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EXHIBIT 2.19
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ASSET PURCHASE AGREEMENT
BY AND AMONG
MANAGED HEALTHCARE, INC.
(PURCHASER);
LONG TERM PHARMACEUTICAL CARE, INC.
(SELLER);
BALANCED CARE CORPORATION
(THE SHAREHOLDER);
AND
OMNICARE, INC.
(OMNICARE)
DATED AS OF OCTOBER 16, 1997
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TABLE OF CONTENTS
PAGE
RECITALS: 1
1. AGREEMENT TO SELL AND AGREEMENT TO PURCHASE. 1
1.1 Assets to be Conveyed 1
1.2 Excluded Assets 3
1.3 Further Assurances 4
1.4 Closing 4
1.5 Trust 4
2. CONSIDERATION TO BE PAID BY PURCHASER 4
2.1 Purchase Price for Acquisition Assets; Payment Thereof 4
2.2 Allocation of Purchase Price 5
2.3 Liabilities Assumed by Purchaser 5
2.4 Election to Assume Certain Liabilities 6
2.5 Liabilities Not Assumed by Purchaser 6
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
AND OMNICARE 8
3.1 Organization, Good Standing, Authority and Enforceability 8
3.2 Agreement Not in Breach of Other Instruments 8
3.3 Compliance with Laws 8
3.4 No Legal Bar 9
3.5 No Brokerage Fees 9
3.6 Other Information 9
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND
THE SHAREHOLDER 9
4.1 Organization, Good Standing and Authority 9
4.2 Authorization of Agreement; Capital Stock 10
4.3 Ownership of Acquisition Assets 10
4.4 Financial Statements 10
4.5 Absence of Certain Changes 11
4.6 [Reserved] 11
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4.7 Tangible Personal Property Other Than Inventory 11
4.8 Intangible Personal Property 12
4.9 Inventory 12
4.10 Accounts Receivable 13
4.11 Insurance 13
4.12 [Reserved] 13
4.13 Employment Matters 13
4.14 Employee Benefit Plans 13
4.15 Freedom to Deal; Agreement Not in Breach of
Other Instruments 14
4.16 Tax Returns 14
4.17 Litigation 15
4.18 Compliance with Law 15
4.19 Brokerage 15
4.20 Contracts 15
4.21 No Undisclosed Liabilities 16
4.22 Other Material Circumstances 16
4.23 Other Information 16
4.24 Necessary Assets 17
4.25 Conflicts of Interest 17
5. CERTAIN UNDERSTANDINGS AND AGREEMENTS OF
THE PARTIES 17
5.1 Access; Due Diligence 17
5.2 Confidentiality 17
5.3 Conduct of Business 18
5.4 Preservation of Organization 19
5.5 Current Information 19
5.6 Change of Name 19
5.7 Covenant Not to Compete 19
5.8 [Reserved] 20
5.9 Compliance with Bulk Sales Laws 20
5.10 [Reserved] 20
5.11 Condition to Transfer of Certain Contracts 20
5.12 Satisfaction of Leases 20
5.13 Prorations and Sales Tax 20
5.14 [Reserved] 20
5.15 Collection of Accounts Receivable 20
5.16 Employees 21
5.17 Tail Insurance 21
5.18 Patient Records 21
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6. CONDITIONS TO CLOSING. 21
6.1 Conditions to Obligations of Each Party 21
6.2 Conditions to Obligations of Purchaser and Omnicare 22
6.3 Conditions to Obligations of Seller and the Shareholder. 24
7. INDEMNIFICATION 26
7.1 Indemnification by Seller and the Shareholder 26
7.2 Indemnification by Purchaser and Omnicare 26
7.3 Determination of Loss 27
7.4 Indemnification Payments 27
7.5 Limitations on Indemnification 28
7.6 Notification 28
8. ADDITIONAL COVENANTS AND AGREEMENTS 28
8.1 Expenses 28
8.2 Survival of Representations and Warranties 28
8.3 Public Releases 29
8.4 Other Transactions Prohibited 29
9. TERMINATION; REMEDIES 29
9.1 Termination 29
9.2 Liability in the Event of Termination; Remedies 30
10. MISCELLANEOUS 30
10.1 Entire Agreement 30
10.2 Amendments 31
10.3 Successors; Assignment 31
10.4 Notices 31
10.5 Waiver 32
10.6 Severability 32
10.7 No Third Party Beneficiary 32
10.8 Applicable Law 32
10.9 [Reserved] 32
10.10 References to Best Knowledge 32
10.11 Counterparts 32
10.12 Omnicare Guarantee 32
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") dated as of
October 16, 1997, by and among MANAGED HEALTHCARE, INC., a Delaware corporation
("Purchaser"); LONG TERM PHARMACEUTICAL CARE, INC., a Missouri corporation
("Seller"); BALANCED CARE CORPORATION, a Delaware corporation (the
"Shareholder"); and OMNICARE, INC., a Delaware corporation ("Omnicare").
RECITALS:
A. WHEREAS, Seller is engaged in the business of selling and
distributing oral prescription pharmaceutical products, and medical and
surgical supplies and providing consultant pharmacy services to nursing homes
and other institutional care facilities and to patients resident in such
facilities, provided, however, that Seller is not engaged in the business of
selling and distributing enteral, urological or intravenous products (the
"Business");
B. WHEREAS, Seller conducts the principal operations of the
Business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (together, the "Operations Facilities") and
at various client facilities;
C. WHEREAS, Purchaser is a second tier wholly owned
subsidiary of Omnicare;
D. WHEREAS, the Shareholder owns all of the issued and
outstanding shares of the capital stock of Seller as specifically set forth on
Exhibit A attached hereto; and
E. WHEREAS, Purchaser desires to purchase on a going-concern
basis the Business and substantially all of the assets of Seller used or usable
in the Business, and Seller desires to sell such assets and the Business to
Purchaser, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual
promises and covenants herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
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1. AGREEMENT TO SELL AND AGREEMENT TO PURCHASE.
1.1. Assets to be Conveyed. On the terms and subject to the
conditions set forth herein, and except as provided in Section 1.2 hereof, on
the Closing Date (as such term is defined in Section 1.4 hereof), Seller shall
convey, sell, transfer, assign and deliver to Purchaser, and Purchaser shall
purchase, acquire and accept from Seller, on a going-concern basis, the
Business and the goodwill of Seller and all of the assets, properties and
rights of Seller of every kind and description, wherever located, tangible or
intangible, used or usable in connection with the Business (hereinafter
collectively referred to as the "Acquisition Assets"), including, but not
limited to, all rights, title and interest of Seller in, to and under:
(a) Inventories (including, without limitation,
inventories of pharmaceutical products, intravenous products and solutions,
medical products and supplies, and containers and other packaging materials) of
Seller which exist at the Closing Date and are purchased by Purchaser as
determined in accordance with Section 2.1(b) hereof (the "Inventory");
(b) Prepaid items, deposits and other similar assets of
Seller (the "Prepaid Expenses") including, without limitation, those items
listed on Schedule 1.1(b);
(c) [Reserved];
(d) Customer lists, computer software, software in
progress, rights in software used, but not owned, pursuant to license or
otherwise (all as listed on Schedule 1.1(d)), medical and patient records (to
the extent legally transferable) and all correspondence relating thereto and
data bases relating to or arising out of the Business;
(e) All rights of Seller under express or implied
warranties, to the extent that such warranties are transferable, from the
suppliers of Seller with respect to the Acquisition Assets;
(f) Subject to Sections 1.2(b), 5.11 and 5.12 hereof,
all of Seller's rights, title and interest in and to each lease, license,
contract, agreement, employee secrecy, pharmacy provider or confidentiality
agreement (to the extent transferable), written or oral, to which Seller is a
party at the Closing Date, by which any of the Acquisition Assets is then bound
or from which Seller benefits, including, without limitation, each of such
items listed as being assigned to and assumed by Purchaser on Schedule 1.1(f)
hereto, with copies of each item so listed having been previously delivered to
Purchaser (all of the foregoing to be assigned to Purchaser
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pursuant hereto are hereinafter referred to collectively as the "Contracts" and
individually as a "Contract");
(g) [Reserved];
(h) Machinery, equipment, telecommunications devices,
computers, tools, furniture, medication carts, medical equipment and other
similar items, whether or not located at the Operations Facility owned by
Seller and used exclusively in the Business, including, without limitation,
those assets set forth on Schedule 1.1(h) hereto (the assets to be conveyed to
Purchaser pursuant to this Section 1.1(h) are hereinafter referred to
collectively as the "Fixed Assets");
(i) To the extent transferable, licenses, trademarks and
trademark registrations (whether registered or to be registered in the United
States of America or elsewhere) applied for, issued to or owned by Seller, and
each trade name (including the "Long Term Pharmaceutical Care" name and all
goodwill of the Seller therein) and computer program owned by Seller or which
Seller has the right to use and assign to Purchaser, and which is used by the
Business, including those items listed on Schedule 1.1(i) hereto; and
(j) All other assets and property of Seller used in the
conduct of the Business which exist at the Closing Date, whether tangible,
intangible, real or personal.
