ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and
entered into as of the 25th day of June 1999, by and between THE CARE GROUP OF
TEXAS, INC. a Texas business corporation, and CARE LINE OF HOUSTON, INC., a
Texas business corporation,, (collectively referred to as "Seller") and OSHER
INVESTMENTS, LTD., a Texas limited partnership ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is a Texas business corporation and Seller
owns and operates an infusion therapy services company, which is located at 0000
Xxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, and which has the following two components:
(a) The Care Group of Texas, Employer Identification Number 00-0000000, and (b)
Care Line of Houston, Inc., Employer Identification Number 00-0000000
(collectively referred to herein as the "Business"), both of which are
wholly-owned subsidiaries of Allion Healthcare, Inc.
WHEREAS, Buyer is a Texas limited partnership and provides
home health services;
WHEREAS, Seller desires to sell certain tangible and
intangible assets to Buyer upon the terms and conditions contained herein, and
Buyer desires to purchase such assets from Seller.
NOW, THEREFORE, for and in consideration of the premises, and
the agreements, mutual covenants, representations, and warranties hereinafter
set forth, and other good and valuable consideration, the receipt and adequacy
of which are forever acknowledged and confessed, the parties hereto covenant and
agree as follows:
1. SALE OF ASSETS AND CERTAIN RELATED MATTERS
1.1 SALE OF ASSETS. Subject to the terms and conditions of
this Agreement, Seller agrees to sell, convey, transfer, and deliver to Buyer
and Buyer agrees to purchase as of Closing (as defined in Section 3.1) all
tangible and intangible assets (except as set forth in Section 1.2 hereof) owned
by Seller and associated with or employed in the operations of the Business,
including, without limitation, the following items (collectively, the "Assets"):
(A) all major, minor, and other equipment, furniture
and furnishings, machinery, appliances, tools, instruments, and other
tangible personal property, including, without limitation, those items
listed in Schedule l.l(b) hereto;
(B) all supplies, inventory, prepaids and deposits
including, without limitation, all medicines, drugs, medical products
and devices, janitorial and office supplies, including, without
limitation, those items listed in Schedule 1.1(b) hereto;
(C) all equipment records and manuals, operating and
protocol manuals, and computer software owned by Seller and used in the
Business;
(D) all patient, medical, and personnel records
(including, without limitation, medical administrative libraries,
medical records, patient billing records, documents, catalogs, books,
records, and files);
(E) all prepaid expenses, claims for refunds, and
rights of offset, except as listed on Schedule 1.1(e);
(F) all names, trade names, assumed names,
trademarks, and service marks, (or variations thereof), including, but
not limited to, the names "The Care Group of Texas, Inc.," and "Care
Line of Houston, Inc." and any derivations thereof together with all
goodwill associated therewith;
(G) all licenses and permits, including without
limitation, the Medicare and other provider numbers to the extent
assignable, that are held by Seller;
(H) all patents and patent applications;
(I) all phone numbers used in connection with the
Business, including, but not limited to, the numbers listed on Schedule
1.1(i);
(J) all of Seller's interest in any commitments,
contracts, leases, and agreements, including without limitation, those
which Buyer elects to assume in writing pursuant to the terms of the
Assignment and Assumption Agreement (as hereinafter defined) and which
are described on Schedule 4.4 hereto (collectively the "Contracts");
and
(K) all books, records and files, including without
limitation, client information, employee and contractor files, and
financial statements and documents relating to the Business or the
Assets.
Seller shall convey good and marketable title to the Assets
and all parts thereof to Buyer free and clear of all agreements, liabilities,
claims, assessments, security interests, liens, pledges, rights of first
refusal, options, restrictions, and encumbrances, and defects in title except
for the Assumed Liabilities (as hereinafter defined) and any other items
expressly provided herein.
1.2 EXCLUDED ASSETS. T he following items, which are part of
the Business and related to the Assets, are not intended by the parties to be a
part of the sale and purchase contemplated hereunder and are specifically
excluded from the Assets:
(A) cash in Seller's bank accounts,
(B) the accounts receivable of Seller,
(C) any records that by law Seller is required to
retain in its possession, and
(D) those items specifically described in Schedule
1,24(d) hereto.
All other assets of Seller associated with or employed in the
operations of the Business, whether or not scheduled or described herein, are
included in the Assets to be conveyed to Buyer pursuant to this Agreement.
1.3 ASSUMED LIABILITIES. As of Closing, Buyer agrees to assume
the future payment and performance of the following liabilities and obligations
of the Seller (collectively, the "Assumed Liabilities"):
(A) the Contracts listed in Section 4.4 of this
Agreement;
(B) the remaining liability for the Metamed Software
after the `initial payment by Allion Healthcare of $15,000.00;
(C) that one certain professional office lease
executed February 6, 1998, between Xxxxxx X X Partners Limited
Partnership and The Care Group, Inc. (n/k/a Allion Healthcare, Inc.)
and The Care Group of Texas, Inc., both as Lessees, for the rental of
0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxx 00000 (the "Office Lease");
(D) such other liabilities of Seller as Buyer
expressly elects to assume in writing.
