EXHIBIT 10.91
DATED AS OF DECEMBER 5, 2001
ASSET PURCHASE AGREEMENT
BY AND AMONG
MARINER POST-ACUTE NETWORK, INC.
MARINER HEALTH GROUP, INC.
THE MPAN SELLERS IDENTIFIED ON SCHEDULE 1A
THE MHG SELLERS IDENTIFIED ON SCHEDULE 1A
OMNICARE, INC.
AND
APS ACQUISITION LLC
TABLE OF CONTENTS
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SECTION 1 DEFINED TERMS...........................................................................................3
1.1 Definitions.....................................................................................3
1.2 Certain Rules of Construction...................................................................3
SECTION 2 PURCHASE AND SALE OF ASSETS.............................................................................3
2.1 Acquired and Excluded Assets....................................................................3
2.2 Purchase Price..................................................................................6
2.3 Preparation and Delivery of Financial Information; Calculation of Closing Payment
and Cash Purchase Price........................................................................11
2.4 Contract Assumption............................................................................14
2.5 Amounts Due Under Designated Contracts.........................................................16
2.6 Assumed and Excluded Liabilities...............................................................16
2.7 Allocation of Cash Purchase Price..............................................................17
2.8 Transfer Taxes.................................................................................17
2.9 Prorations.....................................................................................17
2.10 Reconciliation and Allocations.................................................................17
SECTION 3 CONDITIONS TO CLOSING..................................................................................18
3.1 Conditions Precedent to Obligations of MPAN, MHG, Sellers, and Purchaser.......................18
3.2 Conditions Precedent to Obligations of MPAN, MHG, and Sellers..................................19
3.3 Conditions Precedent to the Obligations of Purchaser...........................................19
SECTION 4 THE CLOSING............................................................................................20
4.1 Closing........................................................................................20
4.2 Deliveries by MPAN, MHG, and Sellers at Closing................................................21
4.3 Deliveries by Purchaser at Closing.............................................................22
4.4 Delivery of Acquired Assets....................................................................23
SECTION 5 REPRESENTATIONS AND WARRANTIES OF MPAN, MHG, AND SELLERS...............................................23
5.1 Organization, Standing and Authority...........................................................23
5.2 Transfer of Acquired Assets....................................................................23
5.3 Real Property..................................................................................24
5.4 Contracts......................................................................................24
5.5 Intellectual Property Rights...................................................................27
5.6 Brokers........................................................................................27
5.7 Employee Matters...............................................................................27
5.8 Financial Statements...........................................................................27
5.9 Licenses, Compliance with Laws.................................................................27
5.10 Institutional Pharmacy Business................................................................28
5.11 Intentionally Omitted..........................................................................28
5.12 Environmental Matters..........................................................................28
5.13 Litigation.....................................................................................29
5.14 Included Mariner Receivables...................................................................29
SECTION 6 REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.................................................30
6.1 Organization, Standing and Authority...........................................................30
6.2 Transfer of Acquired Assets....................................................................30
6.3 Brokers........................................................................................30
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SECTION 7 COVENANTS..............................................................................................30
7.1 The Mariner Bankruptcy Courts Approvals........................................................30
7.2 Closing........................................................................................31
7.3 Conduct of Business by MPAN, MHG, and Sellers Pending the Closing..............................31
7.4 Conduct of Business by Purchaser After the Closing.............................................31
7.5 Access and Information.........................................................................32
7.6 Notification...................................................................................32
7.7 Satisfaction of Conditions.....................................................................32
7.8 Filings........................................................................................32
7.9 Employment Matters.............................................................................33
7.10 Additional Matters and Further Assurances......................................................34
7.11 Maintenance of Books and Records...............................................................35
7.12 Confidentiality................................................................................36
7.13 Further Solicitations..........................................................................37
7.14 Restriction on Use of Names....................................................................38
7.15 Option to Sublicense Compuaims Medicare Part B Billing Software................................38
7.16 Management Agreements..........................................................................38
7.17 Use of Service ▇▇▇▇............................................................................39
SECTION 8 TERMINATION............................................................................................39
8.1 Termination....................................................................................39
8.2 Termination Payments...........................................................................41
8.3 Procedure and Effect of Termination............................................................41
SECTION 9 INDEMNIFICATION........................................................................................42
9.1 MPAN's, MHG's, and Sellers' Obligation to Indemnify............................................42
9.2 Parent's and Purchaser's Obligation to Indemnify...............................................43
9.3 Notice to Indemnifying Party...................................................................43
9.4 Time Limitations...............................................................................43
9.5 Set off as Exclusive Remedy....................................................................44
9.6 Threshold......................................................................................44
9.7 Additional Limitation Regarding Waivers of Conditions..........................................44
9.8 Remedies Exclusive.............................................................................44
SECTION 10 GENERAL PROVISIONS....................................................................................45
10.1 Notices........................................................................................45
10.2 Survival of Representations, Warranties, and Covenants.........................................47
10.3 No Implied Warranties; No Liability of Agents..................................................47
10.4 Insurance Proceeds.............................................................................47
10.5 Public Announcements...........................................................................47
10.6 Descriptive Headings...........................................................................48
10.7 Entire Agreement; Assignment...................................................................48
10.8 Governing Law..................................................................................48
10.9 Expenses.......................................................................................49
10.10 Amendment......................................................................................49
10.11 Waiver.........................................................................................49
10.12 Counterparts; Effectiveness....................................................................49
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10.13 Severability; Validity; Parties in Interest....................................................49
10.14 Court Approval.................................................................................49
10.15 Guaranty of Performance; Proportionate Liability...............................................50
10.16 Representation by Counsel......................................................................50
10.17 Successors and Assigns.........................................................................50
10.18 References to Knowledge........................................................................50
10.19 Certain Terminations of Services Contracts.....................................................50
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Annex A Definitions A-1
Schedule 1A MPAN Sellers and MHG Sellers S-1A
Schedule 2.1(a) Selling Affiliates and Additional Assets S-2.1(a)
Schedule 2.1(a)(iv) Rebate Accounts Receivable S-2.1(a)(iv)
Schedule 2.1(b)(vii) Additional Excluded Assets S-2.1(b)(vii)
Schedule 2.1(b)(viii) Designated Contracts Not Assignable Without
Consent under Bankruptcy Code S-2.1(b)(viii)
Schedule 2.2(b)(i)(B) Retail Pharmacies S-2.2(b)(i)(B)
Schedule 2.3(a)(i) Inventory Procedures S-2.3(a)(i)
Schedule 2.4(a) Designated Contracts S-2.4(a)
Schedule 2.7 Allocation of Cash Purchase Price S-2.7
Schedule 2.9 Accounts Payable Procedures S-2.9
Schedule 3.1(a) Form of Sellers' Approval Order S-3.1(a)
Schedule 3.3(c) Acceptable Title Insurance Exceptions S-3.3(c)
Schedule 3.3(e) Required Consents S-3.3(f)
Schedule 3.3(g) Form of Non-Compete Agreements S-3.3(h)
Schedule 4.2(a) Form of ▇▇▇▇ of Sale S-4.2(a)
Schedule 4.2(e) Form of Vesting Deed S-4.2(e)
Schedule 4.2(f) Form of Assignment and Assumption Agreements S-4.2(f)
Schedule 5.1 Exceptions to Good Standing S-5.1
Schedule 5.2 Permitted Liens S-5.2
Schedule 5.3(a) Owned Real Property S-5.3(a)
Schedule 5.3(c) Other Occupants S-5.3(c)
Schedule 5.4(a) Real Property Leases S-5.4(a)
Schedule 5.4(b)(i) Independent Facility Contracts S-5.4(b)(i)
Schedule 5.4(b)(ii) Independent Facility Arrangements S-5.4(b)(ii)
Schedule 5.4(c) Services Contracts S-5.4(c)
Schedule 5.4(d) Other Contracts S-5.4(d)
Schedule 5.5 Intellectual Property S-5.5
Schedule 5.7 Acquired Business Employees S-5.7
Schedule 5.8 March Financial Statements S-5.8
Schedule 5.9(a) Sellers' Licenses S-5.9(a)
Schedule 5.9(b) Sellers' License Violations S-5.9(b)
Schedule 5.10 Institutional Pharmacy Business S-5.10
Schedule 5.12(e) Underground Storage Tanks S-5.12(e)
Schedule 5.13 Litigation S-5.13
Schedule 7.9(a) Excluded Employees S-7.9(a)
Schedule 7.16 Form of Management Agreement S-7.16
Schedule 7.17 Service ▇▇▇▇ S-7.17
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of December 5, 2001
("Agreement"), is made and entered into by and among Mariner Post-Acute
Network, Inc., a Delaware corporation ("MPAN"), Mariner Health Group, Inc., a
Delaware corporation ("MHG"), the corporate entities related to MPAN identified
in Schedule 1A hereto (the "MPAN Sellers"), the corporate entities related to
MHG identified in Schedule 1A hereto (the "MHG Sellers") (the MPAN Sellers and
the MHG Sellers being hereinafter collectively referred to as the "Sellers"),
Omnicare, Inc., a Delaware corporation ("Parent") and APS Acquisition LLC, a
Delaware limited liability company and wholly owned subsidiary of Parent
("Purchaser").
RECITALS
WHEREAS, MPAN, the MPAN Sellers, and certain other related
business entities are debtors under those cases which are jointly administered
and consolidated for procedural purposes only (the "MPAN Bankruptcy Cases")
filed with the United States Bankruptcy Court for the District of Delaware (the
"MPAN Bankruptcy Court") on January 18, 2000, captioned "In Re: Mariner
Post-Acute Network, Inc., a Delaware corporation, and affiliates, Debtors" Case
No. 00-113 (MFW) (Jointly Administered Case Nos. 00-113 (MFW) through 00-214
(MFW), inclusive);
WHEREAS, MHG, the MHG Sellers, and certain other related
business entities are debtors under those cases which are jointly administered
and consolidated for procedural purposes only (the "MHG Bankruptcy Cases")
filed with the United States Bankruptcy Court for the District of Delaware (the
"MHG Bankruptcy Court") on January 18, 2000, captioned "In Re: Mariner Health
Group, Inc., a Delaware corporation, and affiliates, Debtors" Case No. 00-215
(MFW) (Jointly Administered Case Nos. 00-215 (MFW) through 00-301 (MFW),
inclusive);
WHEREAS, the MPAN Bankruptcy Cases and the MHG Bankruptcy
Cases are collectively referred to herein as the "Mariner Bankruptcy Cases",
and when the MPAN Bankruptcy Court and the MHG Bankruptcy Court are referred to
herein with regard to the Mariner Bankruptcy Cases, together they are referred
to as the "Mariner Bankruptcy Courts";
WHEREAS, MPAN, MHG, and Sellers continue to operate their
businesses as debtors-in-possession;
WHEREAS, when the United States Bankruptcy Court for the
District of Delaware is generally referred to without reference to any given
case or cases, it is referred to as the "Bankruptcy Court";
WHEREAS, Purchaser desires to purchase from Sellers the
Acquired Assets (as defined below) and to assume certain liabilities from
Sellers in connection therewith, and Sellers desire to sell, convey, assign,
and transfer to Purchaser the Acquired Assets concurrently with Purchaser's
assumption of certain obligations and liabilities relating thereto, pursuant to
the terms and conditions of this Agreement; and
WHEREAS, subject to the provision for higher and better
offers from third parties, the Acquired Assets are intended to be sold pursuant
to the terms of this Agreement and an order or orders of the Mariner Bankruptcy
Courts approving such sale under section 363 of the Bankruptcy Code and the
assumption of certain executory and unexpired contracts and leases and of
liabilities under section 365 of the Bankruptcy Code (collectively, the
"Sellers' Approval Orders");
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, and agreements set forth
herein, and intending to be legally bound, subject to the approval of the
Mariner Bankruptcy Courts, the Parties hereto agree as follows:
SECTION 1
DEFINED TERMS
1.1 Definitions. Unless the context otherwise requires,
capitalized terms used in this Agreement shall have the meanings set forth in
Annex A hereto.
1.2 Certain Rules of Construction.
(a) Any term defined herein in the singular form shall
have a comparable meaning when used in the plural form, and vice versa.
(b) When used herein, the words "hereof," "herein" and
"hereunder" and words of similar import shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. References to the
Preamble, Recitals, Sections, Schedules or Annexes shall refer respectively to
the preamble, recitals, articles, sections, schedules or exhibits of this
Agreement, unless otherwise expressly provided.
(c) When used herein, the terms "include," "includes,"
and "including" are not limiting.
(d) Unless the context requires otherwise, derivative
forms of any term defined herein shall have a comparable meaning to that of
such term.
(e) When a Party's consent is required hereunder, such
Party's consent may be granted or withheld in such Party's sole discretion,
unless otherwise specified.
SECTION 2
PURCHASE AND SALE OF ASSETS
2.1 Acquired and Excluded Assets.
(a) Acquired Assets. Subject to the terms and conditions
herein set forth, at the Closing, Sellers shall sell, assign, transfer, convey,
and deliver to Purchaser free and clear of all Liens (other than the Permitted
Liens), and Purchaser shall purchase and accept from Sellers,
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free and clear of all Liens (other than the Permitted Liens), all of Sellers'
right, title, and interest in, to, and under the following, as the same shall
exist on the Closing Date (collectively, the "Acquired Assets"): except as
provided in Section 2.1(b) below, all assets owned by Sellers, wherever
located, whether real, personal, or mixed, tangible or intangible, which shall
also include Sellers' (i) interests in joint ventures and other ownership
interests or business arrangements (to the extent any required written
consent(s) or approval(s) of the other joint venture members, partners, or
other parties thereto are obtained), (ii) prepaid items in respect of the
Acquired Assets, (iii) Inventory, (iv) rebate accounts receivable, including
such rebate accounts receivable listed on Schedule 2.1(a)(iv) hereto (such
Schedule to include the name of each payor and the corresponding amount owed
with respect to such rebate), (v) Government Payment Program Proceeds, (vi) if
any, the Included Mariner Receivables (as defined in Section 2.3(a)(iv) below),
(vii) right, title and interest in and to all of the names of Sellers and any
variations thereof (including "American Pharmaceutical Services," "APS," and
all corporate names, fictitious names, product names and service names)
(subject to Section 7.14 hereof), and (viii) Medicare Part B Business and
Assets as it relates only to the provision of Medicare Part B Products and
Services to Independent Facilities (the "Acquired Medicare Part B Business and
Assets").
MPAN and MHG, respectively, shall cause the Affiliate or
Affiliates of MPAN or MHG as identified in Schedule 2.1(a) (collectively, all
such Affiliates of MPAN or MHG identified in Schedule 2.1(a) are herein
referred to as the "Selling Affiliates") to sell, assign, transfer, convey, and
deliver to Purchaser at Closing free and clear of all Liens (other than the
Permitted Liens), and Purchaser shall purchase and accept from such Selling
Affiliate(s) free and clear of all Liens (other than the Permitted Liens), all
of such Selling Affiliates' right, title, and interest in, to, and under the
assets identified in Schedule 2.1(a) hereto which are not owned by any Seller
but which are used in the Acquired Business, as the same shall exist on the
Closing Date (collectively, the "Additional Assets"). It is hereby understood
and agreed that only the Additional Assets owned by the applicable Selling
Affiliate identified in Schedule 2.1(a) hereto may be acquired pursuant to this
Agreement, and no other assets of such Selling Affiliate whatsoever, whether
real, personal, or mixed, tangible or intangible, shall be acquired by
Purchaser hereunder.