1.2. Excluded Assets. Notwithstanding anything contained in
Section 1.1 hereof to the contrary, Seller is not selling, and Purchaser is not
purchasing, pursuant to this Agreement, any of the following, all of which
shall be retained by Seller (hereinafter referred to collectively as the
"Excluded Assets"):
(a) all cash or cash equivalents of Seller, subject to
the transfer of accrued payroll-related liabilities at the Closing Date for
which offsetting cash balances will be left on hand or deducted from the
Closing Date Payment (as defined in Section 2.1 hereof) pursuant to Section 2.4
hereof;
(b) Accounts and accounts receivable of the Business
existing at the Closing Date payable to Seller (including, without limitation,
all accounts and accounts receivable which have been "written off" or charged
against or to any bad debt reserve of Seller), and any security held by Seller
for the payment thereof (the accounts and accounts receivable to be retained by
Seller pursuant hereto are hereinafter called the "Accounts Receivable");
(c) all of Seller's right, title and interest in and to
the Operations Facilities (except as described in Section 1.1(h) hereof) and
the leases of the
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real property and improvements relating to the Operations Facilities (the
"Operations Facilities Leases");
(d) Seller's minute books, tax returns and other
corporate documents, and Seller's financial records and employment records;
provided, however, that Purchaser shall have reasonable access to such
employment records upon notice and the right to review and copy such records at
Purchaser's cost for as long as Seller maintains such records, which shall in
no event be less than three years from the Closing Date;
(e) all books, records, correspondence and other
information which relate exclusively to the assets and other interests of
Seller to be retained by it pursuant to the terms hereof;
(f) assets of Seller and the Shareholder unrelated to or
not utilized in the Business;
(g) loans to Seller's employees and other affiliated and
non- affiliated persons or entities and deferred charges relating to interest
on loan payments, as identified on Schedule 1.2(g) hereto;
(h) any tax refunds, prepaid taxes, insurance refunds
from prepaid insurance, insurance deposits or recoveries from claims with
respect to periods prior to the Closing Date;
(i) any insurance policies as identified on Schedule
1.2(i) hereto; and
(j) any property owned by the Shareholder which has been
used by Seller in the operation of the Business, as listed on Schedule 1.2(j)
hereto.
1.3. Further Assurances. From time to time after the Closing
(as hereinafter defined), Seller will execute and deliver to Purchaser such
instruments of sale, transfer, conveyance, assignment and delivery, consents,
assurances, powers of attorney and other similar instruments as may be
reasonably requested by Purchaser or its counsel in order to vest in Purchaser
all rights, title and interest of Seller in and to the Acquisition Assets and
otherwise in order to carry out the purposes and intent of this Agreement.
Notwithstanding any provision of this Agreement to the contrary, neither Seller
nor the Shareholder prior to the Closing shall (i) take any action that would
cause a material decrease in the value of the goodwill of the Business,
including but not limited to Seller's relationships with each of its customers,
or (ii) fail to take any action of which either Seller or the Shareholder
becomes aware that would prevent a material decrease in such value.
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1.4. Closing. The closing of the transactions herein
contemplated (the "Closing") shall, unless another date, time or place is
agreed to by the parties hereto, take place via facsimile transmissions,
overnight courier services and wire transfers of funds on October 16, 1997 (the
"Closing Date").
1.5 Trust. Seller shall hold in trust for the benefit of
Purchaser any of the Acquisition Assets that may not be transferred on the
Closing Date until such time as such transfer is legally permissible, subject
to the provisions of Section 5.10 hereof.
2. CONSIDERATION TO BE PAID BY PURCHASER.
2.1. Purchase Price for Acquisition Assets; Payment Thereof.
(a) The purchase price for the Acquisition Assets (the
"Purchase Price") shall be Four Million Eight Hundred Thousand Dollars
($4,800,000), plus the value of the Inventory as of the Closing Date, as
determined in accordance with Section 2.1(b) hereof. The Purchase Price shall
be paid as follows:
(i) At the Closing, Purchaser shall pay to Seller
Four Million Three Hundred Thousand Dollars ($4,300,000) (the "Closing Date
Payment") in cash, by certified check or by wire transfer ("Immediately
Available Funds").
(ii) At the Closing, Purchaser shall deliver to The
Fifth Third Bank (the "Escrow Agent"), as escrow agent, the sum of Five Hundred
Thousand Dollars ($500,000) in Immediately Available Funds (the "Holdback
Payment"), pursuant to the terms of an Escrow Agreement by and among Omnicare,
Purchaser, Seller and the Escrow Agent, substantially in the form of Exhibit B,
attached hereto (the "Escrow Agreement").
(iii) Within ten (10) days after the completion of
the taking and pricing of the Inventory, Purchaser shall pay to Seller in
Immediately Available Funds an amount equal to the aggregate value of the
Inventory determined in accordance with Section 2.1(b) hereof.
(b) Within ten (10) days after the Closing Date,
Purchaser and Seller shall cause an independent third party inventory counting
firm selected by them to take a physical count of the inventory of Seller as of
the Closing Date, and, thereafter, the Inventory shall be valued as follows:
(i) each item of usable and saleable Inventory shall
be valued at Omnicare's "acquisition" cost (i.e. purchase price, net of any
applicable rebates); and
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(ii) each item of nonsaleable inventory shall be
retained by Seller and not acquired by Purchaser hereunder.
2.2. Allocation of Purchase Price. The Purchase Price shall
be allocated among the Acquisition Assets as set forth on Schedule 2.2 hereto.
Seller and Purchaser jointly shall complete and separately file Form 8594 with
their respective federal income tax returns for the tax year in which the
Closing Date occurs in accordance with such agreed procedures and guidelines,
and neither Seller nor Purchaser shall, without the written consent of the
other, take a position on any tax return before any governmental agency charged
with the collection of any such tax, or in any judicial proceeding, that is in
any manner inconsistent with the terms of any such allocation.
2.3. Liabilities Assumed by Purchaser. As further
consideration for the consummation of the transactions contemplated hereby, on
the Closing Date, Purchaser and Seller shall execute an Assignment and
Assumption Agreement in form and substance substantially identical to Exhibit C
attached hereto, pursuant to which Purchaser shall assume, and agree thereafter
to pay or perform when due, the executory liabilities and obligations of Seller
under each Contract to be assumed as provided herein to the extent such
liabilities and obligations are required to be paid or performed after the
Closing Date (the "Assignment and Assumption Agreement").
2.4. Election to Assume Certain Liabilities. On the Closing
Date, if the parties mutually agree, Purchaser shall assume those accrued
payroll, accrued vacation and accrued sick pay liabilities (and related payroll
taxes) as of the Closing Date, as set forth on Schedule 2.4 hereto, so long as
either (i) Seller pays to Purchaser on the Closing Date, in Immediately
Available Funds, an amount equal to the liabilities assumed by Purchaser
pursuant to this Section 2.4, or (ii) Purchaser subtracts from the Closing Date
Payment an amount equal to the liabilities assumed pursuant to this Section
2.4. Purchaser agrees to refund any such amount to Seller that subsequently
may be found to have been an overpayment of, and Seller agrees to pay any
additional amount that subsequently may be required to compensate Purchaser
for, any liabilities assumed by Purchaser pursuant to this Section 2.4.
2.5. Liabilities Not Assumed by Purchaser. Purchaser shall
not be deemed by anything contained in this Agreement to have assumed any
liabilities, obligations, expenses or indebtedness (including any principal,
interest or other amount owing in respect of any such indebtedness) of Seller
of any nature whatsoever, whether absolute, accrued, contingent or otherwise,
unless specifically assumed by Purchaser pursuant to Sections 2.3 and 2.4
hereof, including but not limited to:
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(a) Any liability of Seller to any person or entity the
existence of which constitutes a breach of any covenant, agreement,
representation or warranty of Seller contained in this Agreement;
(b) Any liability of Seller for any federal, state,
local or foreign income, franchise, sales, use, withholding or property taxes
or other taxes of any kind or description (and any fine, penalty or interest
with respect thereto);
(c) Except as provided pursuant to Section 2.4 hereof,
any and all employee compensation, employee benefit, vacation, severance,
pension, profit sharing and other retirement obligations, and tax liabilities
incurred in connection therewith, that have accrued during the course of
Seller's employment of each of its employees (each, an "Employee") or each
person who in the past has worked for Seller (each, a "Former Employee"),
including, without limitation, any accrued or other liability for contributions
or payments to be made in respect of participation by any Employee or Former
Employee in any employee pension benefit plan (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
employee welfare benefit plan (as defined in Section 3(1) of ERISA) or any
other employee benefit plan maintained for the employees of Seller
(collectively, the "ERISA Plans"). Purchaser expressly assumes no liabilities
or obligations with respect to any of the ERISA Plans, whether or not described
or listed on Schedule 4.14 attached hereto and whether or not such liabilities
arise from the transactions contemplated herein, including, without limitation,
(i) health care continuation liability under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), and (ii) ERISA pension
liability. Except as provided in Section 2.4 hereof, Seller shall remain liable
and responsible for and pay all taxes, as such term is used in Section 4.16
hereof, for all time periods prior to and including the Closing Date, relating
to employee wages, salaries and benefits. Seller, to the extent required by
law, regulations or interpretations, shall be liable and responsible for all
obligations to give notice of and to provide health care continuation coverage
for Employees, Former Employees and their respective dependents and qualified
beneficiaries, in accordance with the requirements of COBRA (hereinafter
referred to as "COBRA Coverage"), including, without limitation, all
liabilities, taxes, sanctions, interest and penalties imposed upon, incurred by
or assessed against Purchaser or any affiliated corporation within a controlled
group relationship with Purchaser (as determined under Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code")), and any of their
employees, arising by reason of or relating to any failure to provide the COBRA
Coverage, including, but not limited to, Purchaser's failure to provide COBRA
Coverage to Employees or Former Employees who are receiving COBRA Coverage
under Seller's plans at the Closing Date as well as any of Seller's Employees
who are not hired by Purchaser. In addition, to the extent required by law,
regulations or interpretations, Seller shall be responsible for providing
notice of the availability of COBRA Coverage to all of its Employees and Former
Employees, including any Employees of Seller who will not be employed by
Purchaser
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immediately after the Closing Date, and all such employees' dependents,
entitled to such notice because of a qualifying event occurring before or on
the Closing Date or as a result of the Closing, and for providing COBRA
Coverage for all such employees or their dependents, who elect or have elected
such coverage;
(d) Any liability or obligation (contingent or
otherwise) of Seller arising out of any threatened or pending litigation,
whether or not set forth on Schedule 4.17 attached hereto;
(e) Any liability, obligation or damage to persons or
property arising out of defects in products sold or services provided by Seller
prior to the Closing Date;
(f) Any other liability or obligation of Seller under
any Contract which is required to be paid or performed prior to the Closing
Date;
(g) Any liability for any account, account payable,
note, note payable or other amount payable by Seller to the Shareholder;
(h) Any liability for any account, account payable,
Contract, note or note payable, whether due or to become due, of Seller of any
nature whatsoever, other than those liabilities specifically assumed by
Purchaser pursuant to Sections 2.3 and 2.4 hereof;
(i) Any negative cash balances, book overdrafts, held
checks or similar liabilities of Seller; and
(j) Any liability or obligation (contingent or
otherwise) of Seller arising out of or in connection with any federal, state,
local or foreign laws which relate to protection of human health, public
welfare or the environment.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND OMNICARE.