1.4 EXCLUDED LIABILITIES. Except as expressly provided to the
contrary in StctiQn-L3-above, Buyer is not assuming and under no circumstance
shall Buyer be obligated to pay or assume, and none of the Assets shall be or
become liable for or subject to, any liability of Seller, whether known or
unknown, fixed or contingent, recorded or unrecorded, including, without
limitation, the following (collectively, the "Excluded Liabilities"):
(A) indebtedness and other obligations or guarantees
of Seller, including, without limitation, current liabilities of Seller
and those listed on Schedule 1.4(a);
(B) federal, state, or local tax liabilities or
obligations of Seller including, but not limited to, real property,
personal and ad valorem taxes in respect of periods prior to Closing;
(C) liabilities or obligations arising out of any
breach by Seller at any time of any contract or commitment, whether or
not assumed by Buyer;
(D) any liability arising out of or in connection
with claims for acts or omissions of Seller or Seller's partners,
members, employees, agents, or independent contractors, which allegedly
occurred prior to or as of Closing, including, without limitation, all
malpractice and general liability claims, whether or not same are
pending, threatened, known or unknown;
(E) liability prior to the Closing Date for any and
all claims by or on behalf of Seller's employees, including, without
limitation, liability for any pension, profit sharing, deferred
compensation or any other employee health and welfare benefit plans,
liability for any EEOC claim, OSHA claim, employment discrimination
claim (whether based on sex, age, race, or otherwise), wage and hour
claim, unemployment compensation claim, worker's compensation claim and
the like, and liability for all employee wages and benefits, including,
without limitation, accrued vacation, sick leave and holiday pay and
taxes or other liability related thereto;
(F) liabilities or obligations in respect of
contracts or agreements of Seller which are not described in, Schedule
4.4 and not expressly assumed in writing by Buyer; and
(G) any debt, obligation, expense, or liability of
Seller arising out of or incurred in respect of any transaction of
Seller occurring after Closing or for any violation by Seller of any
law, regulation, or ordinance at any time.
2. FINANCIAL ARRANGEMENTS
2.1 PURCHASE PRICE. Subject to the terms and conditions
hereof, in reliance upon Seller's representations and warranties herein set
forth, and as consideration for the sale and purchase of the Assets as herein
contemplated, Buyer agrees to deliver to Seller as the total purchase price
hereunder an amount equal to Two Million Eight Hundred Twenty Thousand Eight
Hundred and Five Dollars and No Cents ($2,820,805.00) (the "Purchase Price").
2.2 PAYMENTS TO SELLER. At Closing, Buyer shall deliver to
Seller a check payable to the order of Seller (the "Check") in an amount equal
to Two Million Four Hundred Twenty Thousand Eight Hundred and Five Dollars and
No Cents ($2,420,805.00) and a non-interest bearing promissory note in the
amount of Four Hundred Dollars ($400,000.00) in the form attached as Exhibit
2.1-1.
2.3 ALLOCATION OF PURCHASE PRICE. Buyer and Seller agree that
the Purchase Price shall be allocated, at Closing, among the Assets. In
connection therewith, Buyer and Seller shall enter into an Allocation Agreement
in a form mutually agreeable to Buyer and Seller, effective as of the Closing
Date (defined in Section 3.1), setting forth the parties' agreement as to the
allocation of the Purchase Price.
Buyer and Seller further agree that the Purchase Price shall
be allocated, for purposes of Section 1060 of the Internal Revenue Code of 1986,
as amended (the "Code"), in accordance with the value of each class of asset set
forth above, and any tax rectums or other tax information they may file or cause
to be filed with any governmental agency shall be prepared and filed
consistently with such agreed upon allocations. In this regard, Buyer and Seller
agree that, to the extent required, they will each properly prepare and file
Form 8594 in accordance with Section 1060 of the Code.
2.4 RETAINED LIABILITIES; PRORATIONS.
(A) Buyer and Seller acknowledge and agree that
except for the Assumed Liabilities, and those items to be prorated at
Closing pursuant to this Section, Seller will retain and pay in a
timely manner all bills, obligations, indebtedness, or other
liabilities due, accrued, incurred, or arising in connection with the
ownership of the Assets or the operation and/or maintenance of the
Assets for the period on and prior to the Closing Date, as defined in
Section 3.1 (collectively the "Retained Liabilities"). basis for
payment, and (ii) invoices that are received by Seller that are the
responsibility of Buyer hereunder will be accumulated and delivered to
Buyer on a weekly basis for payment.
(B) Notwithstanding that the parties intend to make a
final settlement with respect to certain items as of the Closing Date,
(i) all payments for utility services, contract services, ad valorem
and personal property taxes relating to the Assets (which are not
prorated at Closing) shall be prorated between Seller and Buyer as soon
as reasonably practicable as of the Closing Date, and (ii) settlement
of such items shall occur within five (5) business days after receipt
of a request therefor accompanied by evidence that such proration and
payment is required hereunder.
3. CLOSING
3.1 GENERAL. The consummation of the sale and purchase of the
Assets and the other transactions contemplated by and described in this
Agreement (the "Closing") shall take place at the offices of Jenkens &
Xxxxxxxxx, P.C. located at 0000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (or
at such other place as the parties may mutually agree) at 10:00 a.m., local
time, on June 30, 1999, (such date of Closing is referred to herein as the
"Closing Date"), and shall be effective as of 12:01 a.m. on June 26, 1999. If
the parties to this Agreement mutually agree, they may postpone the Closing Date
to a later time and date. If the Closing is postponed, all references to the
Closing Date in this Agreement shall refer to the postponed date.
