AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
Exhibit 2.1
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
This Amended and Restated Asset Purchase Agreement (the “Agreement”), made as of this 3rd
day of September, 2005, 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,
Xxxxxxxxxx, Xxxxxxx 00000; MED 4 HOME 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,
Xxxxxxxxxx, Xxxxxxx 00000 (together hereinafter referred to as “Buyer”); UNITED STATES
PHARMACEUTICAL GROUP, LLC, a limited liability company duly organized and existing under the laws
of the State of Delaware (hereinafter referred to as “Seller” or “Company”); and NATIONSHEALTH,
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. 0xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000
(hereinafter referred to as “Owner”) amends, restates, and supercedes the Asset Purchase Agreement
executed by the parties on September 2, 2005 (the “Effective Date”). Buyer desires to purchase,
and Seller wishes to sell to Buyer, all of the assets and business related to the respiratory
equipment, aerosol inhalation therapy equipment and respiratory medications services and other
respiratory therapy and respiratory-related durable medical equipment products, supplies, and
services that are specifically described below (the “Business”), upon the following terms and
conditions:
1. (a) Subject to the terms and conditions set forth in this Agreement, Seller hereby sells,
conveys, transfers, assigns and delivers to Buyer, and Buyer hereby purchases and accepts from
Seller, the following tangible and intangible assets relating to the Business: (i) list of all
customers of the Business delivered to Buyer electronically on September 1, 2005 (hereinafter
referred to as the “Customer List”); (ii) the original and all copies of customer files,
(including, but not limited to, prescriptions and the original certificates of medical necessity,
the original physicians orders and assignments of benefits and the original of any other evidence
of medical necessity related to equipment or services being rendered, and the original of any other
information supporting the billing), for all customers who are identified on the Customer List and
who are designated as having only respiratory illness but not diabetes or an ostomy-related
condition, except that without limiting the scope of Paragraph 9 hereof, Seller may retain a copy
of such customer files; (iii) copies of customer files, (including, but not limited to, copies of
prescriptions and copies of certificates of medical necessity, copies of physicians orders and
copies of assignments of benefits and copies of any other evidence of medical necessity related to
equipment or services being rendered, and copies of any other information supporting the billing),
for all customers who are identified on the Customer List and who are designated as having both
respiratory illness and diabetes or an ostomy-related condition, and Seller shall, without limiting
the scope of Paragraph 9 hereof, retain possession of all original customer files pertaining to
customers who are identified on the Customer List and who are designated as having both respiratory
illness and diabetes or an ostomy-related condition, including without limitation the original
assignments of benefits for such customers; (iv) the current referral list of the Business, which
includes the name of the referring physician; (v) all equipment, supplies, and medications in
inventory related to the Business or resident with a customer of the Business (a listing of all
equipment, supplies, and medications in inventory is set forth in Schedule I hereto); (vi) all of
the business of the Business; and (vii) all other assets identified on Schedule II hereto. All of
such assets identified in these Paragraphs 1(a) and (b) are hereinafter referred to collectively as
the “Assets.”
(b) Seller represents that it has not billed and agrees that it will not xxxx for any
equipment, products, supplies or services provided relating to the Business and provided from and
after the Effective Date to any customers of the Business, it being agreed that the right to any
and all such xxxxxxxx shall be included in the Assets purchased by Buyer and shall be for the sole
benefit of Buyer. Buyer acknowledges that Seller is not precluded by this Agreement from billing
customers identified on the Customer List for equipment, products, supplies, and services (i) that
were provided by Seller prior to the Effective Date or (ii) that were or are provided by Seller
before, on, or after the Effective Date and that are unrelated to the Business.
(c) Buyer shall not purchase and acquire, and same are specifically excluded under the
Agreement, the following assets (“Excluded Assets”) of Seller in respect of the Business: (i) the
cash and cash equivalents of the Business owned by Seller and on hand at the close of business on
the day immediately prior to the Effective Date (ii) all of the accounts receivable of the Business
on hand on the Effective Date, and all liabilities and obligations related thereto; (iii) any and
all licenses, permits, supplier numbers or other regulatory approvals of Seller; (iv) all contracts
of the Seller; and (v) any assets of the Seller or Owner not otherwise included among the Assets
as defined herein. For all assets not purchased, Buyer assumes no liability associated therewith.
