EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
AGREEMENT, made as of this 30th day of June, 1999, by and among
LINCARE INC., a corporation duly organized and existing under the laws of
the State of Delaware, having its principal place of business at 00000 X.X.
00 Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 (hereinafter referred to as
"Lincare") and HEALTHCOR HOLDINGS, INC., a corporation duly organized and
existing under the laws of the State of Delaware, having its principal
place of business at 0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx X0000, Xxxxxx,
Xxxxx 00000 (hereinafter referred to as the "Company").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the business of marketing,
advertising, selling, leasing, renting, distributing or otherwise providing
oxygen, oxygen equipment, aerosol inhalation therapy equipment and
respiratory medications, nasal continuous positive airway pressure devices,
infant monitoring equipment and services, home sleep studies and related
therapy equipment, and other respiratory therapy and durable medical
equipment, products, supplies and services to customers in their homes or
other alternative site care facilities in the Territory (as such term is
defined in Section 1.1(f) hereof); and
WHEREAS, Lincare desires to acquire, and Company desires to sell to
Lincare, substantially all of the business and assets of Company's Home
Medical Equipment Division;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties hereto agree and
contract as follows:
ARTICLE 1 - DEFINITIONS
1.1 In this Agreement, the following terms shall mean the
following:
(a) "ASSETS" shall mean and include all assets and properties
owned, leased, rented, used or otherwise possessed by Company in respect of
the Business (as such term is defined in Section 1.1(b) hereof), of every
kind, character and description, whether tangible or intangible, and
wherever located, except for the Excluded Assets (as such term is defined
in Section 1.1(c) hereof). The Assets shall include, but shall not be
limited to, the following:
(i) all of Company's rights with respect to the real
property leased, rented, used or otherwise possessed by the Company in
respect of the Business at those locations listed on Schedule 1 hereto
which are not identified as Excluded Assets;
(ii) all of the oxygen equipment, aerosol inhalation
therapy equipment, nasal continuous positive airway pressure devices,
infant monitoring equipment, home sleep study and related therapy equipment
and all other respiratory therapy and durable medical equipment, products
and supplies owned, leased, rented, used or otherwise possessed by the
Company in respect of the Business (including, but not limited to, all of
such items provided to customers in their homes or alternative site care
facilities);
(iii) all of the inventory, disposables, spare parts,
materials, work-in-process and supply items owned, leased, rented, used or
otherwise possessed by Company in respect of the Business;
(iv) all other equipment, products, machines, furniture,
fixtures, furnishings, parts, supplies and vehicles owned, leased, rented,
used or otherwise possessed by Company in respect of the Business;
(v) all patents, trademarks, trade names, service marks,
copyrights and applications therefor owned or licensed by Company in
respect of the Business, including, but not limited to, the names "I
CareNetwork", "XxXxxxxx'x Rentals, Inc.,", "Charlie's Drug and Medical",
and use of the name "HealthCor Oxygen & Medical Equipment" for a period of
up to six (6) months after the Closing;
(vi) the originals and all copies of the customer list and
copies of all customer files of Company in respect of the Business, the
current and historical referral list of the Company in respect of the
Business, and all other documents, files and records of, or relating to,
any of the Assets or the Business (as defined in Section 1.1(b) hereof);
(vii) all of the rights and interests in and to the
specific contracts, agreements and leases set forth on Schedules 1, 2 and 3
attached hereto, but specifically excluding as Excluded Assets, subject to
the provisions of Sections 3.3 and 4.5(b)(ii) and (iii) hereof, those
contracts, agreements and leases listed on Schedules 1, 2 and 3 hereof and
designated as Excluded Assets. Company represents and warrants to Lincare
that Schedules 1, 2, and 3 contain each and every contract, agreement and
lease of, or relating to, the Business or any of the Assets; provided,
however, that if at any time it is determined that any contract, agreement
or lease was omitted from such schedules, Lincare shall have the option, in
its sole discretion, to determine whether such contract, agreement or lease
shall be an Asset or Excluded Asset under this Agreement, whether to accept
or reject assignment of each such contract, agreement or lease, and whether
the Contract Asset Purchase Requirements (as defined in Section 3.3 hereof)
of Sections 3.3 and 4.5(b)(iii) shall apply to any such additional
contract, agreement or lease. Company agrees to amend promptly Schedule 1,
2, or 3 hereof, as the case may be, to include all such additional
contracts, agreements, and leases in accordance with Lincare's
determinations;
(viii) the sole and exclusive use of all regulatory licenses
and permits owned, held, possessed, or otherwise used by Company in respect
of the Business;
(ix) all of the Business of Company; and
(x) the exclusive use of the telephone numbers of Company
in respect of the Business and all intangible personal property rights and
goodwill of Company in respect of the Business.
(b) "BUSINESS" shall mean the entire business of the Company of
marketing, advertising, selling, leasing, renting, distributing or
otherwise providing oxygen, oxygen equipment, aerosol inhalation therapy
equipment and respiratory medications, nasal continuous positive airway
pressure devices, infant monitoring equipment and services, home sleep
studies and related therapy equipment, and other respiratory therapy and
durable medical equipment, products, supplies and services to customers in
their homes or other alternative site care facilities. Notwithstanding the
foregoing, the Business shall not be deemed to include the Denver, Colorado
operations of Company's HME Division.
(c) "EXCLUDED ASSETS" shall mean exclusively the following:
(i) the cash and cash equivalents owned by Company and on
hand on the day immediately preceding the Closing Date;
(ii) subject to the provisions of Sections 3.3 and
4.5(b)(ii) and (iii) hereof, the contracts, agreements and leases listed on
Schedules 1, 2 and 3 hereof which are designated as Excluded Assets on such
schedules;
(iii) all of the Accounts Receivable (as such term is
defined in Section 1.1(g) hereof) of Company on hand on the Closing Date;
(iv) all of the business and assets used exclusively in
connection with the Denver, Colorado operations of Company's HME Division;
(v) all of the vehicles of Company in respect of the
Business that are not specifically identified on Schedule 3B hereto, and
all liabilities and obligations related thereto; and
(vi) all of Company's rights and interests with respect to
the real property leased, rented, used or otherwise possessed by the
Company in respect of the Business at those locations which are not
specifically listed on Schedule 1 hereto, and all liabilities and
obligations related thereto; provided, however, Lincare shall have the
right to use, without charge, those facilities for a period of up to thirty
(30) days after the Closing for transition of the Business into Lincare.
(d) "ACCEPTED LIABILITIES" shall mean exclusively the
following:
(i) all debts, liabilities and obligations of every kind
whatsoever incurred in connection with or arising out of Lincare's conduct
of the Business or ownership of the Assets from and after the Closing Date;
(ii) pursuant to the provisions of Section 4.5(b)(ii)
hereof, Lincare shall be responsible for the liabilities, duties and
obligations arising out of the contracts, agreements and leases listed on
Schedules 1, 2 and 3 hereof which are not designated as Excluded Assets and
which liabilities, duties and obligations arise and pertain to periods
commencing on or after the Closing Date; and
(iii) those certain liabilities of Company expressly set
forth on Schedule 1.1(d)(iii) hereto, which liabilities shall not exceed,
in the aggregate, THREE MILLION TWO HUNDRED SEVENTY FIVE THOUSAND SEVEN
HUNDRED THIRTY FIVE AND 84/100 DOLLARS ($3,275,735.84); provided however,
if the total aggregate amount required to pay off in full all such Accepted
Liabilities listed on Schedule 1.1(d)(iii) (including, but not limited to,
the payment of any purchase options or other similar payments relating to
any Assets subject to any lease or rental agreement) exceeds $3,275,735.84
(such amount in excess of $3,275,735.84 hereinafter referred to as the
"Excess Amount"), then the payments to be made pursuant to Section
3.1(a)(ii)and(iii) hereof shall be reduced by the Excess Amount, as
applicable. In the event that any or all of the Excess Amount cannot be
deducted from such Purchase Price payment, then any such additional Excess
Amount shall be the sole obligation of the Company, which shall be payable
by the Company to Lincare within ten (10) days of Lincare's demand
therefor.