Purchaser and Omnicare, jointly and severally, represent and
warrant to Seller and the Shareholder that:
3.1. Organization, Good Standing, Authority and
Enforceability. Each of Purchaser and Omnicare is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Each has full authority and power to carry on its business as it is now
conducted, and to own, lease and operate the assets owned, leased or operated
by it. On or before the Closing Date, Purchaser shall be qualified to do
business in the State of Missouri. Each of Purchaser and Omnicare
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has all requisite corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby, subject to the approval
of the sole shareholder and the board of directors of Purchaser and the board
of directors of Omnicare. Such approvals will not be obtained prior to the
signing of this Agreement; Purchaser shall promptly advise Seller in writing
when such approvals have been obtained. This Agreement and each other agreement
herein contemplated to be executed in connection herewith by Purchaser or
Omnicare have been (or upon execution will have been) duly executed and
delivered by Purchaser or Omnicare, as the case may be, and constitute (or upon
execution will constitute) legal, valid and binding obligations of Purchaser or
Omnicare, as the case may be, enforceable against Purchaser or Omnicare, as the
case may be (subject to the approval of the sole shareholder of Purchaser and
the respective boards of directors of Purchaser and Omnicare as provided
above), in accordance with their respective terms.
3.2. Agreement Not in Breach of Other Instruments. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof will not violate or
result in a breach of any of the terms or provisions of, or constitute a
default (or any event which, with notice or the passage of time, or both, would
constitute a default) under, or conflict with or result in the termination of,
or accelerate the performance required by, (i) any agreement, indenture or
other instrument to which Purchaser or Omnicare is a party or by which either
of them is bound, (ii) the Certificates of Incorporation or Bylaws of Purchaser
or Omnicare, (iii) any judgment, decree, order or award of any court,
governmental body or arbitrator by which Purchaser or Omnicare is bound, or
(iv) any law, rule or regulation applicable to Purchaser or Omnicare.
3.3. Compliance with Laws. All consents, approvals and
authorizations and all other requirements prescribed by any law, rule or
regulation which must be obtained or satisfied by Purchaser and which are
necessary for the execution and delivery by Purchaser of this Agreement and the
documents to be executed and delivered by Purchaser in connection herewith and
in order to permit the consummation of the transactions contemplated by this
Agreement have been obtained and satisfied or shall be obtained and satisfied
by Closing.
3.4. No Legal Bar. Neither Purchaser nor Omnicare is
prohibited by any order, writ, injunction or decree of any body of competent
jurisdiction from consummating the transactions contemplated by this Agreement
and all other agreements referenced herein, and no such action or proceeding is
pending against Purchaser or Omnicare which questions the validity of this
Agreement or any such other agreements, any of the transactions contemplated
hereby or thereby or any action which has been taken by any of the parties in
connection herewith or therewith or in connection with any of the transactions
contemplated hereby or thereby.
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3.5. No Brokerage Fees. No broker or finder has acted for
Purchaser or Omnicare in connection with this Agreement or the transactions
contemplated hereby, and no broker or finder is entitled to any brokerage or
finder's fees or other commission in respect of such transactions based in any
way on agreements, arrangements or understandings made by or on behalf of
Purchaser or Omnicare.
3.6 Other Information. The information concerning Purchaser
and Omnicare set forth in this Agreement, the Schedules hereto and any document
to be delivered by Purchaser or Omnicare at the Closing to Seller pursuant
hereto, does not and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated herein or therein or
necessary to make the statements and facts contained herein or therein, in
light of the circumstances under which they are made, not false or misleading.
Copies of all documents heretofore or hereafter delivered or made available to
Seller pursuant hereto were or will be complete and accurate copies of such
documents.
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE SHAREHOLDER.
Seller and the Shareholder, jointly and severally, represent
and warrant to Purchaser and Omnicare that:
4.1. Organization, Good Standing and Authority. Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Missouri. Seller has full authority and power to carry on
its business as it is now conducted, and to own or lease, and operate, the
Acquisition Assets. Seller is qualified to do business and is in good standing
and has all required and appropriate licenses in each jurisdiction in which its
failure to obtain or maintain such qualification, good standing or licensing
would have a material and adverse effect on the condition (financial or
otherwise), assets, properties or prospects of the Business.
4.2. Authorization of Agreement; Capital Stock. Seller has
all requisite power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby, subject to the approval of the
sole shareholder and the board of directors of Seller and the board of
directors of the Shareholder. Such approvals may not be obtained prior to the
signing of this Agreement; Seller shall promptly advise Purchaser in writing
when such approvals have been obtained. This Agreement and each other agreement
and instrument to be executed by Seller and the Shareholder in connection
herewith have been (or upon execution will have been) duly executed and
delivered by Seller and the Shareholder, as the case may be, have been
effectively authorized by all necessary corporate action and constitute (or
upon execution will constitute) legal, valid and binding obligations of Seller
and the
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Shareholder, enforceable against each of them (subject to the approval of the
sole shareholder of Seller and the respective boards of directors of Seller and
the Shareholder) in accordance with their respective terms. The Shareholder
owns all of the shares of the capital stock of Seller as set forth on Exhibit A
attached hereto, which shares constitute all of the issued and outstanding
shares of the capital stock of Seller.
4.3. Ownership of Acquisition Assets. Seller is the lawful
owner of or has the right to use and shall at Closing have the right to
transfer to Purchaser each of the Acquisition Assets, and, except as disclosed
on Schedule 4.3 attached hereto, the Acquisition Assets are free and clear of
all liens, mortgages, pledges, security interests, restrictions, prior
assignments, encumbrances and claims of any kind or nature whatsoever. The
delivery to Purchaser of the instruments of transfer of ownership contemplated
by this Agreement will:
(a) with respect to the Acquisition Assets other than
those listed on Schedule 1.1(f), vest good and marketable title to such assets
in Purchaser on the Closing Date, free and clear of all liens, mortgages,
pledges, security interests, restrictions, prior assignments, encumbrances and
claims of any kind or nature whatsoever; and
(b) with respect to the Acquisition Assets described in
Sections 1.1(e) and 1.1(f) hereof, provide Purchaser with all rights of
possession and/or enforcement to allow Purchaser the opportunity to realize the
full benefits of such items in accordance with the terms of any written or oral
agreements underlying such assets.
4.4. Financial Statements.
(a) Annual Financial Statements. Included with Schedule
4.4(a) attached hereto are the balance sheets of the Business as of June 30,
1997, and the related statements of income for the fiscal year then ended, as
prepared by Seller (collectively, the "Annual Financial Statements"). Except as
disclosed on Schedule 4.4(a), the Annual Financial Statements (i) have been
prepared in accordance with the books and records of Seller, (ii) have been
prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods covered thereby, (iii) fairly
present in all material respects the financial condition and the results of
operations of the Business as of the relevant dates thereof and for the periods
covered therein, and (iv) contain and reflect all necessary adjustments and
accruals, including, without limitation, contractual allowances related to
Medicaid and Medicare revenues, for a fair presentation of the financial
condition and results of operations of the Business as of the relevant dates
thereof and for the periods covered by the Annual Financial Statements.
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(b) Interim Financial Statements. Included with Schedule
4.4(b) attached hereto is an unaudited balance sheet and the related statement
of income of the Business as of and for the two-month period ended August 31,
1997 prepared by Seller (collectively, the "Interim Financial Statements").
Except as disclosed on Schedule 4.4(b), such Interim Financial Statements (i)
have been prepared in accordance with the books and records of Seller; (ii)
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the period covered thereby; (iii) fairly
present in all material respects the financial condition and results of
operations of the Business as of the date thereof and for the period covered
therein; and (iv) contain and reflect all necessary adjustments and accruals,
subject to normal year-end adjustments and including, without limitation,
contractual allowances related to Medicaid and Medicare revenues, for a fair
presentation of the financial condition and the results of operations of the
Business as of the date thereof and for the period covered by the Interim
Financial Statements.
4.5. Absence of Certain Changes. Except as disclosed on
Schedule 4.5 attached hereto or as otherwise provided for or contemplated in
this Agreement, since the date of the Interim Financial Statements, there has
not been any (i) transaction or occurrence relating to the Business or the
Acquisition Assets other than in the ordinary course of business, (ii) sale or
disposition of any Fixed Assets of Seller, (iii) sale or disposition of
Inventory other than in the ordinary course of business, or (iv) event or
condition of any character which could have or has had a material and adverse
effect on the condition (financial or otherwise), assets, properties, customer
or employee relations, or prospects of the Business.
4.6. [Reserved].
4.7. Tangible Personal Property Other Than Inventory. Except
as indicated on Schedule 4.7:
(a) Seller has good and marketable title to each item of
tangible personal property included in the Acquisition Assets, each of which it
owns free and clear of all liens, leases, encumbrances, claims under bailment
and storage agreements, equities, conditional sales contracts, security
interests, charges and restrictions except for liens, if any, for personal
property taxes not yet due and payable;
(b) To the best knowledge of Seller and the Shareholder,
each item of tangible personal property not owned by Seller, but subject to a
lease agreement being assigned to Purchaser as a part of the Acquisition
Assets, is currently in such condition that, upon the return of such property
to its owner in its present condition at the end of the relevant lease term or
as otherwise contemplated by the applicable agreement between Seller and the
owner or lessor thereof, the obligations of
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Seller to such owner or lessor would be discharged without further obligation
or the payment of any termination fee, penalty or other fees;
(c) The tangible personal property included in the
Acquisition Assets and considered in the aggregate is, and as of the Closing
Date shall be, in all material respects in good operating condition and repair,
ordinary wear and tear excepted; and
(d) Seller owns or otherwise has the right to use all of
the tangible personal property now used by it in the operation of the Business
or the use of which is necessary for the performance of any contract or
proposal to which Seller is a party.
