claims"):
(a) any and all damages, losses, claims, deficiencies,
liabilities, costs and expenses (including, but not limited to, any interest,
penalties, fines, reasonable attorneys' fees and costs and expenses incurred in
the defense or settlement of any claims of an Indemnified Buyers' Party covered
by this Article 12) incurred or suffered by any Indemnified Buyers' Party
arising out of:
(i) the Excluded Liabilities;
(ii) any breach of a representation or warranty on the part of
Seller contained in Article 5; provided, that for purposes of this Section
12.1(a)(ii) any qualification of such representations and warranties by
reference to the materiality of matters stated therein, and any limitation of
such representations and warranties as being "to the Knowledge of," or words of
similar effect, shall be disregarded in determining any breach thereof, it being
understood and agreed among the parties, however, that this proviso shall not be
applicable to the representations and warranties set forth in Section 5.12 (f);
or
(iii) any breach or nonfulfillment of any agreement or
covenant to be performed by Seller pursuant to this Agreement; and
(b) any and all actions, suits, claims, proceedings, demands,
assessments, judgments, costs and other expenses (including reasonable
attorneys' fees and disbursements) incident to any of the foregoing or to the
enforcement of this Section 12.1.
(c) Notwithstanding anything to the contrary contained herein:
(i) Seller shall not have any liability hereunder for the continuation after the
Closing by a Buyer or any of its Affiliates of any policy, practice or procedure
of Seller in effect prior to or on the Closing Date; (ii) Seller shall not have
any liability hereunder for a breach of a representation or warranty contained
in Article 5 arising out
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of the failure of Seller or a Buyer to receive, for any reason whatsoever (A)
any approval, consent or license of any Regulatory Authority or (B) any consent
which is required under any contractual arrangement as a result of the
transactions contemplated by this Agreement, in each case to the extent the need
to obtain such approval, license or consent was disclosed to Buyers; (iii)
Seller shall not have any liability hereunder for a breach of a representation
or warranty contained in Article 5 for any damage, loss, claim, deficiency,
liability, cost or expense relating to the operation of the Business pursuant to
any authority granted by Seller in accordance with Section 11.7 of this
Agreement, under Seller's Health Care Licenses, except where the foregoing
liabilities arose as a result of actions taken by Seller; and (iv) Seller shall
not have any liability hereunder for punitive damages or any overhead or general
administrative expenses or costs (direct or indirect) of any Indemnified Buyers'
Party. Seller shall be entitled to all sources of recovery relating to an
Indemnified Buyers' Claim, including any proceeds of any right of setoff of
amounts then due and payable or counterclaim, and any insurance proceeds
realized by the Indemnified Buyers' Party; provided, that such entitlement shall
not diminish Seller's indemnity undertaking as and when due.
12.2. By Buyers. From and after the Closing and subject to the
limitations of this Article 12, Buyers will indemnify and hold harmless Seller,
its Affiliates and any director, shareholder, employee or officer of Seller or
any of its Affiliates (an "Indemnified Seller Party"), from and against the
following (referred to herein as the "Indemnified Seller Claims"):
(a) any and all damages, losses, claims, deficiencies,
liabilities, costs and expenses (including, but not limited to, any interest,
penalties, fines, reasonable attorneys' fees and costs and expenses incurred in
the defense or settlement of any claims of an Indemnified Seller Party covered
by this Article 12) incurred or suffered by any Indemnified Seller Party arising
out of:
(i) the operation by a Buyer or any of its Affiliates of the
Business from and after the Closing Date, including, without limitation (A) the
operation of the Business pursuant to any authority granted by Seller in
accordance with Section 11.7 of this Agreement, under Seller's Health Care
Licenses or (B) the operation of the Business without having obtained an
approval, consent or license from a Regulatory Authority;
(ii) the Assumed Liabilities;
(iii) any breach of a representation or warranty on the part
of Buyers contained in Article 6; provided, that for purposes of this Section
12.2(a)(iii) any qualification of such representations and warranties by
reference to the materiality of matters stated therein, and any limitation of
such representations and warranties as being "to the knowledge of," or words of
similar effect, shall be disregarded in determining any breach thereof; or
(iv) any breach or nonfulfillment of any agreement or covenant
to be performed by Buyers pursuant to this Agreement; and
(b) any and all actions, suits, claims, proceedings, demands,
assessments, judgments, costs and other expenses (including reasonable
attorneys' fees and disbursements) incident to any of the foregoing or to the
enforcement of this Section 12.2.