(b) Excluded Assets. Only the Acquired Assets and the
Additional Assets shall be conveyed by Sellers and the Selling Affiliates and
purchased by Purchaser pursuant to this Agreement, and the following assets,
rights, and properties of Sellers (collectively, the "Excluded Assets") are not
being sold, assigned, transferred, conveyed, or delivered to Purchaser pursuant
to this Agreement:
(i) Sellers' cash, cash equivalents,
inter-company accounts receivable (including all accounts receivable from MPAN
and MHG, except the Included Mariner Receivables (if any)), inter-company
notes, securities (including securities representing stock in any of Sellers'
subsidiaries) (except for the interests in the joint ventures identified in
Section 2.1(a) above) or like assets of Sellers;
(ii) Sellers' right, title, and interest in, and
to, causes of action arising under Chapter 5 of the Bankruptcy Code;
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(iii) Sellers' bank or deposit accounts,
insurance policies, and insurance proceeds or awards except as specifically
provided in Section 10.4 hereof;
(iv) Sellers' right, title, and interest in, and
to, any loss recapture benefits to which Sellers may be eligible at any time
under any agreement or applicable Law, including any Law pertaining to Taxes or
any Law pertaining to Medicare, Medicaid, or any Governmental Authority having
jurisdiction over Sellers and their business;
(v) Sellers' rights and claims (other than
those related to any Acquired Assets) against Medicare, Medicaid, CHAMPUS, the
Veteran's Affairs program, or any other governmental health care payor (each, a
"Government Payment Program" and, collectively, the "Government Payment
Programs"), or against any health insurer, any health maintenance organization,
or any other non-governmental health care payor;
(vi) Sellers' right, title, and interest in, and
to, the following assets used exclusively for the provision of Medicare Part B
Products and Services to Facilities owned, managed or operated by MPAN, MHG, or
any of their respective Affiliates (collectively, the "Mariner Facilities")
(which assets shall collectively be referred to herein as the "Excluded
Medicare Part B Business and Assets"): Inventory on consignment at Mariner
Facilities, equipment at Mariner Facilities, and books and records;
(vii) the assets, rights, and properties set
forth in Schedule 2.1(b)(vii) hereto;
(viii) any Designated Contract (A)(1) set forth in
Schedule 2.1(b)(viii) hereto which may not be assigned to Purchaser under
applicable provisions of the Bankruptcy Code without the consent or approval of
the other party thereto (such as, without limitation, contracts with
Governmental Authorities, personal services contracts, and non-exclusive
licenses), or (2) which based upon the objection of a party to a Designated
Contract other than a Seller or Sellers or any of their Affiliates, the Mariner
Bankruptcy Courts have determined shall not be assigned to Purchaser under
applicable provisions of the Bankruptcy Code without the consent or approval of
the other party thereto (such as, without limitation, contracts with
Governmental Authorities, personal services contracts, and non-exclusive
licenses), and (B) with respect to which the written consent or approval to the
assignment of such Designated Contract to Purchaser hereunder has not been
provided by the other party thereto as of the Closing;
(ix) Sellers' right, title and interest in, and
to, Sellers' accounts receivable from Government Payment Programs (it being
understood that the Government Payment Program Proceeds are included in the
Acquired Assets and are not Excluded Assets); and
(x) intentionally omitted;
(xi) all Contracts other than Designated
Contracts.
The Parties expressly agree and understand that Sellers shall
not sell, assign, transfer, convey, or deliver to Purchaser any of the Excluded
Assets. The Parties also expressly
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agree and understand that Purchaser is not hereunder acquiring any assets,
rights, or properties, whether real, personal or mixed, tangible or intangible,
of MPAN or MHG, whatsoever, except to the extent that they may be owners of the
Additional Assets.
2.2 Purchase Price.
(a) Closing Payment. In consideration for the transfer
of the Acquired Assets and the Additional Assets, Purchaser shall pay, by wire
transfer of immediately available funds, to Sellers, or as directed by Sellers,
(i) the amount of $97,000,000 (the "Initial Cash") less the Current Assets
Holdback (as calculated pursuant to Section 2.3(a)(iv) below), at the Closing
(the "Closing Payment"), and (ii) the Earnout Payments (in accordance with and
subject to the conditions set forth in Section 2.2(b) below) (the Initial Cash,
as adjusted in accordance with Section 2.3(e), being hereinafter sometimes
referred to as the "Cash Purchase Price," and such Cash Purchase Price along
with the Earnout Payments being hereinafter collectively referred to as the
"Purchase Price").
(b) Earnout Payments.
(i) Certain Definitions. For the purposes of
this Section 2.2(b) and the other provisions of this Agreement, the following
terms shall have the meanings ascribed to them:
(A) "Average Monthly Revenues" means
an amount equal to the average of the monthly Accrued Revenues during the 3
full calendar month period (for which Revenue figures are available)
immediately preceding an applicable anniversary of the Closing Date.
(B) "Accrued Revenues" means the
Revenues accrued by Purchaser or any of its Affiliates in consideration for
Services provided from and after the Closing pursuant to (1) all Independent
Facility Contracts and (2) all Independent Facility Arrangements for the
Line(s) of Business any Seller historically provided to each such Independent
Facility; provided, however, that for the purposes of this Section 2.2(b), all
Revenues accrued by Purchaser or any of its Affiliates in respect of all
products and services sold or provided from and after the Closing by the retail
pharmacies identified at Schedule 2.2(b)(i)(B) shall be deemed Accrued
Revenues.
(C) "Independent Facility" means a
long-term care facility (including an assisted living facility, nursing
facility, skilled nursing facility, long-term care hospital, subacute care
facility, independent living facility, continuing care retirement community,
and any combination of the foregoing, including any such facilities which may
be otherwise designated under applicable state law (individually, a "Facility"
and collectively, the "Facilities")) which meets all the following
requirements:
1. Neither any Seller nor
any of its Affiliates has any ownership, management, or leasehold interest in
the Facility or in any Person which owns or participates in the management or
leasing of the Facility (collectively, the "Facility Persons");
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2. Neither any Seller nor
any of its Affiliates, officers, directors, or management level employees are
in a position to influence any Facility Person with respect to the Facility's
continued use of the Acquired Business as a source of any Services for the
Facility and its residents; and
3. Neither any Seller nor
any of its Affiliates has directly or indirectly offered to pay, or promised to
pay, any remuneration to any Facility Person, or to any Person in a position to
influence any Facility Person, with respect to the Facility's continued use of
the Acquired Business as a source of Services for the Facility and its
residents.
(D) "Independent Facility Contract"
means a Designated Contract with an Independent Facility to which any Seller is
a party and pursuant to which such Seller provides any Services to the
Independent Facility or to patients resident in such Facility that is
identified on Schedule 5.4(b)(i) as an Independent Facility Contract and is in
effect at Closing.
(E) "Independent Facility
Arrangements" means all understandings and arrangements (other than the
Independent Facility Contracts) with Independent Facilities identified on
Schedule 5.4(b)(ii) as such Schedule is updated prior to Closing pursuant to
Section 5.4(b) (which Schedule shall include a list of the Independent
Facilities that have provided Revenues to Sellers within the 12 month period
immediately prior to the Closing Date for Services provided by Sellers, the
Services (identified by the respective Line(s) of Business) provided thereto,
and the Revenues for such 12 month period.
(F) "Revenues" means net revenues
determined in accordance with Sellers' Accounting Policies.
(G) "Services" means dispensing and/or
distributing all or any of the following to Facilities or to patients resident
at such Facilities: (i) pharmaceutical products, pharmaceutical services
provided or customarily provided to a Facility by an institutional pharmacy,
consultant pharmacy services, infusion therapy products and services, (ii)
oxygen and other respiratory supplies and equipment, or (iii) parenteral or
enteral nutrition products, patient specific wound care products, ostomy and
urological supplies. Each of clauses (i), (ii), and (iii) above is individually
a "Line of Business".
(ii) Calculation and Payment of Earnout
Payments.
(A) The amounts set forth below,
subject to reduction in accordance with the provisions of this Section 2.2(b)
(the "Earnout Payments"), shall be paid by Purchaser to Sellers, in accordance
with the following:
1. The amount of $6,000,000
not later than 30 days following the date that is the first anniversary of the
Closing Date, subject to downward adjustment as described below in Section
2.2(b)(ii)(B) below if the Average Monthly Revenues are less than $10,500,000;
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2. The amount of $6,000,000
not later than 30 days following the date that is the second anniversary of the
Closing Date, subject to downward adjustment as described below in Section
2.2(b)(ii)(B) below if the Average Monthly Revenues are less than $9,900,000;
and
3. The amount of $6,000,000
not later than 30 days following the date that is the third anniversary of the
Closing Date, subject to downward adjustment as described below in Section
2.2(b)(ii)(B) below if the Average Monthly Revenues are less than $9,400,000.
(B) Each Earnout Payment described in
Section 2.2(b)(ii)(A)1, 2, and 3 above shall be reduced proportionately to the
extent that the Average Monthly Revenues utilized in the calculation of such
Earnout Payment are less than the stated threshold amount of Average Monthly
Revenues required for the payment of the full amount of such Earnout Payment.
For example, if with respect to Section 2.2(b)(ii)(A)(1) above the Average
Monthly Revenues are $5,250,000, then the Earnout Payment would be $3,000,000
(i.e., $6,000,000 multiplied by $5,250,000 divided by $10,500,000).
(C) For the purposes of calculating
the amount of each Earnout Payment, (i) an Independent Facility shall no longer
be taken into account in calculating an Earnout Payment as of such date that
Purchaser or any of its Affiliates cease providing (1) all Services which are
covered by an Independent Facility Contract, or (2) Services in the Line(s) of
Business historically provided by a Seller to an Independent Facility or its
patients or residents pursuant to an Independent Facility Arrangement, for any
reason whatsoever other than the termination of the Independent Facility
Contract or the Independent Facility Arrangement with such Independent Facility
as a result of Purchaser's or any of its Affiliates' breach of or default under
such contract or arrangement, and (ii) Revenues accrued by Purchaser or any of
its Affiliates for Services provided to a Facility which is an Independent
Facility as of the Closing but which later ceases to qualify as an Independent
Facility will not be considered Accrued Revenues from and after such date the
Facility in question no longer qualifies as an Independent Facility, and such
Revenues shall not be taken into account in calculating an Earnout Payment, and
(iii) Revenues accrued by Purchaser or any of its Affiliates for Services (1)
which are not covered under an existing Independent Facility Contract, or (2)
which are not in the Line(s) of Business historically provided under an
Independent Facility Arrangement, will not be considered Accrued Revenues, and
such Revenues shall not be taken into account in calculating an Earnout Payment
(provided, however, that for the purposes of this clause (iii) Revenues accrued
by Purchaser or any of its Affiliates for the provision of consultant pharmacy
services to Independent Facilities to which a Seller provided Services covered
by an Independent Facility Contract in the Line of Business described in
Section 2.2(b)(i)(G)(i) under a new or amended Independent Facility Contract
shall be taken into account in calculating an Earnout Payment). Notwithstanding
the foregoing, if any Independent Facility Contract or Independent Facility
Arrangement expires or is terminated for any reason whatsoever, and such
Independent Facility Contract or Independent Facility Arrangement is renewed or
Purchaser or any of its Affiliates and the Independent Facility in question
enter into a new or amended Services Contract or Independent Facility
Arrangement, then such renewed, new or amended Services Contract or Independent
Facility Arrangement shall be deemed either (1) an Independent Facility
Contract,
8
to the extent the Line(s) of Business covered by such Services Contract were
covered under the terminated or expired Independent Facility Contract or (2) an
Independent Facility Arrangement, to the extent the Line(s) of Business covered
by such arrangement were historically provided under the terminated or expired
Independent Facility Arrangement, as the case may be, and in each instance, the
Accrued Revenues thereunder shall be included in the calculation of Average
Monthly Revenues. In the event of the termination of an Independent Facility
Contract as a result of Purchaser's or any of its Affiliates' breach of or
default under such contract, an amount equal to the Accrued Revenues that would
have been generated through the term of such contract had it not been so
terminated (and which such Accrued Revenues shall be calculated based upon the
average monthly Accrued Revenues under such contract calculated using the 3
full calendar month period immediately preceding such contract's termination)
will be considered Accrued Revenues and will be taken into account in
calculating an Earnout Payment. In the event of the (y) termination of an
Independent Facility Contract by any party thereto that does not result from
the breach or default by Purchaser or any of its Affiliates of such contract's
terms, or (z) expiration of an Independent Facility Contract pursuant to its
terms and such contract is not renewed, then no Revenues with respect to such
contracts following such termination or expiration shall be taken into account
in calculating an Earnout Payment.
(D) Each Earnout Payment that is less
than the amounts stated in Sections 2.2(b)(ii)(A)(1), (2) and (3),
respectively, shall be accompanied by (and if no Earnout Payment is made, then
MPAN, MHG, and Sellers shall be provided) a written statement prepared by
Purchaser (the "Earnout Payment Statement"). Each such Earnout Payment
Statement shall set forth in reasonable detail the information and data used in
the calculation of the Earnout Payment (or the absence thereof) in question,
including a listing of all Independent Facilities used in such calculation of
the amount of Accrued Revenues and the amount of Accrued Revenues attributable
to each such Independent Facility.
(E) After the later of (i) Sellers'
receipt of each Earnout Payment that is less than the amounts stated in
Sections 2.2(b)(ii)(A)(1), (2) and (3), respectively, or (ii) Sellers' receipt
of the Earnout Payment Statement if no Earnout Payment is received (such date
being herein referred to as the "Payment Date"), Sellers shall have 20 Business
Days to deliver written notice (the "Earnout Payment Objection Notice") to
Purchaser stating that they object to the amount or calculation of the Earnout
Payment. If the Earnout Payment Objection Notice is not received by Purchaser
on or prior to the 20th Business Day after the Payment Date, Sellers shall be
deemed to have accepted and agreed to the amount and calculation of the Earnout
Payment unless such failure to provide an Earnout Payment Objection Notice is a
result of Purchaser's and/or Parent's failure to timely provide or make
available to MPAN, MHG, and Sellers all information and documentation
reasonably requested by them pursuant to Section 2.2(b)(ii)(F) below, in which
case such Earnout Payment Objection Notice shall be provided to Purchaser no
later than the date that is 30 Business Days after the Payment Date (the
"Extended Earnout Payment Objection Notice Date"). If, however, Sellers provide
an Earnout Payment Objection Notice to Purchaser on or prior to the 20th
Business Day or the Extended Earnout Payment Objection Notice Date, as the case
may be, after the Payment Date, the Parties shall in good faith attempt to
resolve their differences with respect to all objections set forth therein
within 30 Business Days (or such longer period as all Parties may agree in
writing) following Purchaser's receipt of such Earnout Payment Objection Notice
(the "Earnout Payment
9
Resolution Period"), and any resolution agreed upon by the Parties in writing
as to any such objections shall, subject to the provisions of the Bankruptcy
Code, be final, binding, and conclusive on all Parties. In so doing, the
Parties may, but shall not be obligated to, engage a mutually agreed upon
independent accounting firm experienced in audit projects to assist in such
resolution by acting as a non-binding mediator. Sellers shall not object to any
method, principle, practice, or policy employed in the calculation of the
applicable Earnout Payment if such method, principle, practice, or policy is
consistent in all material respects with Sellers' Accounting Policies,
provided, however, that the foregoing shall not be construed to prohibit
Sellers from objecting to the fact that any method, principle, practice, or
policy employed in the calculation of the applicable Earnout Payment was or may
have been applied in a manner that was not materially consistent with Sellers'
Accounting Policies. All objections relating to the amount or calculation of an
Earnout Payment remaining in dispute at the conclusion of the Earnout Payment
Resolution Period shall be promptly submitted to the MPAN Bankruptcy Court for
determination, and the determination of the MPAN Bankruptcy Court in such
dispute shall be final, binding, and conclusive on all Parties. Each Party
shall bear its own costs related to the review, investigation, and resolution
of all objections raised by Sellers to the amount or calculation of any Earnout
Payment. Any amount finally determined to be owed by Purchaser to Sellers in
accordance with this Section 2.2(b)(ii)(E) (the "Earnout Deficiency Amount")
shall accrue simple interest on the full amount thereof for the period
commencing on the date such Earnout Deficiency Amount should have been paid by
Purchaser to Sellers and ending on the date such Earnout Deficiency Amount is
actually paid to Sellers, and such simple interest shall accrue at the rate of
8% per annum.