(e) "EXCLUDED LIABILITIES" shall mean and include all debts,
liabilities and obligations of Company of every kind, character and
description whatsoever, except for the Accepted Liabilities.
(f) "TERRITORY" shall mean the States of Arizona, Arkansas,
Kansas, Missouri, New Mexico, Oklahoma and Texas and a radius of (150)
miles from each of the Business' current operating locations, regardless of
which states such territory may include.
(g) "ACCOUNTS RECEIVABLE" shall mean the accounts receivable of
Company as of the close of business on the Closing Date, including the
amounts billed in respect of equipment and services provided by Company
which relate to customer cycle billing dates occurring on or prior to the
Closing Date, and the amounts billed in respect of equipment and services
provided by Company on or prior to the Closing Date, whether billed before
or after the Closing Date.
1.2 In addition to the terms defined in Section 1.1 hereof, other
terms defined elsewhere in this Agreement shall have the meanings set forth
therein.
ARTICLE 2 - PURCHASE AND SALE OF ASSETS
Subject to the terms and conditions set forth in this Agreement,
Company hereby sells, conveys, transfers, assigns, and delivers to Lincare,
and Lincare hereby purchases and accepts from Company, good and marketable
title to the Assets, free and clear of any restrictions or conditions to
transfer or assignment and free and clear of all liens, mortgages, pledges,
encumbrances, agreements, leases, contracts, claims, security interests,
taxes, conditions enforceable by any third party, covenants, conditions or
restrictions of any kind or description (hereinafter referred to
collectively as "Encumbrances").
ARTICLE 3 - PURCHASE PRICE AND METHOD OF PAYMENT
3.1 PURCHASE PRICE AND METHOD OF PAYMENT.
(a) The aggregate purchase price (hereinafter referred to as the
"Purchase Price") for the Assets and the Business shall be NINE MILLION
SEVEN HUNDRED TWENTY FOUR THOUSAND TWO HUNDRED SIXTY FOUR AND 16/100
DOLLARS ($9,724,264.16), payable to Company, or its designees, as follows:
(i) EIGHT MILLION SEVEN HUNDRED TWENTY FOUR THOUSAND TWO
HUNDRED SIXTY FOUR AND 16/100 DOLLARS ($8,724,264.16) shall be paid in cash
at the Closing (as such term is defined in Section 6.1 hereof); and
(ii) FIVE HUNDRED THOUSAND DOLLARS ($500,000) shall be
payable, without interest, three (3) months after the Closing Date; and
(iii) FIVE HUNDRED THOUSAND DOLLARS ($500,000) shall be
payable, without interest, six (6) months after the Closing Date.
3.2 ACCEPTED LIABILITIES.
In connection with its purchase of the Assets hereunder, Lincare shall
assume and be responsible for the Accepted Liabilities.
3.3 EXCLUDED LIABILITIES.
Lincare shall not assume, nor be responsible for, any Excluded
Liabilities. All Excluded Liabilities shall be retained by, and shall be
the sole responsibility of, Company. Without limiting the generality of the
foregoing or the definition of Excluded Liabilities contained in Section
1.1(e) hereof, the Excluded Liabilities shall include, but shall not be
limited to, the following: (a) the obligation to pay all invoices which are
dated on or before the Closing Date or which relate to goods or services
ordered, consumed or used on or before the Closing Date; (b) the
liabilities and obligations under all contracts, agreements and leases
designated as Excluded Assets on Schedules 1, 2 or 3 hereof; and (c) the
obligation, in accordance with the provisions of Section 4.5(b)(iii)
hereof, to pay-off in full those certain leases and rental agreements
expressly designated on Schedules 1, 2 and 3 hereof as subject to this
Section 3.3(c), and to deliver to Lincare title to all such leased or
rented Assets free and clear of any Encumbrances. (Company's obligations
under this Section 3.3(c) are referred to herein as the "Contract Asset
Purchase Requirements".) The Contract Asset Purchase Requirements shall
include, but shall not be limited to, the payment of any purchase options
or other similar payments relating to any of such Assets.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents, warrants and covenants as follows:
4.1 ORGANIZATION, STANDING AND QUALIFICATION OF COMPANY.
Company is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and has all necessary
corporate powers, governmental qualifications and authorizations to own its
assets and to operate its business in each jurisdiction in which such
assets are now owned and such business is now operated by it. Company has
furnished to Lincare true and complete copies of its Certificate of
Incorporation, as amended to date, and Certificate of Good Standing, each
certified by the Secretary of the State of Delaware not earlier than thirty
(30) days prior to the date hereof, and true and complete copies of
Company's By-Laws, as amended to date, certified by the Secretary of
Company.
4.2 AFFILIATES.
Company does not own or control, directly or indirectly, in whole or
in part, any other corporation, partnership, association, or organization,
or any interest therein, which is engaged in the same business as Company,
except for Company's ownership and operation of its Denver, Colorado HME
Division business operations which are identified as Excluded Assets
hereunder.
4.3 FINANCIAL STATEMENTS.
(a) Company has delivered to Lincare copies of the following
financial statements for the Business:
(i) Consolidated Balance Sheets and Income Statements,
each as at the end of Company's fiscal years ending December 31, 1997 and
December 31, 1998; and
(ii) HME Income Statements for the Company's interim
period commencing January 1, 1999 and ending April 30, 1999.
(b) All of the financial statements referenced in Section 4.4(a)
above are hereinafter referred to collectively as the "Financial
Statements" and are attached hereto as Exhibit A. The Financial Statements
are complete, true and correct, and have been prepared on a basis
consistent in all material respects with that of the preceding year or
period. The Financial Statements present fairly the financial condition of
the Business as at the dates stated and the operation of the Company for
the periods stated. The Company has no knowledge of any facts which could
give rise to any material liability or obligation of the Business
whatsoever, liquidated or unliquidated, actual or contingent, criminal or
civil, whether or not covered by insurance, for which adequate provision
has not been made in the Financial Statements. Company represents and
warrants that there has been no material adverse change in the assets,
liabilities, financial performance or capitalization of the Business since
December 31, 1998.
4.4 TAXES.
All tax returns required to be filed by or on behalf of Company in
respect of the Business on or before the date hereof by any applicable law
have been filed within the times and in the manner prescribed by law,
including, but not limited to, returns covering sales and use taxes,
property taxes, franchise taxes, employment taxes (including payroll and
social security payments) and income taxes (including all federal, state,
local and foreign taxes). All liabilities for taxes, assessments and other
charges upon Company in respect of the Business or any of the property,
assets or income of Company in respect of the Business which are owing to
the government of any nation or state, or any local government within such
nations or states, and which were due and payable on or before the date
hereof, have been duly paid and satisfied on or before all their respective
due dates. With respect to liabilities for any such taxes, assessments or
other charges which are not yet due and payable, Company represents,
warrants and covenants, that it will pay all such amounts when due. Any
such tax liability (or any such liability of Company relating to the
operation of the Business or operation of the Assets transferred hereunder)
for federal, state or local taxes (including, without limitation, interest
and penalties) shall be the sole responsibility of Company. If the
Internal Revenue Service seeks to collect any such liability from Lincare
or from any other member of Lincare's affiliated group, Company will
indemnify and hold harmless any such party for the entire amount of such
liability pursuant to the provisions of Article 7 hereof.