4.8. Intangible Personal Property. Schedules 1.1(d) and
1.1(i) hereto include (i) a list and description of all intangible personal
property owned by Seller or used in the Business, including, but not limited
to, computer software and programs, software in progress, computer operating
systems and applications, United States and foreign patents, patent
applications, trade names, trademarks, trade name and trademark registrations,
copyright registrations and applications for any of the foregoing, and (ii) a
true and complete list of all licenses or similar agreements or arrangements to
which Seller is a party either as licensee or licensor for each such item of
intangible personal property. Except as indicated on Schedule 4.8:
(a) Seller owns or has the right to use such intangible
personal property, free and clear of all liens, security interests, charges,
encumbrances, equities and other adverse claims;
(b) No interference actions or other judicial or
adversary proceedings concerning any of such items of intangible personal
property are pending, and, to the best knowledge of Seller and the Shareholder,
no such action or proceeding is threatened;
(c) Seller has the right and authority to use such items
of intangible personal property in connection with the conduct of the Business
in the manner presently conducted, and, to the best knowledge of Seller and the
Shareholder, such use does not conflict with, infringe upon or violate any
rights of any other person, firm or corporation;
(d) There are no outstanding or, to the best knowledge
of Seller and the Shareholder, threatened disputes or other disagreements with
respect to any licenses or similar agreements or arrangements described on
Schedule 1.1(d) or 1.1(i); and
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(e) There is no intangible personal property currently
used in the operations of the Business as presently conducted which is not
owned by or licensed to Seller.
4.9. Inventory. The Inventory is used in the ordinary course
of the Business, and the quantities of all Inventory items are justified in
light of the present and anticipated volume of the Business. The Inventory is
good, usable, merchantable and saleable in the ordinary course of the Business.
4.10. Accounts Receivable. Schedule 4.10 attached hereto sets
forth a true and complete list of the Accounts Receivable.
4.11. Insurance. Schedule 4.11 attached hereto sets forth a
true and correct list of all insurance policies (including binders, declaration
pages and endorsements) of any nature whatsoever maintained by Seller on the
date of this Agreement and describes the annual or other premiums payable from
time to time thereunder. Complete copies of all such policies have been
furnished to Purchaser. Except as disclosed on Schedule 4.11, to the best
knowledge of Seller and the Shareholder, there are no outstanding requirements
or recommendations by any insurance company or by any Board of Fire
Underwriters or other similar body exercising similar functions or by any
governmental authority exercising similar functions which require or recommend
any changes in the conduct of the Business, or any repairs or other work to be
done on or with respect to any of the properties, vehicles or assets of Seller.
Except as set forth on Schedule 4.11, Seller has received no written notice or
other written communication from any such insurance company within the three
(3) years preceding the date hereof canceling or materially amending any
insurance policies or materially increasing the annual or other premiums
payable under any of such insurance policies and no such cancellation,
amendment or material increase of premiums is or has been threatened.
4.12. [Reserved].
4.13. Employment Matters. Except as set forth on Schedule
4.13 attached hereto (i) there are no pending claims by any Employee or Former
Employee against Seller other than for compensation and benefits due in the
ordinary course of employment, (ii) there are no pending claims against Seller
arising out of any statute, ordinance or regulation relating to employment
practices or occupational or safety and health standards, (iii) there are no
pending or, to the best knowledge of Seller and the Shareholder, threatened
labor disputes, strikes or work stoppages against Seller, and (iv) there are no
union organizing activities in process or contemplated with respect to the
Business. Schedule 4.13 identifies all collective bargaining units which have
been certified or recognized by Seller, and Purchaser has been supplied with
all collective bargaining agreements covering the Employees. Schedule 4.13 also
identifies all
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Employees on leave of absence and all Employees and Former Employees and their
dependents receiving health benefits, or eligible to receive health benefits,
as required by COBRA. Notice of the availability of healthcare continuation
coverage for Employees, Former Employees and their respective dependents, in
accordance with the requirements of COBRA will have been provided to all
persons entitled thereto, and all persons electing such coverage are being (or
have been, if applicable) provided such coverage.
4.14. Employee Benefit Plans. Schedule 4.14 attached hereto
lists all plans, programs, agreements, commitments and arrangements maintained
by or on behalf of Seller that provide benefits or compensation to, or for the
benefit of, any Employee or Former Employee of Seller (the "Plans"). Except as
set forth on Schedule 4.14, only Employees and Former Employees (and eligible
dependents and beneficiaries of such Employees and Former Employees)
participate in the Plans. All of the Plans covered thereby are in compliance in
all respects with ERISA and the Code. All of the Plans which are intended to
meet the requirements of Section 401(a) of the Code have been determined by the
Internal Revenue Service to be "qualified" within the meaning of Section 401(a)
of the Code, and, to the best knowledge of Seller and the Shareholder, there
are no facts which would adversely affect the qualified status of any of the
Plans. Except as set forth on Schedule 4.14, (i) there is no accumulated
funding deficiency, within the meaning of Section 412(a) of the Code or Section
302(a)(2) of ERISA, in connection with the Plans; (ii) no reportable event, as
defined in Section 4043(b) of ERISA, has occurred in connection with the Plans;
(iii) the Plans have not, nor has any trustee or administrator of the Plans,
engaged in any prohibited transaction as defined in Sections 406 and 407 of
ERISA or Section 4975 of the Code; (iv) Seller is not contributing to, and has
not, since January 1, 1974, contributed to, any multi-employer plan, as defined
in Section 4001(a)(3) of ERISA; and (v) Seller has not, since January 1, 1974,
terminated a single-employer plan, as defined in Section 4001(a)(15) of ERISA.
4.15. Freedom to Deal; Agreement Not in Breach of Other
Instruments. Seller and the Shareholder are free to deal with Purchaser and
Omnicare, and to sell the Business and Acquisition Assets to Purchaser. Except
as set forth on Schedule 4.20 attached hereto, the execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby and
the fulfillment of the terms hereof will not violate or result in a breach of
any of the terms and provisions of, or constitute a default (or an event which,
with notice or the passage of time, or both, would constitute a default) under,
or conflict with or result in the termination of, or accelerate the performance
required by, any (i) agreement, indenture or other instrument to which Seller
is a party or by which Seller is bound, (ii) Seller's Articles of
Incorporation, Bylaws or similar organizational documents, (iii) any judgment,
decree, order or award of any court, governmental body or arbitrator by which
Seller is bound, or (iv) any law, rule or regulation applicable to Seller.
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4.16. Tax Returns. Except as disclosed on Schedule 4.16
attached hereto:
(a) Within the times and in the manner prescribed by
law, Seller has filed all federal, state and local tax returns (including
information returns) and all tax returns for foreign countries, provinces and
other governing bodies having jurisdiction to levy taxes upon Seller, and has
paid all taxes shown to be due to any taxing authority with respect to all
periods ending prior to or on the Closing Date;
(b) All tax returns filed by Seller through the Closing
Date constitute complete and accurate representations of the tax liabilities of
Seller as appropriate (and any predecessor or subsidiary entity) for such years
and accurately set forth all items (to the extent required to be included or
reflected in such returns) relevant to its future tax liabilities, including
the tax bases of its properties and assets; and
(c) All deposits and payment of taxes required to be
made have been fully paid and deposited in a timely manner.
As used in this Section 4.16, the term "taxes" shall
include all federal, state, local, foreign or other income, gross profits,
payroll, workers' compensation, unemployment, withholding, excise, sales, use,
property, ad valorem or other taxes of any kind or nature whatsoever, together
with any penalties or interest applicable thereto.
4.17. Litigation. Except as listed on Schedule 4.17 attached
hereto, there is no action, suit, proceeding or investigation to which Seller
is a party (either as a plaintiff or defendant) presently pending, nor has any
such action, suit, proceeding or investigation been pending at any time since
[September 1, 1996], before any court or governmental agency, authority or body
or arbitrator; to the best knowledge of Seller and the Shareholder, (i) there
is no action, suit, proceeding or investigation threatened against Seller, and
(ii) there has been no such action, suit, proceeding or investigation pending
involving the Business between January 1, 1995 and September 1, 1996; and, to
the best knowledge of Seller and the Shareholder, there is no basis for any
such action, suit, proceeding or investigation.
4.18. Compliance with Law. Seller now and at all times since
[September 1, 1996], holds and has held all licenses and permits in all
applicable jurisdictions necessary or appropriate to conduct the Business, and
the Business is being and has been conducted in compliance in all material
respects with all applicable laws and regulations, including, without
limitation, Medicare and Medicaid fraud and abuse laws and regulations. To the
best knowledge of Seller and the Shareholder, between January 1, 1995 and
September 1, 1996, the Business has been conducted in compliance in all
material respects with all applicable laws and regulations.
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4.19. Brokerage. Neither Seller nor the Shareholder has dealt
with, or is obligated to make any payment to, any finder, broker, investment
banker or financial advisor in connection with any of the transactions
contemplated by this Agreement or the negotiations looking toward the
consummation of such transactions.
