ASSET PURCHASE AGREEMENT dated as of July 14, 2006 by and among MOMS PHARMACY OF BROOKLYN, INC. ALLION HEALTHCARE, INC. ST. JUDE PHARMACY & SURGICAL SUPPLY CORP. MILLIE CHERVIN and MITCHELL CHERVIN
dated
as
of July 14, 2006
by
and
among
MOMS
PHARMACY OF BROOKLYN, INC.
ALLION
HEALTHCARE, INC.
ST.
JUDE
PHARMACY & SURGICAL SUPPLY CORP.
▇▇▇▇▇▇
▇▇▇▇▇▇▇
and
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
This
ASSET PURCHASE AGREEMENT dated as of July 14, 2006, is by and between MOMS
PHARMACY OF BROOKLYN, INC., a New York corporation (“Buyer”), ALLION HEALTHCARE,
INC., a New York corporation (“Guarantor”), ST. JUDE PHARMACY & SURGICAL
SUPPLY CORP., a New York corporation (“Seller”), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “Seller’s
Shareholder”) and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “Pharmacist-in-Charge”).
Seller
is
a licensed New York pharmacy located at ▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇
▇▇▇▇ ▇▇▇▇▇ (the “Pharmacy”).
Buyer
desires to purchase and Seller desires to sell, transfer and deliver to Buyer
Seller’s right, title and interest in and to the Acquired Assets (as defined
below), on the terms and conditions set forth in this Agreement.
Guarantor
is the parent corporation of Buyer.
The
parties agree as follows:
ARTICLE
I
DEFINITIONS
The
terms
defined in this Article I, whenever used herein (including the schedules hereto,
unless otherwise defined therein), shall have the following
meanings:
1.1 “Additional
Payments”
shall
have the meaning set forth in Section 2.2(a)(ii) of this Agreement.
1.2 “Affiliate”
shall
mean any Person that directly or indirectly controls, is controlled by or is
under common control with another Person.
1.3 “Acquired
Assets”
shall
mean all of Seller’s business and assets related to the HIV/AIDS Business, which
shall include but be limited to: (a) all of Seller's right, title and interest
in and to the customer list for its HIV/AIDS Business (the “Customer
List”),
as
well as all other information, including without limitation names, addresses,
referring physicians, documents, Prescription Files, other files and records,
and goodwill, in each case to the extent related to the customers listed on
the
Customer List, and (b) all of the Inventory.
1.4 “Business
Day”
shall
mean any day other than a Saturday, Sunday or other day on which banks are
closed or are authorized to be closed in New York, New York.
1.5 “Buyer
Claimant”
shall
have the meaning set forth in Section 8.2 of this Agreement.
1.6 “Closing”
shall
have the meaning set forth in Section 3.1 of this Agreement.
1.7 “Closing
Date”
shall
have the meaning set forth in Section 3.1 of this Agreement.
1.8 “Code”
shall
mean the Internal Revenue Code of 1986, as amended.
1.9 “Contract”
shall
have the meaning set forth in Section 4.3 of this Agreement.
1.10 “Employee
Benefit Plan”
means
any “employee benefit plan” within the meaning of Section 3(3) of ERISA, and any
other bonus, profit sharing, compensation, pension, severance, deferred
compensation, fringe benefit, insurance, welfare, medical, post-retirement
health or welfare benefit, medical reimbursement, health, life, stock option,
stock purchase, tuition refund,
service award, company car, scholarship, relocation, disability, accident,
sick
pay, sick leave, vacation, termination, individual employment, executive
compensation, incentive, bonus, commission, payroll practices, retention or
other plan, agreement, policy, trust fund or arrangement, whether written or
unwritten, and whether maintained, sponsored or contributed to by Seller or
any
entity that would be deemed a “single employer” with Seller under Section
414(b), (c), (m) or (o) of the Code or Section 4001(a)(14) of ERISA (an “ERISA
Affiliate”) on behalf of any of the current, former or retired employees of
Seller or its beneficiaries or with respect to which Seller or any ERISA
Affiliate has or has had any obligation on behalf of any such employee or
beneficiary.
1.11 “Encumbrance”
shall
mean any lien, charge, encumbrance, option, right of first refusal, security
interest, easement, obligation or claim or other third party right of any
kind.
1.12 “Environment”
shall
mean any surface or subsurface physical medium or natural resource, including,
air, land, soil, surface waters, ground waters, stream and river sediments,
and
biota.
1.13 “Environmental
Laws”
shall
mean any federal, state, local or foreign law, rule, regulation, ordinance,
code, order or judgment (including the common law and any judicial or
administrative interpretations, guidances, directives or opinions) relating
to
the injury to, or the pollution or protection of human health and safety or
the
Environment.
1.14 “Environmental
Liabilities”
shall
mean any claims, judgments, damages (including punitive damages), losses,
penalties, fines, liabilities, encumbrances, liens, violations, costs and
expenses (including attorneys and consultants fees) of investigation,
remediation or defense of any matter relating to human health, safety or the
Environment of whatever kind or nature by any party, entity or authority, (a)
which are incurred as a result of (i) the existence of Hazardous Substances
in,
on, under, at or emanating from any real property presently or formerly owned
or
operated by Seller or any of its Affiliates, (ii) the offsite transportation,
treatment, storage or disposal of Hazardous Substances generated by Seller
or
any of its Affiliates, or (iii) the violation of any Environmental Laws or
(b)
which arise under the Environmental Laws.
1.15 “ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as amended, and the
regulations thereunder.
1.16 “ERISA
Affiliate”
shall
have the meaning set forth in the definition of “Employee Benefit
Plan”.
2
1.17 “Excluded
Liabilities”
shall
have the meaning set forth in Section 2.1(c) of this
Agreement.
1.18 “GAAP”
shall
mean generally accepted accounting principles.
1.19 “Hazardous
Discharge”
shall
mean any releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, migrating, disposing or dumping
(including the movement of any material through or in air, soil, surface or
groundwater) of Hazardous Substances, whether on, off, under or from any real
property owned, operated, leased or used at any time by Seller or its
predecessors.
1.20 “Hazardous
Substances”
shall
mean petroleum, petroleum products, petroleum-derived substances, radioactive
materials, hazardous wastes, polychlorinated biphenyls, lead based paint, urea
formaldehyde, asbestos or any materials containing asbestos, and any materials,
wastes or substances regulated or defined as or included in the definition
of
“hazardous substances,” “hazardous materials,” “hazardous constituents,” “toxic
substances,” “pollutants,” “contaminants” or any similar denomination intended
to classify substances by reason of toxicity, carcinogenicity, ignitability,
corrosivity or reactivity under any Environmental Laws.
1.21 “HIV/AIDS
Business”
shall
mean Seller’s business and assets related to Seller’s HIV/AIDS
business.
1.22 “Indemnitee”
and
“Indemnitor”
shall
have the meanings set forth in Section 8.4(a) of this
Agreement.
1.23 “Initial
Payment”
shall
have the meaning set forth in Section 2.2(a)(i) of this Agreement.