3.2 Action of Seller at Closing. At the Closing, Seller shall
deliver to Buyer the following:
(A) General Xxxx of Sale and Assignment, fully
executed by Seller conveying to Buyer good and marketable title to each
of the Assets, free and clear of all liens, security interests, claims,
liabilities, and other encumbrances;
(B) An Assignment and Assumption Agreement fully
executed by Seller, conveying to Buyer Seller's interest in the Assumed
Liabilities;
(C) Evidence satisfactory to Buyer that Seller has
taken all action necessary to authorize the execution, delivery and
performance of this Agreement and the documents described herein and
that the person or persons executing the Closing documents on behalf of
Seller have full right, power, and authority to do so;
(D) The Allocation Agreement described in Section 2.2
above, fully executed by Seller;
(E) A certificate, dated the Closing Date, executed
by the secretary or assistant secretary of Seller, certifying
resolutions of the Board of Directors and of the shareholders of Seller
approving and authorizing the execution, delivery and performance by
Seller of this Agreement and of each of the other documents to which
Seller is a party and the consummation of the transactions contemplated
hereby and thereby.
(F) A copy of the Certificate of Incorporation of
Seller, certified by the Secretary of State of the State of Texas, and
a copy of the Bylaws of Seller;
(G) Articles of Amendment to the Articles of
Incorporation of Seller changing the name of Seller;
(H) Actual or constructive possession of the Assets;
(I) A Certificate of Good Standing from the State of
Texas as of a date within thirty (30) days before the Closing Date;
(J) An assignment of the Office Lease as executed by
Seller and a consent and estoppel certificate for the Office Lease;
(K) Evidence reasonably satisfactory to Buyer that
any liens of record on the date hereof have been removed or released;
(L) A legal opinion of Seller's counsel substantially
in the form as attached hereto as Exhibit 3.2(m); and
(M) Such other instruments and documents, including,
without limitation, third-party consents, releases of liens,
terminations of security interests, and estoppel certificates, as Buyer
reasonably deems necessary to effect the transactions contemplated
hereby and to place Buyer in legal and operational possession of the
Assets.
3.3 ACTION OF BUYER AT CLOSING. At the Closing, Buyer shall
deliver to Seller the following:
(A) The Check in the amount of the Purchase Price,
payable to the order of Seller;
(B) An Assignment and Assumption Agreement, fully
executed by Buyer, pursuant to which Buyer assumes the future payment
and performance of the Assumed Liabilities as herein provided;
(C) The Allocation Agreement described in Section 2.2
above, fully executed by Buyer;
(D) Copies of resolutions duly adopted by Buyer's
General Partner, authorizing and approving Buyer's performance of the
transactions contemplated hereby and the execution and delivery of this
Agreement and the documents described herein, certified as true and of
full force as of Closing by an appropriate officer of Buyer;
(E) The Promissory Note described in Section 2.1
above, fully executed by Buyer;
(F) Proof from the Secretary of State of the State of
Texas that Buyer is a Texas Limited Partnership;
(G) A legal opinion of Buyer's counsel substantially
in the form as attached hereto as Exhibit 3.2(f); and
(H) Such other instruments and documents as Seller
reasonably deems necessary to effect the transactions contemplated
hereby
4. REPRESENTATIONS AND WARRANTIES OF SELLER
As of the Closing Date, Seller hereby represents and warrants
to Buyer the following:
4.1 Capacity. Seller is a Texas business corporation, and
Seller has the requisite power and authority to enter into this Agreement, to
perform its obligations hereunder, and to conduct its business as now being
conducted. Seller is duly authorized, qualified, and licensed under all
applicable laws, regulations, ordinances, and orders of governmental authorities
having jurisdiction over the Assets and the Business to own the properties and
conduct the Business in the place and in the manner now conducted. Seller's
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized.
4.2 CONSENTS; ABSENCE OF CONFLICTS WITH OTHER AGREEMENTS, ETC.
The execution, delivery, and performance of this Agreement by Seller and the
consummation of the transactions contemplated herein by Seller:
(A) do not require any approval, consent of, or
filing with any person or entity not a party hereto;
(B) will neither conflict with nor result in any
breach or contravention of, nor permit the acceleration of the maturity
of, or the creation of any lien under, any indenture, mortgage,
agreement, lease, contract, instrument, or understanding to which
Seller is a party or by which Seller or the Assets are bound, except as
expressly provided herein to the contrary;
(C) will not violate any judgment, decree, order,
writ, or injunction of any court or governmental authority to which
Seller or the Assets may be subject; and
(D) are and will constitute the valid and legally
binding obligation of Seller, enforceable in accordance with the terms
of this Agreement, except as enforceability may be restricted, limited,
or delayed by applicable bankruptcy or other laws affecting creditors'
rights generally and except as enforceability may be subject to general
principles of equity.
4.3 [THIS SECTION INTENTIONALLY LEFT BLANK]
4.4 THE CONTRACTS.
4.4-1 GENERAL. Seller has delivered to Buyer an
accurate list and substantially complete description (Schedule 4.4) of
all of the material commitments, contracts, leases and agreements which
are outstanding in respect of the Assets or the Business and Seller's
obligations thereunder.