(d) Seller shall have the obligation to pay off in full all Assets, including without
limitation any operating and capital leases and rental agreements related to the Business and the
payment of any purchase options or other similar payments relating to any of such Assets and to
deliver to Buyer title to all Assets, including without limitation leased and rented Assets,
free and clear of any Encumbrances (as such term is defined herein). If the Encumbrances are not
satisfied prior to the Effective Date, Buyer, after written notice to Seller if feasible,
providing Seller with five (5) business days to cure such obligations, will (i) make payment to
satisfy those obligations directly to the third parties and (ii) deduct that amount from the
purchase price paid to Seller on the Effective Date or deduct that amount from its other payment
obligations under this Agreement.
2. In consideration of the purchase and sale of the Assets and Business hereunder, Buyer agrees to
pay to Seller, or its designee, a total purchase price of Sixteen Million and no/100 Dollars
($16,000,000.00), payable as follows: (a) Fourteen Million Four Hundred Thousand and no/100
Dollars ($14,400,000.00) will be paid by Buyer on the Effective Date; (b) Eight Hundred Thousand
and no/100 Dollars ($800,000.00) shall be payable, without interest, six (6) months after the
Effective Date, subject to the terms and conditions of this Agreement; and (c) Eight Hundred
Thousand and no/100 Dollars ($800,000.00) shall be payable, without interest, twelve (12) months
after the Effective Date, subject to the terms and conditions of this Agreement.
3. Buyer shall not assume nor be responsible for any debts, liabilities or obligations of Seller or
Owner or the Business of any nature whatsoever, and Seller and Owner shall indemnify, jointly and
severally, Buyer from and against any such debts, liabilities or obligations in accordance with the
provisions of Paragraph 8 of this Agreement. If Buyer reasonably deems it necessary or appropriate
to make payment of any such liability or debt, after written notice to Seller if feasible,
providing Seller with five (5) business days to cure, Buyer shall have the right to deduct such
amount or amounts from its payment obligations under this Agreement.
4. Seller and Owner represent, warrant and covenant, jointly and severally, as follows:
(a) Seller is a limited liability company, duly organized, validly existing, and in good
standing under the laws of the State of Delaware and has all necessary limited liability company
powers to own the Assets and to operate the Business as now owned and operated by it. Neither
Owner nor Seller has knowledge of any fact which could give rise to any liability or obligation of
the Seller whatsoever, liquidated or unliquidated, actual or contingent, criminal or civil, whether
or not covered by insurance, relating to the Business for which adequate provision has not been
made by the Seller. Seller and Owner represent and warrant that there has been no material adverse
change in the assets, liabilities, financial performance or capitalization of the Seller’s Business
since June 30, 2005.
(b) The Assets are free and clear of any restrictions or conditions to sale, conveyance or
transfer and are free and clear of all liens, mortgages, pledges, encumbrances, leases, agreements,
contracts, rental agreements, charges, claims, security interests, taxes, conditions or
restrictions of any nature or description whatsoever (all of the foregoing are referred to herein
collectively as “Encumbrances”). If the Assets are not free and clear of any Encumbrances on the
Effective Date, after written notice to Seller if feasible, providing Seller with five (5) business
days to cure, Buyer may make full payment to any appropriate third party to release the Encumbrance
and deduct such amount or amounts from its payment obligations under this Agreement.
(c) Seller has complied with, and is not in violation of, any federal, state, or local
statutes, laws, ordinances, rules, regulations, codes or standards which affect the operation of
the Business, including, without limitation, any federal or state government funded health care
program and the provisions of the federal fraud and abuse statutes, laws, rules and regulations.