(F) MPAN, MHG, and Sellers, together
with their financial advisors, legal counsel, accountants, consultants, and
other authorized representatives, shall have the right to review, and shall,
upon reasonable advance notice to Parent and Purchaser and during normal
business hours, have the right to conduct an audit or audits (the "Earnout
Audit") to confirm the information and calculations provided or performed, as
the case may be, by Parent and Purchaser hereunder with respect to the amount
and calculation of each Earnout Payment to the extent that such Earnout Payment
is less than the amounts stated in Sections 2.2(b)(ii)(A)(1), (2) and (3),
respectively, or no Earnout Payment is made. If less than the amounts stated in
Sections 2.2(b)(ii)(A)(1), (2) and (3), respectively, is paid to Sellers in
respect of any of the 3 Earnout Payments on the applicable Payment Date, or if
no Earnout Payment is made on such Payment Date, then, throughout the period
commencing on the applicable Payment Date and ending on the last day of the
applicable Earnout Payment Resolution Period, Parent and Purchaser shall afford
to MPAN, MHG, and their financial advisors, legal counsel, accountants,
consultants, and other authorized representatives reasonable access during
normal business hours to all books, records, properties, and personnel of
Parent and Purchaser that pertain to the calculation of the Earnout Payments
(including the work papers of Parent, Purchaser and their respective
accountants utilized in preparing such Earnout Payment Statement) and, during
such period, shall furnish as promptly as practicable to MPAN, MHG, and Sellers
any and all such information and documentation as MPAN, MHG, and Sellers may
reasonably request pertaining to the calculation of the Earnout Payments
(provided that such right of access with respect to an applicable Earnout
Payment shall terminate if an Earnout Payment Objection Notice with respect to
such applicable Earnout Payment is not delivered to Purchaser in accordance
with this Agreement).
10
2.3 Preparation and Delivery of Financial Information;
Calculation of Closing Payment and Cash Purchase Price.
(a) Prior to Closing, Sellers shall prepare and deliver
to Purchaser:
(i) (A) a balance sheet of Sellers as of June
30, 2001 which shall include therein the Additional Assets (the "June Balance
Sheet"). The June Balance Sheet shall be prepared by Sellers in good faith on a
basis consistent in all material respects with the Sellers' combined,
consolidated financial statements attached hereto as Schedule 5.8 (the "March
Financial Statements"), which March Financial Statements were prepared as of
March 31, 2001 in accordance with (1) GAAP, and (2) the methods, principles,
practices and policies employed by Sellers historically in the preparation and
presentation of their financial information consistently applied ((1) and (2)
being herein collectively referred to as the "Sellers' Accounting Policies").
As part of the procedures used to prepare the June Balance Sheet, and in
accordance with the provisions set forth in Schedule 2.3(a)(i) hereto, (i) an
independent inventory counting service, arranged and paid for by Sellers,
conducted a physical count of all Inventory (excluding Inventory included in
Excluded Medicare Part B Business and Assets) at all of Sellers' locations on
or about June 30, 2001 and (ii) employees of Sellers conducted a physical count
of all Inventory included in the Acquired Medicare Part B Business and Assets
(which included such Inventory at Sellers' locations and on consignment at the
locations of Sellers' third party customers) on or about May 31, 2001 (the
inventory count described in parts (i) and (ii) above being collectively
referred to as the "June Inventory").
(B) at least 20 Business Days prior to
Closing, a balance sheet of Sellers (the "Pre-Closing Balance Sheet") as of a
date that is the last day of a calendar month and not more than 60 days prior
to Closing (the "Pre-Closing Balance Sheet Date"). The Pre-Closing Balance
Sheet shall be prepared by Sellers in good faith on a basis consistent in all
material respects with the Sellers' Accounting Policies. As part of the
procedures used to prepare the Pre-Closing Balance Sheet, Sellers shall
roll-forward the June Inventory to the Pre-Closing Balance Sheet Date (the
"Pre-Closing Inventory").
(ii) at least 20 Business Days prior to the
Closing, a statement of Net Current Assets as of the Pre-Closing Balance Sheet
Date (the "Pre-Closing Statement of Net Current Assets"), derived from the
Pre-Closing Balance Sheet. The Pre-Closing Statement of Net Current Assets
shall be prepared by Sellers in good faith on a basis consistent in all
material respects with Sellers' Accounting Policies, and shall set forth (1)
the amount of Net Current Assets as of the Pre-Closing Balance Sheet Date (it
being understood that no Mariner Receivables are included in the definition of
Net Current Assets set forth in Annex A) (the "Pre-Closing Net Current
Assets"), and (2) a reasonably detailed calculation of the Pre-Closing Net
Current Assets showing each separate component of such calculation, including
the type and amount of accounts receivable, rebate accounts receivable,
Inventory, and prepaid expenses. For the purposes of calculating the
Pre-Closing Net Current Assets (A) no inventory reserve shall be used as an
offset against Net Current Assets and (B) the value of the assets of APS-Summit
Care Pharmacy, LLC (the "Austin Joint Venture") as stated in the Pre-Closing
Balance Sheet shall be reduced by an amount equal to 50% of the value of the
Austin Joint Venture's Inventory, accounts receivable, rebate accounts
receivable (if any), prepaid expenses and cash in depository accounts (but only
if the applicable Seller's membership interest in the Austin Joint Venture is
an
11
Acquired Asset, it being understood that if the applicable Seller's membership
interest in the Austin Joint Venture is not an Acquired Asset, the value of the
Austin Joint Venture's assets shall be eliminated from such calculation).
(iii) at least 15 Business Days prior to the
Closing, an estimated statement of the Assumed Reserved Liabilities as of the
Closing Date (the "Statement of Estimated Assumed Reserved Liabilities").
Purchaser shall review such statement and prepare and deliver to Sellers, not
later than 5 Business days following Purchaser's receipt of the Statement of
Estimated Assumed Reserved Liabilities, a statement setting forth some, all, or
none of the liabilities in the Statement of Estimated Assumed Reserved
Liabilities that, in Purchaser's sole and absolute discretion, it agrees to
assume upon Closing (the "Statement of Assumed Reserved Liabilities"). The
liabilities set forth in the Statement of Assumed Reserved Liabilities
delivered to Sellers shall be the "Assumed Reserved Liabilities".
(iv) at least 3 Business Days prior to Closing,
a statement (the "Sellers' Calculation of the Current Assets Holdback"). The
Sellers' Calculation of the Current Assets Holdback shall set forth (1) the
Pre-Closing Net Current Assets, (2) a reasonably detailed listing of the
individual and aggregate amounts of all Mariner Receivables that MPAN, MHG, and
Sellers, respectively, decide, in their respective sole and absolute
discretion, to include as part of the Acquired Assets (the "Included Mariner
Receivables"), and (3) the "Current Assets Holdback", which shall equal the
amount, if any, by which $44,500,000 exceeds the result of the following
calculation: Pre-Closing Net Current Assets plus Included Mariner Receivables
less Assumed Reserved Liabilities.
(b) As of the Closing Date, and in accordance with the
provisions set forth in Schedule 2.3(a)(i) hereto, (i) an independent inventory
counting service, arranged for by Sellers and paid for by Purchaser, shall
conduct a physical count of all Inventory (excluding Inventory included in
Sellers' Medicare Part B Business and Assets) at all of Sellers' locations and
(ii) employees of Sellers shall conduct a physical count of all Inventory
included in the Acquired Medicare Part B Business and Assets (which shall
include such Inventory at Sellers' locations and on consignment at the
locations of Sellers' third party customers) (the inventory count described in
parts (i) and (ii) above being collectively referred to as the "Closing
Inventory"). Sellers and their representatives (including their outside
auditors) and Parent, Purchaser and their representatives (including their
outside auditors) shall be allowed to monitor the Closing Inventory at such
locations as Sellers and their representatives, in their sole discretion, and
Parent, Purchaser and their representatives, in their sole discretion, deem
necessary. The Closing Inventory shall be used by Purchaser in its preparation
of the Closing Balance Sheet (as defined below in Section 2.3(c)).
(c) Within 120 days after the Closing Date, Purchaser
shall prepare and deliver to Sellers:
(i) a balance sheet of Sellers as of the
Closing Date (the "Closing Balance Sheet"). The Closing Balance Sheet shall be
prepared by Purchaser in good faith on a basis consistent in all material
respects with Sellers' Accounting Policies.
12
(ii) a statement of Net Current Assets as of the
Closing Date (the "Closing Statement of Net Current Assets"), derived from the
Closing Balance Sheet. The Closing Statement of Net Current Assets shall be
prepared by Purchaser in good faith on a basis consistent in all material
respects with Sellers' Accounting Policies, and shall set forth (1) the amount
of Net Current Assets as of the Closing Date (it being understood that no
Mariner Receivables are included in the definition of Net Current Assets set
forth in Annex A) (the "Closing Net Current Assets"), and (2) a reasonably
detailed calculation of the Closing Net Current Assets showing each separate
component of such calculation, including the type and amount of accounts
receivable, rebates accounts receivable, Inventory, and prepaid expenses. For
the purposes of calculating the Closing Net Current Assets (A) no inventory
reserve shall be used as an offset against Net Current Assets, and (B) the
value of the assets of the Austin Joint Venture as stated in the Closing
Balance Sheet shall be reduced by an amount equal to 50% of the value of the
Austin Joint Venture's Inventory, accounts receivable, rebate accounts
receivable (if any), prepaid expenses and cash in depository accounts (but only
if the applicable Seller's membership interest in the Austin Joint Venture is
an Acquired Asset, it being understood that if the applicable Seller's
membership interest in the Austin Joint Venture is not an Acquired Asset, the
value of the Austin Joint Venture's assets shall be eliminated from such
calculation).
(iii) a statement as of the Closing Date (the
"Purchaser's Calculation of the Current Assets Reduction"). The Purchaser's
Calculation of the Current Assets Reduction shall set forth (1) the Closing Net
Current Assets, (2) an amount equal to the amount of the Included Mariner
Receivables actually paid to and received by Purchaser as of the date on which
the Closing Balance Sheet is delivered (the "Paid Included Mariner
Receivables"), and (3) the "Current Assets Reduction", which shall equal the
amount, if any, by which $44,500,000 exceeds the result of the following
calculation: Closing Net Current Assets, plus Paid Included Mariner
Receivables, less Assumed Reserved Liabilities.
(d) After receipt of the Closing Balance Sheet, the
Closing Statement of Net Current Assets, and the Purchaser's Calculation of the
Current Assets Reduction (collectively, the "Closing Statements"), Sellers
(including their advisors), shall have 60 days to review them together with all
work papers of Parent, Purchaser, their respective accountants, and the
independent inventory counting service used in the preparation thereof, and
Parent and Purchaser shall, immediately upon Sellers' request, provide to
Sellers copies of all such work papers of Parent and Purchaser, their
respective accountants, and the independent inventory counting service utilized
in preparing such Closing Statements. Unless Sellers deliver written notice
(the "Closing Statements Objection Notice") to Parent and Purchaser on or prior
to the 60th day after Sellers' receipt of the Closing Statements stating that
they object thereto, Sellers shall be deemed to have accepted and agreed to the
Closing Statements. If, however, Sellers provide a Closing Statements Objection
Notice to Parent and Purchaser on or prior to the 60th day after Sellers'
receipt of the Closing Statements, all Parties shall in good faith attempt to
resolve their differences with respect to all objections set forth therein
within 30 Business Days (or such longer period as all Parties may agree upon in
writing) following Parent's and Purchaser's receipt of such Closing Statements
Objection Notice (the "Resolution Period"), and any resolution by all Parties
in writing as to any such objections shall, subject to the provisions of the
Bankruptcy Code, be final, binding, and conclusive on all Parties. In so doing,
the Parties may, but shall not be obligated to, engage a mutually agreed upon
independent accounting firm experienced in
13
audit projects to assist in such resolution by acting as a non-binding
mediator. Sellers shall not object to any method, principle, practice, or
policy employed in the preparation of the Closing Statements if such method,
principle, practice, or policy is consistent in all material respects with
Sellers' Accounting Policies and this Agreement, provided, however, that the
foregoing shall not be construed to prohibit Sellers from objecting to the fact
that any method, principle, practice, or policy employed in the preparation of
the Closing Statements was or may have been applied in a manner that was not
materially consistent with Sellers' Accounting Policies and this Agreement. All
objections relating to any current assets and other accounts set forth in the
Closing Statements remaining in dispute at the conclusion of the Resolution
Period shall be promptly submitted to the MPAN Bankruptcy Court for
determination, and the determination of the MPAN Bankruptcy Court in such
dispute shall be final, binding, and conclusive on all Parties, all of whom
hereby waive their right to appeal in respect of any such determination. Each
Party shall bear its own costs related to the review, investigation, and
resolution of all objections raised by Sellers to the Closing Statements.
(e) Once the Closing Statements have been finalized in
accordance with Section 2.3(d) (as so finalized therein, the Current Assets
Reduction shall be the "Final Current Assets Reduction"), the "Cash Purchase
Price" shall be determined by subtracting from the Initial Cash the Final
Current Assets Reduction.
(f) If the Cash Purchase Price is less than the Closing
Payment, Sellers, jointly and severally, shall promptly pay Purchaser an amount
of cash equal to the difference obtained by subtracting the Cash Purchase Price
from the Closing Payment. If the Cash Purchase Price exceeds the Closing
Payment, Purchaser shall promptly pay Sellers an amount of cash equal to the
difference obtained by subtracting the Closing Payment from the Cash Purchase
Price; it being understood that, in no event shall the aggregate payments made
by Purchaser in respect of the Closing Payment and this Section 2.3(f) exceed
the Initial Cash.