Seller warrants and represents that:
(A) The Contracts constitute valid and legally
binding obligations of the Seller and are enforceable in accordance
with their terms;
(B) Each Contract constitutes the entire agreement by
and between the respective parties thereto and has not been amended
except as indicated in Schedule 4.4;
(C) In all material respects, (i) all obligations
required to be performed prior to Closing under the terms of the
Contracts have been performed, (ii) no act or omission has occurred or
failed to occur which, with the giving of notice, the lapse of time, or
both would constitute a default under the Contracts, and (iii) each of
the Contracts is now and will be after the Closing Date in full force
and effect without default on the part of the parties thereto;
(D) Except as expressly set forth in Schedule 4.4,
none of the Contracts require the consent of the other party for the
assignment of such Contracts to Buyer or the assumption of such
Contracts by Buyer (such non-assignable contracts shall be referred to
herein as the "Non-Assignable Contracts");
(E) Except with respect to the Non-Assignable
Contracts, the assignment of the Contracts to and the assumption of the
Contracts by Buyer will not result in any penalty, premium, or
variation of the rights, remedies, benefits, or obligations of any
party thereunder; and
4.4-2 ASSIGNMENT OF CONTRACTS. Seller and Buyer
acknowledge that certain of the Contracts to be assigned to Buyer
require consents from third parties hereto prior to assignment to
Buyer. Seller and Buyer agree that although such Non-Assignable
Contracts may not be assigned as of the Closing Date, such
non-assignment shall not constitute a breach of Seller's obligations
under this Agreement; provided that Seller:
(A) uses its best efforts to obtain any necessary
consents within a reasonable time after the Closing;
(B) upon receipt of all necessary consents to assign
the Non-Assignable Contracts, executes an assignment agreement with
Buyer assigning Seller's rights in and to such Non-Assignable Contracts
to Buyer;
(C) during the period on and from the Closing Date
until the date of assignment of each such Non-Assignable Contract,
Seller, at Buyer's option, shall enter into a lock-box agreement,
satisfactory to Buyer, which shall (i) designate to each payee under
such Non-Assignable Contracts a lock-box address for delivery of all
payments due under such Non-Assignable Contracts, (ii) designate Buyer
as agent for Seller to maintain the lock-box and to collect and deposit
all checks or other payments from the payees under such Non-Assignable
Contracts in accordance with the terms and conditions of the
Non-Assignable Contracts, and (iii) be irrevocable without the mutual
written consent of Buyer and Seller, until all such Non-Assignable
Contracts have been assigned to Buyer; and
(D) cause any and all monies payable to Seller under
any Non-assignable Contract to be delivered to Buyer promptly upon
receipt, hold all Non-Assignable Contracts as agent of Buyer in trust
for the benefit of Buyer, cooperate with Buyer in any lawful
arrangement to provide that Buyer shall receive the benefits under any
Non-Assignable Contract, and enforce and perform for the account of
Buyer any rights of Seller arising from any Non-Assignable Contract.
4.5 EQUIPMENT. Seller has delivered to Buyer an accurate list
and a substantially complete description (Schedule 1.1(a)) of all the equipment
associated with, or constituting any part of, the Assets, designating which of
such equipment is owned and which is leased by Seller. To the best knowledge of
Seller, the equipment to be transferred hereunder to Buyer is adequate in all
material respects to fully equip and operate the Business at its level of
operation as of the Closing Date. To the best knowledge of Seller, substantially
all of such equipment is in good operating condition and fit for the purpose for
which it is intended.
4.6 INVENTORY AND SUPPLIES. Seller has delivered to Buyer an
accurate list of all of the inventory and supplies constituting any part of the
Assets the value of which is calculated at actual cost, to include any discounts
received, and a substantially complete description of all such inventory and
supplies is listed on Schedule 1.l(b). Substantially all of such inventory and
supplies are of a quality and quantity usable and salable in the ordinary course
of the Business.
4.7 TITLE TO TANGIBLE PROPERTY. Seller has and at Closing will
convey to Buyer good and marketable title to all properties and assets, tangible
and intangible, constituting the Assets or any part thereof, subject to no
mortgage, lien, pledge, security interest, conditional sales agreement, right of
first refusal, option, restriction, liability, encumbrance, or charge, except
for those expressly assumed by Buyer hereunder.
4.8 INSURANCE. Seller has delivered to Buyer an accurate
schedule (Schedule 4.8 hereto) disclosing the insurance policies covering the
ownership and operations of the Business and the Assets, which schedule reflects
such policies' numbers, terms, identity of insurers, amounts, and coverage. All
of such policies are in full force and effect on a claims made basis with no
premium arrearages. True and correct copies of all such policies and any
endorsements thereto have been delivered to Buyer prior to Closing. Seller has
given in a timely manner to its insurers all notices required to be given under
its insurance policies with respect to all of the claims and actions covered by
insurance and disclosed on Schedule 4.9, the claims and actions on Schedule 4.8
represent all claims and actions against Seller covered by insurance during the
three-year period ending on the Closing Date and no insurer has denied coverage
of any such claims or actions or reserved its rights in respect of or rejected
any of such claims.
4.9 EMPLOYEE RELATIONS. Seller is in compliance with all
federal and state laws respecting employment and employment practices, terms and
conditions of employment, and wages and hours, and Seller has not engaged in any
unfair labor practices. Schedule 4.9 sets forth a list of the current names,
titles and cash compensation, including, without limitation, wages, salaries,
bonuses and other cash compensation of all Business employees. Except as set
forth in Schedule 4.9, all present and former Business employees have been paid
in full all wages, salaries, commissions, bonuses, severance and termination
pay, and other direct compensation for all services performed by them that was
accrued by them up to the Closing, payable in accordance with the obligations of
Seller under any employment practices and policies, or any collective bargaining
agreement or other employment agreement to which Seller is a party, or by which
Seller may be bound. All of the employees listed on Schedule 4.9 attached hereto
who work in the United States are lawfully authorized to work in the United
States according to federal immigration laws. Except as disclosed on Schedule
4.9, Seller believes that the relationships of Seller with its employees are
good and there is, and during the past three (3) years there has been, no
material labor strike, dispute, slowdown, work stoppage or other labor
difficulty actually pending or, to the best of Seller's knowledge, threatened
against or involving Seller. None of the employees of Seller is covered by any
collective bargaining agreement, no collective bargaining agreement is currently
being negotiated and, to the best of Seller's knowledge, no attempt is currently
being made or during the past three (3) years has been made to organize any
employees of Seller to form or enter a labor union or similar organization.