1.24 “Inventory”
means
all items of Seller’s inventory related to the HIV/AIDS Business, provided that
an item shall be considered “Inventory” only if Seller has provided to Buyer at
or prior to the Inventory Date the following information for such item: (a)
the
proprietary and established name of the item; (b) dosage; (c) container size;
(d) number of containers; (e) the item’s lot or control number(s); (f) the
business name and address of all parties to each prior transaction involving
the
item, starting with the manufacturer; and (g) the date of each previous
transaction.
1.25 “Inventory
Date”
shall
mean a date when representative of Buyer and Seller shall jointly make a
physical inspection of the Inventory, at the offices of the Seller, and
determine the amount of the Inventory Payment, which date shall be no later
than
five (5) days following the date on which Buyer notifies Seller that Seller
may
no longer sell inventory related to the HIV/AIDS Business, as provided in
Section 6.5(c).
1.26 “Inventory
Payment”
shall
have the meaning given such term in Section 2.2(b) of this
Agreement.
1.27 “IRS”
shall
mean the Internal Revenue Service.
3
1.28 “Licenses
and Permits”
shall
have the meaning set forth in Section 4.12 of this Agreement.
1.29 “Losses”
shall
have the meaning set forth in Section 8.2 of this Agreement.
1.30 “Material
Adverse Effect”
shall
mean any material adverse effect, individually or in the aggregate, on the
condition (financial or otherwise), business, assets, operations or prospects
of
Seller or the Acquired Assets.
1.31 “Payment
Program”
shall
have the meaning set forth in Section 4.14 of this Agreement.
1.32 “Person”
shall
mean any natural person, corporation, professional corporation, limited or
limited liability partnership, general partnership, joint venture, association,
joint-stock company, limited liability company, company, trust, bank, trust
company, land trust, business trust or other organization, whether or not a
legal entity, and any governmental unit or agency or political subdivision
thereof.
1.33 “Prescription
Files”
shall
mean all prescription files owned or used by Seller that are associated with
the
HIV/AIDS Business, and all customer data and information derived from customer
purchases from Seller.
1.34 “Purchase
Price”
shall
have the meaning set forth in Section 2.2(b) of this Agreement.
1.35 “Real
Property”
shall
mean the real property and interests in real property owned or leased by Seller
and the plants, buildings, structures, storage tanks, erections and improvements
of all kinds made to, located on or forming a part of the real property and
interests in real property (including, without limitation, all fixtures),
together with all easements, rights-of-way, appurtenances and tenements to,
on
or otherwise beneficial to the use of such real property or interests in real
property.
1.36 “Related
Party”
shall
have the meaning set forth in Section 4.11 of this Agreement.
1.37 “Seller
Claimant”
shall
have the meaning set forth in Section 8.3 of this Agreement.
1.38 “Taxes”
(or
“Tax” where the context requires)
shall
mean all federal, state, local, foreign or other taxes, duties, or similar
charges (including, without limitation, income (whether net or gross), profits,
premium, estimated, excise, sales, use, environmental (including taxes under
Code Section 59A), occupancy, franchise, license, value added stamp, windfall
profits, social security, gross receipts, franchise, ad valorem, severance,
capital levy, production, transfer, gains, withholding, occupation, employment
and payroll related and property taxes, alternative or add-on, minimum or
estimated, import and export duties and other governmental charges and
assessments) imposed by any taxing or governmental authority on or payable
by
Seller or any other party with respect to the income, operations, products,
assets or properties of Seller, whether attributable to statutory or
nonstatutory rules and whether or not measured in whole or in part by net
income, and including interest, additions to tax or interest, and penalties
with
respect thereto, and including expenses associated with contesting any proposed
adjustment related to any of the foregoing.
4
ARTICLE
II
SALE
AND PURCHASE OF THE ACQUIRED ASSETS
2.1 Purchase
of the Acquired Assets.
(a) Upon
the
terms and subject to the conditions hereof, and upon the basis of the
agreements, representations and warranties contained in, and the schedules
to,
this Agreement, (i) at the Closing, Seller shall sell, transfer, assign, convey
and deliver to Buyer, and Buyer shall purchase and acquire from Seller, all
of
the Acquired Assets (other than the Inventory), and (ii) on the Inventory Date,
Seller shall sell, transfer, assign, convey and deliver to Buyer, and Buyer
shall purchase and acquire from Seller, all of the Inventory as of the Inventory
Date, in each case free and clear of Encumbrances of any kind, which
Encumbrances, if any, shall be discharged by Seller at or prior to the
Closing.
(b) Notwithstanding
anything contained in this Agreement, Seller shall not sell, transfer, assign,
convey or deliver to Buyer, and Buyer shall not purchase or acquire from Seller,
(i) any of Seller’s cash or accounts receivable, (ii) any of Seller’s equipment,
agreements, furniture or fixtures, or (iii) any of Seller’s
Contracts.
(c) Buyer
shall not be required to assume, pay, fulfill, perform or otherwise discharge
any liabilities or obligations of Seller, including of Seller’s business, of any
kind whatsoever (the “Excluded Liabilities”), and Seller shall pay, fulfill,
perform and discharge such Excluded Liabilities when due. The Excluded
Liabilities include, without limitation:
(i) Legal,
accounting, brokerage, finder’s fees, Taxes or other expenses incurred by Seller
or any Affiliate, including, without limitation, in connection with this
Agreement or the consummation of the transactions contemplated
hereby;
(ii) Any
intercompany debt or other liability or obligation of any nature between Seller
and any past or present Related Party of Seller;
(iii) Liabilities
or obligations incurred by Seller or any Affiliate of Seller after the
Closing;
(iv) Any
obligation or liability relating to any litigation or any claim arising out
of
any dispute, the elements of which occurred prior to the Closing, or any
litigation or other claim against Seller, whether or not listed on any schedule
hereto and regardless of whether accruing prior to or subsequent to the
Closing;
(v) Any
liability for any Taxes accrued to or incurred by Seller or any Affiliate of
Seller or relating to operations, products or assets of Seller or any Affiliate
of Seller or arising as a consequence of the transactions contemplated
hereby;
5
(vi) Any
liability or costs (including, without limitation, costs of remediation) arising
out of or relating to a Hazardous Discharge or the release, discharge or
disposal of any solid wastes or the handling, storage, use, transportation
or
disposal of any of the foregoing, as these terms are defined by the
Environmental Laws in, on, under or from facilities of Seller at any time prior
to the Closing, regardless of whether such liability or costs arise before
or
after Closing and whether or not in breach of any representation or warranty
under this Agreement;
(vii) Any
liability or obligation to employees, government agencies or other third parties
in connection with any option plan, pension plan, other ERISA plan or other
Employee Benefit Plan, and any health, dental or life insurance benefits,
whether or not insured and whether or not disclosed on any schedule
hereto;
(viii) Any
liability or obligation under any contract or commitment, and any liability
or
obligation which relates to any default in respect of such contract or other
commitment or obligation of Seller;
(ix) Any
liability or obligation to employees in the nature of accrued payroll, vacation,
holiday or sick pay, worker’s compensation relating to the period prior to the
Closing, whether or not listed on any schedule hereto and regardless of whether
accruing prior or subsequent to the Closing;
(x) Any
trade
debt, accounts payable, notes payable and bank debts; or
(xi) Any
other
liability, debt or obligation of Seller or Seller’s Shareholder.