4.5 SCHEDULES.
Company has delivered to Lincare the following Schedules, which are
true, complete and accurate:
(a) REAL ESTATE. Schedule 1 is a complete list of all land,
warehouses, office buildings, stores and other buildings and real property
owned, rented, leased, used, occupied or otherwise possessed by the Company
in respect of the Business. As to each property rented, leased, used,
occupied or otherwise possessed by the Company in connection with the
Business, Schedule 1 lists the location of the property; the name and
address of the lessor; the expiration date of such lease; and the monthly
rent payable under the lease. Each such property rented or leased is held
under a valid and enforceable lease, binding upon each of the parties
thereto, and each such lease is in full force and effect in accordance with
its terms and there are no existing defaults or events of default under any
such lease. Company has not given or received notice of any claimed default
or termination with respect to any such lease. Schedule 1 identifies all
material violations of any applicable law, statute, ordinance, code, rule,
regulation or standard relating to any building rented, leased, used,
occupied or otherwise possessed by the Company or the operations of the
Company conducted therein. The facilities listed in Schedule 1 have been
regularly and appropriately maintained in the normal course of business and
the fixtures, mechanical systems (including electrical, plumbing, heating,
ventilation and air conditioning) and roof and structural systems of the
facilities shown on Schedule 1 are in good working condition and in a good
state of maintenance and repair.
(b) AGREEMENTS AND CONTRACTS.
(i) Schedule 2 is a complete list of all contracts and
agreements (including, without limitation, agreements relating to the
purchase, sale, lease or rental of equipment, materials, products, supplies
and services; preferred provider agreements, health maintenance
organization agreements or any other managed care contracts or agreements;
service contracts; employment and consulting agreements; covenants not to
compete; distributorship agreements; leases of personal property; licenses
of intellectual property rights; security agreements; and loan agreements)
which relate, in whole or part, to the Business or the Assets. Schedule 2
specifies the type of agreement and the names of the parties to such
agreements. The agreements listed in Schedule 2 are valid, binding and
enforceable upon the parties thereto. Except as indicated in Schedule 2,
all such contracts and agreements are in full force and effect in
accordance with their terms and there are no existing defaults or events of
default under any such contract or agreement. Company has not given or
received notice of any claimed default or termination with respect to any
such contract or agreement. Except as disclosed on Schedule 2, neither this
Agreement nor consummation of the transactions contemplated hereby shall
result in a default under or breach of, or require the consent or approval
of any party to any agreement listed on Schedule 2 with respect to the
transfer and assignment of such contract or agreement to Lincare hereunder.
(ii) Schedules 1, 2 and 3 list each of the contracts,
agreements and leases which are included in the Assets, except those
contracts, agreements and leases which are designated on such schedules as
Excluded Assets. It is understood and agreed between the parties that
Lincare shall assume the liabilities, duties and obligations of Company
under the contracts, agreements and leases listed on Schedules 1, 2 or 3
which: (A) are not Excluded Assets; and (B) which liabilities, duties and
obligations arise and pertain to periods commencing on or after the Closing
Date. Company shall remain solely liable for all liabilities, duties and
obligations under all contracts, agreements and leases which: (X) are
Excluded Assets; or (Y) which are not Excluded Assets but which
liabilities, duties and obligations arise or pertain to periods prior to
the Closing Date.
(iii) Notwithstanding anything to the contrary contained in
this Agreement, Lincare shall obtain title to all assets covered by those
certain contracts, agreements and leases identified on Schedules 1, 2 or 3
as Excluded Assets to which the Contract Asset Purchase Requirements
pertain, and Company shall have completed the Contract Asset Purchase
Requirements set forth in Section 3.3 of this Agreement with respect to the
assets covered by such contracts, agreements and leases.
(iv) The parties acknowledge that Company's agreement with
Home Health Corporation of America ("HHCA") as identified on Schedule 2 is
subject to the final approval of the United States Bankruptcy Court for the
District of Delaware having jurisdiction over the Chapter 11 Voluntary
Petition for Reorganization filed by HHCA. Lincare shall assume Company's
obligations under such agreement pursuant to the provisions of Section
4.5(b)(ii), subject to the limitations specifically set forth in Section
1.1(d)(iii) with respect thereto.
(c) PERSONAL PROPERTY. Schedule 3 (including each of the
subparts referenced below) lists by type and quantity the tangible personal
property owned, rented, leased, used or otherwise possessed by the Business
and pertaining to the asset classes described below:
(i) Schedule 3A lists, in summary form, the oxygen
equipment, respiratory therapy equipment and other items of durable medical
equipment and other tangible personal property owned, leased, rented, used
or otherwise possessed by the Business (including, but not limited to, all
of such items currently provided to customers in their homes or alternative
site care facilities); and
(ii) Schedule 3B lists, in summary form, the vehicles
owned, leased, rented, used or otherwise possessed by the Business that are
included among the Assets to be acquired by Lincare.
Except as disclosed on Schedule 3, Company owns and has good and marketable
title to all of the tangible personal property included in the Assets
(whether or not any such Asset is included within the asset classes
described in Sections 4.5(c)(i)-(ii) above), free and clear of any
restrictions or conditions to transfer or assignment and free and clear of
all Encumbrances. If any property included in the Assets and owned by
Company is subject to an Encumbrance, Schedule 3 identifies as to each such
item of personal property the nature of such Encumbrance, the holder
thereof, and the amount of such Encumbrance. With regard to each item of
personal property included in the Assets and rented or leased by Company,
Schedule 3 identifies the party from whom such property is rented or
leased, the date and term of the lease or rental agreement, the amount of
the monthly rent payable and any renewal and purchase options. Except as
set forth in Schedule 3, no personal property included in the Assets
(whether or not any such Asset is included within the asset classes
described in Sections 4.5(c)(i)-(ii) above) and owned, rented, leased, used
or otherwise possessed by the Company is subject to any Encumbrance. Each
item of personal property included in the Assets has been regularly and
appropriately maintained and repaired in the normal course of business and
substantially all of such items are in good working condition and in a good
state of maintenance and repair as of the Closing Date.
(d) ACCOUNTS RECEIVABLE. Schedule 4 contains a summary of the
accounts receivable of or pertaining to the Business, including an aging of
such accounts receivable in thirty (30) day increments for one hundred
twenty days (120) days from the date of original invoice, and the total
amount of all accounts receivable. Each Account Receivable of the Business:
(i) arose from valid sales or rentals in the ordinary course of business;
(ii) relates to equipment or products provided to customers covered under
the Medicare, Medicaid or other third party public or private insurance
program, or were provided on a direct xxxx basis, each of which customers
were qualified under such programs to receive such products and services;
(iii) relates to xxxxxxxx by or on behalf of the Business which were
prepared and submitted with all the complete and correct forms, documents,
test results and other information necessary to receive payment with
respect to each such Account Receivable and which xxxxxxxx were prepared
and submitted in conformity with all applicable laws, rules, regulations
codes and guidelines of federal, state and local health care programs and
in conformity with the requirements of each third party payor; and (iv) has
been diligently pursued for payment in accordance with the requirements of
the respective payors. Except as disclosed on Schedule 4 hereto, the
Business has not received nor has it applied for any cash advances from any
Medicare, Medicaid or third party public or private insurance program or
carrier, whether or not any such cash advance has been repaid to or
recouped by such insurance program or carrier.