4.10 TAX LIABILITIES. All tax returns, including, without
limitation, income tax returns, employee payroll tax returns, employee
unemployment tax returns and franchise tax returns, for periods prior to and
including Closing which are required to be filed by Seller (collectively
"Returns") have been filed or will be filed within the time and in the manner
provided by law (including any valid extensions thereof), and all Returns are
true and correct and accurately reflect the tax liabilities of Seller. There are
no tax liens on any of the Assets.
4.11 EMPLOYEE BENEFIT PLANS. Except as set forth in Schedule
4. 11 hereto, Seller does not have and has never had any pension, profit
sharing, deferred compensation, or other employee pension or health or welfare
benefit plan or arrangement relating to the Business and the Assets. All
employee pension benefit plans and employee health or welfare benefit plans (as
such terms are defined in the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder ("ERISA"),
collectively "Benefit Plans") have been administered in accordance with ERISA
and the applicable provisions of the Code. There are no "accumulated funding
deficiencies" within the meaning of ERISA or the Code or any federal excise tax
or liability on account of any deficient findings in respect of the Benefit
Plans. Seller has not committed any reportable event(s) (within the meaning of
ERISA) or prohibited transaction(s) (within the meaning of the Code) in respect
of the Benefit Plans. There are no threatened or pending claims by or on behalf
of the Benefit Plans or by any Business employee alleging a breach or breaches
of fiduciary duties or violations of other applicable state or Federal law which
could result in liability on the part of either Seller or the Benefit Plans
under ERISA or any other law, nor is there any basis for such a claim. The
Benefit Plans do not discriminate in operating in favor of employees who are
officers or highly compensated. All returns, reports, disclosure statements, and
premium payments required to be made under ERISA and the Code with respect to
the Benefit Plans have been timely filed or delivered. The Benefit Plans have
not been audited or investigated by either the Internal Revenue Service, the
Department of Labor, or the Pension Benefit Guaranty Corporation within the last
five (5) years, and there are no outstanding issues with respect to the Benefit
Plans pending before said governmental agencies. Seller shall fund all Seller's
obligations under the Benefit Plans, if any, for all periods prior to Closing,
including, without limitation, for the current fiscal year, regardless of
whether the documents controlling such Benefit Plans require Seller to fund its
obligations prior to a fiscal year end.
4.12 LITIGATION OR PROCEEDINGS. Except as set forth in
Schedule 4,12, the Seller has not received notice of any claims, actions, suits,
proceedings or investigations pending against Seller or the Assets, and no
incidents have occurred upon which one could be based or threatened against, or
affecting Seller or the Assets, at law or in equity, or before or by any
federal, state, municipal, or other governmental department, commission, board,
bureau, agency, or instrumentality wherever located.
4.13 REGULATORY COMPLIANCE. Seller is in compliance with all
applicable rules, regulations, and requirements of all federal, state, and local
commissions, boards, bureaus, and agencies having jurisdiction over the Seller
and its assets and business, including, without limitation, the United States
Department of Health and Human Services and the Texas Department of Health, and
Seller has timely filed all reports, data, and other information required to be
filed with such commissions, boards, bureaus, and agencies.
4.14 NO MATERIAL ADVERSE EFFECTS OR CHANGES. Except as listed
on Schedule 4,14, since February 1, 1999, Seller has not (a) experienced an
event that had a material adverse effect on the Business or the Assets, (b)
increased the compensation of any executive officer of Seller, or (c) taken any
of the following actions:
(i) take any action, or enter into or authorize any
contract or transaction other than in the ordinary course of
business and consistent with past practice;
(ii) sell, transfer, convey, assign or otherwise
dispose of any of Seller's assets other than in the ordinary
course of business;
(iii) make any changes in its accounting system,
policies, principles or practices;
(iv) enter into, adopt, amend or terminate any bonus,
profit-sharing, compensation, termination, stock option, stock
appreciation right, restricted stock, performance unit,
pension, retirement, employment, severance or other employee
benefit agreements, trusts, plans, funds or other arrangements
for the benefit or welfare of any director, officer or
employee, or increase in any manner the compensation or fringe
benefits of any director, officer or employee, or pay any
benefit not required by any existing plan and arrangement or
enter into any contract, agreement, commitment or arrangement
to do any of the foregoing;
(v) acquire, lease or encumber any assets outside the
ordinary course of business or any assets which are material
to Seller;
(vi) terminate, modify, amend or otherwise alter or
change any of the terms or provisions of any material contract
or arrangement, or breach the terms of any material contract
or arrangement; or
(vii) take any other action that would have a material adverse effect on the
Business or the Assets.
4.15 SOLVENCY AND PAYMENT OF LIABILITIES. Seller will not be
on the Closing Date, either as a result of the transactions contemplated by this
Agreement or otherwise, insolvent, as such term is defined in Title
11-Bankruptcy of the United States Code or any state statute relating to
insolvency; the sum of its debts is not greater than all of its property on the
date hereof nor will it be on the Closing Date either as a result of the
transactions contemplated herein or otherwise; and it is on the date hereof, and
will be after the Closing Date, able to pay its debts as they mature.