(g) During the preparation of the June Balance Sheet,
the Pre-Closing Balance Sheet, the Pre-Closing Statement of Net Current Assets,
the Statement of Estimated Assumed Reserved Liabilities, the Statement of
Assumed Reserved Liabilities, the Sellers' Calculation of the Current Assets
Holdback, and the Closing Statements and the period of any review or dispute
within the contemplation of this Section 2.3, each of the Parties shall (i)
provide the other and their authorized representatives (including their
respective auditors) with reasonable access at reasonable times, and in a
manner so as not to interfere in any material respect with normal business
operations, to all relevant books, records, work papers, information and
employees, and (ii) cooperate fully in the preparation, calculation, and
reviews, as appropriate, of the June Balance Sheet, the Pre-Closing Balance
Sheet, the Pre-Closing Statement of Net Current Assets, the Statement of
Estimated Assumed Reserved Liabilities, the Statement of Assumed Reserved
Liabilities, the Sellers' Calculation of the Current Assets Holdback, and the
Closing Statements or for the resolution of any dispute relating thereto.
2.4 Contract Assumption.
(a) Schedule 2.4(a) hereto sets forth a list of all
executory and unexpired contracts and leases to which Sellers are party and
which are included in the Acquired Assets ("Designated Contracts"). Designated
Contracts do not include any vendor Contract (i) that is
14
not material to the Acquired Business, and (ii) with respect to which vendor
Contract (a) payments from a Seller or Sellers during the 12-month period prior
to the Closing Date do not exceed $50,000 in amount or (b) any party thereto
may cancel or terminate such Contract at will or on notice of 30 days or less.
For purposes of this Section 2.4(a), a vendor Contract material to the Acquired
Business is a vendor Contract which involves payments of greater than $250,000.
At the Closing, subject to the approval of the Mariner Bankruptcy Courts, and
except to the extent any such Designated Contracts are deemed Excluded Assets
by virtue of Section 2.1(b)(viii) above, Sellers shall assume and then assign
to Purchaser, and Purchaser shall assume from Sellers, the Designated
Contracts. Sellers shall make provision for the payment of, and be responsible
for and bear the cure and reinstatement costs and expenses for services
rendered before the Closing Date (collectively, the "Cure Costs") and relating
to the assumption and assignment of the Designated Contracts; provided,
however, that notwithstanding any provision in this Agreement to the contrary,
Purchaser shall be obligated to pay the full amount of any Cure Costs arising
from Purchaser's inclusion in the Designated Contracts under or pursuant to
this Agreement any Contract (other than any Real Property Lease) which is not
identified as a Designated Contract under or pursuant to that certain Asset
Purchase Agreement dated as of September 24, 2001 by and among MPAN, MHG,
Sellers, Genesis Health Ventures, Inc. and NeighborCare Pharmacy Services, Inc.
Purchaser shall provide such support for and evidence of adequate assurance of
future performance as may be reasonably requested by Sellers in connection with
any hearing before the Mariner Bankruptcy Courts in connection with the
approval by the Mariner Bankruptcy Courts of the assumption and assignment of
the Designated Contracts.
(b) If after the date hereof, but prior to the Closing,
any Party becomes aware of any executory and unexpired contract or lease to
which any Seller is a party which (i) is related to the Acquired Business, (ii)
has not been previously rejected, and (iii) has not been previously disclosed
to Parent and Purchaser ("Undisclosed Contract"), the discovering Party shall
promptly notify the other Parties of such Undisclosed Contract, and, subject to
the approval of the Mariner Bankruptcy Courts, Parent and Purchaser may direct
Sellers, no later than the date of the first hearing with respect to the
disclosure statement filed in connection with a plan proposed by the MHG Seller
or the MPAN Seller who is a party to such Undisclosed Contract (the
"Undisclosed Contract Designation Date"), to assume and assign to Purchaser
such Undisclosed Contract in which event it shall at that time be deemed a
Designated Contract.
(c) With respect to Contracts set forth in Schedule
5.4(a) hereto which are not Designated Contracts and which constitute pharmacy
premises which are the subject of non-residential real property leases which
are not being assumed and assigned under this Agreement ("Excluded Leases"),
the Parties agree that the Sellers' Approval Orders shall contain a provision
(which is incorporated by reference herein) (the "Temporary Occupancy
Provision") seeking to authorize Purchaser to occupy the subject premises of
each Excluded Lease on a temporary basis for a period of up to 6 months
following Closing, or such additional time as the Mariner Bankruptcy Courts
shall approve upon notice to the lessors in question and a hearing.
Notwithstanding anything to the contrary in this Agreement, Parent and
Purchaser hereby acknowledges and agrees that neither the denial of such
Temporary Occupancy Provision by the Mariner Bankruptcy Courts nor any change
or modification to the Temporary Occupancy Provision shall entitle Parent or
Purchaser to terminate this Agreement, subject MHG, MPAN or
15
any Seller to any liability whatsoever or claim that any condition to Closing
under Section 3 of this Agreement has not been satisfied. During any period of
occupancy of the subject premises under any Excluded Lease by Purchaser
following the Closing Date, MPAN, MHG, Sellers and Parent and Purchaser shall
comply with all provisions of Bankruptcy Code section 365(d)(3), and MPAN, MHG,
Sellers, Parent and Purchaser shall be responsible for all costs of use and
occupancy and for the acts of Parent and Purchaser, provided, however, that
Parent and Purchaser shall indemnify and hold harmless MPAN, MHG and Sellers
for use and occupancy costs and any injury or damages caused by Parent's or
Purchaser's occupancy. Nothing in this Agreement shall in any way affect the
Sellers' further rights to assume, assume and assign or reject non-residential
real property leases, other than as expressly set forth in this Section 2.4(c).
In addition, MPAN, MHG and Sellers agree not to file a motion to reject any
Excluded Lease prior to the Closing Date (unless MPAN, MHG or Sellers believe
in their sole and absolute discretion, that Sellers or any of them, is required
to assume or reject any such Excluded Lease pursuant to an order of a Mariner
Bankruptcy Court) or otherwise under the Bankruptcy Code. If Parent and
Purchaser so request at any time prior to the Closing Date, MPAN, MHG and
Sellers shall use commercially reasonable efforts to assume and assign any
Excluded Lease to Purchaser and Purchaser and Parent shall cooperate with and
use commercially reasonable best efforts to support such efforts.
2.5 Amounts Due Under Designated Contracts. Purchaser shall be
obligated to pay all amounts for services rendered by a third party under the
Designated Contracts from and after the Closing in accordance with the terms
and conditions of all such Designated Contracts. Any amounts for services
rendered by a third party under the Designated Contracts during the period
until the Closing shall not be a Liability of Parent or Purchaser (unless
included in the Assumed Reserved Liabilities to be assumed by Purchaser) and
shall be a retained liability of Sellers' in an amount determined by the
Mariner Bankruptcy Courts to the extent not included as an Assumed Reserved
Liability.
2.6 Assumed and Excluded Liabilities. Subject to the terms and
conditions set forth herein, including approval of the Bankruptcy Court, at the
Closing, Purchaser shall assume from Sellers and thereafter pay, perform,
and/or discharge in accordance with their respective terms, all (i) of
Purchaser's share of prorated liabilities of Sellers pursuant to Section 2.9
hereof (to the extent not otherwise addressed through the determination of the
Final Current Assets Reduction), (ii) duties, responsibilities, and obligations
that arise or which by their terms are to be observed, paid, discharged, or
performed, as the case may be, from and after the Closing under the Designated
Contracts, (iii) liabilities and obligations with respect to Transferred
Employees arising from and after the Closing as set forth in Section 7.9
hereof, and (iv) Assumed Reserved Liabilities. The liabilities to be assumed
pursuant to the preceding sentence shall be referred to herein as the "Assumed
Liabilities" and all other liabilities of MPAN, MHG, and Sellers shall be
referred to herein as the "Excluded Liabilities". Notwithstanding anything
contained in this Agreement to the contrary, neither Parent nor Purchaser
assumes or agrees to pay, satisfy, discharge, or perform, and shall not be
deemed by virtue of the execution and delivery of this Agreement, to have
assumed, or to have agreed to pay, satisfy, discharge, or perform, any
liability, obligation, or indebtedness of MPAN, MHG, or any Seller, whether
primary or secondary, direct or indirect, other than the Assumed Liabilities;
provided, however, that if an
16
item is included in the Assumed Reserved Liabilities, then Purchaser shall
remain solely responsible for its satisfaction and discharge.
2.7 Allocation of Cash Purchase Price. The Cash Purchase Price
shall be allocated among the Acquired Assets and Assumed Liabilities for tax
purposes in accordance with the allocation schedule to be agreed upon in
writing by all Parties at or prior to Closing and attached as Schedule 2.7. The
allocation, as shall be set forth on Schedule 2.7 at Closing, shall be binding
for tax purposes on all Parties. All Parties hereby agree to timely file IRS
Form 8594 based on the allocations set forth in Schedule 2.7.
2.8 Transfer Taxes. Any sales, use, transfer, or recordation
Taxes with respect to real or personal property due as a result of the
transactions provided for herein shall be paid by Sellers. The Parties will
reasonably cooperate to minimize such Taxes.
2.9 Prorations. To the extent not included in the Assumed
Reserved Liabilities, (i) Sellers shall bear all personal property and ad
valorem Tax liability with respect to the Acquired Assets to the extent such
Tax relates to periods prior to the Closing, and (ii) Purchaser shall bear all
personal property and ad valorem Tax liability with respect to the Acquired
Assets to the extent such Tax relates to periods from and after the Closing, in
each instance irrespective of the reporting and payment dates of such Taxes. To
the extent not included in the Assumed Reserved Liabilities, (i) Sellers shall
bear all salaries and other compensation payable to employees or officers who
are Transferred Employees, and other recurring payments under Contracts that
are Designated Contracts with respect to the Acquired Assets to the extent such
salaries and compensation and recurring payments relate to periods prior to the
Closing, and (ii) Purchaser shall bear all salaries and other compensation
payable to employees or officers who are Transferred Employees and other
recurring payments under Contracts that are Designated Contracts with respect
to the Acquired Assets, to the extent such salaries and compensation and
recurring payments relate to periods from and after the Closing. To the extent
not included in the Assumed Reserved Liabilities, all other property Taxes, ad
valorem Taxes, and similar recurring Taxes and fees on the Acquired Assets, and
all salaries and other compensation payable to employees or officers who are
Transferred Employees, and other recurring payments under Contracts that are
Designated Contracts, shall be pro rated for the applicable period between
Purchaser and the applicable Seller as of 12:01 a.m. local time on the Closing
Date. All payments to be made by Purchaser or any Seller in accordance with
this Section 2.9 shall be made, to the extent then determinable within 5
Business Days of the determination of the Final Closing Net Current Assets, or
to the extent not determinable as of the determination of the Final Closing Net
Current Assets, promptly following the determination thereof, with such
payments paid to the appropriate Party when due. Each Party shall have the
right of reasonable review and approval of the other's property Tax Returns and
assessments for which any other Party bears any economic responsibility. The
Parties shall reasonably cooperate with respect to any review, contest, or
challenge of any Tax Return or assessment. The Parties shall undertake a
reconciliation and allocation procedure using the mechanism set out above for
the reconciliation and allocation of payroll expenses and costs, and other
recurring payments under Contracts that are Designated Contracts; it being
understood that the processing and payment of vendor invoices shall be
performed in accordance with the procedures set forth in Schedule 2.9 hereto.
2.10 Reconciliation and Allocations.
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(a) Beginning on the Closing Date, all payments received
by MPAN, MHG, and each Seller, respectively, on account of the accounts
receivable (including the accounts receivable underlying the Government Payment
Program Proceeds that Purchaser may not, by law, collect directly) and all
other payments received by each of them, respectively, which are included in
the Acquired Assets, shall be held in trust for Purchaser and shall be paid to
Purchaser within 10 Business Days. For purposes of the Government Payment
Program Proceeds included in the Acquired Assets, MHG, MPAN and Sellers hereby
agree to act as agent for Purchaser for purposes of collecting the accounts
receivable underlying such proceeds, and shall collect such accounts receivable
diligently and in good faith and promptly pay such collected proceeds thereof
to Purchaser. At the Closing and, thereafter, on the last day of each month
during the 6 month period beginning on the Closing Date, MPAN, MHG, and each
Seller shall report to Purchaser the amounts of such payments held by each of
them, respectively, and the amounts held by MPAN, MHG, and each Seller shall be
paid by MPAN, MHG, and such Seller to Purchaser within 10 Business Days. After
such 6 month period, MPAN, MHG, and each Seller shall cooperate with Purchaser
to allocate and remit to Purchaser any accounts receivable and Government
Payment Program Proceeds collected by MPAN, MHG, and each Seller, and shall
continue to hold such payments in trust for Purchaser and remit such payments
so held periodically as received.
(b) Beginning on the Closing Date, all payments received
by Parent and Purchaser on account of, or which are included in, the Excluded
Assets shall be held in trust for Sellers and shall be paid to Sellers within
10 Business Days. At the Closing and, thereafter, on the last day of each month
during the 6 month period beginning on the Closing Date, Parent and Purchaser
shall report to MPAN, MHG, and Sellers the amounts of such payments held by
Parent and Purchaser, and the amounts held by them shall be paid by Parent and
Purchaser to Sellers within 10 Business Days. After such 6 month period, Parent
and Purchaser shall cooperate with Sellers to allocate and remit to Sellers all
payments received by Parent and Purchaser on account of, or which are included
within, the Excluded Assets, and shall continue to hold such payments in trust
for Sellers and remit them to the appropriate Seller periodically as received.
SECTION 3
CONDITIONS TO CLOSING
3.1 Conditions Precedent to Obligations of MPAN, MHG, Sellers,
Parent and Purchaser. The respective obligations of each Party to consummate
the transactions contemplated by this Agreement shall be subject to
satisfaction or waiver at or prior to the Closing Date of the following
conditions precedent:
(a) the Sellers' Approval Orders in the forms attached
at Schedule 3.1(a) hereto, or in such other forms as shall have been agreed
upon by all Parties in writing in their reasonable discretion, shall have each
been entered by the Mariner Bankruptcy Courts and shall have each become a
Final Order in accordance with this Agreement;
(b) the waiting period, if any, under the HSR Act shall
have expired, and no condition or requirement unacceptable to any Party, in its
reasonable opinion, shall be imposed
18
on or required of any Party or any of its Affiliates as a result of or as a
condition to the foregoing;
(c) no action, suit, or proceeding (including any
proceeding over which the Bankruptcy Court has jurisdiction under 28 U.S.C. ss.
157(b) and (c)) shall be pending by any Governmental Authority to enjoin,
restrain, prohibit, or obtain substantial damages or significant equitable
relief in respect of or related to the transactions contemplated by this
Agreement, or that would be reasonably likely to prevent or make illegal the
consummation of the transactions contemplated by this Agreement or that, if
adversely determined, would constitute a Material Adverse Effect with respect
to the Acquired Business; and
(d) there shall not be in effect any Law of any
Governmental Authority of competent jurisdiction restraining, enjoining, or
otherwise preventing consummation of the transactions contemplated by this
Agreement.