(e) CUSTOMERS. Schedule 5 lists each active customer of the
Business. For each such customer, Schedule 5 lists the customer's name and
address; the customer's account number; and the equipment, products and
services currently supplied to such customer. Each customer included on
Schedule 5 has been duly qualified under the Medicare, Medicaid or other
third party public or private insurance program for reimbursement for
services rendered by Company, or is being provided services on a direct
xxxx basis to customers who otherwise have the financial capability to pay
for such services.
(f) EMPLOYMENT MATTERS. Schedule 6 sets forth a list of:
(i) the name of each of the employees of Company who work
for or who provide services to the Business, and the current annual rate of
compensation for each such person;
(ii) all pension, retirement, profit-sharing, savings,
bonus, deferred compensation, incentive compensation, hospitalization,
medical, life and disability insurance, vacation, termination, and other
similar plans in effect which provide benefits to present and past
directors, officers and employees of Company who work for or who provide
services to the Business;
(iii) all claims and litigation asserted by or against
Company (or any director, shareholder, officer or employee of Company in
such representative capacity) in respect of the Business arising from
transactions and occurrences after December 31, 1993, or any claim or
litigation, whenever arising, which is still pending as of the date hereof,
which claims any right to workers compensation benefits or alleges any
claim relating to race discrimination, age discrimination, harassment, sex
discrimination, sexual harassment, or wrongful termination. As to each
such claim or litigation, Schedule 6 lists the identity of the claimant; a
brief description of the matter; and the outcome or status of the matter;
(iv) all collective bargaining agreements or other
contracts with labor unions to which Company is a party; and
(v) all employment agreements, consulting agreements,
independent contractor agreements, and covenants not to compete of the
Business (including, but not limited to, covenants not to compete with any
predecessors in interest of Company or the Business).
Company is in compliance in all material respects with all federal,
state and local laws, statutes, ordinances, rules, regulations, codes and
orders relating to conditions of employment of the Business, and Company
does not know of or have any reasonable grounds to anticipate, any labor
dispute. Company has not incurred any liability for any arrearage of wages
or other payments in respect of employment and Company has made all
contributions to employee benefit plans of the Business required by such
plans to be made on or before the date hereof. All liabilities and expenses
with respect to compensation or benefits applicable to all directors,
shareholders, officers and employees of Company under any employee benefit
plan shall be the sole responsibility of Company.
(g) CLAIMS, INVESTIGATIONS AND LITIGATION. Schedule 7 lists all
claims and litigation asserted by or against Company in respect of the
Business arising from transactions and occurrences after December 31, 1993,
or any such claim or litigation, whenever arising, which was filed and is
still pending as of the date hereof alleging personal injury, property
damage or economic loss and involving Company in respect of the Business
(or any director, shareholder, officer or employee of Company in such
representative capacity) or any property of, or product or service sold,
rented, leased or provided by Company in respect of the Business, and any
litigation, or to the best of Company's knowledge, any investigation
(including government investigations or audits) commenced after December
31, 1993, or whenever commenced, if still pending. Schedule 7 also lists
each judgment, order, writ, injunction and decree of any federal, state or
local court or governmental authority to which Company is a party or by
which it is bound or which relates to any of the ownership interests in the
Business or the Assets. As to each such claim, investigation, audit or
litigation, Schedule 7 lists the type of proceeding; the identity of the
claimant or investigating agency; a brief description of the matter; the
damages claimed or relief sought; and the outcome or status of the matter.
Except as set forth in Schedule 7, there are no claims, lawsuits,
arbitrations, government proceedings, investigations or audits pending
relating to the Business to which Company or any of its directors,
shareholders, officers or employees is a party (as plaintiff, defendant or
otherwise) or which relate to any of the ownership interests in the
Business or the Assets. To the best of Company's knowledge, there are no
grounds for the filing or receipt of any other claim or the commencement of
any other lawsuit, arbitration or proceeding by or against, or
investigation of, Company in respect of the Business, or involving the
Assets or equity interests in, the Business, except as set forth in
Schedule 7.
(h) HEALTH CARE COMPLIANCE. Schedule 8 lists all claims,
statements and other matters (including, but not limited to, all
correspondence or communications with governmental agencies, intermediaries
or carriers) concerning or relating to any federal or state government
funded health care program that involves, relates to, or alleges: (A) any
violation or irregularity with respect to any activity, practice or policy
of Company in respect of the Business; or (B) any violation or irregularity
with respect to any claim for payment or reimbursement made by Company in
respect of the Business, or any payment or reimbursement paid to Company in
respect of the Business. Except as set forth on Schedule 8, there are no
violations or irregularities nor are there any reasonable grounds to
anticipate the commencement of any investigation or inquiry, or the
assertion of any claim or demand by any such government agency,
intermediary or carrier against Company with respect to any of the
activities, practices, policies or claims of Company in respect of the
Business, or any payments or reimbursements received by Company in respect
of the Business. The Company is not currently subject to any outstanding
audit by any such government agency, intermediary or carrier, and to the
best of Company's knowledge, there are no reasonable grounds to anticipate
any such audit of the Business in the foreseeable future.
(i) LICENSES AND PERMITS. Schedule 9 lists all governmental
licenses, permits and authorizations which are held or used by Company in
respect of the Business. With respect to each such license, permit or
authorization, Schedule 9 contains a brief description of the license,
permit or authorization; the identity of the issuing agency or authority;
the license or permit number; and the expiration date of each such license,
permit or authorization. Such licenses, permits and authorizations are the
only governmental licenses, permits and authorizations currently required
by Company for the operation of the Business and all such licenses, permits
and authorizations are in effect as of the date hereof. Company has
complied in all material respects with all conditions or requirements
imposed by such licenses, permits and authorizations. Company has not
received any notice of, nor, to the best of the Company's knowledge, is
there any reason to believe, that any appropriate authority intends to
cancel or terminate any of such licenses, permits or authorizations or that
valid grounds for such cancellation or termination currently exist.
(j) ENVIRONMENTAL MATTERS. Schedule 10 lists, for the entire
period of operation of Company any and all claims, suits, actions or
proceedings (including government investigations and audits) relating to
the release, discharge or emission of any pollutants or contaminants, or to
the generation, treatment, storage or disposal of any wastes, in connection
with Company's operation or ownership of the Business or the Assets. With
respect to each such pending or prior matter, Schedule 10 lists the date of
the claim, suit, action or proceeding (including governmental
investigations and audits); the claimant or investigating agency; the
nature and a brief description of the matter; the damages claimed or relief
sought; and the status, outcome or disposition of the matter. Except as set
forth in Schedule 10, there are no claims, suits, actions, or proceedings
(including governmental investigations and audits), asserted or threatened,
relating to environmental matters of the types specified in this Section
4.5(j) or otherwise, to which Company, in respect of the Business, is a
party; nor does Company know or have any reasonable grounds to know of any
activity of Company or potential liability of Company in connection with
Company's operation or ownership of the Business or the Assets involving or
relating to the release, discharge or emission of any pollutants or
contaminants, or to the generation, treatment, storage or disposal of any
wastes, or otherwise relating to the protection of the environment.
(k) DIRECTORS AND OFFICERS. Schedule 11 lists the officers and
directors of Company in office as of the date hereof. Schedule 11 also
lists all contracts, agreements, commitments, leases, instruments, debts,
or obligations affecting the Business or the Assets: (i) between Company
and any of its directors, officers, or shareholders; and (ii) among or
between any directors, officers, or shareholders of Company. With respect
to each such contract, agreement, commitment, lease, instrument, debt, or
obligation, Schedule 11 indicates the parties; their relationship to
Company; and a general description of the subject matter thereof.