4.20. Contracts. Schedule 1.1(f) hereto sets forth a true and
correct list of each Contract including, without limitation, pharmacy vending
and consulting pharmacist agreements. True, complete and correct copies of each
of the Contracts, or where they are oral, true and complete written summaries
thereof, have been delivered to Purchaser by Seller. Except as expressly
described on Schedule 4.20 attached hereto:
(a) Seller has fulfilled all material obligations
required pursuant to each Contract to have been performed by Seller, and there
is no reason to believe that Seller through the Closing Date will not be able
to fulfill, when due, all of its obligations under the Contracts which remain
to be performed after the date hereof and prior to the Closing Date;
(b) There has not occurred any default under any of the
Contracts on the part of Seller or, to the best knowledge of Seller and the
Shareholder, any other party thereto, nor has Seller received notice of default
under any of the Contracts from any other party thereto or sent notice of
default under any of the Contracts to any other party thereto; to the best
knowledge of Seller and the Shareholder, no event has occurred which, with the
giving of notice or the lapse of time, or both, would constitute a default on
the part of Seller under any of the Contracts, nor has any event occurred
which, with the giving of notice or the lapse of time, or both, would
constitute a default on the part of any other party to any of the Contracts;
and
(c) No consent of any party to any of the Contracts is
required for the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby or the assignment of any
Contract to Purchaser.
4.21. No Undisclosed Liabilities. Except as and only to the
only extent specifically reflected or reserved against in the Annual Financial
Statements or Interim Financial Statements, and except for ongoing operating
expenses incurred in the ordinary course of the Business, to the best knowledge
of Seller and the Shareholder, Seller has no liabilities or obligations of a
material nature, whether absolute, accrued, contingent or otherwise, or whether
due or to become due (including, without limitation, any liability for taxes,
interest, penalties or other charges payable with respect to any such
liability), except as specifically set forth elsewhere in this Agreement or in
the Schedules attached hereto.
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4.22. Other Material Circumstances. There is no material fact
or circumstance related to the Business, Acquisition Assets or liabilities of
Seller which constitutes or would constitute a serious threat to the viability
or survival of the Business as an asset owned and operated by Purchaser. To the
best knowledge of Seller and the Shareholder, no customer or supplier of the
Business intends to reduce materially the level of business which it currently
does with the Business after the Business is acquired by Purchaser as
contemplated herein. To the best knowledge of Seller and the Shareholder, no
current employee of the Purchaser intends not to accept Purchaser's offer of
employment or to terminate such employment within 90 days after the Closing.
4.23. Other Information. The information concerning Seller
set forth in this Agreement, the Schedules hereto and any document to be
delivered by Seller or the Shareholder at the Closing to Purchaser pursuant
hereto, does not and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated herein or therein or
necessary to make the statements and facts contained herein or therein, in
light of the circumstances under which they are made, not false or misleading.
Seller has provided to Buyer all material information related to the Business
and the Acquisition Assets. Copies of all documents heretofore or hereafter
delivered or made available to Purchaser pursuant hereto were or will be
complete and accurate copies of such documents.
4.24. Necessary Assets.The Acquisition Assets include
substantially all of the assets that have been used by Seller in the operation
of the Business and neither Seller nor the Shareholder has any reason to
believe that the Acquisition Assets do not constitute all the assets necessary
for Purchaser to operate the Business after Closing, in the same manner Seller
has operated the Business prior to Closing.
4.25. Conflicts of Interest. To the best knowledge of Seller
and the Shareholder, except as disclosed in Schedule 4.25 hereto, no officer,
director or employee of Seller, now has, or within the past three (3) years has
had, a majority or controlling interest in any corporation, partnership, joint
venture, association, organization or other entity which (a) furnishes or
sells, or during such period furnished or sold, any services or products used
by Seller in the Business, or purchases, or during such period purchased, any
products or services relating to the Business from Seller, or (b) owns or
operates any one or more nursing homes or other institutional long-term care
facilities within the geographic area described in the Non-competition
Agreements referred to in Section 5.7 hereof, which receives, or during such
period received, any supplies or services from Seller relating to the Business.
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5. CERTAIN UNDERSTANDINGS AND AGREEMENTS OF THE PARTIES.
5.1. Access; Due Diligence. Between the date hereof and the
Closing Date, (i) authorized representatives of Purchaser shall have reasonable
access to all properties, books, records, Contracts and documents of Seller,
(ii) Seller and the Shareholder will furnish to Purchaser all information with
respect to Seller's affairs and the Business that Purchaser may reasonably
request, and (iii) Purchaser shall have the right to discuss the affairs and
the Business of Seller with the Employees; provided, however, that Purchaser
shall not contact any Employee, customer or supplier of Seller unless such
Employee, customer or supplier previously has been designated in writing by the
Shareholder, or Purchaser receives the prior authorization of the President of
Seller. The President of Seller shall have the right to be present during any
such discussions and, to the extent practical, Purchaser will conduct its
review at a site other than either of the Operations Facilities.
5.2. Confidentiality.
(a) All information relating to the Shareholder which
Purchaser and its authorized representatives obtain prior to the Closing in
connection with the transactions contemplated by this Agreement shall be kept
confidential by Purchaser prior to the Closing and shall not be used by it for
any purpose other than to evaluate the proposed purchase of the Business and
the Acquisition Assets and, if applicable, in connection with the transactions
contemplated hereby; provided, however, that the foregoing shall not apply to
(i) any information generally available to the public on the date hereof or
which becomes generally available to the public through no fault of Purchaser,
but only from and after the date such information becomes so available, (ii)
any information obtained by Purchaser from a third party having the right to
disclose the same, (iii) any information not first given to Purchaser by
Seller, the Shareholder or their agents, that was known to Purchaser as of the
date of this Agreement or developed independently by Purchaser after the date
hereof, or (iv) any information Purchaser is required by law to disclose. In
the event no Closing occurs, at the request of the Shareholder, Purchaser shall
promptly return all such written information, and all copies thereof, to the
Shareholder.
(b) All information relating to Seller obtained prior to
the Closing by Purchaser and its authorized representatives pursuant to Section
5.1 hereof or otherwise in connection with the transactions contemplated hereby
shall be kept confidential by Purchaser prior to the Closing and shall not be
used by it for any purpose other than to evaluate the proposed purchase of the
Business and the Acquisition Assets and, if applicable, in connection with the
transactions contemplated hereby; provided, however, that the foregoing shall
not apply to (i) any information generally available to the public on the date
hereof or which becomes generally
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available to the public through no fault of Purchaser, but only from and after
the date such information becomes so available, (ii) any information obtained
by Purchaser from a third party having the right to disclose such information,
(iii) any information not first given to Purchaser by Seller, the Shareholder,
or their agents, that was known to Purchaser as of the date of this Agreement
or developed independently by Purchaser after the date hereof, or (iv) any
information Purchaser is required by law to disclose; and provided further that
Purchaser shall have no obligation with respect to, or be restricted in its use
of, any such information after the Closing. In the event no Closing occurs,
upon the request of Seller, Purchaser shall promptly return all such written
information, and all copies thereof, to Seller.
5.3. Conduct of Business. Seller shall conduct the Business
from the date of this Agreement through the Closing in accordance with prior
practice and only in the ordinary course of the Business, and, without limiting
the generality of the foregoing, Seller shall not (except with the prior
written consent of Purchaser): (i) enter into any material transaction not in
the ordinary course of the Business; (ii) sell or transfer any of its assets,
including, without limitation, any Fixed Assets, except for sales of Inventory
in the ordinary course of the Business or immaterial amounts of other tangible
personal property not required in the Business; (iii) mortgage, pledge or
encumber any of the properties or assets of Seller, except liens for taxes not
yet due and payable, and existing bank indebtedness; (iv) amend, modify or
terminate any material Contract other than in the ordinary course of the
Business; (v) make any increase in, or any commitment to increase, the benefits
or compensation payable to any of its officers, directors, shareholders,
employees or agents; (vi) reduce the amount of its Inventory or other assets
other than in the ordinary course of the Business; (vii) alter the manner of
keeping its books, accounts, or records or the accounting practices therein
reflected; (viii) make any changes in its capital or corporate structure; (ix)
delay the payment of any account payable to the extent such delay may adversely
affect Purchaser's ability to conduct business with the payee thereof; (x) make
any material changes in its methods of business operations; (xi) make, enter
into any agreement to make or become obligated to make, any capital expenditure
in excess of Five Thousand Dollars ($5,000); (xii) make, enter into or renew
any agreement for services to be provided to Seller, or permit the automatic
renewal of any such agreement; or (xiii) fail to maintain the condition of the
Acquisition Assets until the Closing.
5.4. Preservation of Organization. Prior to the Closing,
Seller shall use its commercially reasonable efforts to preserve the Business,
to keep available to Purchaser the services of Seller's Employees, and to
preserve for Purchaser Seller's favorable business relationships with its
suppliers, customers and others with whom business relationships exist.
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5.5. Current Information.
(a) Each of Seller and Purchaser will advise the other
in writing immediately, but in any event prior to the Closing, of:
(i) the occurrence of any event which renders any of
the representations or warranties set forth herein materially inaccurate or the
awareness of either Purchaser or Seller that any representation or warranty set
forth herein was not materially accurate when made;
(ii) any fact that, if existing or known on the date
hereof, would have been required to be set forth or disclosed in or pursuant to
this Agreement; and
(iii) the failure of any party hereto to comply with
or accomplish any of the covenants or agreements set forth herein.
(b) Seller shall provide to Purchaser copies of all
operating and financial reports prepared by or for Seller prior to the Closing
Date as soon as such reports become available.
5.6. Change of Name. On the Closing Date Seller will
discontinue any business operations under, and any use of, the name "Long Term
Pharmaceutical Care" (or any similar name). Seller agrees that it will not
conduct any business after the Closing Date under the name "Long Term
Pharmaceutical Care" (or any similar name), other than such business as is in
furtherance of the terms and provisions of this Agreement and as is for the
benefit of, or at the express request of, Purchaser.
5.7. Covenant Not to Compete. At the Closing, each of Seller,
the Shareholder and ▇▇▇▇ __. ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇") shall enter into a
Non-competition Agreement with Purchaser, substantially in the forms attached
hereto as Exhibits D, E and F, respectively.
5.8. [Reserved].