3.2 Conditions Precedent to Obligations of MPAN, MHG, and
Sellers. The obligation of MPAN, MHG, and Sellers to consummate the
transactions contemplated by this Agreement shall be subject to the
satisfaction or waiver of the following conditions precedent at or prior to the
Closing Date (or, with respect to Section 3.2(c) below, as of the date
expressly provided therein):
(a) the representations and warranties of Parent and
Purchaser contained in this Agreement shall be true and correct in all material
respects as of the Closing Date as if made on such date, and at the Closing
Parent and Purchaser shall have delivered to MPAN, MHG, and Sellers a
certificate to such effect signed by a duly authorized officer of each of
Parent and Purchaser;
(b) Parent and Purchaser shall have performed in all
material respects their respective obligations under this Agreement required to
be performed by them on or prior to the Closing Date, including payment of the
Closing Payment, and at the Closing Parent and Purchaser shall have delivered
to MPAN, MHG, and Sellers a certificate to such effect signed by a duly
authorized officer of each of Parent and Purchaser; and
(c) Prior to or contemporaneously with the entry of the
Sellers' Approval Orders, the written consent to the transfer of the Acquired
Assets free and clear of Liens of the MPAN Bank Group and the MHG Bank Group
shall have been obtained from the MPAN Bank Group and the MHG Bank Group.
3.3 Conditions Precedent to the Obligations of Parent and
Purchaser. The obligation of Parent and Purchaser to consummate the
transactions contemplated by this Agreement shall be subject to the
satisfaction or waiver of the following conditions precedent at or prior to the
Closing Date (or, with respect to Section 3.3(h) below, as of the date
expressly provided therein):
(a) the representations and warranties of MPAN, MHG, and
Sellers contained in this Agreement shall be true and correct in all material
respects as of the Closing Date as if made on such date, and at the Closing
MPAN, MHG, and each Seller shall have delivered to
19
Parent and Purchaser a certificate to such effect signed by a duly authorized
officer of MPAN, MHG, and each Seller;
(b) MPAN, MHG, and each Seller shall have performed in
all material respects their respective obligations under this Agreement
required to be performed by them at or prior to the Closing Date, and at the
Closing MPAN, MHG, and Sellers shall have delivered to Parent and Purchaser a
certificate to such effect signed by a duly authorized officer of MPAN, MHG,
and each Seller;
(c) Purchaser, at its sole cost and expense, shall have
obtained an owner's title insurance policy commitment issued by a national
title insurance company containing standard endorsements reasonably acceptable
to Purchaser insuring the Owned Real Property, subject only to those matters
set forth on Schedule 3.3(c), in an amount reasonably acceptable to Purchaser,
naming Purchaser as the insured owner, and in addition, the Owned Real Property
must be delivered free and clear of all leases;
(d) since the signing date hereof, no Material Adverse
Effect with respect to the Acquired Business shall have occurred;
(e) all material third party consents and approvals
necessary for Purchaser's operation of the Acquired Business from and after the
Closing as set forth at Schedule 3.3(e) (the "Required Consents") shall have
been obtained in form and substance reasonably satisfactory to Parent and
Purchaser;
(f) intentionally omitted;
(g) MPAN, MHG, and each Seller shall have executed and
delivered to Purchaser the Non-Compete Agreements in the form attached at
Schedule 3.3(g);
(h) Prior to or contemporaneously with the entry of the
Sellers' Approval Orders, the written consent to the transfer of the Acquired
Assets free and clear of Liens of the MPAN Bank Group and the MHG Bank Group
shall have been obtained from the MPAN Bank Group and the MHG Bank Group;
(i) intentionally omitted; and
(j) MPAN, MHG, and each Seller shall cause the Selling
Affiliates to execute and deliver to Purchaser any other documents reasonably
requested by Purchaser so as to convey to Purchaser title, free and clear of
all Liens (other than Permitted Liens), to the Additional Assets.
SECTION 4
THE CLOSING
4.1 Closing. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of ▇▇▇▇ ▇▇▇▇▇
LLP, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ on (i)
a date as shall be agreed upon by all Parties in
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writing after all of the conditions to Closing set forth in Section 3 have been
met or waived, but not less than 14 days nor more than 50 days following the
conclusion of the hearing on MPAN's, MHG's and Sellers' motions to approve the
Sellers' Approval Order (the "Sale Hearing") or (ii) such other time, date, and
place as shall be agreed upon by all Parties in writing (the date of the
Closing being herein referred to as the "Closing Date"). The Closing shall be
effective as of 12:01 a.m. on the Closing Date.
4.2 Deliveries by MPAN, MHG, and Sellers at Closing. At the
Closing, MPAN, MHG, and Sellers, as the case may be, shall deliver to
Purchaser, or in the case of Sections 4.2(g) and (h) below, make available to
Purchaser:
(a) a ▇▇▇▇ of sale duly executed by each Seller and each
Selling Affiliate, in the applicable form attached at Schedule 4.2(a) hereto
(the "▇▇▇▇ of Sale"), with respect to the Acquired Assets and the Additional
Assets other than real estate to be conveyed by Sellers and the Selling
Affiliates at the Closing, and any other documents reasonably requested by
Purchaser so as to convey to Purchaser title, free and clear of all Liens
(other than Permitted Liens), to all of Sellers' and the Selling Affiliates'
right, title and interest in and to the Acquired Assets and the Additional
Assets (other than Owned Real Property) to be conveyed at Closing, each
executed by the applicable Seller and/or Selling Affiliate;
(b) a certificate, dated the Closing Date, of the
Secretary of MPAN, MHG, and each Seller as to the incumbency and signatures of
the officer(s) of each such entity executing this Agreement;
(c) copies of the resolutions duly adopted by the board
of directors of MPAN, MHG, and each Seller authorizing each such entity to
enter into and perform this Agreement, certified by proper officers of each
such entity as in full force and effect on and as of the Closing Date;
(d) good standing certificates for MPAN, MHG, and each
Seller (except Pinnacle Pharmaceutical Services, Inc.), dated no earlier than
30 days before the Closing Date, from their respective jurisdictions of
incorporation, and from each other jurisdiction in which each such entity is
qualified or registered to do business as a foreign corporation;
(e) a vesting deed in the form attached at Schedule
4.2(e) hereto with respect to the Owned Real Property;
(f) an assignment and assumption agreement duly executed
by each Seller and each Selling Affiliate assigning its interest in each
Designated Contract to which it is a party to Purchaser, in the applicable form
attached at Schedule 4.2(f) hereto (the "Assignment and Assumption Agreement"),
with respect to Sellers' and/or the applicable Selling Affiliates' assignment
to Purchaser, and Purchaser's assumption from Sellers and the applicable
Selling Affiliates, of each Seller's and each Selling Affiliate's right, title,
and interest in and to the Designated Contracts and the respective performance
obligations relating thereto;
(g) keys, security codes, and pass cards to the Owned
Real Property and Leased Real Property, and every lock thereon in MPAN's, MHG's
and Sellers' possession;
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(h) all of Sellers' books and records, accounting
systems, databases, customer files and related business records pertaining to
the Acquired Assets and the Acquired Business, the originals of all Designated
Contracts in Sellers' possession, the originals of all Licenses and warranties,
and copies of all maintenance records and operating manuals in Sellers'
possession pertaining to the personal property or any portion of the Owned Real
Property or Leased Real Property included in the Acquired Assets;
(i) a FIRPTA Non-Foreign Transferor Certificate in
accordance with Section 1445 of the Internal Revenue Code, and any similar
state required documents and MPAN and MHG shall cause each Selling Affiliate to
deliver such a certificate;
(j) Management Agreements and powers of attorney to the
extent required under Section 7.16 below;
(k) the Non-Compete Agreements, duly executed by MPAN,
MHG, and each Seller, in the form attached at Schedule 3.3(g) hereto;
(l) certificates pursuant to and in accordance with
Sections 3.3(a) and 3.3(b), dated the Closing Date, in form and substance
reasonably satisfactory to Parent and Purchaser; and
(m) all other documents, certificates, instruments, or
writings reasonably requested by Parent and Purchaser or their counsel in
connection herewith.
4.3 Deliveries by Parent and Purchaser at Closing. At the
Closing, Parent and Purchaser, as the case may be, shall deliver to Sellers:
(a) a certificate, dated the Closing Date, of the
Secretary of each of Parent and Purchaser as to the incumbency and signatures
of the officer(s) of Parent and Purchaser executing this Agreement;
(b) copies of the resolutions duly adopted by the board
of directors or member, as the case may be, of Parent and Purchaser authorizing
Parent and Purchaser to enter into and perform this Agreement, certified by
proper officers of each such entity as in full force and effect on and as of
the Closing Date;
(c) good standing certificates for Parent and Purchaser,
dated no earlier than 30 days before the Closing Date, from their respective
jurisdictions of incorporation or formation, as the case may be, and from each
other jurisdiction in which Purchaser will operate the Acquired Business on and
after the Closing Date;
(d) the Closing Payment in accordance with Section
2.2(a) by wire transfer of immediately available funds to an account or
accounts designated by Sellers;
(e) the Assignment and Assumption Agreement duly
executed by Purchaser;
(f) Management Agreements to the extent required under
Section 7.16 below;
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(g) certificates pursuant to and in accordance with
Sections 3.2(a) and 3.2(b), dated the Closing Date, in form and substance
reasonably satisfactory to MPAN, MHG, and Sellers; and
(h) all other documents, instruments, or certificates
required to be delivered in connection with Parent's and Purchaser's
obligations under this Agreement, or as MPAN, MHG, or Sellers or their counsel
may reasonably request.
4.4 Delivery of Acquired Assets. At the Closing, Sellers shall
deliver to Purchaser possession of the Acquired Assets, provided, that
Purchaser, MPAN, MHG and Sellers agree to use their commercially reasonable
efforts to coordinate such delivery in a mutually agreeable manner in order to
minimize, to the greatest extent possible, any Taxes.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF MPAN, MHG, AND SELLERS
MPAN and the MPAN Sellers jointly and severally with respect
to MPAN and the MPAN Sellers, and MHG and the MHG Sellers jointly and severally
with respect to MHG and the MHG Sellers, make the following representations and
warranties to Parent and Purchaser:
5.1 Organization, Standing and Authority. Each of MPAN, MHG, and,
except as set forth in Schedule 5.1, each Seller is a corporation duly
organized, validly existing, and in good standing under the Laws of its
jurisdiction of incorporation. Subject to compliance with applicable provisions
of the Bankruptcy Code and orders of the Mariner Bankruptcy Courts, each of
MPAN, MHG, and each Seller has all requisite corporate power and authority to
own, lease, and operate its properties, and to carry on its business as it is
now being conducted. Subject to compliance with applicable provisions of the
Bankruptcy Code and the entry by the Mariner Bankruptcy Courts of the Sellers'
Approval Orders, the enforceability of which is not stayed (i) MPAN, MHG, and
each Seller has all requisite corporate power and authority to enter into the
transactions contemplated hereby, (ii) the execution, delivery, and performance
of this Agreement by MPAN, MHG, and each Seller and the consummation by each of
them of the transactions contemplated hereby have been duly authorized by all
requisite corporate actions, (iii) this Agreement has been duly and validly
executed and delivered by MPAN, MHG, and each Seller, and (iv) (assuming this
Agreement constitutes a valid and binding obligation of Parent and Purchaser)
this Agreement constitutes a valid and binding obligation of MPAN, MHG, and
each Seller enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium, and
other Laws affecting creditors' rights generally from time to time in effect.
Each Seller is duly qualified as a foreign corporation to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities make such
qualification necessary, except where the failure to be so qualified would not
have a Material Adverse Effect on the Acquired Business.
5.2 Transfer of Acquired Assets. At the Closing, and subject to
entry of the Sellers' Approval Orders by the Mariner Bankruptcy Courts, the
enforceability of which are not stayed,
23
Sellers shall have the power and the right to sell, convey, transfer, assign,
and deliver to Purchaser the Acquired Assets, and on the Closing Date shall
sell, convey, transfer, assign and deliver the Acquired Assets free and clear
of all Liens, claims, encumbrances and security interests, except for and
subject to the Assumed Liabilities and Permitted Liens. The Acquired Assets
constitute all assets, real, personal and mixed, tangible and intangible owned
by Sellers and used in the conduct of the Acquired Business, other than the
Excluded Assets, and the Additional Assets constitute all material assets,
real, personal and mixed, tangible and intangible used in the conduct of the
Acquired Business which are not owned by a Seller. The Acquired Assets and the
Additional Assets include (i) all material assets necessary to operate the
Acquired Business as it is operated currently, other than the Excluded Assets
and (ii) substantially all of the assets, other than the Excluded Assets,
identified in the March Financial Statements.
5.3 Real Property.
(a) Schedule 5.3(a) hereto sets forth a true and
complete list of the Owned Real Property. At the Closing, and subject to the
entry of Sellers' Approval Orders by the Mariner Bankruptcy Courts, Sellers
shall have the power and the right to sell, convey, transfer, assign, and
deliver to Purchaser the Owned Real Property free and clear of all Liens other
than Liens set forth on Schedule 5.3(a), and shall convey to Purchaser
insurable title to the Owned Real Property. There is no condemnation or
casualty with respect to any such Owned Real Property.
(b) No Seller has received written notice of any pending
or threatened proceedings which, if adversely decided, could have a Material
Adverse Effect with respect to the current zoning or use of the Owned Real
Property by Purchaser in the Acquired Business after the Closing. The Owned
Real Property is presently zoned for its current uses, and the improvements
thereon comply with the particular zoning classification and zoning
requirements. There are no offsite parking facilities used in connection with
the operation of the Owned Real Property.
(c) The Seller identified on Schedule 5.3(a) is the sole
occupant of the Owned Real Property. No Person has any right or option to
acquire the Owned Real Property or any portion thereof or lease or occupy any
space in the Owned Real Property, except as specified in Schedule 5.3(c)
hereto.
(d) There are no real property interests (whether fee or
leasehold interests), buildings, structures or other improvements that are used
by Sellers to conduct the Acquired Business that are not included in the Owned
Real Property or Real Property Leases, other than leases that have been
rejected prior to the date hereof or leases that are not Designated Contracts.
There is no location at which any of the Acquired Business is operating except
for the Owned Real Property and locations for which Sellers have in effect a
Real Property Lease.
5.4 Contracts.
(a) Schedule 5.4(a) hereto sets forth a complete and
accurate list of all Real Property Leases in effect as of the date hereof,
including all modifications, alterations, and amendments thereto. True and
complete copies or descriptions (as to oral contracts) of such Real
24
Property Leases have heretofore been delivered or made available by MPAN, MHG,
and Sellers to Parent and Purchaser. Except as specified in Schedule 5.4(a)
hereto and except as specifically provided in any such Real Property Lease as
modified, altered or amended, (i) the Sellers identified on Schedule 5.4(a) are
the sole occupants of their respective Leased Real Property, (ii) no Person has
any right or option to acquire the Leased Real Property or any portion thereof,
(iii) no Person has the right to lease or occupy any space in the Leased Real
Property, (iv) no tenant has the right to cancel or terminate its lease, and
(v) to the knowledge of Sellers, no material default by any landlord has
occurred and is continuing under any of the Real Property Leases. Except for
such Real Property Leases that have expired pursuant to their terms, and
subject to the entry of the Sellers' Approval Orders by the Mariner Bankruptcy
Courts, upon Sellers' assignment of such Real Property Leases to Purchaser at
the Closing and the payment by Sellers of the applicable Cure Costs, each such
assumed Real Property Lease will be a valid and binding obligation of Purchaser
and, to the knowledge of Sellers, the other parties thereto, in full force and
effect against Purchaser and, to the knowledge of Sellers, such other parties
in accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization, or
similar Laws of general application relating to or affecting creditor's rights.