2.2 Purchase
Price.
(a) In
consideration for the Acquired Assets (other than the Inventory), Buyer shall
pay to Seller an amount in cash equal to Ten Million Dollars ($10,000,000),
payable as follows:
(i) At
the
Closing, Buyer shall pay to Seller an amount in cash equal to Eight Million
Dollars ($8,000,000) (the “Initial Payment”); and
(ii) In
addition, on each of August 14, 2006, September 14, 2006 and October 14, 2006,
Buyer shall pay to Seller an amount equal to Six Hundred Sixty-Six Thousand
Six
Hundred Sixty-Six Dollars and Sixty-Six Cents ($666,666.66) (the “Additional
Payments”) if, and only if, Seller and Seller’s management, including Seller’s
Shareholder and the Pharmacist-in-Charge, have during the three (3) month period
from the Closing Date through October 14, 2006 provided during normal business
hours such reasonable assistance to Buyer as Buyer from time to time has
requested to transition the HIV/AIDS Business and the Acquired Assets to Buyer,
by (A) writing a mutually satisfactory letter to Seller’s former HIV customers
regarding the Buyer’s acquisition of the Acquired Assets (substantially in the
form attached as Exhibit
A),
(B)
contacting such customers by telephone to advise them of the transition to
Buyer
and assisting such customers with any questions they may have, (C) coordinating
with Buyer’s information technology personnel the downloading of customer
records and information, and (D) participating in meetings between Buyer and
physicians, clinics and other referral sources; and
6
(b) Within
five (5) Business Days following the Inventory Date, in consideration for the
Inventory, Buyer shall pay to Seller an amount equal to Seller’s acquisition
cost of the Inventory (as calculated by Buyer and Seller based on documentation
provided by Seller to Buyer) as of the Inventory Date, in each case only to
the
extent that such Inventory conforms to the representation contained in Section
4.6 (the “Inventory Payment” and, collectively with the Initial Payment and the
Additional Payments, the “Purchase Price”). Any Purchase Price payable under
this Agreement shall be paid in cash, in immediately available funds, via bank
wire transfer per Seller’s written instructions.
(c) Guarantor
hereby absolutely, irrevocably and unconditionally guarantees the full and
prompt performance of Buyer’s obligation under this Agreement to pay the
Purchase Price. Guarantor’s liability under this Section 2.2(c) is unconditional
and shall not in any manner whatsoever be deemed to be affected or impaired
by
any waiver, forbearance, extension of time, amendment, or modification of any
of
the provisions of this Agreement, provided that Guarantor may assert any and
all
defenses, counterclaims and set-offs that Buyer could assert under this
Agreement. Seller may, upon notice to Guarantor, enforce this Section 2.2(c)
against Guarantor and it shall not be necessary to enforce this Agreement
against Buyer before proceeding under this Agreement against Guarantor. Demand,
protest and presentment for payment are hereby waived.
2.3 Allocation
of Purchase Price. The
Purchase Price for the Acquired Assets shall be allocated for federal, state,
local and foreign tax purposes by each party among the Acquired Assets as
mutually determined by Seller and Buyer, in compliance with applicable laws
and
generally accepted accounting principles, and based upon the appraisal performed
by The Mentor Group, Inc. (at Buyer’s sole cost and expense). Each of Buyer and
Seller shall have access to information, and an opportunity to participate
in
discussions regarding the appraisal, in each case in a manner consistent with
The Mentor Group, Inc.’s customary processes, procedures and guidelines for
appraisals of this type. For all pertinent tax purposes, each party hereto
shall
report the purchase and sale provided for, and with the characterization given
these transactions in this Agreement, to taxing authorities on a basis
consistent with such allocation, and each party agrees not to take a position
inconsistent with such allocation. After the Closing, Seller and Buyer each
shall timely file form 8594 with the IRS detailing this allocation. In the
event
that Buyer determines, subject to Seller's reasonable approval, that any
adjustments to such allocation are necessary, Seller shall make such
modifications as are necessary, reporting the same on Seller's form 8594 (if
required) or any tax report or return filed or to be filed by Seller in order
to
conform to Buyer's allocation as adjusted.
ARTICLE
III
CLOSING
3.1 The
Closings.
Subject
to the terms and conditions of this Agreement, the Closing of the purchase
and
sale of the Acquired Assets (the “Closing”) shall occur on July 14, 2006
(the
“Closing Date”), at the offices of Buyer’s counsel, ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, 990
▇▇▇▇▇▇▇ Avenue, Garden City, New York, and shall be effective as of 12:01
a.m. on July 15, 2006.
7
3.2 Obligations
of ▇▇▇▇▇▇.▇▇
the
Closing, Seller shall deliver to Buyer the following:
(a) A
▇▇▇▇ of
sale, in customary form, duly executed by Seller.
(b) Copies
of
the resolutions of the Board of Directors and Shareholder of Seller certified
by
the secretary or assistant secretary of Seller, which resolutions shall approve
and authorize the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby.
(c) Any
required consents to the assignment to Buyer of each of the Acquired
Assets.
(d) Such
other instruments of assignment and conveyance as may be necessary or
appropriate to fully and effectively transfer to Buyer the Acquired
Assets.
(e) All
of
the other documents and instruments required to be delivered by
Seller.
3.3 Obligations
of Buyer. At
the
Closing, Buyer shall deliver to Seller the following:
(a) The
Initial Payment.
(b) Copies
of
the resolutions of the Board of Directors of Buyer certified by the secretary
or
assistant secretary of Seller, which resolutions shall approve and authorize
the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
(c) All
of
the other documents and instruments required to be delivered by
Buyer.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES REGARDING SELLER
AND
SELLER’S BUSINESS
Seller,
Seller’s Shareholder and the Pharmacist-in-Charge hereby represent and warrant
to Buyer, as of the date hereof and as of the Closing, as follows:
4.1
Organization
and Qualification.
Seller
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of New York, with full corporate power and authority to own,
lease and operate its properties and assets and to conduct its business as
it is
now being conducted. Seller has no Affiliates, subsidiaries or equity interest
in any other Person. Seller is duly qualified and in good standing as a New
York
corporation and has all requisite corporate power and authority to do business
in the State of New York, which jurisdiction is the only jurisdiction wherein
the character of the properties owned or leased or the nature of activities
conducted by Seller make such qualification necessary. Seller’s Shareholder owns
all the issued and outstanding capital stock of Seller. Neither Seller’s
Shareholder nor the Pharmacist-in-Charge, directly or indirectly, owns any
equity or other interest in any HIV/AIDS Business, other than Seller and other
than passive investments in publicly-traded companies.