(c) Notwithstanding anything to the contrary contained herein,
Buyers shall not have any liability hereunder for any punitive damages or any
overhead or general administrative expenses or costs (direct or indirect) of any
Indemnified Seller Party. Buyers shall be entitled to all sources of recovery
relating to an Indemnified Seller's Claim, including any proceeds of any right
of setoff of amounts then due and payable or counterclaim, and any insurance
proceeds realized by the Indemnified Seller's Party; provided, that such
entitlement shall not diminish Buyers' indemnity undertaking as and when due.
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12.3. Entitlement to Indemnification, Exclusivity.
(a) Each Indemnified Buyers' Party or Indemnified Seller
Party, as the case may be, shall be entitled to indemnity under Section
12.1(a)(ii) or 12.2(a)(iii), as applicable, for any and all claims as to which
notice is given pursuant to Section 12.5 during the periods set forth in Section
12.6. The termination of the representations and warranties contained in this
Agreement shall not affect the rights of any Indemnified Buyers' Party or
Indemnified Seller Party, as applicable, to prosecute to conclusion any claim
resulting from any breach of a representation or warranty as to which notice is
given pursuant to Section 12.5 prior to the termination of such representation
or warranty.
(b) Except with respect to claims of fraud, the
indemnification provided in this Article 12 shall be the sole and exclusive
remedy of any Indemnified Seller Party or Indemnified Buyers' Party in respect
of breach of the representations and warranties of Seller and Buyers or the
breach of any covenants of Seller or Buyers hereunder to be performed on or
prior to the Closing.
12.4. Arbitration Procedure.
(a) Buyers and Seller agree that the arbitration procedure set
forth below shall be the sole and exclusive method for resolving and remedying
claims for money damages arising out of the provisions of Article 12 (the
"Disputes"). Nothing in this Section 12.4 shall prohibit a party hereto from
instituting litigation to enforce any Final Determination (as defined below).
The parties hereby acknowledge and agree that, except as otherwise provided in
this Section 12.4 or in the Commercial Arbitration Rules of the American
Arbitration Association as in effect from time to time, the arbitration
procedures and any Final Determination hereunder shall be governed by, and shall
be enforced pursuant to the State of Delaware.
(b) In the event that any party asserts that there exists a
Dispute, such party shall deliver a written notice to each other party involved
therein specifying the nature of the asserted Dispute and requesting a meeting
to attempt to resolve the same. If no such resolution is reached within ten (10)
Business Days after such delivery of such notice, the party delivering such
notice of Dispute (the "Disputing Person") may, within forty five (45) Business
Days after delivery of such notice, commence arbitration hereunder by delivering
to each other party involved therein a notice of arbitration (a "Notice of
Arbitration"). Such Notice of Arbitration shall specify the matters as to which
arbitration is sought, the nature of any Dispute, the claims of each party to
the arbitration and shall specify the amount and nature of any damages, if any,
sought to be recovered as a result of any alleged claim, and any other matters
required by the Commercial Arbitration Rules of the American Arbitration
Association as in effect from time to time to be included therein, if any.
(c) Buyers and Seller each shall select one non-neutral
arbitrator expert in the subject matter of the Dispute (the arbitrators so
selected shall be referred to herein as "Buyers' Arbitrator" and "Seller's
Arbitrator," respectively). In the event that either party fails to select an
arbitrator as set forth herein within twenty (20) days from the delivery of a
Notice of Arbitration, then the matter shall be resolved by the arbitrator
selected by the other party. Seller's Arbitrator and Buyers' Arbitrator shall
select a third independent, neutral arbitrator expert in the subject matter of
the dispute, and the three arbitrators so selected shall resolve the matter
according to the procedures set forth in this Section 12.4. If Seller's
Arbitrator and Buyers' Arbitrator are unable to agree on a third arbitrator
within twenty (20) days after their selection, Seller's Arbitrator and Buyers'
Arbitrator shall each prepare a list of three independent arbitrators. Seller's
Arbitrator and Buyers' Arbitrator shall each have the opportunity to designate
as objectionable and eliminate one arbitrator from the other arbitrator's list
within seven (7) days after submission thereof, and the third arbitrator shall
then be selected by lot from the arbitrators remaining on the lists submitted by
Seller's Arbitrator and Buyers' Arbitrator.