(l) CHANGED CONDITIONS. Except as listed in Schedule 12, since
December 31, 1998, the business of he Business has been conducted in
substantially the same manner as theretofore and there has not been any:
(i) transaction by Company relating to the Business
except in the ordinary course of business as conducted on that date;
(ii) material change in the condition (financial or
otherwise) of the liabilities, assets, equity, properties, business, or
prospects of the Business;
(iii) labor dispute, or other similar event or condition of
any character, materially or adversely affecting the financial condition,
business, assets, or prospects of the Business;
(iv) change in business or accounting methods or practices
(including, without limitation, any change in depreciation or amortization
policies or rates) by Company in respect of the Business;
(v) revaluation by Company of any of the assets of the
Business;
(vi) lease, sale or transfer of any tangible or intangible
asset of Company in respect of the Business, except in the ordinary course
of business and for fair market value;
(vii) entry into, or amendment or termination of, any
contract, agreement, or license, except in the ordinary course of business
and upon fair market value, terms and conditions;
(viii) waiver or release of any right or claim of Company in
respect of the Business, except in the ordinary course of business and upon
fair market value, terms and conditions;
(ix) other event or condition of any character that has,
or might reasonably have, a material and adverse effect on the financial
condition, business, assets, or prospects of the Business;
(x) amendment of Company's Certificate of Incorporation
or By-Laws; or
(xi) agreement by Company to do any of the things
described in the preceding clauses (i) through (x).
4.6 TITLE TO ASSETS.
Company has good and marketable title to, or holds by valid and
enforceable agreement of lease or license, all of the tangible assets
owned, leased, rented, licensed, used or otherwise possessed by it in
connection with the Business, and such assets are free and clear of any
restrictions or conditions to transfer or assignment and are free and clear
of all Encumbrances; provided, however, the parties acknowledge that as of
the Closing Date, Company shall not have good and marketable title to the
assets subject of the HHCA agreement listed on Schedule 2 hereto.
4.7 NO VIOLATION.
Neither this Agreement nor the consummation of the transactions
contemplated hereby violate or will violate in any material respect any
statute, law, regulation, rule, ordinance, code, standard, order, writ,
judgment, injunction, decree, determination or award, or conflict with or
constitute a default under Company's Certificate of Incorporation or By-
Laws or any indenture, mortgage, lease, lien, instrument or other agreement
by which Company is bound, nor will it result in an event which, whether
immediately or upon the giving of notice or lapse of time or both, will
permit the acceleration of the maturity date of any obligation under any
such indenture, mortgage, lease, lien, instrument or other agreement or the
creation of any lien or encumbrance on any property or asset of Company,
nor will it enable any party to any agreement to which Company is a party
to exercise a right to terminate or otherwise modify the terms thereof.
4.8 COMPLIANCE WITH LAW.
Company has complied with, and is not in violation of, in any material
respect any federal, state, or local statutes, laws, ordinances, rules,
regulations, codes or standards which affect the operation of the Business
(including, but not limited to, compliance with all statutes, laws,
ordinances, rules, regulations relating to any federal or state government
funded health care program, including, but not limited to, the provisions
of the federal fraud and abuse statutes, laws, rules and regulations).
Company has not received any notice of any claimed violation of any
federal, state or local statute, law, ordinance, rule, regulation, code,
standard or order by the Business, nor has any such violation occurred.
4.9 LEGAL POWER AND AUTHORITY TO ENTER TRANSACTION.
Company has the full right, power, legal capacity, and authority to
enter into and deliver this Agreement and to perform their respective
obligations hereunder and the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby has been duly authorized by Company, and a copy of such
resolutions so authorizing the execution, delivery and performance of this
Agreement, certified by Secretary of Company has been delivered to Lincare.
This Agreement constitutes the valid and binding obligation of Company and
is enforceable in accordance with its terms. Except as stated above, no
approvals or consents of any persons or entities are required for Company
to execute and deliver this Agreement to perform their respective
obligations hereunder and the transactions contemplated hereby.
4.10 BOOKS AND RECORDS.
The books and records of the Company are complete, true and correct in
all material respects and fairly reflect the conduct of the Business.
4.11 DISCLOSURE.
No representation or warranty by Company contained in this Agreement,
and no writing, certificate, schedule, list, report, instrument, or other
document furnished to Lincare pursuant hereto or in connection with the
transactions contemplated hereby, contains any untrue statement of material
fact, or omits to state a material fact necessary in order to make the
statements and information contained therein not misleading, or necessary
in order to provide a prospective purchaser of the Assets and Business with
full and proper material information relating to the Company and Company's
affairs and the Business' prospects of future business.
4.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations, warranties, covenants and agreements made by
Company in or pursuant to this Agreement or in any writing, certificate,
schedule, exhibit, statement, list, report, instrument, or other document
furnished or delivered to Lincare in connection with, or in contemplation
of, this Agreement, or the purchase and sale of the Assets shall be true on
and as of the Closing Date with the same effect as if made on and as of
Closing Date, and shall survive the execution, delivery and performance of
this Agreement and the Closing.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF LINCARE
Lincare represents, warrants and covenants as follows:
5.1 ORGANIZATION, STANDING AND QUALIFICATION.
Lincare is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all necessary
corporate powers, governmental qualifications and authorizations necessary
to own its assets and to operate its business in each jurisdiction in which
such assets are now owned and such business is now operated by it.
5.2 LEGAL POWER AND AUTHORITY TO ENTER TRANSACTION.
Lincare has the full right, power, legal capacity, and authority to
enter into and deliver this Agreement and to perform its obligations
hereunder and the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the transactions contemplated hereby
have been duly authorized by Lincare's Board of Directors, a copy of such
resolutions so authorizing the execution, delivery and performance of this
Agreement, certified by the Secretary of Lincare, has been delivered to
Company. This Agreement constitutes the valid and binding obligation of
Lincare and is enforceable in accordance with its terms.
5.3 SURVIVAL of Representations and Warranties.
All representations and warranties made by Lincare in or pursuant to
this Agreement shall survive the execution, delivery and performance of
this Agreement and the Closing.
ARTICLE 6 - CLOSING
6.1 DATE, TIME AND PLACE.
The closing under this Agreement (herein referred to as the "Closing")
shall take place at the offices of Company at 0000 Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxx X0000, Xxxxxx, Xxxxx 00000, on the date first set forth
above (said date shall herein be referred to as the "Closing Date"). All
transactions at the Closing shall be deemed to have taken place
simultaneously and no transaction shall be deemed to have been completed
and no document, instrument or certificate shall be deemed to have been
delivered until all transactions are completed and all documents delivered.
6.2 OBLIGATIONS OF COMPANY.
At the Closing, Company has delivered to Lincare the following:
(a) lease assignments, assumption agreements and estoppel
certificates, in form and substance reasonably satisfactory to Lincare,
sufficient to transfer to Lincare all of Company's rights with respect to
the premises leased or rented by Company at the locations listed on
Schedule 1 hereto which are not identified as Excluded Assets;
(b) a general xxxx of sale, in form and substance reasonably
satisfactory to Lincare, sufficient to convey to Lincare good and
marketable title to the Assets;
(c) a certificate of title and a xxxx of sale for each
automobile, truck or other vehicle included in the Assets, in the form
required by the applicable statutes, laws, rules and regulations of the
state of registration;
(d) an incumbency certificate, dated as of the Closing Date and
executed by the Secretary of Company certifying the identity and signature
of the officers executing any documents required by or relating to this
Agreement;
(e) a copy of all corporate resolutions necessary to authorize
the execution, delivery and performance of this Agreement by Company and
copies of Company's Certificate of Incorporation, as amended, and
Certificate of Good Standing, each certified by the Secretary of the State
of Delaware, and the By-Laws of Company, as amended, certified by the
Secretary of Company;
(f) any other consents, waivers, instruments or documents as may
be reasonably requested by Lincare; and
(g) Uniform Commercial Code termination statements, lease
termination statements, releases and any other documents necessary to
evidence that each of the Assets is being sold, conveyed, transferred,
assigned and delivered to Lincare free and clear of any Encumbrances.