8
4.2
Authority. Seller
has all requisite power and authority to execute and deliver this Agreement
and
all documents, certificates, agreements, instruments and writings related hereto
to which it is a party and to perform, carry out and consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of
this
Agreement have been duly authorized by all necessary corporate action on the
part of Seller. This Agreement has been duly and validly executed by Seller,
Seller’s Shareholder and the Pharmacist-in-Charge and constitutes the legal,
valid and binding obligations of Seller, Seller’s Shareholder and the
Pharmacist-in-Charge, enforceable against Seller, Seller’s Shareholder and the
Pharmacist-in-Charge in accordance with its terms.
4.3
No
Breach. Neither
the execution and delivery of this Agreement by Seller nor the consummation
of
the transactions contemplated hereby will: (a) violate any provision of the
Certificate of Incorporation or Bylaws of Seller; (b) conflict with, result
in a
breach of or constitute a default (or an event which, with or without notice,
lapse of time or both, would constitute a default) under any leases, agreements,
instruments, arrangements, contracts, commitments or understandings, written
or
oral, to which Seller is a party or by which Seller or any of the Acquired
Assets is bound (collectively, the “Contracts”); (c) result in the creation of,
or give any party the right to create, any Encumbrance upon any of the Acquired
Assets; (d) conflict with, violate, result in a breach of or constitute a
default under any judgment, decree, order or process of any court or
governmental authority; (e) to the best of Seller’s knowledge, conflict with or
violate any statute, law or regulation applicable to Seller or any of the
Acquired Assets; or (f) to the best of Seller’s knowledge, require Seller to
obtain any authorization, consent, approval or waiver from, or to make any
filing with, any governmental or regulatory authority,
or
other third party.
4.4 Sales
Information.
In the
four (4) month period ended June 30, 2006, Seller filled HIV/AIDS-related
prescriptions for at least one thousand twenty (1,020) different HIV/AIDS
patients.
4.5 Absence
of Certain
Changes or Events.
Since
December 31, 2005: the HIV/AIDS Business has been conducted and the Acquired
Assets have been acquired and operated only in the ordinary and usual course
consistent with past practice; neither the HIV/AIDS Business nor the Acquired
Assets have suffered any event or condition that has had a Material Adverse
Effect; and Seller is not aware of any event or condition that has occurred
or
would reasonably be expected to occur that could result in a Material Adverse
Effect.
4.6 Acquired
Assets.
Seller
has good and freely transferable title to all of the Acquired Assets, free
and
clear of all Encumbrances, and has the complete and unrestricted power and
right
to sell and transfer the Acquired Assets to Buyer in accordance with the terms
hereof. All items included in the Inventory consist of a quality and quantity
usable and saleable in the ordinary course of business of Seller, and are not
slow moving, damaged, below-standard quality or in excessive
quantities.
9
4.7
Contracts
and Commitments.
Seller
has no written Contracts relating to the HIV/AIDS Business.
4.8
Litigation,
Etc.
There
has not been in the five (5) years prior to the date hereof, nor is there
currently, any claim, action, suit, inquiry, proceeding or, to the best of
Seller's knowledge, investigation of any kind or nature whatsoever, by or before
any court or governmental or other regulatory or administrative agency,
commission or tribunal brought, asserted or initiated by Seller, or pending
or,
to the best of Seller's knowledge, threatened against or involving Seller and
relating to or affecting the HIV/AIDS Business. To the best of Seller’s
knowledge, there is no valid basis for any such claim, action, suit, inquiry,
proceeding or investigation. Seller is not subject to any judgment, order or
decree.
4.9
Compliance
with Law.
To the
best of Seller’s knowledge, Seller is and has been conducting the HIV/AIDS
Business and owning and operating all of the Acquired Assets in compliance
in
all material respects with all applicable laws, rules, regulations, orders,
codes, ordinances, authorizations, judgments and decrees, of all federal, state,
local, foreign or other governmental or regulatory authorities.
Seller
and each of its employees or agents providing services at the pharmacy, as
applicable, (a) hold all permits, licenses, registrations, franchises,
certificates, concessions and other governmental approvals and authorizations
(the “Licenses and Permits”) required for the operation of the HIV/AIDS
Business, including, without limitation, all Licenses and Permits required
by
federal, state and local law and all applicable regulatory agencies, and (b)
are
in compliance in all material respects with all applicable laws, regulations
and
agreements, including without limitation the Health Insurance Portability and
Accountability Act of 1996 as it relates to the maintenance of customer and
patient lists and records of the HIV/AIDS Business. All such Licenses and
Permits are in full force and effect and Seller is not in default in any respect
with respect to any such Licenses and Permits. No notice from any authority
with
respect to the revocation, termination, suspension or limitation of any such
Licenses and Permits has been issued or given, nor is Seller aware of the
proposed or threatened issuance of any such notice.
4.10
Finders.
Neither
Seller, nor any of its Affiliates, nor any of Seller’s directors or officers,
has taken any action that, directly or indirectly, would obligate Buyer or
any
of its Affiliates to anyone acting as broker, finder, financial advisor or
in
any similar capacity in connection with this Agreement or any of the
transactions contemplated hereby.
4.11
Related
Party Transactions; Intercompany Accounts. There
are
no Contracts between Seller, on one hand, and any shareholder, director,
officer, employee, consultant or Affiliate of Seller (each, a “Related Party”),
on the other, related to the HIV/AIDS Business. There have been no transactions
during the prior eighteen (18) months between Seller, on one hand, and any
Related Party, on the other, related to the HIV/AIDS Business.
4.12
Tax
Matters.
All
Taxes that are due or payable by Seller, whether or not disputed by Seller,
have
been paid in full. All tax returns to be filed in connection with Taxes have
been accurately prepared and duly and timely filed (it being understood that
tax
returns for 2005 are on extension). Attached as Schedule
4.12
are
true, complete and accurate copies of Seller’s Federal and state income tax
returns for 2002, 2003 and 2004.
10
4.13
Improper
Payments. Neither
Seller, nor any of Seller’s officers and employees nor, to the best of Seller’s
knowledge, Seller’s agents have made any illegal or improper payments to, or
provided any illegal or improper benefit or inducement for, any governmental
official, supplier, customer or other person, in an attempt to influence any
such person to take or to refrain from taking any action relating to the
HIV/AIDS Business.
4.14 Payment
Programs.
Neither
Seller, nor any of its officers or employees, nor, to the best knowledge of
Seller, agents have received written notice that it is subject to any
restriction or limitation on the receipt of payment under the Medicare program,
any other federally funded health care program or any other third party payor
(collectively, the “Payment Programs”). Seller has valid and current provider
agreements with the Payment Programs. Seller is in compliance in all material
respects with the conditions of participation for the Payment Programs. Neither
Seller, nor any of Seller’s officers or employees, nor, to the best knowledge of
Seller, agents have received written notice that a Payment Program has requested
or threatened any recoupment, refund or set-off from Seller, or imposed any
fine, penalty or other sanction on Seller, nor has Seller been excluded from
participation in a payment program. Seller has not submitted to a Payment
Program any false or fraudulent claim for payment, nor has Seller at any time
violated in any material respect any condition for participation, or any
published rule, regulation, policy or standard of a Payment
Program.