5.9. Compliance with Bulk Sales Laws. Purchaser hereby waives
compliance with the provisions of Missouri law governing the bulk sale or
transfer of assets. Notwithstanding the foregoing, Seller agrees, pursuant to
Section 7.1(a) hereto, to indemnify Purchaser and Omnicare for any loss either
sustains as a consequence of any claim by a third party that such provisions do
apply.
5.10. [Reserved].
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5.11. Condition to Transfer of Certain Contracts. Seller and
Purchaser shall use their respective reasonable best efforts and work
cooperatively to timely procure all permits, consents, approvals,
authorizations, waivers and all other requirements which must be obtained or
satisfied by Seller or Purchaser for the completion of the transactions
contemplated hereby, including all required consents from third parties under
the Contracts or otherwise so that the Business may continue to be operated by
Purchaser without interruption or any material adverse effect following the
Closing. All Contracts requiring consent to the assignment thereof to Purchaser
and which Purchaser has agreed to assume are listed on Schedule 4.20 attached
hereto (individually, a "Contract Requiring Consent" and collectively, the
"Contracts Requiring Consent"); all such required consents shall be obtained by
Seller prior to the Closing Date.
5.12. Satisfaction of Leases. Prior to the Closing, Seller
shall present to Purchaser written statements prepared by the owner of any
equipment and other personal property (but not any real property) governed by
any capital lease, providing the full amount to be paid to satisfy all
liabilities and obtain good and marketable title to such equipment and property
(the "Payoff Amount"). Purchaser, in its sole discretion, either may (i) reduce
the Closing Date Payment by the Payoff Amount, or (ii) demand and receive
payment of the Payoff Amount from Seller at the Closing in Immediately
Available Funds.
5.13. Prorations and Sales Tax. Any personal property taxes
with respect to the Acquisition Assets which shall be based on the immediately
prior year's tax bills and adjusted post-Closing after the current tax year's
tax bills are issued and received (if such current tax year's bills are not
issued before the Closing) and any charges for utilities, telephone, rents or
similar costs of the Business shall be prorated through the Closing Date. In
the event any amount is due from Seller to Purchaser as a result of any such
proration, the resulting amount payable by Seller shall be paid to Purchaser
within ten (10) business days after Purchaser has submitted to Seller
satisfactory written evidence of such proration, including the basis therefor.
5.14. [Reserved].
5.15. Collection of Accounts Receivable. On and after the
Closing Date, Purchaser agrees that it will, within five (5) days after the
receipt thereof, forward to Seller any monies, checks or negotiable instruments
received by Purchaser after the Closing Date relating to any Accounts
Receivable, and Seller agrees that it will, within five (5) days after the
receipt thereof, forward to Purchaser any monies, checks or negotiable
instruments received by Seller after the Closing Date relating to any accounts
receivable generated by Purchaser in the operation of the Business or
otherwise. Each
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of Purchaser and Seller agree to fully cooperate with the other in the
collection of their respective accounts receivable.
5.16. Employees. Except as otherwise specifically agreed to
pursuant to Section 2.4, Seller shall be responsible for any severance
payments, accrued payroll, vacation, sick pay and associated payroll tax
liabilities, pension or other retirement plan obligations, COBRA rights, WARN
Act liability and any other liabilities associated with the Employees' and
Former Employees' employment by Seller.
5.17. Tail Insurance. If any of Seller's liability insurance
policies are "claims made" policies, Seller shall purchase and maintain a tail
insurance policy relating to the Acquisition Assets and the Business naming
Purchaser and Omnicare as additional insureds, with such tail insurance being
in effect as of the Closing.
5.18. Patient Records. Purchaser agrees to maintain all
medical records transferred by Seller pursuant to this Agreement for a period
of time equal to the longer of (a) the period of time required by applicable
law and (b) five (5) years from the last day on which a patient to whom any
such medical record applies has received services or supplies from Purchaser in
connection with the Business.
6. CONDITIONS TO CLOSING.
6.1. Conditions to Obligations of Each Party. The obligations
of Purchaser, Omnicare, Seller and the Shareholder to consummate the
transactions contemplated hereby shall be subject to the fulfillment, on or
prior to the Closing Date, of the following conditions:
(a) Compliance with Law. There shall have been obtained
all permits, approvals, consents and authorizations of all governmental bodies
or agencies necessary or appropriate so that consummation of the transactions
contemplated by this Agreement will be in compliance with applicable laws, and
so that Purchaser will be eligible to operate the Business and qualify for
reimbursement by all applicable federal and state regulatory agencies,
including, but not limited to, Medicaid and Medicare, for services and goods
rendered.
(b) IRS Form 8594. Purchaser and Seller shall have
agreed on the procedure for determining the figures that shall be entered to
complete Form 8594, and completed drafts of Forms 8594 of both Purchaser and
Seller shall be delivered at the Closing in form satisfactory to Purchaser,
Seller and their respective advisors and consultants.
(c) No Action or Proceeding. No claim, action, suit,
investigation or other proceeding brought by any governmental agency or other
third
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party shall be pending or threatened before any court or governmental agency
which presents a substantial risk of the restraining or prohibition of the
transactions contemplated by this Agreement or the obtaining of material
damages from Purchaser, Omnicare, Seller or the Shareholder or other relief in
connection therewith.
6.2. Conditions to Obligations of Purchaser and Omnicare. The
obligations of Purchaser and Omnicare to consummate the transactions
contemplated hereby shall be subject to the fulfillment, at or prior to the
Closing, of the following additional conditions:
(a) Representations and Warranties True.
(i) The representations and warranties of Seller and
the Shareholder contained in this Agreement or in any other document delivered
by Seller or the Shareholder pursuant hereto shall have been true and correct
in all material respects as of the date of this Agreement or when otherwise
given and shall be true and correct in all material respects on the Closing
Date with the same effect as if made on the Closing Date, and at the Closing
Seller shall have delivered to Purchaser certificates to such effect signed by
two (2) duly authorized officers of Seller and the Shareholder.
(ii) This Agreement may be executed and delivered by
Purchaser and Omnicare prior to their receipt of the Schedules to be prepared
and delivered to them by Seller and the Shareholder pursuant to Articles 1, 4
and 5 hereof and prior to the completion of their due diligence investigation
of Seller, the Business and the Acquisition Assets. In such event, if, upon
receipt and review of the Schedules Purchaser determines, in its reasonable
discretion, that any of Seller's or the Shareholder's representations and
warranties contained in this Agreement or in any other document delivered by
Seller or the Shareholder pursuant hereto, disclose facts or information not
previously known to Purchaser that could have a material adverse effect on the
Business or the Acquisition Assets, Purchaser for itself and also on behalf of
Omnicare shall have the right to terminate this Agreement pursuant to Article 9
hereof. Likewise, if after Purchaser completes its due diligence investigation
of Seller, the Business and the Acquisition Assets, Purchaser determines, in
its reasonable discretion, that any of Seller's or the Shareholder's
representations and warranties contained in this Agreement or in any other
document delivered by Seller or the Shareholder pursuant hereto are not true
and correct in any material respect, or if Purchaser or Omnicare become aware
of any information not previously disclosed that could have a material adverse
effect on the Business or Purchaser's operation thereof, Purchaser, for itself
and also on behalf of Omnicare, shall have the right to terminate this
Agreement pursuant to Article 9 hereof. Purchaser shall promptly notify Seller
in writing if it intends to terminate this Agreement in accordance with this
subparagraph.
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(iii) Performance of Covenants. Each of the
obligations of Seller and the Shareholder to be performed by them on or before
the Closing Date pursuant to the terms of this Agreement shall have been duly
performed in all material respects on or before the Closing Date, and at the
Closing Seller shall have delivered to Purchaser certificates to such effect
signed by the two (2) duly authorized officers of Seller and the Shareholder.
(iv) Authority. All actions required to be taken by,
or on the part of, Seller and the Shareholder to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly and validly taken by the
board of directors of Seller and the Shareholder.
(v) Opinion of Seller's and the Shareholder's
Counsel. Purchaser shall have been furnished at the Closing with an opinion of
Hearne, Nickolaus, Green & ▇▇▇▇▇▇, counsel to Seller and the Shareholder, dated
the Closing Date, substantially in the form of Exhibit G hereto.
(vi) Additional Closing Documents of Seller and the
Shareholder. Purchaser shall have received at the Closing the following
documents, dated the Closing Date:
(a) A copy, certified by the Secretary of
Seller, of resolutions of the board of directors of Seller authorizing the
execution, delivery and performance of this Agreement and all other agreements,
documents and instruments relating hereto and the consummation of the
transactions contemplated hereby;
(b) Bills of sale and assignments, in form and
substance reasonably satisfactory to counsel for Purchaser, covering the items
of tangible and intangible personal property included in the Acquisition
Assets;
(c) The Non-competition Agreements, duly
executed by Seller, the Shareholder and ▇▇▇▇▇▇▇▇▇, pursuant to Section 5.7
hereof;
(d) The Escrow Agreement, duly executed by
Seller, pursuant to Section 2.1(a)(ii) hereof;
(e) A blanket assignment by Seller and any
other document or certificate necessary for Purchaser to use the name "Long
Term Pharmaceutical Care" and any derivative thereof and individual assignments
to use such name valid for each state in which Seller currently conducts its
Business, in connection with the conduct of the Business from and after the
Closing Date;
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(f) A good standing certificate, certificate of
existence or certificate of valid qualification as a foreign corporation, as
the case may be, from the state of Seller's incorporation and each state in
which Seller conducts its businesses;
(g) Incumbency Certificates of Seller's and the
Shareholder's officers executing any documents or instruments delivered to
Purchaser hereunder;
(h) The Assignment and Assumption Agreement
duly executed by Seller pursuant to Section 2.3 hereof; and
(i) Such further documents and instruments of
sale, transfer, conveyance, assignment or delivery covering the Acquisition
Assets or any part thereof as Purchaser may reasonably require to assure the
full and effective sale, transfer, conveyance, assignment or delivery to it of
all the Acquisition Assets to be transferred to Purchaser pursuant to this
Agreement.