Seller further represents, warrants, and covenants that, in respect of the transaction described
herein, Seller has complied with and will comply with any legal or regulatory requirements of the
applicable state board of pharmacy to include but not be limited to any notice and record-keeping
obligations. All xxxxxxxx by Seller in respect to customers of the Business: (i) arose from valid
sales or rentals in the ordinary course of business; (ii) relate to equipment or products provided
to customers covered under the Medicare, Medicaid or private insurance program, each of which
customers, who are among those set forth in the Customer List, were qualified under such programs
to receive such products or services, or were provided on a direct xxxx basis; and (iii) were
prepared and submitted by Seller with all the complete and correct forms, documents, test results
and other information necessary to receive payment with respect to each such billing in conformity
with all applicable legal and contractual requirements. There are no claims, lawsuits,
arbitrations, government proceedings, investigations or audits pending relating to the Business to
which Seller or any of its directors, 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 Seller’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, Seller in respect of the Business or involving the assets of, or equity interests in, the
Business or the Assets. The parties understand and agree that Buyer does not assume the liability
or responsibility for any such claim or litigation which has been asserted or which might be
asserted and arose from actions prior to the Effective Date.
(d) Seller has not received nor has it applied for any cash advances in respect of the
Business 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. Within ten (10) days of Seller’s receipt of Buyer’s invoice, Seller shall reimburse Buyer
for the amount of any such advances which are deducted by any such payor from amounts billed by
Buyer after the Effective Date or, if Buyer still has payment obligations under the Agreement, Buyer shall
deduct such amount from its payment obligations.
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(e) The Customer List is a complete list identifying each customer of the Business
(identifying respiratory medications customers, identifying those customers with nebulizers, and
identifying those customers designated as having only respiratory illness and those customers with
both respiratory illness and diabetes or an ostomy-related condition) to whom Seller is currently
supplying any equipment, products, supplies or services, and Seller has no reason to believe that
the Customer List, in its electronic format, is incompatible with Buyer’s information systems. For
each such customer, the Customer List includes the customer’s correct name, address and payor
account number and the equipment, products (in the case of prescriptions, the prescription
information, date of prescription, the initial date of service, the date of last shipment, the
prescribing physician, next call-back date, next shop date, compliance call data and any other
information necessary to service the customer), supplies and services currently supplied to such
customer by Seller in connection with the Business. Except as otherwise indicated on the Customer
List, each customer included on the Customer List has been duly qualified by the appropriate payor
for reimbursement for services rendered by the Business or is on a direct xxxx basis. Seller and
Owner represent and warrant that, as of the Effective Date, the Customer List is an accurate and
complete list of 33,000 unique customers who have been shipped unit dose respiratory medications
and who have not cancelled service. With respect to 30,878 of such customers, as of the Effective
Date, Seller has all appropriate documentation necessary to xxxx the appropriate payor for same.
In the event Buyer determines after the Effective Date that, as of the Effective Date, the Seller
was providing respiratory medications to fewer than the represented number of unit dose respiratory
medications customers, Buyer shall have the right, in addition to its other rights hereunder
(including its right to indemnification), to deduct an appropriate amount per missing or shortfall
customer from its payment obligations under the Agreement.
(f) Seller is the only equitable and legal owner of the Business. The business of the
Business has been conducted in substantially the same manner since June 30, 2005 and, except as
otherwise disclosed on Schedule III hereto, there has not been any: (i) transaction by Seller
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) change in business or accounting methods
or practices (including, without limitation, any change in depreciation or amortization policies or
rates) by Seller in respect of the Business; (iv) revaluation by Seller of any of the Assets of the
Business; (v) lease, sale or transfer of any tangible or intangible asset of the Business, except
in the ordinary course of business and for fair market value; (vi) entry into, or amendment or
termination of, any contract, agreement, or license related to the Business, except in the ordinary
course of business and upon fair market value, terms and conditions; (vii) waiver or release of any
right or claim of Seller in respect of the Business, except in the ordinary course of business and
upon fair market value, terms and conditions; (viii) 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; and (ix) agreement by Seller to do any of the things
described in the preceding clauses (i) through (viii).