(d) The arbitrator(s) selected pursuant to paragraph (c) will
determine the allocation of the costs and expenses of arbitration based upon the
percentage which the portion of the contested
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amount not awarded to each party bears to the amount actually contested by such
party. For example, if Buyers submit a claim for $1,000 and if Seller contests
only $500 of the amount claimed by Buyers, and if the arbitrator(s) ultimately
resolves the dispute by awarding Buyers $300 of the $500 contested, then the
costs and expenses of arbitration will be allocated 60% (i.e., 300 / 500) to
Seller and 40% (i.e., 200 /500) to Buyers.
(e) The arbitration shall be conducted in Orlando, Florida
under the Commercial Arbitration Rules of the American Arbitration Association
as in effect from time to time, except as modified by the agreement of all of
the parties to this Agreement. The arbitrator(s) shall conduct the arbitration
so that a final result, determination, finding, judgment and/or award (the
"Final Determination") is made or rendered as soon as practicable, but in no
event later than ninety (90) Business Days after the delivery of the Notice of
Arbitration nor later than ten (10) days following completion of the
arbitration. The Final Determination must be agreed upon and signed by the sole
arbitrator or by at least two of the three arbitrators (as the case may be). The
Final Determination shall be final and binding on all parties and there shall be
no appeal from or reexamination of the Final Determination, except for fraud,
perjury, evident partiality or misconduct by an arbitrator prejudicing the
rights of any party and to correct manifest clerical errors.
(f) Buyers and Seller may enforce any Final Determination in
any state or federal court located in Orlando, Florida. For the purpose of any
action or proceeding instituted with respect to any Final Determination, each
party hereto hereby irrevocably submits to the jurisdiction of such courts,
irrevocably consents to the service of process by registered mail or personal
service and hereby irrevocably waives, to the fullest extent permitted by law,
any objection which it may have or hereafter have as to personal jurisdiction,
the laying of the venue of any such action or proceeding brought in any such
court and any claim that any such action or proceeding brought in any court has
been brought in an inconvenient forum.
(g) Any party required to make a payment pursuant to this
Section 12.4 shall pay the party entitled to receive such payment within three
(3) days of the delivery of the Final Determination to such responsible party.
If any party shall fail to pay the amount of damages, if any, assessed against
it within ten (10) days of the delivery to such party of such award, the unpaid
amount shall bear interest from the date of such delivery at the maximum rate
permitted by applicable usury laws. Interest on any such unpaid amount shall be
compounded monthly, computed on the basis of a 365-day year and shall be payable
on demand. In addition, such party shall reimburse the other party for any and
all costs or expenses of any nature or kind whatsoever (including but not
limited to all attorneys' fees) incurred in seeking to collect such damages or
to enforce any such award.
12.5. Notice and Defense of Claims.
(a) Promptly upon receipt of notice of any claim, demand or
assessment or the commencement of any suit, action, arbitration or proceeding in
respect of which indemnity may be sought on account of the indemnity agreement
contained in this Article 12 (a "Third Party Claim"), the party seeking
indemnification (the "Asserting Party") will notify in writing, within
sufficient time to respond to such claim or answer or otherwise plead in such
action, the party from whom indemnification is sought (the "Defending Party").
Any such notice shall include a description of the Third Party Claim, an
estimate of the amount of the claim if determinable, a reference to the Section
of this Agreement under which indemnification is being sought (including, in the
case of a claim under Sections 12.1(a)(ii), 12.1(a)(iii), 12.2(a)(iii) or
12.2(a)(iv), reference to the representation, warranty, covenant or other
provision of this Agreement alleged to have been breached or nonfulfilled) and,
if the Third Party Claim involves an Assumed Contract, the identity of such
Assumed Contract. Except to the extent that the Defending Party is prejudiced
thereby, the omission of such Asserting Party so to notify promptly the
Defending Party of any such Third Party Claim shall not relieve such Defending
Party from any liability which it may have to such Asserting Party in connection
therewith, on account of the indemnity agreements contained in this Article 12.