Upon entry of the Sellers' Approval Orders, none of such Real Property Leases
included in the Designated Contracts will require the consent of any party to
its assignment in connection with the transactions contemplated hereby. To the
knowledge of Sellers, no property subject to the Real Property Leases has
suffered a casualty loss and no condemnation proceedings in respect of any such
property is pending or has been threatened in writing.
(b) To Sellers' knowledge (i) Schedule 5.4(b)(i) hereto
sets forth a list which is complete and accurate in all material respects of
all Independent Facility Contracts in effect as of the date hereof (which
Schedule shall be revised to identify (1) the name or the title of the
Contract, (2) the date of the Contract, (3) the names of the parties to the
Contract, and (4) modifications, alterations and amendments to such Contract),
and (ii) Schedule 5.4(b)(ii) hereto sets forth a list which is complete and
accurate in all material respects of all Independent Facilities with which
Sellers have understandings or arrangements (other than Independent Facility
Contracts) as of the date hereof (which Schedule includes a list of the
Independent Facilities that have provided Revenues to Sellers within the 12
month period immediately prior to the date hereof for Services provided by
Sellers, the Services provided thereto, and the Revenues for such 12 month
period). No later than 15 days prior to the Closing, Sellers shall provide to
Purchaser in writing an updated Schedule 5.4(b)(ii) which shall be complete and
accurate in all material respects as of the Closing Date and which Schedule
shall include a list of the Independent Facilities that have provided Revenues
to Sellers within the 12 month period immediately prior to the Closing Date for
Services provided by Sellers, the Services (identified by the respective
Line(s) of Business) provided thereto, and the Revenues for such 12 month
period. True and correct copies or descriptions (as to oral contracts) of such
Independent Facility Contracts and Independent Facility Arrangements have been
delivered or made available to Parent and Purchaser. Except for such
Independent Facility Contracts that have expired pursuant to their terms, and
subject to the entry of the Sellers' Approval Orders by the Mariner Bankruptcy
Courts, upon Sellers' assignment of such Independent Facility Contracts to
Purchaser at the Closing and the payment by Sellers of the applicable Cure
Costs, each such Independent Facility Contract will be a valid and binding
obligation of Purchaser and, to the knowledge of Sellers, the
25
other parties thereto, in full force and effect against Purchaser and, to the
knowledge of Sellers, such other parties in accordance with its terms, except
as the same may be limited by applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization, or similar Laws of general application
relating to or affecting creditor's rights. Upon entry of the Sellers' Approval
Orders, none of such Independent Facility Contracts included in the Designated
Contracts will require the consent of any party to its assignment in connection
with the transactions contemplated hereby.
(c) To Sellers' knowledge, Schedule 5.4(c) hereto sets
forth a list which is complete and accurate in all material respects of all
Contracts pursuant to which any Seller provides Services to Facilities which
are not Independent Facilities and to patients resident in such Facilities
("Services Contracts") and in effect as of the date hereof. Each of the
Services Contracts listed on Schedule 5.4(c) hereto is (i) subject to the Order
Authorizing Certain Debtors To Enter Into Master Amendment To Various Pharmacy
Services Agreements with Debtors American Pharmaceutical Services, Inc. and
Affiliates of the Mariner Bankruptcy Courts, (ii) in effect as of the date
hereof pursuant to terms of such Master Amendments, effective as of January 1,
2001 and (iii) is in the form of the forms of Contract attached as Annex A to
Schedule 5.4(c) depending on the nature of the Services provided pursuant
thereto as indicated in the column "Segments Served" on Schedule 5.4(c). True
and complete copies or descriptions (as to oral contracts) of such Services
Contracts have been delivered or made available to Parent and Purchaser. Except
for such Services Contracts that have expired pursuant to their terms, and
subject to the entry of the Sellers' Approval Orders by the Mariner Bankruptcy
Courts, upon Sellers' assignment of such Services Contracts to Purchaser at the
Closing and the payment of the applicable Cure Costs, each such Services
Contract will be a valid and binding obligation of Purchaser and, to the
knowledge of Sellers, the other parties thereto, in full force and effect
against Purchaser and, to the knowledge of Sellers, such other parties in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization, or
similar Laws of general application relating to or affecting creditor's rights.
Upon entry of the Sellers' Approval Orders, none of such Services Contracts
included in the Designated Contracts will require the consent of any party to
its assignment in connection with the transactions contemplated hereby.
(d) To Sellers' knowledge, Schedule 5.4(d) hereto sets
forth a list which is complete and accurate in all material respects of all
Contracts in effect as of the date hereof other than the Real Property Leases,
Independent Facility Contracts and the Services Contracts identified in
Schedules 5.4(a), (b), and (c); provided, however, that it is hereby
acknowledged and agreed by all Parties that the Contracts listed at Schedule
5.4(d) do not include any vendor Contract (i) that is not material to the
Acquired Business, and (ii) with respect to which vendor Contract (a) payments
from a Seller or Sellers during the 12-month period prior to the date of this
Agreement do not exceed $50,000 in amount, or (b) any party thereto may cancel
or terminate such Contract at will or on notice of 30 days or less. For
purposes of this Section 5.4(d), a vendor Contract material to the Acquired
Business is a vendor Contract which involves payments of greater than $250,000.
True and complete copies or descriptions (as to oral contracts) of the
Contracts listed at Schedule 5.4(d) hereto have been delivered or made
available to Parent and Purchaser. Except for such Contracts that have expired
pursuant to their terms, and subject to the entry of the Sellers' Approval
Orders by the Mariner Bankruptcy Courts, upon
26
Sellers' assignment of such Contracts included in the Designated Contracts to
Purchaser at the Closing and the payment by Sellers of the applicable Cure
Costs, each such Designated Contract will be a valid and binding obligation of
Purchaser and, to the knowledge of Sellers, the other parties thereto, in full
force and effect against Purchaser and, to the knowledge of Sellers, such other
parties in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization or similar Laws of general application relating to or affecting
creditor's rights. Upon entry of the Sellers' Approval Orders, none of such
Contracts included in the Designated Contracts will require the consent of any
party to its assignment in connection with the transactions contemplated
hereby.
5.5 Intellectual Property Rights. Schedule 5.5 hereto contains a
list of all patents, trade names, registered and unregistered copyrights,
trademarks, and service marks and applications for the foregoing owned or used
in the Acquired Business by Sellers. True and complete copies of all material
listed in Schedule 5.5 hereto have been delivered or made available to Parent
and Purchaser. No Seller has received any written notice of any material claims
or assertions made by others that any Seller has infringed any Intellectual
Property Rights of others.
5.6 Brokers. No Person other than ▇▇▇▇▇▇, Del Genio, ▇▇▇▇▇ & Co.
is entitled to any brokerage, financial advisory, finder's, or similar fee or
commission payable by MPAN, MHG, or Sellers in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
MPAN, MHG, or Sellers.
5.7 Employee Matters. Schedule 5.7 hereto sets forth a list which
is true and complete in all material respects of the current employees of
Sellers in respect of the Acquired Business ("Acquired Business Employees"),
their current respective positions or job classifications and their current
respective wage scales or salaries, as the case may be. Sellers are, in respect
of the Acquired Business, in compliance in all material respects with all
applicable Laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and are not engaged in any unfair
labor practice.
5.8 Financial Statements. Copies of the March Financial
Statements are attached at Schedule 5.8 hereto. The March Financial Statements
have been prepared in accordance with Sellers' Accounting Policies,
consistently applied, and fairly present, in all material respects, the
financial condition, results of operations and cash flows of Sellers for the
dates and periods set forth therein. The Pre-Closing Balance Sheet shall be
prepared in accordance with Seller's Accounting Policies, consistently applied,
and shall present, in all material respects, the financial position of Sellers
as of the Pre-Closing Balance Sheet Date.
5.9 Licenses, Compliance with Laws.
(a) The certificates, permits, licenses, registrations,
franchises, consents, approvals, orders, clearances, and authorizations issued
by any Governmental Authority (collectively "Licenses") to each Seller with
respect to its current operation of the Acquired Business and ownership of the
Acquired Assets are listed on Schedule 5.9(a) hereto, and all such Licenses
issued to Sellers are all the material Licenses necessary to own, lease,
conduct or operate the Acquired Business as presently conducted, and all such
Licenses are valid and in full
27
force and effect. Copies of all of Sellers' material Licenses have been
provided or made available to Parent and Purchaser. Except to the extent set
forth in Schedule 5.9(a), each Seller is in material compliance with its
obligations under the Licenses listed on Schedule 5.9(a), and, to Sellers'
knowledge, no event has occurred that allows, or after notice or lapse of time
would allow, revocation or termination of such Licenses. Except to the extent
set forth in Schedule 5.9(a), no Seller has knowledge of any facts or
circumstances that could reasonably be expected to result in the denial of the
issuance of a state pharmacy License or DEA registration (each such License or
registration referred to herein as a "Pharmacy License"). For purposes of the
preceding sentence only, a Seller shall be deemed to have knowledge of any
facts or circumstances that could reasonably be expected to result in the
denial of the issuance of a Pharmacy License to Purchaser only to the extent
such Seller has information from any member, representative or employee of a
Governmental Authority having authority to issue a Pharmacy License.
(b) Except as otherwise disclosed on Schedule 5.9(b), to
Sellers' knowledge, no Seller has violated or failed to comply in any material
respect with any Law (including the Medicare and Medicaid fraud and abuse
provisions of the Social Security Act and the Civil Monetary Penalty Law of the
Social Security Act, the applicable recordkeeping, inventory, and other
requirements and regulations of the FDA, the DEA, and state pharmacy boards in
jurisdictions in which any such Seller conducts business), or any judgment,
decree, or order of any court, applicable to its business or operations, except
for any such violations or failures to comply that, individually or in the
aggregate, would not constitute a Material Adverse Effect on the Acquired
Business from and after the Closing.
5.10 Institutional Pharmacy Business. Each Seller is duly licensed
to provide the Services and the other similar products and services which it
provides in the states listed in Schedule 5.10 hereto, and is also a provider
under the Medicare program and the Medicaid programs of such states except as
otherwise disclosed in Schedule 5.10.
5.11 Intentionally Omitted.
5.12 Environmental Matters.
(a) To Sellers' knowledge, (i) no Seller has caused or
permitted any Hazardous Substances to have been stored, used, generated,
manufactured, refined, treated, discharged, disposed of, deposited,
transported, handled, released, or otherwise present on any of the Owned Real
Property or Leased Real Property in material violation of any Environmental
Law, and (ii) no Hazardous Substances currently are stored, used, generated,
transported, handled, or otherwise present thereon, in material violation of
any Environmental Law and in excess of (A) any concentrations or quantities
that occur naturally thereon or that are present in construction materials,
office equipment, or other office furnishings used in the existing improvements
thereon, and (B) normal quantities of those Hazardous Substances customarily
used in the conduct of the business of supplying Services, general
administrative and executive office activities, and use and maintenance of
computer systems (e.g., copier fluids and cleaning supplies).
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(b) To Sellers' knowledge, (i) no Seller has received
any written notice that any part of the Owned Real Property or Leased Real
Property or the operations thereon, including with respect to off-site waste
disposal, is the subject of any proceeding or judgment relating to
environmental matters, and (ii) no part of the Owned Real Property, Leased Real
Property, or the operations thereon is the subject of any proceeding or
judgment relating to environmental matters. No Seller has received any written
notice from any Governmental Authority regarding a material violation of any
Environmental Law.
(c) To Sellers' knowledge, Sellers have made available
or delivered to Purchaser copies of any and all applications, correspondence
and studies, including any and all material environmental engineering studies,
any material tests or testing performed on, the Owned Real Property or Leased
Real Property in their possession and relating to the Owned Real Property. To
Sellers' knowledge, there is no sinkhole, coastal zone, flood plain, flood
hazard area or wetlands in or on the Owned Real Property, which would restrict
any use of the Owned Real Property as an office, warehouse, storage facility or
other facility used by, in or for the Acquired Business.
(d) To Sellers' knowledge, no information request has
been issued to any Seller pursuant to section 104 of the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
9601 et seq. or any other Environmental Laws with regard to the Owned Real
Property or Leased Real Property or any activities conducted thereon, including
off-site waste disposal.
(e) To Sellers' knowledge, and except as set forth at
Schedule 5.12(e) hereto, no underground storage tanks are or have been located
at the Owned Real Property.
5.13 Litigation. To Sellers' knowledge, and except as set forth at
Schedule 5.13 hereto, there are no judicial or administrative actions,
proceedings, or investigations pending or threatened against any Seller in
connection with any part of the Acquired Business other than the Mariner
Bankruptcy Cases, except for such judicial or administrative actions,
proceedings, or investigations pending or threatened against any Seller that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Acquired Business from and after the Closing. To Sellers' knowledge, and
except as set forth in Schedule 5.13 hereto, no Seller is subject to or in
default in any material respect with respect to any final judgment, writs,
injunctions, or decrees of any Governmental Authority, except for such
violations and defaults that, individually or in the aggregate, would not have
a Material Adverse Effect on the Acquired Business from and after the Closing.
5.14 Included Mariner Receivables. The Included Mariner
Receivables, if any, shall not be subject to recoupment and shall be
collectible by Purchaser in full within the period(s) of time specified by the
agreements giving rise to such accounts receivable (without any counterclaim or
rights of set off). There are no refunds, discounts, rights of set off,
assignments, or defenses affecting the Included Mariner Receivables.
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SECTION 6
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser, jointly and severally, make the
following representations and warranties to MPAN, MHG and Sellers:
6.1 Organization, Standing and Authority. Each of Parent and
Purchaser is a corporation duly organized, validly existing, and in good
standing under the Laws of its jurisdiction of incorporation. Each of Parent
and Purchaser has all requisite power and authority to own, lease, and operate
its properties, and to carry on its business as it is now being conducted. Each
of Parent and Purchaser has all requisite power and authority to enter into the
transactions contemplated hereby. The execution, delivery, and performance of
this Agreement by each of Parent and Purchaser and the consummation by each of
Parent and Purchaser of the transactions contemplated hereby have been duly
authorized by all requisite corporate actions. This Agreement has been duly and
validly executed and delivered by each of Parent and Purchaser, and (assuming
this Agreement constitutes a valid and binding obligation of MPAN, MHG and
Sellers) this Agreement constitutes a valid and binding obligation of each of
Parent and Purchaser enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium, and
other Laws affecting creditors' rights generally from time to time in effect.
Each of Parent and Purchaser is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the nature of its
activities make such qualification necessary, except where the failure to be so
qualified would not have a Material Adverse Effect on its business.
6.2 Transfer of Acquired Assets. At the Closing, Purchaser shall
have (i) the cash or cash equivalents unconditionally available from
depositories or other financing sources to purchase, accept, and assume from
Sellers the Acquired Assets and (ii) the corporate power, right, and authority
to fully and timely perform all duties, responsibilities, and obligations
required to be performed by it under this Agreement at, from, and after the
Closing.