6.3 OBLIGATIONS OF LINCARE.
At the Closing, Lincare has delivered to Company the following:
(a) payment of all amounts required to be paid by Lincare to
Company at the Closing pursuant to the provisions of Section 3.1 hereof;
(b) an incumbency certificate, dated as of the Closing Date and
executed by the Secretary of Lincare, certifying the identity and signature
of the officers of Lincare executing any documents required by or relating
to this Agreement; and
(c) a copy of all corporate resolutions of Lincare necessary to
authorize the execution, delivery and performance of this Agreement by
Lincare, certified by the Secretary of Lincare.
6.4 COOPERATION AFTER THE CLOSING.
(a) Promptly after the Closing, Company will put Lincare into
full possession and enjoyment of the Assets.
(b) Lincare and Company will, at any time, and from time to
time, after the Closing Date, execute and deliver such further instruments
of conveyance and transfer and take such additional action as may be
reasonably necessary to effect, consummate, confirm or evidence the
transactions contemplated by this Agreement.
(c) Company shall be responsible for all income, franchise,
sales, use, property, employment (including social security payments),
payroll or other tax liabilities, including, without limitation, any
interest and penalties thereon, which are attributable to operation or
ownership of Company or the Assets or the operation of the Business for
periods prior to the Closing Date. Lincare shall be responsible for any
such taxes attributable to its ownership of the Assets or the operation of
the Business for periods following the Closing Date. Any such taxes
requiring apportionment (because Company has paid such taxes attributable
to a period subsequent to the Closing Date or Lincare will pay such taxes
attributable to a period prior to the Closing Date) shall be pro-rated on
the basis of the fiscal year covered by such taxes, or otherwise on a
mutually acceptable equitable basis. If Company shall have paid any taxes
for which Lincare is responsible as aforesaid, or if Lincare will pay taxes
for which Company is responsible as aforesaid, appropriate adjustments will
be made by the parties at or as promptly as practicable after the Closing
Date.
(d) Company agrees on behalf of itself and its parents,
subsidiaries and affiliates that, from and after the Closing Date, they
shall cease and desist from all use of the names "HealthCor Oxygen &
Medical Equipment", "I CareNetwork", "XxXxxxxx'x Rentals, Inc.," and
"Charlie's Drug and Medical", and any other trademarks, trade names or
service marks included in the Assets, and any name containing any
variations, combinations or derivatives thereof, or any forms or acronyms
of the same.
(e) It is acknowledged that Lincare has waived compliance by
Company with the provisions of any bulk sales or transfer law of any state
that is or may be applicable to the transactions contemplated hereby and
Company agrees to indemnify Lincare with respect to such waiver and non-
compliance in accordance with the provisions of Article 7 hereof.
(f) Company shall use its best efforts to obtain all consents of
third parties and to make all filings with and give all notices to third
parties and to do any and all other acts and things which may be necessary
or reasonably required in order to transfer to Lincare all of the Assets,
free and clear of any Encumbrances, and to effect fully the transactions
contemplated by this Agreement. In case any Assets or rights have not at
the Closing been transferred effectively, or are subject to any
Encumbrance, Company shall use its best efforts to cooperate with Lincare
in any lawful arrangement to provide that Lincare shall receive the benefit
of Company's interest in any of such Assets and rights.
(g) Company agrees that, after the Closing, it shall provide
reasonable cooperation and assistance to Lincare, with respect to any
matters, disputes, suits or claims by or against any person not a party to
this Agreement.
(h) If, after the Closing Date, Lincare desires to have an audit
performed of any or all of the Financial Statements, Company agrees to
cooperate with Lincare and to provide Lincare with all reasonable
assistance required to prepare such audited financial statements,
including, without limitation, the following: (i) providing Lincare and its
representatives with all necessary information, data, documents and records
in its possession relating to the Business for the time periods covered by
the Financial Statements; and (ii) delivery of customary representation
letters by Company, and Company's legal counsel, to Lincare or its
auditors. If requested by Lincare, Company shall use its best efforts to
cause the Company's accountants, auditors and legal counsel to cooperate
with and to assist Lincare and its representatives in the preparation of
any such audited financial statements, it being expressly agreed and
understood that Lincare shall be solely responsible for the fees and
expenses of the Company's accountants, auditors and legal counsel in
rendering such assistance and cooperation to Lincare and its
representatives.
(i) It is understood and agreed by the parties that on the
Closing Date, Company shall cause to be delivered to Lincare title to all
high pressure cylinders owned, leased, rented, used or otherwise possessed
by Company in respect of the Business, free and clear of all Encumbrances
(including, but not limited to, any lease or rental obligations), except
for those high pressure cylinders specifically identified as being leased
or rented by Company from Med-Ox Specialties, Inc. pursuant to that certain
agreement listed on Schedule 2 hereto. Promptly after the Closing, Lincare
and Company will cooperate to conduct an audit of the high pressure
cylinders leased or rented by Company in respect of the Business, if any,
immediately prior to the Closing Date. To the extent that the number of
cylinders located is less than the total number of cylinders leased or
rented by Company in respect of the Business, then Company shall also be
responsible for any rented or leased cylinder shortfall, including, but not
limited to, settling and paying for any such cylinder shortfall with the
suppliers thereof promptly after the completion of such audit. To the
extent that there is a shortfall in the number of cylinders rented or
leased by Company in respect of the Business, such shortfall shall not be
setoff against any cylinders owned by Company.
(j) If it is impracticable for Company to provide to Lincare at
the Closing all of the Uniform Commercial Code termination statements,
lease termination statements, releases and other documents necessary to
evidence delivery to Lincare of title to the Assets free and clear of any
Encumbrances, Company shall deliver all such statements, releases and
documents to Lincare no later than ten (10) business days after the
Closing.
ARTICLE 7 - INDEMNIFICATION
7.1 INDEMNIFICATION.
(a) Company shall defend, indemnify and hold Lincare harmless
from, against, and in respect of, any and all claims, demands, lawsuits,
proceedings, losses, obligations, assessments, fines, penalties,
administrative or judicial orders, costs, expenses, liabilities and
damages, including interest, penalties and reasonable attorneys' fees
Lincare may incur, which arise, result from or relate to: (i) Company's
breach of, or failure to perform, any of its representations, warranties,
covenants, obligations, liabilities, commitments or agreements under this
Agreement (including, without limitation, any misrepresentation in, or
omission from, any schedule, exhibit, statement, certificate, writing,
list, instrument or report or other document furnished or to be furnished
pursuant to this Agreement); (ii) Lincare's being required to assume or
discharge any of the Excluded Liabilities; or (iii) Lincare's being
required to assume or discharge by operation of law any debt, liability or
obligation of Company, including, but not limited to, any liability or
obligation arising under any federal, state or local bulk sales, bulk
transfer or fraudulent conveyance law.
(b) Lincare shall defend, indemnify and hold Company harmless
from, against, and in respect of, any and all claims, demands, lawsuits,
proceedings, losses, obligations, assessments, fines, penalties,
administrative or judicial orders, costs, expenses, liabilities and
damages, including interest, penalties and reasonable attorneys' fees
Company may incur, which arise, result from or relate to: (i) Lincare's
breach of, or its failure to perform, any of its representations,
warranties, covenants, obligations, liabilities, commitments or agreements
under this Agreement (including, without limitation, any misrepresentation
in, or omission from, any statement, certificate, writing, list, instrument
or report or other document furnished or to be furnished pursuant to this
Agreement); or (ii) Company being required to assume or discharge any of
the Accepted Liabilities.