If any Third Party Claim shall be asserted or commenced, the
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Asserting Party shall notify the Defending Party of the commencement thereof,
the Asserting Party shall have the right to control the defense thereof, but the
Defending Party will be entitled, at its expense, to participate therein, and in
the settlement thereof, provided that the Defending Party shall be entitled, if
it so elects, to take control of the defense and investigation of such Third
Party Claim and to employ and engage attorneys of its own choice to handle and
defend the same, at the Defending Party's cost, risk and expense; provided that:
(i) the Defending Party must consult with the Asserting Party
with respect to the handling of such Third Party Claim and the Defending Party
must employ counsel reasonably satisfactory to the Asserting Party; and
(ii) the Defending Party shall not be entitled to assume
control of any Third Party Claim and shall pay the fees and expenses of counsel
retained by the Asserting Party if (A) the Third Party Claim relates to or
arises in connection with any criminal proceeding, action, indictment,
allegation or investigation, (B) the Asserting Party reasonably believes an
adverse determination with respect to the action, lawsuit, investigation,
proceeding or other claim giving rise to such claim for indemnification would be
detrimental in any material respect to or injure in any material respect the
Asserting Party's reputation or future business prospects, (C) the claim seeks
an injunction or equitable relief against the Asserting Party, or (D) the claim
relates to the intellectual property rights of the Asserting Party. With respect
to the actions, lawsuits, investigations, proceedings and other claims that are
the subject of this clause (ii), the Defending Party shall have the right to
retain its own counsel (but the expenses of such counsel shall be at the expense
of the Defending Party) and participate therein, and no Defending Party shall be
liable for any settlement of any such action, proceeding or claim without its
written consent (which consent shall not be unreasonably withheld or delayed).
(b) No Third Party Claim shall be settled by the Defending
Party without the Asserting Party's prior written consent; provided however,
that the Asserting Party shall not unreasonably withhold or delay its consent to
any proposed settlement if (i) such proposed settlement involves only the
payment of money and (ii) the Defending Party demonstrates to the reasonable
satisfaction of the Asserting Party that it is able to pay the amount of such
settlement and all related expenses. Each party will cooperate with the other
party in connection with any such Third Party Claim, make personnel, books and
records relevant to the Third Party Claim available to the other party, and
grant such authorizations or limited powers of attorney to the agents,
representatives and counsel of such other party as such party may reasonably
consider desirable in connection with the defense of any such Third Party Claim.
(c) With respect to all Indemnified Buyers' Claims and
Indemnified Seller Claims that do not constitute or involve Third Party Claims
("Non-Third Party Claims"), the party seeking indemnification will promptly
notify in writing, the party from whom indemnification is sought. Any such
notice shall include a description of the Non-Third Party Claim, an estimate of
the amount of the claim, a reference to the Section of this Agreement under
which indemnification is being sought (including, in the case of a claim under
Sections 12.1(a)(ii), 12.1(a)(iii), 12.2(a)(iii) or 12.2(a)(iv), reference to
the representation, warranty, covenant or other provision of this Agreement
alleged to have been breached or nonfulfilled) and, if the Non-Third Party Claim
involves an Assumed Contract, the identity of such Assumed Contract. Except to
the extent that the indemnifying party is prejudiced thereby, the omission of
such indemnified party to so notify promptly the indemnifying party of any such
Non-Third Party Claim shall not relieve such indemnifying party from any
liability which it may have to such indemnified party in connection therewith,
on account of the indemnity agreements contained in this Article 12.
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12.6. Survival of Representations and Warranties.
(a) The representations and warranties of Buyers contained in
this Agreement or in any agreement, document or instrument delivered pursuant to
this Agreement shall survive through April 30, 2001.