6.3 Brokers. No Person is entitled to any brokerage, financial
advisory, finder's or similar fee or commission payable by either Parent or
Purchaser in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of either Parent or Purchaser.
SECTION 7
COVENANTS
7.1 The Mariner Bankruptcy Courts Approvals.
(a) If the Sellers' Approval Orders or any other orders
of the Mariner Bankruptcy Courts relating to this Agreement shall be appealed
by any Person (or a petition for certiorari or motion for rehearing,
reconsideration or reargument shall be filed with respect thereto), MPAN, MHG,
and Sellers agree to take all steps as may be commercially reasonable and
appropriate to defend against such appeal, petition, or motion, and Parent and
Purchaser each
30
agrees to cooperate in such efforts. Each Party hereto agrees to use its
commercially reasonable efforts to obtain an expedited resolution of such
appeal, provided that nothing herein shall preclude the Parties hereto from
consummating the transactions contemplated herein if the Sellers' Approval
Orders shall have been entered and not stayed and Purchaser has waived in
writing the requirement that the Sellers' Approval Orders be Final Orders.
(b) MPAN, MHG, and Sellers shall cooperate reasonably
with Parent and Purchaser and their representatives in connection with the
Sellers' Approval Orders. Such cooperation shall include consulting with Parent
and Purchaser at Parent's or Purchaser's reasonable request concerning the
status of such proceedings and providing Parent and Purchaser with copies of
requested pleadings, notices, proposed orders, and other documents relating to
such proceedings as soon as reasonably practicable in connection with any
submission thereof to the MPAN Bankruptcy Court, or the MHG Bankruptcy Court,
as the case may be.
7.2 Closing. The Parties shall use commercially reasonable
efforts to consummate the transactions contemplated under this Agreement on the
date that is the last day of the calendar month following the date on which the
conditions precedent to Closing have been satisfied or waived or such other
date as the Parties may agree in writing. In the event of any inconsistency
between the provisions of this Section 7.2 and those of Section 4.1(i) with
regard to the date of Closing, the provisions of Section 4.1(i) shall govern.
7.3 Conduct of Business by MPAN, MHG, and Sellers Pending the
Closing. From the date hereof until the Closing, no Seller in respect of the
Acquired Assets shall, other than in the ordinary course of business as
currently conducted under and/or in accordance with the Mariner Bankruptcy
Cases (i) enter into any material customer contract with respect to the
Acquired Business which would have a Material Adverse Effect on the Acquired
Business; (ii) sell, transfer, or otherwise dispose of any material tangible or
intangible asset included in the Acquired Assets; (iii) grant any increase in
the compensation or benefits of any employee who is employed primarily for the
conduct of the Acquired Business; (iv) commit or enter into any agreement to do
any of the foregoing, save, in all cases, with the prior written consent of
Purchaser, which such consent shall not be unreasonably withheld; or (v)
without consulting Purchaser, assign, modify, cancel, reject, fail to exercise
a right of renewal or extension under, or otherwise impair or permit to lapse
any Designated Contract.
7.4 Conduct of Business by Purchaser After the Closing. From and
after the Closing Date and until all Earnout Payments have been paid, and all
objections or issues related thereto have been finally resolved in accordance
with the provisions of Section 2.2(b) of this Agreement, Purchaser will use
commercially reasonable efforts to perform its material obligations under the
Independent Facility Contracts; provided, however, that the foregoing shall not
be construed to limit (i) the ability of Purchaser to terminate any Independent
Facility Contract or Independent Facility Arrangement, or permit any such
contract or arrangement to expire, in each instance in accordance with the
terms and conditions of such contract or arrangement, or (ii) the discretion or
right of Purchaser to make business decisions of any kind with regard to the
operation of the Acquired Business, including the decision to terminate or
otherwise cease operations of the Acquired Business in any location (regardless
of whether such location is subject to one or more Independent Facility
Contracts or Independent Facility Arrangements). Notwithstanding anything to
the contrary contained elsewhere in this Agreement, the sole and exclusive
remedy
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of the Sellers, MPAN or MHG with regard to a breach of this Section 7.4 by
Purchaser, shall be the remedy in respect of the payment of the Earnout
Payments contemplated by Section 2.2(b)(ii)(C) under circumstances where an
Independent Facility Contract has been terminated as a result of a breach of,
or default under, such contract by Purchaser. However, none of Sellers, MPAN or
MHG shall be entitled to any damages or other remedy of any kind as a
consequence of a breach of the provisions of this Section 7.4, unless the
conduct constituting a breach of this Section 7.4 likewise has resulted in the
termination of an Independent Facility Contract due to a breach of, or default
under, such contract by Purchaser. This Section 7.4 shall not restrict the
right of MPAN or MHG to pursue remedies for the breach of any contract between
Parent or Purchaser and any MPAN or MHG Facility or Affiliate thereof.
7.5 Access and Information. MPAN, MHG, and Sellers shall afford
to Parent and Purchaser and Parent's and Purchaser's financial advisors, legal
counsel, accountants, consultants, financing sources, and other authorized
representatives) reasonable access during normal business hours throughout the
period prior to the Closing Date to all books, records, properties, and
personnel of MPAN, MHG, and Sellers that pertain to the Acquired Assets and the
Acquired Business and, during such period, shall furnish as promptly as
practicable to Parent and Purchaser any and all such information as Parent and
Purchaser may reasonably request pertaining to the Acquired Assets and the
Acquired Business.
7.6 Notification.
(a) Each Party shall promptly notify the other of any
litigation, arbitration, or administrative proceeding pending or, to the
relevant Party's knowledge, threatened against such Party which challenges or,
if adversely determined, could reasonably be expected to have a Material
Adverse Effect on the Acquired Business or otherwise materially adversely
affect the transactions contemplated hereby.
(b) MPAN, MHG, and Sellers shall promptly provide
written notice to Parent and Purchaser of any material change in any of the
information contained in the representations or warranties made by MPAN, MHG,
or Sellers in Section 5 or any of the Schedules attached hereto and shall
promptly furnish any information that Parent or Purchaser may reasonably
request in relation to such change, provided that such notice shall not operate
to cure any breach of the representations and warranties made by MPAN, MHG, or
Sellers in Section 5 above or in any Exhibits or Schedules referred to herein.
7.7 Satisfaction of Conditions. Prior to Closing, each of the
Parties shall use commercially reasonable efforts with due diligence and in
good faith to promptly satisfy all the conditions precedent to Closing set
forth in Section 3 above in order to expedite the consummation of the
transactions contemplated hereby.
7.8 Filings. Promptly following the execution of this Agreement
Parent and Purchaser shall commence making, and shall diligently pursue
thereafter, all requisite filings, notifications, applications, and requests
for all Licenses and other third party consents and approvals necessary for the
consummation of the transactions contemplated under this Agreement and
Purchaser's ownership of the Acquired Assets and operation of the Acquired
Business from and after the Closing (including all requisite filings,
notifications, and applications
32
under the HSR Act and for participating as a provider in the Medicare,
Medicaid, and other relevant reimbursement programs). Parent and Purchaser
shall pay all costs, filing fees, and other expenses necessary to (i) make all
such filings, notifications, applications, and requests, and (ii) obtain all
such Licenses and other third party consents and approvals. Prior to, at, and
after Closing, MPAN, MHG, and Sellers shall cooperate with Parent and Purchaser
(including by providing all information reasonably requested by Parent and
Purchaser) with respect to (i) the transfer of any transferable Licenses to
Parent and Purchaser, (ii) Purchaser's applications for any Licenses not
transferable to Purchaser, and (iii) otherwise with respect to any License,
consent, and approval sought or required by Parent and Purchaser in connection
with the consummation of the transactions contemplated under this Agreement and
Purchaser's ownership of the Acquired Assets and operation of the Acquired
Business from and after the Closing; provided, however, that MPAN's, MHG's, and
Sellers' obligations under this Section 7.8 shall not include the expenditure
of out-of-pocket amounts or the waiver or modification of any of MPAN's, MHG's,
or any Seller's claims against any entity from which consent or authorization
may be sought or required for the transaction contemplated hereunder.
Notwithstanding any provision in this Agreement to the contrary, Sellers shall
have no obligation to transfer any Medicare, Medicaid, or other provider
numbers or any of Sellers' other rights under any provider or supplier
agreements with any Governmental Authority (other than their National Council
for Prescription Drug Programs ("NCPDP") provider numbers, or rights with
respect thereto, if requested by Purchaser), none of which are to be assigned
to Purchaser hereunder.
7.9 Employment Matters.
(a) Except for those employees disclosed in writing by
Purchaser prior to the execution and delivery of this Agreement and set forth
on Schedule 7.9(a) which shall be attached to this Agreement on or prior to the
Closing Date (the "Excluded Employees") (it being understood that employment
will not be offered to any such Excluded Employees by Purchaser), Purchaser
shall offer employment to all of the Acquired Business Employees on terms
provided by Purchaser and with each such offer being contingent on completion
of the Closing. Purchaser's obligation to employ such Acquired Business
Employees shall be subject to such employees' compliance with the standard
hiring practices of Purchaser. Each such employee who accepts such employment
as of the Closing shall be referred to herein as a "Transferred Employee."
MPAN, MHG, and Sellers shall not, directly or indirectly, from the date hereof
solicit or induce any Acquired Business Employee (other than the Excluded
Employees) to not accept or to terminate employment with Purchaser. Sellers
shall terminate all Transferred Employees as of the Closing Date and shall pay
to such Transferred Employees all unpaid compensation, as well as all earned
benefits to which they are entitled under Sellers' employment policies and
applicable Law. As of the Closing Date, Sellers shall have paid all
contributions which are due and required by the Benefit Plans and Sellers shall
otherwise be compliant in all material respects with the terms of the Benefit
Plans and with applicable Laws.
(b) Purchaser shall treat prior service with Sellers as
service with Purchaser for purposes of eligibility to participate under all
employee benefit plans covering Transferred Employees.
(c) As soon as is practical after the Closing, MPAN,
MHG, and Sellers shall (i) provide such employees an election to rollover their
vested interests to a defined contribution
33
retirement plan of Parent; and (ii) rollover the full amount of the vested
interests which the employees have elected to rollover, as soon as possible but
not later than 6 months after the Closing Date, to the accounts of such
employees under a defined contribution retirement plan of Parent. Parent and
Purchaser shall have no liability for any discontinuance, termination or other
charges that may be due to any investment option or management providers or to
any plan record keeping or other agents with respect to such termination and
rollover of such employees' interests from Sellers' retirement plan(s), as the
case may be, to a retirement plan of Parent.
(d) Sellers agree to continue to employ each Excluded
Employee for the period of time following Closing specified on Schedule 7.9(a)
(subject to each such Excluded Employee's consent), during which time Sellers
shall direct each such Excluded Employee, as his or her full-time employment
duty, to assist Purchaser in connection with the Acquired Business or otherwise
as Purchaser may reasonably direct. For the period of time following Closing
specified on Schedule 7.9(a), Purchaser shall reimburse Sellers for the salary
and out-of-pocket expenses authorized by Purchaser, and the Transition Support
Benefits (as specified in Schedule 7.9(a)) of each such Excluded Employee and
Sellers shall be responsible for all other employment-related costs of each
such Excluded Employee, including benefits and severance compensation (if any).
(e) The Parties acknowledge and agree that the
provisions of this Section 7.9 are designed, in part, to ensure that MPAN, MHG
and Sellers are not required to give notice to employees of the "closure" of
the Acquired Business under the Worker Adjustment and Restraining Notification
Act (the "WARN Act") or any other comparable state law or to pay severance
obligations in connection with Transferred Employees. Accordingly, Purchaser
agrees to indemnify, defend and hold harmless MPAN, MHG and Sellers from any
liability which they may incur to Transferred Employees for severance pay or
under the WARN Act or any comparable state law, including a violation which
results from allegations that Purchaser constructively terminated the employees
of the Acquired Business as a result of the terms and conditions of employment
offered by Purchaser; provided, however, that nothing herein shall be construed
as imposing any obligations on Purchaser to indemnify, defend or hold harmless
MPAN, MHG or Sellers from any liability which they may incur for severance or
under the WARN Act as a result of their acts or omissions prior to Closing,
including any liability which may result from the aggregations of their acts
prior to Closing and the acts of Purchaser after Closing, it being understood
and agreed that Purchaser shall only be liable for its own acts and omissions
after Closing. Nothing in this Section 7.9(e) shall, however, create any rights
in favor of any person not a party hereto, including employees of the Acquired
Business, or constitute an employment agreement or condition of employment for
any employee of the Acquired Business who is a Transferred Employee.
7.10 Additional Matters and Further Assurances.
(a) Subject to the terms and conditions of this
Agreement, each of the Parties agrees to use commercially reasonable efforts to
consummate the transactions contemplated by this Agreement. Without limiting
the generality of the foregoing, from and after the date hereof, MPAN, MHG, and
Sellers shall use commercially reasonable efforts to obtain all consents and
approvals to the assignment of the Designated Contracts to which any Seller is
a party which
34
may not be assigned to Purchaser under applicable provisions of the Bankruptcy
Code without the consent or approval of the other party thereto.
(b) In addition to the provisions of this Agreement,
from time to time after the Closing Date, the Parties will use commercially
reasonable efforts to execute and deliver such other instruments of conveyance,
transfer or assumption, as the case may be, and take such other actions as may
be reasonably requested to implement more effectively, the conveyance, transfer
and operation, as applicable, of the Acquired Assets and Acquired Business to
or by Purchaser. In connection with the foregoing, for a period not to exceed
120 days following the Closing Date, MPAN, MHG, and Sellers shall (i) to the
extent permitted by Sellers' PeopleSoft agreements, allow Parent and Purchaser
reasonable access, upon reasonable advance written notice and during normal
business hours, to data and information included within MPAN's, MHG's, and
Sellers' PeopleSoft system in order to provide for a smooth transition of the
appropriate data and information to Parent's and Purchaser's system in
connection with Purchaser's acquisition of the Acquired Business and (ii) to
the extent permitted by the MCI Agreements, allow Parent and Purchaser to use
the services provided under the MCI Agreements in connection with the Acquired
Business and reasonably cooperate with Parent and Purchaser with respect to the
segregation of the Acquired Business from (y) the MCI WorldCom Network Service
Agreement for Data Services dated December 14, 2000 between MPAN and MCI
Worldcom ("MCI"), and (z) the MCI WorldCom Network Service Agreement for Voice
Services dated December 14, 2000 between MPAN and MCI (collectively, the "MCI
Agreements"); provided, however, that in the event MPAN, MHG, or any Seller
incurs any costs, expenses, or liabilities solely for the benefit of Purchaser
with respect to the foregoing, Parent and Purchaser are the exclusive
beneficiaries of such costs, expenses and liabilities, Parent and Purchaser
shall timely reimburse MPAN, MHG, and said Seller upon request for the full
amount of all such costs, expenses, or liabilities.
(c) As an accommodation to Sellers following the
Closing, and at no cost to Sellers, Purchaser shall direct and permit the
relevant Transferred Employees to assist Sellers in connection with the closing
of their books with respect to the last full calendar month immediately
preceding the Closing. Sellers acknowledge and agree that the closing of their
books will be in accordance with their reasonable and customary past practices.