4.15
Fraud
and Abuse.
Neither
Seller, nor any of Seller’s officers or employees, nor, to the best knowledge of
Seller, agents, have engaged in any activities that are prohibited under Federal
Medicare and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇.▇.▇. §§ ▇▇▇▇▇-▇, ▇▇▇▇▇-▇▇, ▇▇▇▇▇-▇▇ or the
Federal False Claims Act, 31 U.S.C. § 3729 et seq., the regulations promulgated
pursuant to such statutes, or any related state or local statutes or
regulations.
4.16
Physician
Self-Referrals.
Seller’s operations relating to the HIV/AIDS Business are in compliance in all
material respects with and do not otherwise violate the Federal Medicare and
Medicaid statutes regarding physician self-referrals, 42 U.S.C. §§ 1395nn and
1396b(s), the regulations promulgated pursuant to such statutes, or any related
state or local statutes or regulations.
Neither
Seller, nor any of Seller’s officers or employees, nor, to the best knowledge of
Seller, agents, have engaged in any activities that may violate such statutes
or
regulations.
4.17
Controlled
Substances.
Seller
has not engaged in any activities which are prohibited under the Federal
Controlled Substances Act, 21 U.S.C. § 801 et seq., or the regulations
promulgated pursuant to such statute or any related state or local statutes
or
regulations concerning the dispensing and sale of controlled
substances.
4.18
Referrers
and Suppliers. Schedule
4.18
hereto
sets forth a list of Seller’s fifteen largest referral sources and suppliers of
inventory in order of dollar volume of referrals and purchases, respectively,
during its last three fiscal years, in each case related to the HIV/AIDS
Business. There has not been any adverse change and there are no facts known
to
Seller which may reasonably be expected to indicate that any adverse change
may
occur in the business relationship of Seller or, after the Closing, Buyer with
any supplier or referral source named on Schedule
4.18.
11
4.19
Disclosure. No
representation, warranty or other statement by Seller, Seller’s Shareholder or
the Pharmacist-in-Charge herein or made in writing in connection herewith
contains or will contain an untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES REGARDING BUYER
Buyer
hereby represents and warrants to Seller as follows:
5.1 Organization
and Qualification. Buyer
is
a corporation duly organized, validly existing and in good standing under the
laws of the State of New York, with full corporate power and authority to own,
lease and operate its properties and assets and to conduct its business as
it is
now being conducted.
5.2 Authority. Buyer
has
all requisite power and authority to execute and deliver this Agreement and
all
documents, certificates, agreements, instruments and writings related hereto
to
which it is a party and to perform, carry out and consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of
this
Agreement have been duly authorized by all necessary corporate action on the
part of Buyer. This Agreement has been duly and validly executed by Buyer and
constitutes the legal, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with its terms.
5.3 No
Breach.
Neither
the execution and delivery of this Agreement by Buyer nor the consummation
of
the transactions contemplated herein will: (a) violate any provision of the
Certificate of Incorporation or Bylaws of Buyer; (b) conflict with, result
in a
breach of or constitute a default (or an event which, with or without notice,
lapse of time or both, would constitute a default) under, or give any third
party the right to terminate or modify, any material agreement or other
instrument to which Buyer is a party or by which it or any of its assets is
bound; (c) conflict with, violate, result in a breach of or constitute a default
under any judgment, decree, order or process of any court or governmental
authority; (d) conflict with or violate any material statute, law or regulation
applicable to the business of Buyer; (e) require Buyer to obtain any
authorization, consent, approval or waiver from, or to make any filing with,
any
governmental or regulatory authority; or (f) to the best of Buyer’s knowledge,
require Buyer to obtain any authorization, consent, approval or waiver from,
or
to make any filing with, any governmental or regulatory authority, or other
third party.
5.4 Finders. Neither
Buyer, nor any of its Affiliates, nor any of their respective directors or
officers, has taken any action that, directly or indirectly, would obligate
Seller or any of its Affiliates to anyone acting as a broker, finder, financial
advisor or in any similar capacity in connection with this Agreement or any
of
the transactions contemplated hereby.
5.5
Disclosure.
The
public filings of Guarantor made by Guarantor since January 1, 2006 under the
Securities and Exchange Act of 1934, as amended, do not contain an untrue
statement of a material fact, nor omit to state a material fact necessary to
make the statements contained therein not misleading. No
representation, warranty or other statement by Buyer herein or made in writing
in connection herewith contains or will contain an untrue statement of a
material fact, or omits or will omit to state a material fact necessary to
make
the statements contained herein or therein not misleading.
12
ARTICLE
VI
COVENANTS
6.1 Obtaining
Consents. Buyer
and
Seller shall use all reasonable efforts to obtain all consents, approvals and
waivers, if any, from, and give all notices to, and make all declarations,
filings and registrations with, any governmental and regulatory agencies and
other third parties that are required to consummate or are otherwise related
to
the transactions contemplated hereby. Buyer and Seller shall coordinate and
cooperate with one another and supply such assistance as may be reasonably
requested by each in connection with the foregoing.
6.2 Transfer
and Retention of Records. Except
as
may be required for tax purposes or other regulatory purposes, neither Seller,
nor any of its respective successors and assigns, will retain any document,
databases or other media embodying any confidential or proprietary information
relating to the HIV/AIDS Business or use, publish or disclose to any third
person any such confidential or proprietary information relating to the HIV/AIDS
business; provided,
however,
that
Seller shall be entitled to retain copies of any of the foregoing (and have
access to the same after the Closing) to the extent necessary in connection
with
prosecuting or defending any matter not assumed by Buyer or any other
appropriate business purpose. Seller shall take all actions requested by Buyer
to transfer records relating to Seller’s business to Buyer, which may include
making duplicate copies of any records retained by Seller in the form of paper
or electronic media.
6.3 Employee
Matters.
Buyer
shall not assume or be responsible in any way for the obligations, liabilities
or responsibilities (a) of any Employee Benefit Plan of Seller, (b) of Seller,
any Affiliate of Seller or any fiduciary under, arising from, or with respect
to
any Employee Benefit Plan of Seller or (c) to any of Seller's officers,
directors, employees and agents, arising from
or
related to the transactions contemplated by this Agreement. Buyer shall not
be
deemed to be a successor employer with respect to the employment of any employee
of Seller or with respect to any of Seller's Employee Benefit Plans.
Buyer
shall not be obligated to offer employment to any or all of Seller’s
employees.
6.4 Further
Assurances.