(g) Neither this Agreement nor the consummation of the transactions contemplated hereby
violate or shall violate any federal, state or local statute, law, regulation, rule, code,
standard, ordinance, order, writ, judgment, injunction, decree, determination or award, including,
without limitation, any provisions of the Federal Bankruptcy Act or any federal, state or local law
with respect to fraudulent conveyances or transfers or any such similar law, or any term or
provision of the Certificate of Formation or operating agreement, or result in the breach of or
default under any instrument or agreement to which Seller is a party, or require the consent or
approval of any third party, which has not been obtained.
(h) Seller has the right, power, legal capacity, and authority to enter into and perform its
obligations under this Agreement, and any required approvals or consents of any persons have been
obtained. The execution, delivery and performance of this Agreement has been duly authorized by
Seller’s managers, and a copy of such resolutions so authorizing the execution, delivery and
performance of this Agreement, certified by the Secretary of Seller, has been delivered to Buyer.
(i) All representations, warranties, covenants and agreements made by Seller in this Agreement
or in any writing, certificate, schedule, exhibit, statement, list (including without limitation
the Customer List), report, instrument, or other document furnished or delivered to Buyer 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 Effective Date with the same effect as if made on and as of
Effective Date, and shall survive the execution, delivery and performance of this Agreement and the
Effective Date.
5. Buyer represents, warrants and covenants as follows:
(a) Lincare Inc. and Med 4 Home Inc. are corporations duly organized, validly existing and in
good standing under the laws of the State of Delaware. Lincare Inc. and Med 4 Home Inc. are duly
qualified to do business in and are in good standing in all of the states of the United States in
which, to the best of their knowledge and belief, the character of their properties or the nature
of their businesses require them to be so qualified.
(b) Buyer has the right, power, legal capacity, and authority to enter into and perform its
obligations under this Agreement, and no approvals or consents of any persons are required. The
execution, delivery and performance of this
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Agreement and the transactions contemplated hereby have been duly authorized by Lincare Inc.’s and
Med 4 Home Inc.’s Boards of Directors.
(c) Buyer will duly observe proper confidentiality obligations in accordance with applicable
law, rule or regulation with respect to any confidential customer records duly transferred by
Seller to Buyer hereunder.
(d) Neither this Agreement nor the consummation of the transactions contemplated hereby
violate or shall violate any federal, state or local statute, law, regulation, rule, code,
standard, ordinance, order, writ, judgment, injunction, decree, determination or award, or any term
or provision of the Certificate of Incorporation or by-laws, or result in the breach of or default
under any instrument or agreement to which Buyer is a party, or require the consent or approval of
any third party, which has not been obtained.
(e) To Buyer’s knowledge, on the Effective Date, the data contained in the Customer List are
compatible with Buyer’s information systems. In the event Buyer reasonably determines after the
Effective Date that such data are not compatible, without waiving its rights or remedies herein,
Buyer may request Seller’s cooperation in achieving compatibility. In the event Buyer reasonably
determines that supplemental data relating to the customers on the Customer List are required to
ensure Buyer may operate the Business, without waiving its rights or remedies herein, Buyer may
request that Seller provide such supplemental data. Seller agrees to cooperate promptly and in
good faith in the event Buyer makes such a request.
6. Buyer and Seller shall share equally the amount of all taxes, excises and other governmental
charges and/or fees, if any, payable in connection with the sale, conveyance, transfer, assignment
and delivery of the Assets hereunder (including, without limitation, all sales, use, property,
transfer, filing or recording taxes or fees). Seller 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 Buyer
hereunder. If Buyer reasonably deems it necessary to pay any such charge on behalf of Seller,
Buyer, after written notice to Seller if feasible, providing Seller with five (5) business days to
cure, shall deduct such amount from its payment obligations under this Agreement.
7. (a) Legal and equitable title to the Assets shall pass to Buyer effective as of 11:59 p.m. on
the Effective Date.