(b) The representations and warranties of Seller contained in
this Agreement or in any agreement, document or instrument delivered pursuant to
this Agreement shall survive through April 30, 2001; except with respect to
representations and warranties made (i) pursuant to Sections 5.1 (Corporate
Status), 5.2 (Corporate Authority), 5.3 (Non-Contravention), 5.4 (Title) and 5.9
(Brokers); such representations and warranties shall survive until April 30,
2005, and (ii) pursuant to Sections 5.6 (Taxes), 5.7 (Employee Benefits) and
5.12(a-e) (Health Care), such representations and warranties shall survive until
30 (thirty) days past the expiration of the applicable statute of limitations
(including any extensions thereof), including in each case the remaking of such
representations and warranties pursuant to Section 5.25.
12.7. Limitations on Indemnified Buyers Parties' Right to
Indemnification.
(a) The maximum liability of Seller to indemnify the
Indemnified Buyers' Parties for any and all Indemnified Buyers' Claims pursuant
to Section 12.1(a)(ii) shall be limited to an aggregate amount equal to
$2,900,000, except for breaches of the representations and warranties contained
in Sections 5.1, 5.2, 5.4, 5.6, 5.9 and the last sentence of Section 5.25, for
which there shall be no limitation.
(b) The Indemnified Buyers' Parties shall be entitled to seek
indemnification for Indemnified Buyers' Claims pursuant to Section 12.1 from
Seller only when the aggregate value of all such Indemnified Buyers' Claims of
any and all of the Indemnified Buyers' Parties thereto exceeds $619,500, at
which point Seller shall only be liable to the Indemnified Buyers' Parties for
the value of any additional Indemnified Buyers' Claims over $619,500, except for
breaches of the representations and warranties contained in Sections 5.1, 5.2,
5.4, 5.6, 5.9 and the last sentence of Section 5.25, for which there will be
dollar for dollar indemnification without any minimum threshold.
12.8. Adjustment of Purchase Price. Any indemnification
payments made pursuant to this Section 12 shall be treated by all parties as an
adjustment to the purchase price paid hereunder.
13. NON-COMPETITION; NON-SOLICIT.
(a) For a period of thirty six (36) months after the Closing,
within the United States, neither Seller nor any Affiliate of Seller will,
directly or indirectly, alone or in conjunction with any other Person (i) engage
in the (A) delivery of PBM Services, (B) delivery of oral pharmaceuticals
delivered by common carrier, or (C) marketing or operation of a centralized
pharmacy which dispenses to patients injectable pharmaceutical products through
a common carrier (other than pharmaceuticals dispensed to treat persons with
hemophilia or to provide parenteral or enteral nutrition therapies)
(collectively, the "Proscribed Activities") or (ii) invest in, own, manage,
operate, finance, control or participate in the ownership, management,
operation, financing or control of, any Person which provides a Proscribed
Activity; provided however, that Seller or any Affiliate of Seller may purchase
or otherwise acquire up to (but not more than) five percent (5%) of any class of
securities of any Person (but without otherwise participating in the activities
of such Person) who is involved in a Proscribed Activity if such securities are
listed on any national or regional securities exchange or have been registered
under Section 12(g) of the Securities Exchange Act of 1934; and provided
further, that Seller or any Affiliate of Seller may, under any circumstance,
provide charitable assistance to indigent persons.
(b) For a period of thirty six (36) months after the Closing
neither Seller nor any Affiliate of Seller will solicit, directly or indirectly,
the employment of any Employee or in any other
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targeted manner attempt to persuade any Employee to discontinue his or her
relationship with a Buyer; provided, however, that this Section 13(b) shall not
apply to solicitation by Seller or its Affiliates of: (i) any Employee who has
been involuntarily terminated by a Buyer or any Affiliate thereof, (ii) where
such solicitation is expressly consented to in writing by a Buyer in advance; or
(iii) any Employee, who has not been employed by a Buyer or any Affiliate
thereof within the six (6) month period immediately prior to the effective date
of such solicitation or rehiring by Seller or its Affiliate. For the purposes of
this Section 13(b), "solicitation" does not include general employment
solicitation activities by Seller and its Affiliates which are not directed at
Employees, such as media advertisements and notices placed with or through
employment agencies. Further, for a period of thirty six (36) months after the
Closing, neither Seller nor any Affiliate of Seller will, without the prior
written consent of Buyers, hire any of Xxx Xxxxx, Xxx Xxxxxx, Xxx Xxxxxxx, Xxx
Xxxxxx or Xxxxxxxx XxXxxxxxx.