4.16 TRADEMARK RIGHTS; PROPRIETARY INFORMATION. Seller is
transferring in Section 1. I many items that may be collectively referred to as
Intellectual Property. Seller represents and warrants that:
(A) all of the Intellectual Property is owned by
Seller free and clear of any liens, and is not subject to any license,
royalty or other agreement;
(B) none of the Intellectual Property has been or is
the subject of any pending or, to the best of Seller's knowledge,
threatened litigation or claim of infringement;
(C) no license or royalty agreement to which Seller
is a party is in material breach or default by Seller or to the best of
Seller's knowledge, any other party thereto or the subject of any
notice of termination received by Seller;
(D) the Assets do not infringe any trademark, trade
name, service xxxx or name, copyright, trade secret, or confidential or
proprietary rights of another, and Seller has not received any notice
contesting Seller's right to use any Intellectual Property;
(E) Seller has not granted any license or agreed to
pay or receive any royalty in respect of any Intellectual Property; and
(F) Seller owns or possesses, and pursuant to this
Agreement will convey, sell, transfer, assign and deliver to Buyer
adequate rights in perpetuity in and to all Intellectual Property
necessary to conduct the Business as it is currently being conducted.
4.17 MEDICARE COST REPORT. Seller represents and warrants that
the Medicare cost report has been duly filed by Xxxxxxxxx & Xxxxxxx Health Care
Consulting Division of Xxxxx Xxxxxxxxxx & Co., L.L.P. as of the Closing Date.
4.18 NO MISSTATEMENTS OR OMISSIONS. No representation or
warranty made in this Agreement or on any Schedule hereto by Seller is false or
misleading as to any material fact, or omits to state a material fact required
to make any of the statements made herein or therein nonmisleading in any
material respect. All of the Schedules hereto applicable to Seller will
constitute representations and warranties by Seller herein.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
As of the Closing Date, Buyer hereby represents and warrants
to Seller the following:
5.1 CORPORATE CAPACITY. Buyer is a Texas limited partnership
validly existing in good standing under the laws of the State of Texas. Buyer
has the requisite power and authority to enter into this Agreement, to perform
its obligations hereunder, and to conduct its businesses as now being conducted.
Buyer is duly authorized, qualified, and licensed under all applicable laws,
regulations, ordinances, and orders of governmental authorities having
Jurisdiction to own its properties and conduct its business in the place and in
the manner now conducted. Buyer's execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized.
5.2 CORPORATE POWERS; CONSENTS; ABSENCE OF CONFLICTS WITH
OTHER AGREEMENTS, ETC. The execution, delivery, and performance of this
Agreement by Buyer and the consummation of the transactions contemplated herein
by Buyer:
(A) are within Buyer's powers and the terms of
Buyer's Partnership Agreement or any amendments thereto, and have been
duly and properly authorized by all appropriate action;
(B) to the best of Buyer's knowledge, will neither
conflict with nor result in any breach or contravention of, nor pen-nit
the acceleration of the maturity of, or the creation of any lien under,
any indenture, mortgage, agreement, lease, contract, instrument, or
understanding to which Buyer is a party or by which Buyer is bound,
except as expressly provided herein to the contrary;
(C) will not violate any judgment, decree, order,
writ, or injunction of any court or governmental authority to which
Buyer may be subject; and
(D) are and will constitute the valid and legally
binding obligations of Buyer, enforceable in accordance with the terms
of this Agreement, except as enforceability may be restricted, limited,
or delayed by applicable bankruptcy or other laws affecting creditors'
rights generally and except as enforceability may be subject to general
principles of equity.
5.3 FINANCING OF TRANSACTION. Buyer is currently able to
finance the transactions contemplated under this Agreement and will deliver to
Seller by twenty-four hours prior to the Closing Date and time described in
Section 3.1 a Letter of Commitment from Buyer's financial institution or lender
that states Buyer has the cash available to fund the cash portion of the
purchase price described in Section 2.1-1 I herein. Receipt of this Letter of
Commitment from Buyer shall be a condition precedent to Seller's obligation to
Close but the ability to obtain financing shall not be a condition precedent to
Buyer's obligation to Close.
5.4 MEDICARE AND MEDICAID PROVIDER NUMBERS. Buyer shall
undertake all paperwork and filings necessary to assign Seller's current
Medicare and Medicaid provider numbers.
6. INDEMNIFICATION
6.1 INDEMNITY BY SELLER. Seller shall indemnify and hold
Buyer, and the Assets harmless from and against any and all liability, loss,
damage, or deficiency (including, without limitation, reasonable attorneys' fees
and associated costs) resulting from any misrepresentation, breach of warranty,
or nonfulfillment of any agreement on the part of Seller under this Agreement or
under any certificate or other instrument furnished or to be furnished by Seller
hereunder, and from the ownership, management, operations, and interests of
Seller in and to the Business and the Assets, and from any act or omission of
Seller or its partners, agents, employees, and independent contractors, and from
any encumbrance upon, or defect in title to, the Assets, and from the Excluded
Liabilities. The indemnification in this Section 6.1 shall be divided into the
following subject matter and shall be for the following periods: (1)
indemnification for Medicare and Medicaid liability of Seller shall be for five
years after the Closing Date; (2) indemnification for federal or state taxes,
ERLSA or environmental liability of Seller shall be for the applicable statutory
period; (3) indemnification for all other liability of Seller shall be for three
years after the Closing Date. To be entitled to such indemnification, Buyer must
give Seller written notice of the assertion by a third party, to which Buyer has
knowledge, of any claim with respect to which Buyer might bring a claim for
indemnification hereunder, and in all events must have supplied such notice to
Seller within the applicable period for defense of such claim by Seller. Upon
Seller's agreement to indemnify Buyer hereunder, Seller shall have the right, at
Seller's own expense, to defend and litigate any such third party claim;
provided, however, that Seller agrees not to settle any controversy that would
have a negative financial impact on Buyer without Buyer's consent.