(b) Buyer, Seller, and Owner will, at any time, and from time to time, after the Effective
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) Seller shall be responsible for all income, franchise, sales, property or other tax
liabilities, including, without limitation, any interest and penalties thereon, which are
attributable to operation or ownership of the Business or Assets for periods prior to the Effective
Date. Buyer shall be responsible for any such taxes attributable to its operation or ownership of
the Business or the Assets for periods on or following the Effective Date. Any such taxes requiring
apportionment shall be pro-rated on the basis of the fiscal year covered by such taxes. If Seller
shall have paid any taxes for which Buyer is responsible as aforesaid, or if Buyer will pay taxes
for which Seller is responsible as aforesaid, appropriate adjustments will be made by the parties
as promptly as practicable. However, if Buyer reasonably deems it necessary or appropriate, Buyer,
after written notice to Seller if feasible, providing Seller with five (5) business days to cure,
shall deduct such amount, if any, from its payment obligations under this Agreement.
8. (a) Seller and Owner shall, jointly and severally, defend, indemnify and hold Buyer, its parent,
subsidiaries, affiliates, directors, officers, and employees harmless from, against, and in respect
of, any and all claims, demands, lawsuits, investigations, proceedings, losses, obligations,
assessments, fines, penalties, administrative orders, costs, expenses, liabilities and damages
including interest, penalties and reasonable attorneys’ fees which arise or result from or relate
to: (i) Seller’s or Owner’s breach of, or failure to perform, any of its respective
representations, warranties, covenants, agreements or obligations contained in this Agreement or in
any writing, certificate, exhibit, statement, list, report, instrument or other document furnished
or delivered to Buyer in connection with this Agreement; (ii) Buyer being required to assume or
discharge any debt, liability or obligation of Seller or Owner of any nature whatsoever (including,
without limitation, any liability under any federal, state or local bulk transfer or fraudulent
conveyance laws); or (iii) any debt, liability or obligation imposed upon Buyer as a result of, or
which relates to Seller’s ownership or operation of the Business or the Assets prior to the
Effective Date (including, without limitation, any liability under any federal, state or local bulk
transfer or fraudulent conveyance laws).
(b) Buyer shall defend, indemnify and hold Owner, Seller, and Seller’s parent, subsidiaries,
affiliates, managers, directors, officers, and employees harmless from, against, and in respect
of, any and all claims, demands, lawsuits, proceedings, losses, obligations, assessments, fines,
penalties, administrative orders, costs, expenses, liabilities and damages including interest,
penalties and reasonable attorneys’ fees which arise or result from or relate to: (i) Buyer’s
breach of, or failure to perform, any of its representations, warranties, covenants, agreements or
obligations contained in this Agreement or in any writing, certificate, exhibit, statement, list,
report, instrument or other document furnished or delivered to Seller in connection with this
Agreement; (ii) Seller or Owner being required to assume or discharge any debt, liability or
obligation of Buyer of any
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nature whatsoever; or (iii) any debt, liability or obligation imposed upon Seller or Owner as a
result of, or which relates to, Buyer’s ownership or operation of the Assets from and after the
Effective Date.
(c) The indemnification rights provided for in this Paragraph 8 shall be in addition to, and
shall not restrict or impair in any respect, any other rights or remedies of either party at law or
equity.
9. (a) In consideration of Buyer’s purchase of the Business and the Assets, Owner, Company, each
of Company’s parents and shareholders, and each of Owner’s and Company’s subsidiaries and
affiliates (for purposes of this Covenant Not to Compete, “affiliate” with respect to the Owner
shall mean only a “controlled affiliate”) (singly hereinafter called the “Covenantor”), hereby
agrees not to engage, directly or indirectly, in the business of marketing, advertising, selling,
leasing, renting, distributing, or otherwise providing oxygen, oxygen equipment, aerosol inhalation
therapy equipment and respiratory medications that are delivered through a nebulizer in a unit
dose, nasal continuous positive airway pressure devices, home sleep studies and related therapy
equipment, or any other respiratory therapy or durable medical equipment, products or supplies
(except as set forth in this paragraph immediately below) to customers in their homes or other
alternative site care facilities within the United States of America (the “Competitive Business”),
for a period commencing on the Effective Date and continuing for a period of five (5) years
thereafter (the “Covenant Not to Compete”). Notwithstanding anything in the foregoing to the
contrary, no Covenantor will be barred from engaging, directly or indirectly, in the business of
marketing, advertising, selling, leasing, renting, distributing, or otherwise providing (i) insulin
pumps, glucose monitors, test strips, and any other products, supplies, or services relating only
to diabetics, (ii) ostomy supplies, and (iii) pharmaceutical products and services under Medicare
Part D, except in no event shall any Covenantor engage directly or indirectly in the business of
marketing, advertising, selling, leasing, renting, distributing, or otherwise providing unit dose
respiratory medications that are delivered through a nebulizer for a period of five (5) years from
and after the Effective Date. Covenantor shall not be deemed to be engaging “directly or
indirectly in the business of marketing” if Covenantor markets pharmaceutical products and services
under Medicare Part D on behalf of Cigna, pharmacy benefit managers, or any other insurance
company, with which Covenantor is in privity.