(c) If at the time of enforcement of this Section 13, a court
holds that the restrictions stated herein are unreasonable under circumstances
then existing, the parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area. Seller and Buyers agree that money damages
would not be an adequate remedy for any breach of this Section 13. Therefore, in
the event a breach or threatened breach of this Section 13, the parties or their
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any violations of, the provisions hereof (without posting a bond or other
security). Seller and Buyers agree that the restrictions contained in this
Section 13 are reasonable.
14. TERMINATION.
14.1. Termination. This Agreement may be terminated by Seller
or Buyers at any time on or prior to the Closing Date (a) by the mutual written
consent of Seller and Buyers, (b) by the non-defaulting party if there has been
a material breach of any representation, warranty, covenant or agreement
contained in this Agreement on the part of the other party which, if not cured,
would excuse the performance hereof by the non-defaulting party, and such breach
cannot be cured at or prior to August 31, 2000, (c) by any party hereto if the
Closing has not taken place by August 31, 2000, and the party seeking to
terminate this Agreement has not contributed in any material way to the failure
of the Closing to occur by such date and (d) by Buyers if the consents to the
transaction contemplated hereby from the creditor parties under the agreements
specified in the initial six (6) items of Schedule - Seller's Consents (Part A)
have not been obtained by June 30, 2000.
14.2. Effect of Termination. Except for the obligations
contained in Sections 14.3, 15.2, 15.4, 15.6, 15.7, 15.9, 15.10, 15.12 and 15.14
which shall survive any termination of this Agreement, upon the termination of
this Agreement pursuant to Section 14.1, this Agreement shall forthwith become
null and void, and no party hereto or any of its officers, directors, employees,
agents, consultants, stockholders, partners or principals shall have any rights,
liabilities or obligations hereunder or with respect hereto, except with respect
to any breach of any covenant or obligation set forth in this Agreement prior to
the date of such termination.
14.3. Liquidated Damages.
(a) If the transactions contemplated hereby are not
consummated as a result of (i) the breach of the covenants, agreements,
representations or warranties of a Buyer hereunder; or (ii) a termination hereof
pursuant to Section 14.1(c) hereof prior to which Seller shall have
substantially performed its obligations hereunder the performance of which are
conditions to Buyers' obligation to consummate the transactions contemplated
hereby, Buyers shall pay Seller as liquidated damages the amount of One Million
Dollars ($1,000,000) plus expenses reasonably incurred by Seller and its
Affiliates in connection with this Agreement and collection of such fee, not to
exceed in the aggregate
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Two Hundred Fifty Thousand Dollars ($250,000); provided, however, that no fee
shall be payable pursuant to this Section 14.3(a) with respect to a termination
referenced in clause (ii) hereof that occurs as a result of the failure of any
of the conditions set forth in Section 9.1, 9.2, 9.3, 9.4, 9.5, 9.6, 9.7, 9.8,
9.9, 9.10, 10.2 or 10.3 hereof not having been theretofor satisfied other than
as a result of the breach of this Agreement by a Buyer. Such fee shall be paid
on the first Business Day after the termination date. If the above fee is paid
as set forth above, such payment shall be the sole and exclusive remedy of
Seller against Buyers hereunder.
(b) If the transactions contemplated hereby are not
consummated as a result of (i) the breach of the covenants, agreements,
representations or warranties of Seller hereunder; or (ii) a termination hereof
pursuant to Section 14.1(c) hereof prior to which Buyers shall have
substantially performed their obligations hereunder the performance of which are
conditions to Seller's obligation to consummate the transactions contemplated
hereby, Seller shall pay Buyers as liquidated damages the amount of One Million
Dollars ($1,000,000) plus expenses reasonably incurred by Buyers and their
Affiliates in connection with this Agreement and collection of such fee, not to
exceed in the aggregate Two Hundred Fifty Thousand Dollars ($250,000); provided,
however, that no fee shall be payable pursuant to this Section 14.3(b) with
respect to a termination referenced in clause (ii) hereof that occurs as a
result of the failure of any of the conditions set forth in Section 10.1, 10.2,
10.3, 10.4, 9.2, 9.3, 9.4, 9.6, 9.9 or 9.10 hereof not having been theretofor
satisfied other than as a result of the breach of this Agreement by Seller. Such
fee shall be paid on the first Business Day after the termination date. If the
above fee is paid as set forth above, such payment shall be the sole and
exclusive remedy of Buyers against Seller hereunder. Notwithstanding anything
herein to the contrary, this Section 14.3(b) shall in no way limit Buyers'
remedies in the event of a breach of Section 7.9.