7.2 PROCEDURES.
With respect to any claim, demand, lawsuit, action, proceeding, or
assessment (hereinafter referred to as a "Claim") brought by a third party
which may give rise to indemnification under this Agreement from an
indemnitor ("Indemnitor") to an indemnified party ("Indemnified Party"),
the following procedure shall be followed:
(a) Promptly after the assertion of any Claim by a third party,
the Indemnified Party shall notify the Indemnitor in writing of such Claim.
The notice shall specify the facts then known to the Indemnified Party
relating to the Claim and the amount or estimated amount of the liability
claimed by such third party. Promptly after receipt of the written notice,
the Indemnitor shall advise the Indemnified Party whether the Indemnitor
intends to contest such Claim.
(b) The Indemnitor shall have the absolute right, in its sole
discretion and at its sole expense, to elect to defend, contest, settle or
otherwise protect against any Claim or action which may give rise to a
Claim with legal counsel of its own selection; provided, however, that the
Indemnitor shall not agree or consent to any judgment or settlement that
imposes injunctive or equitable relief against the Indemnified Party
without the prior written consent of the Indemnified Party. The
Indemnified Party shall have the right, but not the obligation, to
participate, at its own expense, in the defense thereof through counsel of
its own choice and shall have the right, but not the obligation, to assert
any and all crossclaims and counterclaims it may have. Each party shall,
and shall cause its affiliates to, at all times cooperate in all reasonable
ways with, make its relevant files and records available for inspection and
copying by, and make its employees available or otherwise render reasonable
assistance to, the other party in its defense of any Claim. In the event
that the Indemnified Party shall, without the prior written consent of the
Indemnitor, make any settlement with respect to any Claim, the Indemnitor
shall not be bound to such settlement and shall not be bound to indemnify
for any costs, damages, expenses or other liabilities resulting from such
Claim. In the event the Indemnitor fails timely to defend or contest any
Claim, the Indemnified Party shall have the right, but not the obligation,
to defend, contest, assert crossclaims or counterclaims to otherwise
protect against the same and may make any compromise or settlement thereof
and recover and be indemnified for the entire cost thereof from the
Indemnitor including, without limitation, reasonable legal expenses,
disbursements and all amounts paid as a result of such matter.
(c) It is understood by the parties hereto that in the event
Company breaches, or fails to perform, any of its representations,
warranties, covenants, obligations, liabilities, commitments or agreements
under this Agreement, including, without limitation, any of its
indemnification obligations pursuant to this Article 7, then Lincare shall
have the right, in its sole discretion, to offset from the Purchase Price
payment referenced in Section 3.1(a)(ii) hereof any amounts due Lincare as
a result of any such breach or failure to perform by Company.
7.3 CUMULATIVE REMEDIES.
In no event shall the provisions of this Article 7 restrict or impair
in any respect the rights or remedies otherwise available to the parties
hereto at law or in equity, which rights and remedies shall be cumulative
and in addition to any other available remedies.
ARTICLE 8 - CONFIDENTIALITY
8.1 PROPRIETARY AND CONFIDENTIAL INFORMATION.
Company agrees on behalf of itself and each of its parents,
subsidiaries and affiliates, that from and after the Closing, no such
entity shall, directly or indirectly, use or disclose to any third party
any of the proprietary or confidential information of Company, except when,
after, and only to the extent that: (a) such proprietary or confidential
information is or becomes generally available to the public through no
fault of Company or any of its parents, subsidiaries or affiliates; (b)
such information is required by Company in connection with any tax returns
heretofore or hereafter filed; or (c) disclosure of such information is
required by court order or applicable law. As used herein, the term
"proprietary and confidential information" of Company shall include all
information of or relating to the Assets, and the Business (including, but
not limited to, present or prospective market, sales, product, customer and
referral source information; prices and pricing structure; contractual
arrangements; operating information, policies, procedures and practices;
financial information; product and process knowledge; cost and supplier
information; personnel data; and any strategy or plans related to any of
the foregoing) which has not been generally available or disclosed to the
public by Lincare.
8.2 NO SOLICITATION.
(a) From and after the Closing, Company shall not:
(i) directly or indirectly, hire, offer to hire, or
entice away, or in any other manner persuade or attempt to persuade, any
officer, employee or agent of Lincare (including, but not limited to, any
former officer, employee or agent of the Company who worked for or provided
services to the Business), or in any other manner persuade or attempt to
persuade, any officer, employee or agent of Lincare (including, but not
limited to, any former officer, employee or agent of the Company who worked
for or provided services to the Business) to discontinue his or her
relationship with Lincare. It is understood and agreed that the
prohibitions contained in this Section 8.2(a)(i) shall apply to all current
and future officers, employees and agents of Lincare (including, but not
limited to, any former officer, employee or agent of the Company who worked
for or provided services to the Business), whether or not any such person
is then currently an officer, employee or agent of Lincare or whether any
such prohibited activity is in connection with employment, an offer of
employment or other action within or outside the Territory; or
(ii) directly or indirectly solicit, divert or take away,
or attempt to solicit, divert or take away any business or customers the
Business had enjoyed or solicited prior to the date hereof or which Lincare
may enjoy or solicit in the Territory after the date hereof.
(b) It is expressly understood and agreed by the parties hereto
that it shall be a breach hereof for Company to assist in any way any
business associate, or any other person, firm, corporation, partnership,
joint venture, association, trust or other entity, to engage in any
activity which is prohibited by this Section 8.2.
ARTICLE 9 - COVENANT NOT TO COMPETE.
9.1 COVENANT.
(a) In consideration of the purchase by Lincare of the Assets
and the Business pursuant to the terms and conditions of this Agreement,
and for other good and valuable consideration, Company, on behalf of itself
and each of its parents, subsidiaries and affiliates (all of such entities
being hereinafter referred to jointly and severally as the "Covenantors")
hereby represents, warrants, covenants and agrees, that commencing on the
date hereof and continuing for a period of five (5) years thereafter, none
of the Covenantors will, directly or indirectly, engage in the business of
marketing, advertising, selling, leasing, renting, distributing, or
otherwise providing oxygen, oxygen equipment, aerosol inhalation therapy
equipment and respiratory medications, nasal continuous positive airway
pressure devices, infant monitoring equipment and services, home sleep
studies and related therapy equipment, or any other respiratory therapy or
durable medical equipment, products, supplies and services to customers in
their homes or other alternative site care facilities within the Territory.
(b) Without limiting the generality of the provisions of Section
9.1(a) hereof, this Covenant Not to Compete shall be construed so that a
Covenantor shall also be in breach hereof if it is an employee, officer,
director, shareholder, investor, trustee, agent, principal or partner of,
or a consultant or advisor to or for, or a subcontractor or manager for, a
person, firm, corporation, partnership, joint venture, association, trust
or other entity which is engaged in such business in the Territory, or if
any of them receives any compensation or remuneration from or owns,
directly or indirectly, any outstanding stock or shares or has a beneficial
or other financial interest in the stock or assets of any such person,
firm, corporation, partnership, joint venture, association, trust or other
entity engaged in such business in the Territory. Notwithstanding anything
to the contrary contained in this Section 9.1(b), no Covenantor shall be
deemed to be in breach of this Covenant Not to Compete solely by reason of
owning an interest of less than one percent (1%) of the shares of any
company traded on a national securities exchange or in the over the counter
market.