(b) Without limiting the generality of the provisions of Paragraph 9(a) hereof, this Covenant
Not to Compete shall be construed so that Covenantors shall also be in breach hereof if any
Covenantor is a shareholder, member, investor, trustee, agent, principal or partner of, 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 the Competitive Business, or
if any Covenantor receives any compensation or remuneration in exchange for products or services
provided to aid such person, firm, corporation, partnership, joint venture, association, trust or
other entity’s Competitive Business 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 the
Competitive Business (except as otherwise allowed under Paragraph 9(a) hereof). Notwithstanding
anything to the contrary contained in this Xxxxxxxxx 0, Xxxxxxxxxxx shall not be deemed to be in
breach hereof solely by reason of owning, in the aggregate, 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. This Covenant Not to Compete shall also be construed to prohibit each Covenantor
from engaging in any of the following: (i) hiring, offering to hire, enticing away or in any other
manner persuading or attempting to persuade any officer, employee or agent of Buyer to discontinue
his or her relationship with Buyer; and (ii) directly or indirectly soliciting, diverting or taking
away, or attempting to solicit, divert or take away any customers or business Seller had enjoyed or
solicited prior to the date hereof in respect of the Business or which Buyer may enjoy or solicit
after the date hereof; provided, however, that these provisions in no way restrict Seller from
soliciting or otherwise engaging in activities with customers on the Customer List, so long as such
solicitation and other activities are unrelated to the Competitive Business and so long as such
solicitation is permitted under applicable law and governmental regulations. Covenantors
acknowledge and agree that the provisions of this Covenant Not to Compete are an inducement for,
and a condition precedent to, Buyer’s entering into this Agreement and that Buyer is specifically
relying on covenant in entering into and performing its obligations under this Agreement.
(c) It is expressly understood and agreed by Covenantors that it shall be a breach of this
Covenant Not to Compete for a Covenantor to assist in any way any affiliated group, any parent,
subsidiary or affiliate, 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.
(d) Covenantors agree that the remedy at law for any breach of any obligation under this
Paragraph 9 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, Buyer shall be entitled to injunctive relief, and
reimbursement for all reasonable attorneys’ fees and other expenses incurred in connection with the
enforcement hereof.
(e) Notwithstanding any provision herein to the contrary, in the event that all or a majority
of the stock in the Company or in its direct or indirect parent is sold, assigned, transferred or
otherwise conveyed to an unaffiliated entity, or in the event that the Company or its direct or
indirect parent undergoes any change through consolidation, merger, share exchange or similar
transaction with an unaffilated entity resulting in a change in control of the Company or its
direct or indirect parent, then
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the surviving entity shall not be deemed to be in violation of the Covenant Not to Compete if it is
engaged in the business of marketing, advertising, selling, leasing, renting, distributing, or
otherwise providing (1) respiratory medications to nursing homes or assisted living facilities; or
(2) oxygen, oxygen equipment, aerosol inhalation therapy equipment, durable medical equipment, or
respiratory medications, so long as such service is not provided to patients that are billed by
such surviving entity to the federal Medicare program.