Buyer
and Seller shall, and shall cause their respective Affiliates to, at the request
and the expense of the other, execute and deliver such other instruments of
conveyance and transfer and assumption and take such other action as may be
reasonably requested so as to consummate the transactions contemplated hereby
or
otherwise to consummate the intent of this Agreement. Without limiting the
generality of the foregoing, the Seller will, and will cause its management
to,
execute management representation letters, forms of which are attached as
Exhibit
B,
reasonably requested by Buyer’s outside auditors in connection with the audit of
Seller or otherwise as is required by applicable securities laws.
13
6.5 Certain
Covenants of Seller.
Seller
hereby covenants that (unless Buyer otherwise gives its written approval in
its
sole discretion) Seller shall at its sole cost and expense take the actions
set
forth below:
(a) Within
thirty (30) days after the Closing, Seller shall pay or otherwise discharge
(in
full, without discount or compromise) all the Excluded Liabilities related
to
the HIV/AIDS Business.
(b) After
the
Closing, Seller shall afford Buyer, its attorneys, accountants, consultants
and
representatives, free and full access to the Acquired Assets and books and
records of Seller relating thereto, at all reasonable times upon reasonable
notice and during normal business hours, and shall provide to Buyer and its
representatives such additional financial and operating data and other
information as Buyer shall from time to time reasonably request.
(c) After
the
Closing, Seller shall use its best efforts to preserve for Buyer the goodwill
of
its customers and suppliers, and shall do all things reasonably requested by
Buyer for such purpose. Without limiting the generality of the foregoing, the
parties acknowledge that, after the Closing, certain “walk-in” HIV customers of
Seller shall continue to request that Seller fill their prescriptions for
HIV/AIDS-related medications. Seller shall advise each such customer of the
acquisition by Buyer of the HIV/AIDS Business. In addition, Seller agrees that
it shall continue to fill such customers’ prescriptions for HIV/AIDS-related
medications out of inventory on hand at the Closing, until such time as Buyer
notifies Seller that Seller may no longer sell inventory related to the HIV/AIDS
Business.
(d) After
the
Closing, Seller shall promptly advise Buyer in writing of the commencement
or
threat against Seller of any suit, litigation or legal proceeding that relates
to or might affect the Acquired Assets.
(e) Within
fifteen (15) days after the Closing Date, cause its legal counsel to deliver
a
legal opinion in customary form, covering the items set forth on Exhibit
C.
6.6 Financial
Statements.
After
the Closing, upon Buyer’s request, Seller shall request its accountant to
produce and deliver to Buyer, as soon as practicable, compiled financial
statements for the HIV/AIDS Business for the years ending December 31, 2003,
2004 and 2005, and the six months ended June 30, 2006. Seller shall request
that
the accountant use its reasonable efforts to produce them in accordance with
GAAP. Seller shall request that such financial statements, when produced and
delivered, (i) be prepared from the books and records of Seller, and completely
and accurately reflect all financial transactions of Seller related to the
HIV/AIDS Business, including, without limitation, the accounts receivable,
accounts payable and revenue of Seller for the periods covered by and as at
the
dates of such financial statements; and (ii) be true and correct, and present
fairly the financial condition of the HIV/AIDS Business and the results of
its
operation for the periods covered by, and as at the dates of, each of such
financial statements. In addition, Seller shall request its accountants to
assist McGladrey & ▇▇▇▇▇▇ in the timely preparation of audited financials
for the HIV/AIDS Business. Buyer shall pay to Seller's accountants up to Thirty
Thousand Dollars ($30,000) for such services. Buyer acknowledges that Seller
has
not historically kept separate books and records for the HIV/AIDS Business
and
its other businesses. For the sake of clarity, Buyer acknowledges that it shall
have no claim that Seller has breached its obligations under this Section 6.6
if
its accountants or McGladrey & ▇▇▇▇▇▇ cannot prepare such financial
statements, provided
that
Seller shall use its commercially reasonable efforts to assist its accountants
and McGladrey & ▇▇▇▇▇▇ in this regard, including by provided them with
access to its books and records and providing such other assistance and
cooperation as may from time to time reasonably be requested of Seller by Buyer
or such accountants.
14
ARTICLE
VII
RESTRICTIVE
COVENANTS
7.1 Non-Competition.
Seller,
Seller’s Shareholder and the Pharmacist-in-Charge hereby agree that as a
material inducement to Buyer to enter into this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller, Seller’s Shareholder and the Pharmacist-in-Charge covenant
and agree that it, and each of Seller’s officers, directors and Affiliates, and
each of Seller’s Shareholder’s and the Pharmacist-in-Charge’s respective
Affiliates and immediate family members, shall not, (a) for the period from
the
date hereof until five (5) years following the Closing Date (the “Restricted
Period”), directly or indirectly, on its own behalf or in the service of or on
the behalf of others, as a director, trustee, owner (except as the owner of
less
than two percent (2%) of the outstanding stock of a publicly held corporation),
employee, consultant, advisor, independent contractor or in any other capacity,
engage in the business of operating, within fifty (50) miles of Seller’s present
pharmacy in Brooklyn, New York (the “Restricted Territory”) a pharmacy that
services or treats, or markets or sells AIDS/HIV products to, AIDS/HIV patients,
except as expressly permitted by Section 6.5(c), or (b) for the period from
the
date hereof until three (3) years following the Closing Date, directly or
indirectly, permit a pharmacy that services or treats, or markets or sells
AIDS/HIV products to, AIDS/HIV patients to operate at the location of Seller’s
present or future pharmacy in Brooklyn, New York, or cooperate with or assist
any Person to engage in any such activities, including without limitation by
(i)
selling or otherwise transferring its business and assets (which may include
its
real property interest or a license to use same) to any Person that may or
is
permitted to engage in any such activities and/or (ii) cooperating with or
otherwise assisting any other Person to acquire a license to so engage in any
such activities. For the sake of clarity, a pharmacy “services or treats, or
markets or sells AIDS/HIV products to, AIDS/HIV patients” if it either derives
more than one percent (1%) of its revenues from the sale of AIDS/HIV services
or
products or in any way is marketing its AIDS/HIV services or products
specifically to the AIDS/HIV community.
7.2 Non-Interference.
Seller,
Seller’s Shareholder and the Pharmacist-in-Charge further agree that, during the
Restricted Period and within the Restricted Territory, Seller, Seller’s
Shareholder and the Pharmacist-in-Charge will not, directly or indirectly;
(a) induce any former customer of or referrer of customers to Seller or
customer of or referrer of customers to Buyer to patronize any Person who
competes with Buyer; (b) request or advise any former customer of or
referrer of customers to Seller or customer of or referrer of customers to
Buyer
to withdraw, curtail or cancel such Person’s business with Buyer; (c) enter
into any contract, the purpose or result of which would benefit such Seller
if
any former customer of or referrer of customers to Seller or customer of or
referrer of customers to Buyer were to withdraw, curtail, or cancel such
customer’s or referrer’s business with Buyer; or (d) disclose to any other
Person the names or addresses of any former customer of or referrers of
customers to the HIV/AIDS Business or customer of or referrers of customers
to
Buyer, either individually or collectively.
15
7.3
Acknowledgements.