15. MISCELLANEOUS.
15.1. Amendment and Modification; Waiver of Provisions. This
Agreement may be amended, modified or waived only by a written instrument
executed by all of the parties hereto. The failure of any party at any time or
times to require performance of any provision of this Agreement shall in no
manner affect the right of such party at a later date to enforce the same. No
waiver by any party of any condition or the breach of any provision, term,
covenant, representation, or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or of the
breach of any other provision, term, covenant, representation, or warranty of
this Agreement.
15.2. Expenses. Except as otherwise expressly provided herein,
the parties hereto agree that fees and out of-pocket expenses shall be paid as
follows:
(a) fees and disbursements of counsel, consultants and
accountants shall be paid by the party retaining such Persons;
(b) expenses related to filings under the HSR Act and
obtaining all required Regulatory Authority approvals shall be paid the party
incurring such expenses; and
(c) all other fees and out-of-pocket expenses incurred in
connection with the transactions contemplated hereby shall be paid by the party
incurring such expenses.
15.3. Successors and Assigns; Assignments. All terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective transferees, successors and assigns. No
party hereto may assign or transfer any of its rights or delegate any of its
duties hereunder without the prior written consent of the other party, and any
such attempted assignment, transfer or delegation without such consent shall be
null and void except that a Buyer may assign its rights (but not its
obligations) under this Agreement and any of the provisions hereof without
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written consent of the other parties hereto (a) to any Affiliate of
Buyer, or (b) for collateral security purposes to any lenders providing
financing to Buyers (or its permitted assignees).
15.4. Confidentiality; Public Announcement.
(a) From and after the date of this Agreement, the parties
hereto and their Affiliates shall keep confidential the terms of this Agreement
and the negotiations relating hereto and all documents and information obtained
by a party from another party in connection with the transactions contemplated
hereby, except (i) to the extent this Agreement and such negotiations need to be
disclosed to obtain approval of any Regulatory Authority, (ii) for disclosures
made in accordance with the terms of this Agreement, (iii) to the extent
required by applicable law, regulations or rules of any national securities
exchange and (iv) that nothing shall prevent a party from notifying its
employees, customers and suppliers that the transaction contemplated hereby has
taken place (so long as no disclosure of the material terms of such transaction
is made) and no notification or approval of any other party shall be necessary
in connection therewith.
(b) Except as otherwise required by law, regulations or rules
of any national stock exchange, the parties hereto shall each furnish to the
other the text of all notices and communications, written or oral, proposed to
be sent by the furnishing party regarding the transactions contemplated hereby.
Except as otherwise required by law, regulations or rules of any national stock
exchange, the furnishing party shall not send or transmit such notices or
communications or otherwise make them public unless and until the consent of the
other party is received, which consent shall not be unreasonably withheld or
delayed.
(c) Buyers and Seller shall issue a mutually agreed press
release following execution of this Agreement and following the Closing.
15.5. Notices. All notices, request, demands and other
communications hereunder shall be in writing and shall be delivered personally,
by courier, by telecopy or by mail (regular, certified or registered), postage
prepaid, addressed as follows:
If to Seller:
Coram Healthcare Corporation
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
(000) 000-0000 (facsimile)
And to:
Coram Healthcare Corporation
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esquire
(000) 000-0000 (facsimile)
Xxxx Xxxxx Xxxx & XxXxxx LLP
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esquire/Xxxxxxxxx X. Xxxxx,
Esquire
(000) 000-0000 (facsimile)
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If to Buyers:
GTCR Xxxxxx Xxxxxx, LLC
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Xx.