(vii) Due Diligence; No Material Adverse Changes.
Purchaser shall have satisfactorily completed its due diligence investigation
as contemplated by Section 5.1. Between the date of this Agreement and the
Closing Date there shall not have occurred any damage or destruction of, or
loss to, any of the assets of Seller, whether or not covered by insurance,
which has had or may reasonably be expected to have a material and adverse
effect on the Business or any prospects of Seller, nor shall there have
occurred any other event or condition which has had or which reasonably may be
expected to have a material and adverse effect on the results of operations,
condition (financial or otherwise), assets, properties or prospects of the
Business, including, without limitation, any material adverse change in
Medicare or Medicaid reimbursement laws, proposed legislation, regulations or
practices in any state in which Seller transacts business, which would have a
material adverse effect on the Business.
(viii) Consents to Assignments of Contracts. All
necessary consents to the assignment of any Contracts Requiring Consent which
Purchaser has agreed to assume shall have been obtained in written instruments
reasonably satisfactory to Purchaser.
6.3. Conditions to Obligations of Seller and the Shareholder.
The obligation of Seller and the Shareholder to consummate the transactions
contemplated hereby shall be subject to the fulfillment, at or prior to the
Closing Date, of the following additional conditions:
(a) Representations and Warranties True. The
representations and warranties of Purchaser and Omnicare contained in this
Agreement
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or in any other document delivered by Purchaser and Omnicare to Seller pursuant
hereto shall have been true and correct in all material respects as of the date
of this Agreement or when otherwise given and shall be true and correct in all
material respects on the Closing Date with the same effect as if made on the
Closing Date, and at the Closing Purchaser shall have delivered to Seller a
certificate to such effect, signed by two (2) duly authorized officers of
Purchaser and Omnicare.
(b) Performance of Covenants. Each of the obligations of
Purchaser and Omnicare to be performed on or before the Closing Date pursuant
to the terms of this Agreement shall have been duly performed on or before the
Closing Date, and at the Closing Purchaser shall have delivered to Seller a
certificate to such effect signed by two (2) duly authorized officers of
Purchaser and Omnicare.
(c) Authority. All actions required to be taken by, or
on the part of, Purchaser and Omnicare to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby shall have been duly and validly taken by the sole
shareholder and the board of directors of Purchaser and the board of directors
of Omnicare.
(d) Opinion of Purchaser's and Omnicare's Counsel. The
Seller and the Shareholder shall have been furnished with an opinion of
▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, counsel to Purchaser and Omnicare, dated the Closing
Date, substantially in the form of Exhibit H hereto.
(e) Additional Closing Documents of Purchaser. Seller
and the Shareholder shall have received at the Closing the following documents,
each dated the Closing Date:
(i) Copies, certified by the Secretary of Purchaser
and Omnicare, of resolutions of the sole shareholder of Purchaser and the
respective boards of directors of Purchaser and Omnicare authorizing the
execution and delivery of this Agreement and all other agreements, documents or
instruments relating hereto and the consummation of the transactions
contemplated hereby;
(ii) The Closing Date Payment in Immediately
Available Funds from Purchaser at the Closing pursuant to Section 2.1(a);
(iii) The Non-competition Agreements, duly executed
by Purchaser, pursuant to Section 5.7 hereof;
(iv) The Escrow Agreement, duly executed by
Purchaser, pursuant to Section 2.1(a)(ii) hereof;
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(v) Incumbency Certificates of Purchaser's and
Omnicare's officers executing any documents or instruments delivered to Seller
hereunder;
(vi) The Assignment and Assumption Agreement, duly
executed by Purchaser, pursuant to Section 2.3 hereof; and
(vii) Such other Closing documents as Seller or the
Shareholder may reasonably request.
7. INDEMNIFICATION.
7.1. Indemnification by Seller and the Shareholder. Seller
and the Shareholder, jointly and severally, agree to defend, indemnify and hold
Omnicare and Purchaser, their respective officers, directors, agents,
representatives, subsidiary and parent entities and affiliates and their
successors and assigns, harmless from and against any claim, liability,
expense, loss or other damage (including, without limitation, reasonable
attorneys' fees and expenses) ("Claims") in respect of:
(a) any and all Claims resulting from an unappealable
judicial determination that the sale of the Acquisition Assets hereunder is
ineffective against any creditor of Seller or the Shareholder or any taxing
authority or other entity asserting any similar claim against Seller or the
Shareholder, including, without limitation, any and all liabilities imposed on
Purchaser or Omnicare contrary to Section 2.5 hereof, including, without
limitation, any liability arising out of the failure to comply with applicable
bulk sales laws, as provided in Section 5.9 hereof;
(b) any and all Claims resulting from any
misrepresentation or breach of warranty or violation of any covenant made by
Seller or the Shareholder hereunder, or in any Schedule or certificate
furnished or to be furnished by Seller or the Shareholder hereunder, except to
the extent of any waiver by Purchaser or Omnicare with respect thereto;
(c) any and all Claims relating to the transactions
contemplated hereby or Seller's conduct of the Business or otherwise prior to
the Closing Date, including, without limitation, any Claims arising from any
act, occurrence, event or failure to act which occurs prior to or on the
Closing Date, including, without limitation, any Claims arising in connection
with any failure to satisfy or pay any sales or use taxes to any governmental
authority or with any products sold or services provided by the Business prior
to the Closing Date;
(d) any and all Claims arising from or in connection
with any act, omission or status of Seller or the Shareholder creating
liability under any
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federal, state or local environmental laws, including, but not limited to,
liability for violations of law and for the investigation or cleanup of any
real property; and
(e) any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses incident to any item to
which the foregoing indemnity relates.
7.2. Indemnification by Purchaser and Omnicare. Purchaser and
Omnicare, jointly and severally, agree to defend, indemnify and hold Seller and
the Shareholder, and their successors and assigns, harmless from and against
any claim, liability, expense, loss or other damage (including, without
limitation, reasonable attorneys' fees and expenses) ("Claims") in respect of:
(a) any and all Claims resulting from any liabilities,
obligations, contracts, commitments and other undertakings of Seller assumed
hereunder by Purchaser and any claims, losses, liabilities or other damages,
obligations or liabilities relating to the conduct of the Business by Purchaser
or Omnicare or any affiliate after the Closing Date;
(b) any and all Claims resulting from any
misrepresentation or breach of warranty or violation of any covenant made by
Purchaser hereunder or in any Schedule or certificate furnished or to be
furnished by Purchaser hereunder, except to the extent of any waiver by Seller
or the Shareholder with respect thereto;
(c) any act, omission or status of Purchaser or Omnicare
creating liability under any federal, state or local environmental laws,
including, but not limited to, liability for violations of law and for the
investigation or cleanup of any real property; and
(d) any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses incident to any item to
which the foregoing indemnity relates.
7.3. Determination of Loss. Indemnification pursuant to this
Article 7 shall be payable with respect to any Claim described herein as
subject to indemnification upon the happening of the earlier of the following:
(a) Resolution of such Claim by mutual agreement between
Seller or the Shareholder and Purchaser or Omnicare; or
(b) The issuance of a final judgment, award, order or
other ruling by a court of competent jurisdiction.
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7.4. Indemnification Payments. All amounts payable by one
party to the other pursuant to the provisions of this Article 7 (each, an
"Indemnification Payment") shall be payable within ten (10) days after final
determination thereof in accordance with the provisions hereof. In the event
that Seller or the Shareholder fails to pay any amounts to Purchaser or
Omnicare that are finally determined to be owed to Purchaser or Omnicare
pursuant to this Article 7 within such ten (10) day period, Purchaser may
set-off any such amounts against the amount owed to Seller by Purchaser
pursuant to Section 2.1(a)(iii) hereof. Further, in the event that litigation
has been instituted which could give rise to an indemnification payment to
Purchaser or Omnicare, payment of the amount owed to Seller by Purchaser
pursuant to Section 2.1(a)(iii) hereof may be withheld by Purchaser, in such
amount determined by Omnicare to be reasonably necessary to cover the estimated
amount of such indemnification payment, until such litigation with respect to
any of Seller's or the Shareholder's obligations to indemnify Purchaser or
Omnicare, is finally resolved. In the event that any amount withheld pursuant
to the preceding sentence is determined to be owed to Seller, Purchaser shall
pay such amount, together with interest at the per annum rate of 5% for the
period commencing on the date that the withheld amount was originally due to be
paid and ending on the date such amount was actually paid. In the event that it
is determined that payment is due to Purchaser or Omnicare, Purchaser may
set-off such amount against any amount owed to Seller pursuant to Section
2.1(a)(iii).
7.5 Limitations on Indemnification. Any amounts which any
party hereto may be obligated to pay another party hereto pursuant to Section
7.4 will be reduced by an amount equal to: (i) the tax benefit, if any,
realized as a result of such losses (for purposes of determining the "tax
benefit", if any, the reasonable determination by Purchaser's outside
accountants will be binding and conclusive as to all parties hereto); and (ii)
any insurance recovery with respect to such losses received by the indemnified
party.
7.6 Notification. Purchaser and Omnicare, or Seller and the
Shareholder, as the case may be, will promptly notify the other of the
existence or occurrence of any facts or events which give rise to the assertion
of any claim under the provisions of this Article 7. If such claims are due to
the claims of third parties, the indemnifying parties shall promptly and
diligently take such actions as may be reasonably required to defend or settle
such claims and shall keep the indemnified parties advised of the current
status thereof. The indemnified parties shall, at the indemnifying parties'
expense, reasonably cooperate with the indemnifying parties' defense and the
indemnifying parties shall reasonably consider the indemnified parties' advice.
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8. ADDITIONAL COVENANTS AND AGREEMENTS.
8.1. Expenses.
(a) Each party hereto shall bear and pay all costs and
expenses incurred by it in connection with the transactions contemplated by
this Agreement including, without limitation, fees, costs and expenses of its
own financial consultants, accountants and counsel. Seller shall be responsible
for payment of any sales, use or transfer taxes arising out of the conveyance
of the Acquisition Assets along with the filing of any required return or
report.