6.2 INDEMNITY BY BUYER. Buyer shall indemnify and hold Seller
harmless from and against any and all liability, loss, damage or deficiency
(including, without limitation, reasonable attorneys' fees and associated costs)
resulting from any misrepresentation, breach of warranty, or nonfulfillment
under any agreement on the part of Buyer under this Agreement or under any
certificate or other instrument furnished by Buyer hereunder, and from the
ownership, management operation, and interests of Buyer in and to the Business
and the Assets (excluding, however, any acts of negligence or professional
malpractice by Seller) subsequent to the Closing and from any act or omission of
Buyer or its agents, employees, and independent contractors in respect of
periods subsequent to the Closing. To be entitled to such indemnification,
Seller must give Buyer prompt written notice of the assertion by a third party,
to which Seller has knowledge, of any claim with respect to which Seller might
bring a claim for indemnification hereunder, and in all events must have
provided such notice within the applicable period for defense of such claim by
Buyer. Upon Buyer's agreement to indemnify Seller hereunder, Buyer shall have
the right, at Buyer's own expense, to defend and litigate any such third party
claim; provided, however, that Buyer agrees not to settle any controversy that
would have a negative financial impact on Seller without Seller's consent. In no
event shall Buyer be liable for the acts or omissions of prior owners,
operators, or managers of the Business and the Assets or their agents,
independent contractors, or employees, including, without limitation, any
liability arising out of or in connection with claims which occurred prior to
Closing, except for the Assumed Liabilities.
6.3 CAP ON INDEMNIFICATION. Both parties shall indemnify the
other under this Section 6 only up to a maximum aggregate amount equal to the
cash portion of the Purchase Price.
6.4 DEDUCTIBLES. No claim for indemnification shall be due
unless such claim is over $1,000. In addition, no party shall be obligated to
indemnify the other for the first $l0,000 of such claims over $1,000.00.
7. ADDITIONAL AGREEMENTS
7.1 OFFICE LEASE. As of Closing, Buyer shall assume the
obligations of Seller for amounts owed under the Office Lease.
7.2 EMPLOYMENT OF BUSINESS EMPLOYEE. On the Closing Date,
Buyer shall offer employment to each Business employee set forth on Schedule 4.9
attached hereto. Buyer and Seller agree such employment of Business employees
shall (i) be at will, (ii) initially provide for payment to each Business
employee of a salary equal to such employee's present salary set forth on
Schedule 4.9 attached hereto, and (iii) entitle each such Business employee to
all other normal benefits extended to Buyer's similarly situated employees to
the extent permitted by law.
7.3 TRANSITION. At Buyer's request, Seller shall use its
reasonable best efforts to cause the smooth, efficient, and successful
transition of its business organization, present Business employees, and
relationships with patients and others having business relations with the
Business as of Closing, including providing information to Buyer necessary for
Buyer to assume Seller's Medicare and Medicaid provider numbers.
7.4 NONCOMPETE AND NONSOLICITATION.
(A) Seller understands and agrees that for a period
of thirty-six (36) months following the Closing Date, Seller will not,
directly or indirectly, engage in any enterprise that engages in the
Business within the City of Houston (the "Restricted Area"); provided,
however, that this provision shall in no way prohibit Seller from
engaging in the mail order pharmaceutical business anywhere in the
United States.
(B) Seller further understands and agrees that for a
period of thirty-six (36) months following the Closing Date, Seller
shall not (i) knowingly solicit or induce any then employee of Buyer or
any affiliate of Buyer located within the Restricted Area to leave the
employment of such entity, or (ii) knowingly disrupt relationships of
Buyer or its affiliates with any of their respective agents,
representatives, vendors or customers located within the Restricted
Area.
7.5 SATISFACTION OF LIABILITIES.
(A) Buyer covenants and agree that, on, prior to, or
as soon as practicable after the Closing Date, all outstanding
obligations, liabilities, costs and expenses of Buyer will be paid,
performed or otherwise discharged or provided for by Buyer, including,
without limitation, Buyer's Assumed Liabilities, liabilities and
obligations incurred by Buyer in connection with this Agreement and the
transactions provided for herein or contemplated hereby, fees and
expenses of Buyer's counsel, accountants and other experts, and all
other expenses incurred by Buyer incident to the negotiation,
preparation and execution of this Agreement or any transactions
contemplated hereby, including taxes, if any, payable by Buyer with
respect to and resulting from the transactions contemplated by this
Agreement, except for those liabilities and obligations that are
contested in good faith by Buyer.
(B) Seller covenants and agree that, on, prior to, or
as soon as practicable after the Closing Date, all outstanding
obligations, liabilities, costs and expenses of Seller will be paid,
performed or otherwise discharged or provided for by Seller, including,
without limitation, Seller's Excluded Liabilities, liabilities and
obligations incurred by Seller in connection with this Agreement and
the transactions provided for herein or contemplated hereby, fees and
expenses of Seller's counsel, accountants and other experts, and all
other expenses incurred by Seller incident to the negotiation,
preparation and execution of this Agreement or any transactions
contemplated hereby, including taxes, if any, payable by Seller with
respect to and resulting from the transactions contemplated by this
Agreement, except for those liabilities and obligations that are
contested in good faith by Seller.
7.6 USE OF NAME. Notwithstanding the sale of the names "The
Care Group of Texas, Inc." and "Care Line of Houston, Inc." by Seller to Buyer,
Buyer hereby grants to Seller a non-exclusive license for the use of the names
"The Care Group of Texas," and "CareLine of Houston," for ten months following
the Closing Date for the sole purpose of collecting outstanding accounts
receivable.
8. GENERAL
8.1 SCHEDULES AND EXHIBITS. Each Schedule and Exhibit to this
Agreement shall be incorporated herein and considered a part hereof as if set
forth herein in full.