10. (a) In consideration of Company’s sale of the Business and Assets, Buyer, each of its parents
and shareholders, and each of its subsidiaries and affiliates (singly hereinafter called the “Buyer
Covenantor”), hereby agrees not to engage directly in marketing, advertising, or otherwise
promoting to any customer on the Customer List, who has a respiratory illness and either a diabetes
or an ostomy-related condition, or soliciting any such customers on the Customer List to obtain
from Buyer Covenantor, any product or services relating to diabetes or any ostomy supplies or
services provided by Covenantor after the date hereof, for a period commencing on the Effective
Date and continuing for a period of three (3) years from and after the Effective Date (the “Buyer
Covenant Not to Compete”). Notwithstanding anything in the foregoing to the contrary, Buyer
Covenantor shall not be in violation of this Buyer Covenant Not to Compete in the event any such
customer contacts Buyer, without having been solicited by Buyer, to provide either diabetes or any
ostomy supplies or services. The parties hereto understand and agree that the Buyer Covenant Not
to Compete is applicable only to those customers listed on the Customer List, who have a
respiratory illness and either a diabetes or an ostomy-related condition, and is not applicable to
any customers on the Customer List, who are identified as having neither a diabetes or
ostomy-related condition, and is not applicable to any other customers of the Buyer not included on
such list, including without limitation any customers to whom Buyer may provide services in the
future in connection with the Business.
(b) Without limiting the generality of the provisions of Paragraph 10(a) hereof, this Buyer
Covenant Not to Compete shall be construed so that the Buyer Covenantor shall also be in breach
hereof if any Buyer Covenantor is a shareholder, trustee, agent, principal or majority partner of,
to, or for a person, firm, corporation, partnership, joint venture, association, trust or other
entity which is engaged in the activities prohibited under Paragraph 10(a) hereof, 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 the activities prohibited under Paragraph 10(a)
hereof. Notwithstanding anything to the contrary contained in this Xxxxxxxxx 00, Xxxxx Xxxxxxxxxx
shall not be deemed to be in breach hereof solely by reason of owning, in the aggregate, 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. This Buyer Covenant Not to Compete shall also be
construed to prohibit each Buyer Covenantor from engaging in directly soliciting, diverting or
taking away, or attempting to solicit, divert or take away any customers of Seller who are on the
Customer List and who are using Seller as a provider of diabetic supplies or ostomy products and
supplies. Notwithstanding anything to the contrary contained in this Xxxxxxxxx 00, Xxxxx
Xxxxxxxxxx shall not be deemed to be in breach hereof in the event any such customer contacts
Buyer, without having been solicited by Buyer, for the provision of diabetic supplies or ostomy
products and supplies. Buyer Covenantor acknowledges and agrees that the provisions of this Buyer
Covenant Not to Compete are an inducement for, and a condition precedent to, Seller’s entering into
this Agreement and that Seller is specifically relying on covenant in entering into and performing
its obligations under this Agreement.
(c) It is expressly understood and agreed by the Buyer Covenantor that it shall be a breach of
this Buyer Covenant Not to Compete for a Buyer Covenantor to assist in any way any affiliated
group, any parent, subsidiary or affiliate, any business associate, or any other person, firm,
corporation, partnership, joint venture, association, trust or other entity, to engage in any
activity which a Buyer Covenantor is prohibited from engaging in by this Buyer Covenant Not to
Compete.
(d) Buyer Covenantor agrees that the remedy at law for any breach of any obligation under this
Paragraph 10 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, Seller shall be entitled to injunctive relief, and
reimbursement for all reasonable attorneys’ fees and other expenses incurred in connection with the
enforcement hereof.
11. Without limiting any other rights and remedies to which Buyer may be entitled, at law or in
equity, if Seller materially breaches or misrepresents those warranties or representations of
material fact set forth herein and such material breach or misrepresentation has an adverse effect
upon Buyer, upon which the parties hereby agree Buyer relied, then the parties agree that Buyer has
insufficient remedy at law and that, at any time from the Effective Date until ninety (90) days
after the Effective Date, Buyer shall have the right to rescind this Agreement, including any
agreements and contracts executed therewith or on even date therewith, and the Agreement shall be
void ab initio.