(b) Each of Purchaser and Seller shall bear one-half the
expense of the inventory counting firm retained pursuant to Section 2.1(b)
hereof. Each of Purchaser and Seller shall bear the expense of any other
adviser it retains in connection with the procedures set forth in Section
2.1(b).
8.2. Survival of Representations and Warranties. Except as
otherwise provided herein, the representations and warranties contained in
Articles 3 and 4 of this Agreement shall survive the Closing for a period of
[eighteen (18) months] after the Closing Date; provided however, that: (i) the
representations and warranties contained in Section 4.16 hereof shall survive
the Closing until 60 days after the expiration of the applicable statutes of
limitation; (ii) if any representation or warranty contained in Articles 3 and
4 is fraudulently given, it shall survive the Closing for a period of five (5)
years; and (iii) any specific claim or action of which specific written notice
is given to the party which made such representation or warranty prior to the
date on which such representation or warranty otherwise terminates as provided
herein, may continue to be asserted and shall be indemnified against pursuant
to Article 7.
8.3. Public Releases. Purchaser and Seller shall agree with
each other as to the form and substance of any press release related to this
Agreement or the transactions contemplated hereby, and shall consult with each
other as to the form and substance of other public disclosures related thereto;
provided, however, that nothing contained herein shall prohibit any party
hereto from making any disclosure which it deems necessary in light of
applicable laws or regulations, after notice to the other party with the
opportunity to comment to the extent that delay of the disclosure is permitted
under such laws or regulations.
8.4. Other Transactions Prohibited. During the period from
the date of this Agreement to the Closing Date, or termination hereof, neither
Seller nor the Shareholder shall, and shall not permit their representatives
to, directly or indirectly, initiate, solicit, negotiate with, encourage
discussions with, provide information to, or agree to a transaction with, any
corporation, partnership, person or other entity or
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group concerning any merger or any sale of Seller's assets, sale of shares of
capital stock (or securities convertible or exchangeable into or otherwise
evidencing, or any agreement or instrument evidencing, the right to acquire
capital stock) or similar transaction involving Seller (any such transaction
being referred to herein as an "Acquisition Transaction"). Seller and the
Shareholder shall promptly communicate to Purchaser the terms of any proposal
which they may receive in respect of an Acquisition Transaction and any request
by or indication of interest on the part of any third party with respect to
initiation of any Acquisition Transaction or discussions with respect thereto
in which Seller or the Shareholder may have an interest that might affect the
consummation of the transactions contemplated by this Agreement.
9. TERMINATION; REMEDIES.
9.1. Termination. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to Closing by written
notice delivered by Seller to Purchaser or by Purchaser to Seller, as the case
may be, in the following instances:
(a) By Purchaser pursuant to Section 6.2(a)(ii) hereof
or if there has been a material misrepresentation, a material breach of
warranty or a material failure to comply on the part of Seller or the
Shareholder with respect to any of the representations, warranties, covenants
or provisions set forth herein (or delivered in any other document pursuant
hereto), including without limitation, any misrepresentation, breach or failure
to comply that is evidenced in any Schedule delivered by Seller, and such
misrepresentation, breach or failure has or may reasonably be expected to have
a material adverse effect on the condition (financial or otherwise), assets or
properties of the Business in the hands of Purchaser and has not been cured, if
capable of cure, in full within twenty (20) days of receipt by Seller of notice
from Purchaser.
(b) By Seller if there has been a material
misrepresentation, a material breach of warranty or a material failure to
comply with any covenant on the part of Purchaser with respect to the
representations, warranties or covenants set forth herein (or delivered in any
other document pursuant hereto) and such misrepresentation, breach or failure
to comply has not been cured, if capable of cure, within twenty (20) days of
receipt by Purchaser of notice from Seller.
(c) At any time prior to Closing by the mutual consent
in writing of Seller, the Shareholder, Purchaser and Omnicare.
(d) By Purchaser, if board approvals are not obtained as
provided in Section 3.1 hereof.
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(e) By Seller, if board approvals are not obtained as
provided in Section 4.2 hereof.
(f) By Purchaser, if Purchaser determines not to proceed
with the transactions contemplated hereby after completing its due diligence
investigation.
9.2. Liability in the Event of Termination; Remedies.
(a) In the event of termination of this Agreement and
the transactions contemplated hereby pursuant to Sections 9.1(a) or (b) hereof,
the non-breaching party may avail itself of all rights, power and remedies now
or hereafter existing at law or in equity or by statute or otherwise.
(b) In the event of termination of this Agreement and
the transactions contemplated hereby pursuant to Section 9.1(c) through (f)
hereof, this Agreement shall, with the exception of Sections 5.2, 8.1 and 8.3
hereof, become void and have no further effect, without any liability on the
part of any party hereto.
(c) Section 5.2 hereof shall survive the termination of
this Agreement regardless of the reason for such termination.
10. MISCELLANEOUS.
10.1. Entire Agreement. This Agreement (including all
Exhibits and Schedules hereto) supersedes any and all other agreements, oral or
written, between the parties hereto with respect to the subject matter hereof,
including that certain letter of intent dated August 21, 1997 from Omnicare to
the Shareholder, and contains the entire agreement between such parties with
respect to the transactions contemplated hereby. No party to this Agreement
shall be entitled to rely on any representation, warranty or agreement not set
forth in this Agreement (including all Exhibits and Schedules thereto).
10.2. Amendments. This Agreement shall not be modified or
amended except by an instrument in writing signed by or on behalf of all of the
parties hereto.
10.3. Successors; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted transferees and assignees.
Neither this Agreement nor any interest herein may directly or indirectly be
transferred or assigned by any party, in whole or in part, without the written
consent of the other parties, except that Purchaser may effect any such
assignment to any affiliated company, but
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any such assignment shall not relieve Purchaser or Omnicare of its duties and
obligations contained in this Agreement.
10.4. Notices. All notices, requests, demands, and other
communications to be delivered hereunder shall be in writing and shall be
delivered by hand or mailed, by fax (receipt confirmed), by express mail
services, by registered or certified mail, postage prepaid, at or to the
following addresses:
(a) If to Seller or the Shareholder:
Balanced Care Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
(b) If to Purchaser or Omnicare:
Omnicare, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or to such other address or to such other person as any party shall have last
designated by written notice to the other parties. Notices, requests, demands,
and other communications so delivered shall be deemed given upon receipt.
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10.5. Waiver. If any party expressly waives in writing an
unsatisfied condition, representation, warranty, undertaking, covenant or
agreement (or portion thereof) set forth herein, the waiving party shall
thereafter be barred from recovering, and thereafter shall not seek to recover,
any damages, claims, losses, liabilities or expenses, including, without
limitation, legal and other expenses, from the other parties in respect of the
matter or matters so waived. Except as expressly stated therein, any such
waiver shall not constitute a covenant to waive any such matter or matters in
the future.
10.6. Severability. If any term or provision of this Agreement
or any application thereof shall be invalid or unenforceable, the remainder of
this Agreement and any other application of such term or provision shall not be
affected thereby.
10.7. No Third Party Beneficiary. This Agreement is for the
benefit of, and may be enforced only by, Seller, the Shareholder, Purchaser and
Omnicare, and their respective successors and permitted transferees and
assignees, and is not for the benefit of, and may not be enforced by, any third
party.
10.8. Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with, the laws of the State of Missouri.
10.9. [Reserved].
10/10. References to Best Knowledge. All references in this
Agreement to the best knowledge of any party hereto shall mean that such party
has made a diligent investigation and inquiry with respect to the correctness
of the statement being made.
10.11. Counterparts. This Agreement may be executed in two or
more counterparts and by the parties on separate counterparts, all of which
shall be considered one and the same agreement, and each of which shall be
deemed an original.
10.12. Omnicare Guarantee. Omnicare hereby unconditionally
guarantees the payment and performance of any and all of Purchaser's
liabilities and obligations hereunder and those under any ancillary agreements
or documents executed and delivered in connection with this Agreement. Seller
and the Shareholder may seek remedies directly from Omnicare without first
exhausting their remedies against Purchaser.
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IN WITNESS WHEREOF, the parties hereto have executed this
Asset Purchase Agreement as of the date first hereinabove set forth.
Purchaser: MANAGED HEALTHCARE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary
Omnicare: OMNICARE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President - Operations
Seller: LONG TERM PHARMACEUTICAL CARE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
Shareholder: BALANCED CARE CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
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EXHIBITS
EXHIBIT DESCRIPTION
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A Share Ownership
B Form of Escrow Agreement
C Form of Assignment and Assumption Agreement
D Form of Non-competition Agreement (Seller)
E Form of Non-competition Agreement (the Shareholder)
F Form of Non-competition Agreement (▇▇▇▇▇▇▇▇▇)
G Form of Opinion of Counsel to Seller and the Shareholder
H Form of Opinion of Counsel to Purchaser and Omnicare
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SCHEDULES
SCHEDULE DESCRIPTION
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1.1(b) Prepaid Items
1.1(d) Intangibles
1.1(f) Contracts
1.1(h) Fixed Assets
1.1(i) Licenses, Trademarks and Trade Names
1.2(g) Employee Loans and Deferred Charges
1.2(i) Insurance Policies
1.2(j) Excluded Assets Owned by the Shareholder
2.2 Allocation of Purchase Price
2.4 Certain Liabilities Assumed
4.3 Encumbrances on Acquisition Assets
4.4(a) Annual Financial Statements
4.4(b) Interim Financial Statements
4.5 Changes in Business
4.7 Tangible Personal Property
4.8 Intangible Personal Property
4.10 Accounts Receivable
4.11 Insurance
4.13 Employment Matters
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4.14 Employee Benefit Plans
4.16 Tax Matters
4.17 Litigation
4.20 Contractual Matters
4.25 Conflicts of Interest