(c) It is expressly understood and agreed by Covenantors that it
shall be a breach of this Covenant Not to Compete for any Covenantor to
assist in any way any business associate, or any other person, firm,
corporation, partnership, joint venture, association, trust or other
entity, to engage in any activity which a Covenantor is prohibited from
engaging in by this Covenant Not to Compete.
9.2 REMEDIES.
Covenantors agree that the remedy at law for any breach of obligation
under this Covenant Not to Compete will be inadequate and that in addition
to any other rights and remedies to which it may be entitled hereunder, at
law or in equity, Lincare shall be entitled to injunctive relief, and
reimbursement for all reasonable attorneys' fees and other expenses
incurred in connection with the enforcement hereof. It is the intention of
Covenantors and Lincare that this Covenant Not to Compete be fully
enforceable in accordance with its terms and that the provisions hereof be
interpreted so as to be enforceable to the maximum extent permitted by
applicable law. To the extent that any obligation to refrain from
competing within an area for a period of time as provided in this Covenant
Not to Compete is held invalid or unenforceable, it shall, to the extent
that it is invalid or unenforceable, be deemed void ab initio. The
remaining obligations imposed by the provisions of this Covenant Not to
Compete shall be fully enforceable as if such invalid or unenforceable
provisions had not been included herein and shall be construed, to the
extent possible, such that the purpose of this Covenant Not to Compete, as
intended by Covenantors and Lincare, can be achieved in a lawful manner.
9.3 CONDITION PRECEDENT.
Covenantors acknowledge and agree that their representations,
warranties, covenants, agreements, commitments and obligations contained in
this Covenant Not to Compete are an inducement for, and a condition
precedent to, Lincare's entering into this Asset Purchase Agreement and
that Lincare is specifically relying on such representations, warranties,
covenants, agreements, commitments and obligations of Covenantors in
entering into and performing its obligations under this Asset Purchase
Agreement.
ARTICLE 10 - EXPENSES; TAXES
10.1 EXPENSES.
Each of the parties hereto shall bear the fees and expenses incurred
by it in connection with the preparation, negotiation, execution, delivery,
and performance of this Agreement.
10.2 TAXES.
Lincare and Company shall share equally the amount of all taxes,
excises and other governmental charges and/or fees payable in connection
with the sale, conveyance, transfer, assignment and delivery of the Assets
hereunder (including, without limitation, all sales, use, transfer, filing
or recording taxes or fees). Company shall be responsible for the costs of
obtaining all notices and consents and for the preparation of all necessary
assignments in connection with the sale, conveyance, transfer, assignment,
and delivery of the Assets to Lincare hereunder.
ARTICLE 11 - REPRESENTATIVE'S FEES AND COMMISSIONS
Company acknowledges and agrees that Xxxxxx Xxxxxxxx Xxxxxxx, L.L.C.
has acted as its financial advisor and agent in connection with the
transactions contemplated by this Agreement. All negotiations relative to
this Agreement and the transactions contemplated hereby have been carried
on directly between Lincare and Company without the intervention or
assistance of any party not a party to this Agreement other than Xxxxxx
Xxxxxxxx Xxxxxxx, L.L.C. (other than to provide accounting or legal
counsel). No party to this Agreement, nor any third party, other than
Xxxxxx Xxxxxxxx Xxxxxxx, L.L.C., has any right or claim to any commission,
brokerage fee, finder's fee, expenses or other compensation relative to
this Agreement or the transactions contemplated hereby (other than for
accounting and legal services). Each party shall indemnify, defend and hold
the other parties hereto harmless from, against and in respect of all
claims for commission, brokerage fee, finder's fee, expenses or other
compensation claimed by or through such party.
ARTICLE 12 - GOVERNING LAW
The interpretation and performance of this Agreement shall be governed
by the laws of the State of Texas, without giving effect to its conflicts
of law provisions. Each party hereby agrees that any claims, demands,
lawsuits, proceedings and controversies arising from or relating to this
Agreement shall be brought and heard in federal or state courts of general
jurisdiction located in the State of Texas, and each party hereby consents
to the subject matter and personal jurisdiction of such courts in respect
thereof. The laws of the State of Texas shall govern all questions
concerning the construction, validity and interpretation of this Agreement
and performance of the obligations hereunder.
ARTICLE 13 - NOTICES
All notices, requests, demands, reports, statements or other
communications required to be given hereunder or relating to this Agreement
shall be in writing and shall be deemed to have been duly given on the date
of service if personally served on the party to whom notice is to be given,
or on the date of receipt if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, return receipt
requested, postage prepaid, or by nationally recognized overnight courier,
and properly addressed to any such party at the address listed for such
party in the first paragraph of this Agreement. Any party may at any time
direct in writing that all communications or particular communications or
particular types of communications be delivered to specific designees other
than those specified herein by notifying the other parties in the manner
prescribed herein.
ARTICLE 14 - MISCELLANEOUS
14.1 ENTIRE AGREEMENT.
The terms and conditions of this Agreement (including the exhibits and
schedules hereto) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede any prior
understandings, agreements or representations by or between the parties,
written or oral. There are no understandings, representations or warranties
of any kind whatsoever, except as expressly set forth herein. The exhibits
and schedules attached to this Agreement constitute an integral part hereof
for all purposes, including, without limitation, the construction and
interpretation of the respective rights and obligations of the parties
hereto.
14.2 AMENDMENT.
No amendment or modification of this Agreement or waiver of the terms
or conditions hereof shall be binding upon any party unless approved in
writing by, such party or by an authorized representative of such party.
14.3 NON-WAIVER.
The failure of any party hereto to enforce at any time any of the
provisions of this Agreement shall not be construed to be a waiver of any
such provisions, nor in any way affect the validity of this Agreement or
any part hereof or the right of any party thereafter to enforce any such
provisions. No waiver of any breach of this Agreement shall be deemed a
waiver of any other or subsequent breach, whether of the same provision or
otherwise.
14.4 ASSIGNMENT.
This Agreement shall inure to the benefit of and be binding on the
parties hereto and their respective successors, assigns, legal
representatives and heirs. This Agreement shall not be assigned by any
party without the prior written consent of the other parties. Any
attempted assignment without such consent shall be void. Notwithstanding
anything to the contrary contained in the foregoing, Lincare shall have the
right at any time, and from time to time, to assign this Agreement to its
parent or any affiliate or subsidiary or any successor to its business,
without the consent of the other parties to this Agreement.
14.5 NO THIRD PARTY BENEFICIARIES.
This Agreement is intended for the sole and exclusive benefit of the
parties hereto, and no third party or person is intended as a third party
beneficiary of this Agreement or any part hereof in any respect (including,
but not limited to, any employee of Company) and no third party or person
shall obtain any rights, claims, benefits or privileges under or by virtue
of this Agreement whatsoever.
14.6 CONSTRUCTION.
This Agreement has been negotiated at arm's length among the parties,
and each of the parties has been represented by legal counsel. Accordingly,
each of the parties shall be deemed to have participated in the preparation
of this Agreement and this Agreement shall not be construed more strictly
against one party than the other.
14.7 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become a
binding agreement when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
14.8 NUMBER.
In this Agreement, where applicable, references to the singular shall
include the plural and references to the plural shall include the singular.
14.9 GENDER.
In this Agreement, where applicable, references to the male, female or
neuter gender shall include reference to all other such genders where the
context so requires.
14.10 HEADINGS.
The subject headings of the articles, Sections and Subsections of this
Agreement are included for purposes of convenience and reference only, and
shall not affect the construction or interpretation of any of its
provisions.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed
it as of the day and year first above written.
LINCARE INC.
By: _________________________________
Title: ______________________________
HEALTHCOR HOLDINGS, INC.
By: _________________________________
Title: ______________________________