12. For a period of three (3) years from and after the Effective Date, in the event a customer
inquires telephonically with Seller as to the location of the Business, Seller will advise such
customer in substantial accordance with that certain script set forth in Schedule IV hereof.
Notwithstanding anything in the foregoing to the contrary, after one year after the Effective Date,
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Seller may use commercially reasonable efforts in advising such customer in substantial accordance
with that certain script set forth in Schedule IV hereof. Seller agrees to cease providing the
advice set forth in the script promptly upon written notice from Buyer directing Seller to cease.
The parties acknowledge that the script may require periodic updates to comport with then-existing
circumstances. The parties agree to cooperate in good faith in updating such script from time to
time.
13. (a) The parties acknowledge that there is no requirement, condition or agreement that Seller or
any of its subsidiaries or affiliates, or any of their respective officers, directors, members,
shareholders, or employees, or any other person or entity, refer any customers to Buyer for the
provision of equipment, products or services. The parties further acknowledge that no portion of
the purchase price is to be in return for the purchasing, leasing, renting or ordering of any
product or services from Buyer or referring any customer to Buyer. Furthermore, any officer,
director, member, shareholder or employee of Seller or any of its parents, subsidiaries or
affiliates who is in a position to refer patients to Buyer shall remain free to recommend care and
treatment for their patients to any supplier which in their medical judgment is in the patient’s
best interests.
(b) This Agreement shall be governed by, and construed in accordance with, the laws of the
State of Florida.
(c) The terms and conditions of this Agreement (including the Schedules hereto) constitute the
entire agreement between 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.
The 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. This Agreement shall inure to the benefit of and be binding on
the parties and their respective successors, assigns, legal representatives and heirs. This
Agreement shall not be assigned by any party hereto without the prior written consent of the other
parties, and any attempted assignment without such consent shall be void; provided, however, that
Buyer 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 and provided, however, that Buyer does not object to Seller or
Owner granting a security interest in all payments under the Agreement to CapitalSource Finance,
LLC. 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. 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. This Agreement has been negotiated at arm’s length
among the parties, and 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.
(d) This Agreement may be executed in one or more counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same instrument. This Agreement
may be executed by facsimile signature.
(e) 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, and properly addressed to
any such party at the address listed for such party in this section. 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. Notices hereunder shall be sent to the
following:
To Seller: NationsHealth, Inc.
00000 X.X. 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
XxXxxxxxx Will & Xxxxx LLP
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
To Buyer: Lincare Inc.
00000 X.X. 00 Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Legal Department.
Xxxxxxxxxx, XX 00000
Attention: Legal Department.
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14. Buyer and Seller agree, upon reasonable notice by a requesting party, at reasonable times, and
at the requesting party’s expense, to make copies of records and documents (including without
limitation customer files) directly related to the Business for the requesting party. Seller
agrees that, upon reasonable request by Buyer, at reasonable times, and at Buyer’s expense, to make
available the original documents retained by Seller under Paragraph 1(a)(iii) hereof. Buyer agrees
that, upon reasonable request by Seller, at reasonable times, and at Seller’s expense, to make
available the original documents retained by Buyer under Paragraph 1(a)(ii) hereof. Buyer and
Seller agree to retain all such records and documents as required by applicable law.
15. Neither Seller, Owner, nor Buyer shall issue any press release or public announcement relating
to the subject matter of this Agreement without the prior written approval of the other.
Notwithstanding anything in the foregoing to the contrary, the Seller, Owner, or Buyer may make a
public disclosure, which such disclosing party believes in good faith is required by applicable
law, regulation or stock market rule.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it as of the day and year
first above written.
| LINCARE INC. |
||||
| By: | /s/ Xxxx X. Xxxxx | |||
| Title: | Acquisitions Attorney | |||
| MED 4 HOME INC. |
||||
| By: | /s/ Xxxx X. Xxxxx | |||
| Title: | Acquisitions Attorney | |||
| UNITED STATES PHARMACEUTICAL GROUP, LLC |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Title: | Chief Executive Officer | |||
| NATIONSHEALTH, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Title: | /s/ Chief Executive Officer | |||
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