If the
provisions of this Article VII are violated, in whole or in part, Buyer shall
be
entitled, upon application to any court of proper jurisdiction, to a temporary
restraining order or preliminary injunction to restrain and enjoin Seller,
Seller’s Shareholder and the Pharmacist-in-Charge, and their respective
Affiliates, from such violation without prejudice as to any other remedies
Buyer
may have at law or in equity. In the event of a violation, Seller, Seller’s
Shareholder and the Pharmacist-in-Charge agree that it would be virtually
impossible for Buyer to calculate its monetary damages and that Buyer would
be
irreparably harmed. If Buyer seeks such temporary restraining order or
preliminary injunction, Buyer shall not be required to post any bond with
respect thereto, or, if a bond is required, it may be posted without surety
thereon. If any restriction contained in this Article VII is held by any court
to be unenforceable, or unreasonable, as to time, geographic area or business
limitation, Buyer, Seller, Seller’s Shareholder and the Pharmacist-in-Charge
agree that such provisions shall be and are hereby reformed to the maximum
time,
geographic area or business limitation permitted by applicable laws. The parties
further agree that the remaining restrictions contained in this Article VII
shall be severable and shall remain in effect and shall be enforceable
independently of each other. Seller, Seller’s Shareholder and the
Pharmacist-in-Charge specifically acknowledge, represent and warrant that the
covenants set forth in this Article VII are reasonable and necessary to protect
the legitimate interests of Buyer, and that Buyer would not have entered into
this Agreement or paid the Purchase Price in the absence of such
covenants.
The
Pharmacist-in-Charge specifically acknowledges that he is Seller’s Shareholder’s
spouse and will benefit financially from the transactions contemplated by this
Agreement.
ARTICLE
VIII
INDEMNIFICATION
8.1 Survival
of Representations and Warranties. All
representations and warranties contained in Articles IV and V of this Agreement
shall survive the Closing for the applicable statute of
limitations.
8.2 Indemnification
by Seller and Seller’s Shareholder.
Seller
and Seller’s Shareholder shall indemnify and save Buyer and its Affiliates,
their respective directors, officers, employees, agents and representatives
and
all of their successors and assigns (collectively “Buyer Claimants” and
individually a “Buyer Claimant”) harmless from and defend each of them from and
against any and all demands, claims, actions, liabilities, losses, costs,
damages or expenses whatsoever (including any reasonable attorneys' fees)
(collectively, “Losses”) asserted against, imposed upon or incurred by Buyer
Claimants resulting from or arising out of (a) any inaccuracy or breach of
any
representation or warranty of Seller, Seller’s Shareholder or the
Pharmacist-in-Charge contained herein; (b) any breach of any covenant or
obligation of Seller contained herein; (c) any liability of Seller arising
out
of events occurring, conditions existing, products sold or activities of Seller;
(d) noncompliance with any applicable bulk sales or similar laws (including
laws
which may impose transferee liability on Buyer or an Affiliate of Buyer or
create Encumbrances on the Acquired Assets relating to Seller's liability for
sales, use or other taxes or withholdings arising out of the operations of
Seller); and (e) any liability arising out of or related to Seller’s business
prior to Closing, or the assertion against a Buyer Claimant of a claim which,
if
valid, would constitute a liability arising out of or related to Seller’s
business prior to Closing.
16
8.3 Indemnification
by Buyer.
Buyer
shall indemnify and save Seller and its respective Affiliates and their
respective directors, officers, employees, agents and representatives
(collectively “Seller Claimants” and individually a “Seller Claimant”) harmless
from and defend each of them from and against any and all Losses asserted
against, imposed upon or incurred by Seller Claimants resulting from or arising
out of (a) any inaccuracy or breach of any representation or warranty of Buyer
contained herein; (b) any breach of any covenant or obligation of Buyer
contained herein; (c) any liability of Buyer arising out of events occurring,
conditions exisiting, products sold or activities of Buyer; and (d) except
as
described in Section 8.2 above, Buyer's ownership of the Acquired Assets and
operation of its business from and after the Closing Date.
8.4 Indemnification
Procedures.
(a) The
rights and obligations of each party claiming a right to indemnification
hereunder (“Indemnitee”) from the other party (“Indemnitor”) shall be governed
by the following rules:
(i) The
Indemnitee shall give prompt written notice to the Indemnitor of any state
of
facts which Indemnitee determines will give rise to a claim by the Indemnitee
against the Indemnitor based on the indemnity agreements contained herein,
stating the nature and basis of said claims and the amount thereof, to the
extent known. No failure to give such notice shall affect the indemnification
obligations of Indemnitor hereunder, except to the extent such failure
materially prejudices such Indemnitor's ability successfully to defend the
matter giving rise to the indemnification claim.
(ii) In
the
event any action, suit or proceeding is brought against the Indemnitee, with
respect to which the Indemnitor may have liability under the indemnity
agreements contained herein, then upon the written acknowledgment by the
Indemnitor within thirty (30) days of the bringing of such action, suit or
proceeding that it is undertaking and will prosecute the defense of the claim
under such indemnity agreements and confirming that the claim is one with
respect to which the Indemnitor is obligated to indemnify and that it will
be
able to pay the full amount of potential liability in connection with any such
claim, the action, suit or proceeding (including all proceedings on appeal
or
for review which counsel for the Indemnitee shall deem appropriate) may be
defended by the Indemnitor. However, in the event the Indemnitor shall not
offer
reasonable assurances as to its financial capacity to satisfy any final judgment
or settlement, the Indemnitee may assume the defense and dispose of the claim,
after thirty (30) days prior written notice to the Indemnitor. The Indemnitee
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the Indemnitee's own expense unless
(A)
the employment of such counsel and the payment of such fees and expenses both
shall have been specifically authorized by the Indemnitor in connection with
the
defense of such action, suit or proceeding or (B) the Indemnitee shall have
reasonably concluded and specifically notified the Indemnitor that there may
be
specific defenses available to it which are different from or additional to
those available to the Indemnitor.
(iii) In
addition, in any event specified in clause (B) of the second sentence of
subparagraph (ii) above, the Indemnitor, to the extent made necessary by such
different or additional defenses, shall not have the right to direct the defense
of such action, suit or proceeding on behalf of the Indemnitee. If Indemnitor
and Indemnitee cannot agree on a mechanism to separate the defense of matters
extending beyond the scope of indemnification, such matters shall be defended
on
the basis of joint consultation.
17
(iv) The
Indemnitee shall be kept fully informed by the Indemnitor of such action, suit
or proceeding at all stages thereof, whether or not it is represented by
counsel. The Indemnitor shall, at the Indemnitor's expense, make available
to
the Indemnitee and its attorneys and accountants all books and records of the
Indemnitor relating to such proceedings or litigation, and the parties hereto
agree to render to each other such assistance as they may reasonably require
of
each other in order to ensure the proper and adequate defense of any such
action, suit or proceeding.