8.2 ADDITIONAL ASSURANCES. The provisions of this Agreement
shall be self-operative and shall not require further agreement by the parties
except as may be herein specifically provided to the contrary; provided,
however, at the request of a party, the other party shall execute such
additional instruments and take such additional acts as the requesting party may
deem necessary to effectuate this Agreement. In addition and from time to time
after Closing, Seller shall execute and deliver such other instruments of
conveyance and transfer, and take such other actions as Buyer reasonably may
request, to more effectively convey and transfer full right, title and interest
to, vest in, and place Buyer in legal and actual possession of, any and all of
the Assets.
8.3 LEGAL FEES AND COSTS. In the event either party elects to
incur legal expenses to enforce or interpret any provision of this Agreement,
the prevailing party will be entitled to recover such legal expenses, including,
without limitation, attorney's fees, costs, and necessary disbursements, in
addition to any other relief to which such party shall be entitled.
8.4 CHOICE OF LAW. The parties agree that this Agreement shall
be governed by and construed in accordance with the laws of the State of Texas,
and that the courts of such State shall be the exclusive courts of jurisdiction
and venue for any litigation, special proceedings, or other proceedings as
between the parties that may be brought, or arise out of, in connection with or
by reason of this Agreement.
8.5 BENEFIT/ASSIGNMENT. Subject to provisions herein to the
contrary, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective legal representatives, successors, and
assigns; provided, however, that no party may assign this Agreement without the
prior written consent of the other party, which consent shall not be
unreasonably withheld; and provided that either party may assign this Agreement
to a successor who buys substantially all of the party's assets. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.
8.6 ACCOUNTING DATE. The transactions contemplated hereby
shall be effective for accounting purposes as of 12:01 a.m. on June 25, 1999,
unless otherwise agreed in writing by Seller and Buyer.
8.7 NO BROKERAGE. Seller and Buyer represent to each other
that no broker has in any way been contacted in connection with the transactions
contemplated hereby. Seller and Buyer agree to indemnify the other party from
and against all loss, cost, damage or expense arising out of claims for fees or
commissions of brokers employed or alleged to have been employed by such
indemnifying party.
8.8 COST OF TRANSACTION. Seller will pay the fees, expenses
and disbursements of Seller and its agents, representatives, accountants, and
counsel incurred in connection with the subject matter hereof and any amendments
hereto; and Buyer shall pay the fees, expenses and disbursements of Buyer and
its agents, representatives, accountants and counsel incurred in connection with
the subject matter hereof and any amendments hereto.
8.9 WAIVER OF BREACH. The waiver by either party of a breach
or violation of any provision of this Agreement shall not operate as, or be
construed to constitute, a waiver of any subsequent breach of the same or other
provision hereof.
8.10 NOTICE. Any notice, demand or communication required,
permitted, or desired to be given hereunder shall be deemed effectively given
when personally delivered, when received by telegraphic or other electronic
means (including telefax, facsimile, and telex), when received by overnight
courier, or after three (3) days when mailed by prepaid, certified or registered
mail, return receipt requested, addressed as follows:
SELLER: Allion Healthcare, Inc.
Attn: Xxxx Xxxxx
33 Xxxx Xxxxxxx Road, Suite 200A
Huntington Station, New York 11746
Facsimile Number: (___) ____________
BUYER: Osher Investments, Ltd.
000 Xxxxxxx Xxxxx, Xxx. 00X
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx
Facsimile Number: 713/529-9659
or to such other address, and to the attention of such other persons as either
party may designate, in writing pursuant to this Section 8.10.
8.11 SEVERABILITY. In the event any provision of this
Agreement `s held to be invalid, illegal, or unenforceable for any reason and in
any respect, such invalidity, illegality, or unenforceability shall in no event
affect, prejudice, or disturb the validity of the remainder of this Agreement,
which shall be and remain in fall force and effect, enforceable in accordance
with its terms.
8.12 ENTIRE AGREEMENT/AMENDMENT. This Agreement supersedes all
previous contracts and constitutes the entire agreement of whatsoever kind or
nature existing between or among the parties respecting the within subject
matter, and no party shall be entitled to benefits other than those specified
herein. As between or among the parties, no oral statements or prior written
material not specifically incorporated herein shall be of any force or effect.
The parties specifically acknowledge that in entering into and executing this
Agreement, the parties are relying solely upon the representations and
agreements contained in this Agreement and no others. All prior representations
or agreements, whether written or verbal, not expressly incorporated herein are
superseded and no changes in or additions to this Agreement shall be recognized
unless and until made in writing and signed by all parties hereto. The
representations, warranties, and agreements of the parties set forth herein
shall survive the Closing and remain of full force and effect, and shall survive
the execution and delivery of all other agreements described, referenced, or
contemplated herein, and shall not be merged therewith.
8.13 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each and all of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed in multiple originals by their duly authorized
officers, all as of the day and year first above written.
BUYER: OSHER INVESTMENTS, X.XX.
Osher Management, L.L.C., General Partner
for Osher Investments, Ltd.
By: /s/ Xxxxxxxxx X. Xxxxx
Name: Xxxxxxxxx X. Xxxxx
Title: Manager
SELLER: THE CARE GROUP OF TEXAS, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxx Xxxxx
Title: President and CEO
SELLER: CARE LINE OF HOUSTON, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxx Xxxxx
Title: President and CEO
Guarantor: Allion Healthcare, Inc.
Payment of the obligations of Seller for indemnification pursuant to Section 6.l
of this Agreement shall be guaranteed by Allion Healthcare, Inc. as the parent
of Seller.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxx Xxxxx
Title: President and CEO