Xxxxx X. Xxxxx
(000) 000-0000 (facsimile)
and to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
(000) 000-0000 (facsimile)
and after Closing to the President of Buyers
or to such other address as a party may from time to time designate in writing
in accordance with this Section. Each notice or other communication given to any
party hereto in accordance with the provisions of this Agreement shall be deemed
to have been received (a) on the Business Day it is sent, if sent by personal
delivery, or (b) on the Business Day it is sent, if sent by facsimile
transmission and an activity report showing the correct facsimile number of the
party on whom notice is served and the correct number of pages transmitted is
obtained by the sender, or (c) on the first Business Day after sending, if sent
by courier or overnight delivery, or (d) on the third Business Day after
sending, if sent by mail (regular, certified or registered), provided that
notice of change of address shall be effective only upon receipt.
15.6. No Third Parties Benefited. This Agreement is made and
entered into for the protection and benefit of the parties hereto and their
permitted successors and assigns, and no other Person shall be a direct or
indirect beneficiary of or have any direct or indirect cause of action or claim
in connection with this Agreement or any of the documents executed in connection
herewith.
15.7. Law Governing. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Delaware,
without giving effect to the choice of law provisions thereof.
15.8. Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute but one and the same instrument.
15.9. Severability. Any provision of this Agreement which is
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction.
15.10. Entire Agreement. This Agreement, including the
schedules and exhibits hereto, which are incorporated herein and made an
integrated part hereof by this reference, and the Transaction Documents,
constitute the entire agreement between the parties and supersede and cancel any
and all prior agreements between them relating to the subject matter hereof.
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15.11. Time is of the Essence. Time is of the essence with
respect to this Agreement, the transactions contemplated hereby and the
obligations of the parties hereunder.
15.12. Construction. The parties acknowledge that each party
and its counsel have reviewed and revised this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.
15.13. Consent to Jurisdiction. Each of the parties hereto
agrees that any suit, action or proceeding instituted against such party under
or in connection with this Agreement shall be brought exclusively in a court of
competent jurisdiction of the State of Florida. By execution hereof, each party
hereto irrevocably waives any objection to, and any right of immunity on the
grounds of, improper venue, the convenience of the forum, the personal
jurisdiction of such courts or the execution of judgments resulting therefrom.
Each party hereto hereby irrevocably accepts and submits to the exclusive
jurisdiction of such courts in any such action, suit or proceeding.
15.14. Waiver of Jury Trial. EACH OF SELLER AND BUYERS WAIVES
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF
THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH OR THE
ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN. No party
to this Agreement shall seek a jury trial in any lawsuit, proceeding,
counterclaim, or any other litigation procedure based upon, or arising out of,
this Agreement or any related instruments or the relationship between the
parties. No party will seek to consolidate any such action, in which a jury
trial has been waived, with any other action in which a jury trial cannot be or
has not been waived. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY
THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO
PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE
PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
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IN WITNESS WHEREOF, the parties have caused this Asset
Purchase Agreement to be duly executed by their duly authorized officers, as of
the day and year first above written.
CURASCRIPT PHARMACY, INC. CURAFLEX HEALTH SERVICES, INC.
/s/ XXXXX X. XXXXXXXX, XX. /s/ XXXXX X. XXXXXX
--------------------------------- ---------------------------------
By: Xxxxx X. Xxxxxxxx, Xx. By: Xxxxx X. Xxxxxx
Title: President Title: Vice President and Treasurer
CURASCRIPT PBM SERVICES, INC.
/s/ XXXXX X. XXXXXXXX, XX.
---------------------------------
By: Xxxxx X. Xxxxxxxx, Xx.
Title: President
CORAM HEALTHCARE CORPORATION, solely for purposes of Sections 7.9 and 11.9(a)
/s/ XXXXX X. XXXXXX
---------------------------------
By: Xxxxx X. Xxxxxx
Title: Senior Vice President and Secretary
GTCR FUND VI, L.P., AS BUYERS' GUARANTOR, solely for purposes of Section 14.3
/s/ XXXXX X. XXXXXXXX, XX.
---------------------------------
By: Xxxxx X. Xxxxxxxx, Xx.
Title: Principal
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