(v) The
Indemnitor shall make no settlement of any claims which Indemnitor has
undertaken to defend, without Indemnitee's consent, unless the Indemnitor fully
indemnifies the Indemnitee for all losses, there is no finding or admission
of
violation of law by, or effect on any other claims that may be made against,
the
Indemnitee and the relief granted in connection therewith requires no action
on
the part of and has no effect on the Indemnitee.
ARTICLE
IX
MISCELLANEOUS
9.1 Expenses. Each
party hereto shall pay its own expenses incurred in connection with this
Agreement, except as otherwise specified in this Agreement and except that
all
sales, transfer and other similar taxes, levies and charges that may be imposed,
levied or assessed in connection with the consummation of the transactions
contemplated hereby shall be borne by Seller.
9.2 Amendment. This
Agreement may not be terminated, amended, altered or supplemented except by
a
written agreement executed by the parties hereto.
9.3 Entire
Agreement. This
Agreement, including the schedules hereto, and the instruments and other
documents delivered pursuant to this Agreement, contain the entire agreement
of
the parties relating to the subject matter of this Agreement and supersede
all
other agreements and understandings of any kind between the parties respecting
such subject matter. Each and every representation, warranty and covenant shall
be deemed to include the information contained in the schedules
thereto.
9.4 Waivers. Waiver
by
either party of either breach of or failure to comply with any provision of
this
Agreement by the other party shall not be construed as, or constitute, a
continuing waiver of such provision, or a waiver of any other breach of, or
failure to comply with, any other provision of this Agreement. No waiver of
any
such breach or failure or of any term or condition of this Agreement shall
be
effective unless in a written notice signed by the waiving party and delivered,
in the manner required for notices generally, to each affected
party.
9.5 Notices. All
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms of this Agreement to be given
to any Person shall be in writing, and any such communication shall become
effective five (5) Business Days after being deposited in the United States
mails, certified or registered (return receipt requested), with appropriate
postage prepaid for first class mail or, if delivered by hand or courier service
or in the form of a telex, telecopy or telegram, when received (if received
during normal business hours on a Business Day, or if not, then on the next
Business Day thereafter), and shall be directed to the following address or
telex or telecopy number:
18
If
to
Seller:
St.
Jude
Pharmacy & Surgical Supply Corp.
▇▇▇
▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier:
718-417-3621
With
a
copy to:
▇▇▇▇▇▇▇▇
& Markhoff
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier:
▇▇▇-▇▇▇-▇▇▇▇
If
to
Buyer:
MOMS
Pharmacy of Brooklyn, Inc.
c/o
Allion Healthcare, Inc.
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Mr. ▇▇▇▇ ▇▇▇▇▇
Telecopier:
▇▇▇-▇▇▇-▇▇▇▇
With
a
copy to:
▇▇▇▇▇
Peabody LLP
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Attention:
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Telecopier:
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or
to
such other address as a party may have furnished to the other parties in writing
in accordance herewith, except that notices of change of address shall only
be
effective upon receipt.
9.6 Counterparts.
This
Agreement may be executed in two or more counterparts, and by the different
parties hereto in separate counterparts each of which when executed shall be
deemed to be an original, but all of which together shall constitute one and
the
same document.
9.7 Governing
Law; Submission to Jurisdiction.
This
Agreement shall be governed by, and construed in accordance with, the law of
the
State of New York, without regard to applicable principles of conflict of laws
that might otherwise govern.
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9.8 Binding
Effect; Assignment.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Neither party shall assign
or transfer this Agreement nor any right or obligation hereunder by operation
of
law or otherwise without the consent of the other party.
9.9 Severability. If
any
provision of this Agreement or any part of any such provision is held under
any
circumstances to be invalid or unenforceable in any jurisdiction, then: (a)
such
provision or part thereof shall, with respect to such circumstances and in
such
jurisdiction, be deemed amended to conform to applicable laws so as to be valid
and enforceable to the fullest possible extent; (b) the invalidity or
unenforceability of such provision or part thereof under such circumstances
and
in such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction; and (c) such invalidity or enforceability of such provision or
part thereof shall not affect the validity or enforceability of the remainder
of
such provision or the validity or enforceability of any other provision of
this
Agreement. Each provision of this Agreement is separable from every other
provision of this Agreement, and each part of each provision of this Agreement
is separable from every other part of such provision.
9.10 Headings.
The
headings contained in this Agreement (including the schedules) are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement.
9.11 No
Agency.
Neither
party hereto shall be deemed hereunder to be an agent of, or partner or joint
venture with, the other party hereto.
9.12 Third
Parties.
Nothing
herein is intended or shall be construed to confer upon or give to any person
other than the parties hereto any rights or remedies under or by reason of
this
Agreement.
9.13 Passage
of Title and Risk of Loss.
Legal
title, equitable title and risk of loss with respect to the Acquired Assets
will
not pass to Buyer until the Acquired Assets are transferred at the
Closing.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of
the date first above written.
SELLER:
ST.
JUDE
PHARMACY & SURGICAL SUPPLY CORP.
By:______________________________________
Authorized
Officer
SELLER’S
SHAREHOLDER:
________________________________________
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PHARMACIST-IN-CHARGE:
________________________________________
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BUYER:
MOMS
PHARMACY OF BROOKLYN, INC.
By:______________________________________
▇▇▇▇▇▇▇
▇▇▇▇▇
President
and Chief Executive Officer
GUARANTOR:
ALLION
HEALTHCARE, INC.
By:______________________________________
▇▇▇▇▇▇▇
▇▇▇▇▇
President
and Chief Executive Officer
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EXHIBIT
C
1. Seller
has been duly organized and is validly existing and in good standing under
the
laws of the State of New York. Seller has the power and authority to own, lease
and operate its properties and to conduct its business as it is presently
conducted. Seller’s Shareholder are the only shareholders of
Seller.
2. Seller,
Seller’s Shareholder and the Pharmacist-in-Charge have the power and authority
to execute, deliver and perform, and has taken all action necessary to execute,
deliver and perform the Agreement. Seller, Seller’s Shareholder and the
Pharmacist-in-Charge have duly executed and delivered the Agreement.
3. The
Agreement constitutes the valid and binding obligation of Seller, Seller’s
Shareholder and the Pharmacist-in-Charge, enforceable against such Person in
accordance with its terms.
4. The
execution and delivery of the Agreement, and the consummation by Seller,
Seller’s Shareholder and the Pharmacist-in-Charge of the transactions
contemplated by the Agreement, do not, with or without the giving of notice
or
the lapse of time or both, violate (a) the articles of incorporation or
bylaws of Seller, or (b) any Federal or state law or regulation applicable
to Seller, Seller’s Shareholder or the Pharmacist-in-Charge.
5. No
registration, approval, authorization, consent, notice or other action by,
or
filing with, any Federal or state governmental authority is required on the
part
of Seller, Seller’s Shareholder or the Pharmacist-in-Charge in connection with
the execution and delivery of the Agreement, or the consummation by Seller,
Seller’s Shareholder or the Pharmacist-in-Charge of the transactions
contemplated by the Agreement, or if required, such appropriate action has
been
taken.
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