Sellers further acknowledge and agree that, in light of Purchaser's willingness
to accommodate Sellers' needs with regard to the closing of their books, none
of Purchaser, any of its Affiliates, or any of their respective directors,
officers, or employees (including the Transferred Employees) shall have any
Liability for any acts or omissions of the Transferred Employees in connection
with the services to be provided pursuant to this Section 7.10(c).
(d) The Parties shall cooperate and take such actions as
may be reasonably requested by the other in order to effect an orderly transfer
of the Acquired Business with a minimum of disruption to the operations and
employees of the businesses of the Parties.
7.11 Maintenance of Books and Records. Sellers and Purchaser shall
preserve in accordance with the applicable record keeping requirements and
regulations of the FDA, the DEA and state pharmacy boards in jurisdictions in
which any of the Sellers and the Purchaser conduct business (or, with respect
to any Seller, until such time as such Seller is liquidated) all records
possessed by such Party relating to the Acquired Business prior to and
continuing after
35
the Closing Date until the later of (i) the end of all applicable time periods
required by Law or (ii) the date upon which all Earnout Payments have been
paid, and all objections or issues related thereto have been finally resolved
in accordance with the provisions of Section 2.2(b) of this Agreement. After
the Closing Date, where there is a legitimate purpose and subject to compliance
with applicable Law, including patient confidentiality Laws, each Party shall
provide the other Party with access during regular business hours, upon prior
reasonable written request specifying the need therefor, to (y) the relevant
officers and employees of such Party and (z) the books of account and records
of such Party. In each case, such access shall be limited to matters relating
to the Acquired Business prior to and after the Closing Date and, if permitted
by applicable law, the Party and its representatives seeking access to such
books and records shall have the right to make copies thereof. The foregoing
right of access shall not be exercisable in such a manner as to interfere
unreasonably with the normal operations and business of the Party with
possession of the records, and with regard to such information constituting
trade secrets or confidential business information of such Party the provisions
of Section 7.12 shall apply. Such records may nevertheless be destroyed by a
Party if such Party sends the other Party written notice of its intent to
destroy records, specifying with reasonable particularity the contents of the
records to be destroyed. Such records may then be destroyed after the 30th day
following delivery of such notice unless the other Party objects to the
destruction, in which case the Party seeking to destroy the records shall
either agree to retain such records or to deliver such records to the objecting
Party. At no cost to Sellers, Purchaser shall reasonably cooperate with
Sellers, including providing access to books and records acquired from Sellers,
as needed in connection with Sellers' reconciliation and resolution of any and
all pre-Closing claims asserted by third-party claimants against Sellers in
connection with the Mariner Bankruptcy Cases or otherwise.
7.12 Confidentiality.
(a) All information relating to MPAN, MHG, and Sellers
and the Acquired Business and Acquired Assets obtained prior to the Closing by
Parent and Purchaser and their financial advisors, legal counsel, accountants,
consultants, financing sources, and other authorized representatives or
otherwise in connection with the transactions contemplated hereby shall be kept
confidential by Parent and Purchaser for a period of 3 years following the
Closing Date; 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 Parent or
Purchaser, but only from and after the date such information becomes so
available, (ii) any information obtained by Parent or Purchaser from a third
party which Parent or Purchaser has no reason to believe is violating any
obligation of confidentiality to MPAN, MHG, or any Seller, (iii) any
information not first given to Parent or Purchaser by MPAN, MHG, or any Seller,
or their agents, that was known to Parent or Purchaser as of the date of this
Agreement or developed independently by them after the date hereof, or (iv) any
information Parent or Purchaser is required by law to disclose; and provided,
further, that Parent and Purchaser shall have no obligation with respect to, or
be restricted in its use of, any such information after the Closing with
respect to the Acquired Business and the Acquired Assets. In the event no
Closing occurs and this Agreement shall have terminated or expired by its
terms, upon the request of MPAN, MHG, or any Seller, Parent and Purchaser shall
promptly return all such written information, and all copies thereof, to MPAN,
MHG, and Sellers, and destroy all summaries and analyses prepared by Parent and
Purchaser containing any such information and
36
provide to MPAN, MHG, and Sellers written certification of such destruction.
Notwithstanding the foregoing, this Section 7.12(a) shall not in any way limit
the disclosure of information by Parent or Purchaser to the extent reasonably
required in connection with the efforts to obtain entry of the Sellers'
Approval Orders' and any other orders related to the consummation of the
transactions contemplated by this Agreement. Until Parent and Purchaser are
selected as the successful offeror, without the written consent of MPAN, MHG,
and Sellers, Parent and Purchaser shall not initiate communications with any
customer and/or supplier to the Acquired Business principally in respect of the
Acquired Business. As soon as practicable, MPAN, MHG, Sellers, Parent and
Purchaser shall, in good faith, agree upon a reasonable plan for communication
with customers and suppliers, and shall promptly put such plan into operation.
(b) All information relating to Parent and Purchaser and
their respective business, finances, and operations obtained prior to the
Closing by MPAN, MHG, and Sellers and their financial advisors, legal counsel,
accountants, consultants, financing sources, and other authorized
representatives or otherwise in connection with the transactions contemplated
hereby shall be kept confidential by MPAN, MHG, and Sellers for a period of 3
years following the Closing Date; 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
MPAN, MHG, or any Seller, but only from and after the date such information
becomes so available, (ii) any information obtained by MPAN, MHG, or any Seller
from a third party which MPAN, MHG, or such Seller has no reason to believe is
violating any obligation of confidentiality to Parent or Purchaser, (iii) any
information not first given to MPAN, MHG, or any Seller by Parent or Purchaser,
or its agents, that was known to MPAN, MHG, or such Seller as of the date of
this Agreement or developed independently by them after the date hereof, or
(iv) any information MPAN, MHG, or any Seller is required by law to disclose.
In the event no Closing occurs and this Agreement shall have terminated or
expired by its terms, upon the request of Parent and Purchaser, MPAN, MHG, and
Sellers shall promptly return all such written information, and all copies
thereof, to Parent and Purchaser, and destroy all summaries and analyses
prepared by MPAN, MHG, and Sellers containing any such information and provide
to Parent and Purchaser written certification of such destruction.
Notwithstanding the foregoing, this Section 7.12(b) shall not in any way limit
the disclosure of information by MPAN, MHG, and Sellers to the extent
reasonably required in connection with the efforts to obtain entry of the
Sellers' Approval Orders and any other orders related to the consummation of
the transactions contemplated by this Agreement.
(c) The Parties agree to comply with applicable state
and federal laws and regulations relating to the security, protection and
privacy of individually identifiable health care information, including the
Health Insurance Portability and Accountability Act of 1996 and regulations
promulgated thereunder, as they may be amended from time to time.
7.13 Further Solicitations. Parent, Purchaser, MPAN, MHG, and
Sellers acknowledge that the officers and directors of MPAN, MHG, and Sellers
have fiduciary duties under applicable Law to realize the highest and best
offer for the assets and business of Sellers. Until the conclusion of the Sale
Hearing and entry of the Sellers' Approval Order, MPAN, MHG, and Sellers retain
the rights to entertain unsolicited competing offers, including the right to
(A) furnish information to, cooperate with, and facilitate offers from,
unsolicited competing bidders,
37
(B) negotiate definitive documents and purchase agreements on terms
substantially similar to those of this Agreement with unsolicited competitive
bidders, and (C) determine in their sole and absolute discretion which bid, if
any, to recommend to the Mariner Bankruptcy Courts for approval; provided,
however, that upon conclusion of the Sale Hearing and entry of the Sellers'
Approval Order authorizing the sale of the Acquired Assets and Acquired
Business to Purchaser, MPAN, MHG, and Sellers will not solicit, initiate,
entertain, knowingly encourage, or engage in any substantive discussions with
any other Person regarding the proposed sale of the Acquired Assets or the
Acquired Business other than with Parent and Purchaser.
7.14 Restriction on Use of Names. From and after the Closing,
Sellers shall retain the limited right to use the names of Sellers only in
connection with (i) the Mariner Bankruptcy Cases, (ii) the application for, and
approval of, new names under Sellers' Licenses with respect to the Excluded
Medicare Part B Business and Assets and the ownership and operation of the
Excluded Part B Business and Assets until the approval of new names under
Sellers' Licenses with respect thereto, and (iii) any necessary or appropriate
filings or submissions with any Governmental Authority, including Tax Returns
and corporate filings and reports. Sellers' limited right to use the names of
Sellers shall terminate no later than upon the later to occur of (y) the
completion of (i) and (ii) above, and (z) the date that is 180 days after the
Closing Date. Immediately upon the termination of Sellers' limited right to use
the names of Sellers pursuant to the preceding sentence, Sellers covenant and
agree to cease use of all of the names of Sellers and any variations thereof
(including all corporate names, fictitious names, product names and service
names) and to file proper amendments to each of the Sellers' articles or
certificates of incorporation changing each Seller's corporate name to a name
that is not similar to any of Sellers' corporate names, fictitious names or any
variations thereof. Sellers covenant and agree that upon Purchaser's request,
Sellers shall promptly sign all consents and other documents that may be
necessary to allow Purchaser to use any name used by any Seller at any time on
or before the Closing Date.
7.15 Option to Sublicense Compuaims Medicare Part B Billing
Software. At any time after the Closing, upon the written request of any Seller
and to the extent legally permissible, for a fee of $1.00 per annum, Purchaser
shall grant to such Seller a non-exclusive sublicense to use the Compuaims
Medicare Part B Billing Software. Upon exercise of the foregoing option,
Purchaser and such Seller shall negotiate in good faith to reach a mutually
acceptable form of sublicense agreement.
7.16 Management Agreements.
(a) If on or prior to Closing any Pharmacy License is
not obtained with respect to Purchaser's operation of the Acquired Business at
any particular location or within any particular jurisdiction (the "Unlicensed
Business Location"), then, in such event and assuming the satisfaction or
waiver of all other conditions to Closing pending receipt of the applicable
Pharmacy License(s) with respect to each Unlicensed Business Location each
applicable Seller and Purchaser shall enter into a management agreement in the
form attached at Schedule 7.16 hereto (the "Management Agreement") with respect
to such Unlicensed Business Location.
(b) MPAN, MHG and Sellers covenant and agree that they
will cure, correct and/or remove (and pay all direct expenses, including those
in the nature of fines and penalties,
38
associated with or related to such cure, correction or removal) all
deficiencies or impediments that must be corrected or removed as a condition to
the issuance of the Pharmacy Licenses required for Purchaser's operation of the
Acquired Business from and after the Closing to the extent that such
deficiencies or impediments (i) relate to a Seller's or Sellers' ownership or
operation of a pharmacy and (ii) are disclosed in writing by a member,
representative or employee of a Governmental Authority having authority to
issue a Pharmacy License (the impediments and deficiencies described above are
herein individually referred to as a "Deficiency" and collectively referred to
as "Deficiencies", and the expenses associated with the cure and/or correction
thereof are referred to herein as the "Deficiency Expenses"). MPAN, MHG and
Sellers additionally covenant and agree to promptly pay all Deficiency
Expenses, it being understood that MPAN's, MHG's and Sellers' payment
obligations hereunder (i) shall not enjoy the protection of the Threshold
contemplated by Section 9.6 hereof, (ii) shall be paid in cash when due
including promptly when required as a condition to the issuance of a License to
Purchaser, and (iii) Purchaser's remedies with respect to any failure of MPAN,
MHG and/or Sellers to satisfy their respective obligations under this Section
7.16(b) shall not be limited to the set off against the Earnout Payments
contemplated by Section 9.5 hereof.
7.17 Use of Service ▇▇▇▇. Parent and Purchaser shall have a period
of one year from and after the Closing to (i) dispose of all stationary and
marketing and other materials in their possession bearing the service ▇▇▇▇
depicted at Schedule 7.17 hereto (the "Service ▇▇▇▇"), (ii) remove such Service
▇▇▇▇ from all motor vehicles included in the Acquired Assets, and (iii) remove
such Service ▇▇▇▇ from all signage at locations at which Purchaser operates the
Acquired Business from and after the Closing. Purchaser shall not use the
Service ▇▇▇▇ in connection with the creation of any new materials. At the
expiration of the one year period mentioned above, Purchaser shall cease all
use of the Service ▇▇▇▇ or anything confusingly similar to the Service ▇▇▇▇.
SECTION 8
TERMINATION
8.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual written consent of all Parties;
(b) by either MPAN, MHG, and Sellers, collectively, or
by Parent and Purchaser, collectively (provided that any of the Parties seeking
termination is not then in material breach of any provision of this Agreement):
(i) if the Closing has not occurred on or prior
to the earlier of 50 days following the conclusion of the Sale Hearing unless
otherwise extended by the Parties in writing;
(ii) if a Governmental Authority shall have
issued an order, decree or ruling or taken any other action (which order,
decree or ruling the Parties hereto shall use their commercially reasonable
efforts to lift), in each case permanently restraining, enjoining or
39
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
non-appealable; or
(iii) if the Mariner Bankruptcy Courts approve a
higher and better offer prior to or at the conclusion of the Sale Hearing.
(c) by Parent and Purchaser (provided that Parent or
Purchaser is not then in material breach of any provision of this Agreement):
(i) if a material default or a material breach
shall be made by MHG, MPAN, or any Seller with respect to the performance of
any of their covenants or agreements contained herein, or if any of their
representations or warranties contained in this Agreement shall have been
inaccurate in any material respect as of the date of this Agreement, if such
material default, breach or inaccuracy has not been cured (if capable of being
cured) or waived within 30 days after written notice to MHG, MPAN, and Sellers
specifying, in reasonable detail, such claimed default, breach or inaccuracy
and demanding its cure or satisfaction and such default, breach or
misrepresentation would, if not cured, have a Material Adverse Effect on the
Acquired Business or would materially and adversely affect the Acquired Assets,
provided that if and to the extent that a misrepresentation consists of the
failure to provide information relative to certain facts, circumstances or
matters, the provision of the information in question shall not constitute cure
if the facts, circumstances or matters previously undisclosed, individually or
in the aggregate, would have a Material Adverse Effect on the Acquired Business
or would materially and adversely affect the Acquired Assets;
(ii) if any of the conditions set forth in
Section 3.1 shall have become incapable of fulfillment or cure and shall not
have been waived by Parent and Purchaser (provided Parent and Purchaser shall
have provided written notice to Sellers specifying, in reasonable detail, the
basis for the decision to terminate); or
(iii) if any of the conditions set forth in
Section 3.3 shall have become incapable of fulfillment or cure and shall not
have been waived by Parent and Purchaser (provided Parent and Purchaser shall
have provided written notice to Sellers specifying, in reasonable detail, the
basis for the decision to terminate).
(d) by MPAN, MHG, and Sellers, collectively (provided
that none of them is then in material breach of any provision of this
Agreement):
(i) if a material default or material breach
shall be made by Parent or Purchaser with respect to the performance of any of
their respective covenants or agreements contained herein or if any of their
respective representations or warranties contained in this Agreement shall have
been inaccurate in any material respect as of the date of this Agreement, if
such default, breach, or inaccuracy has not been cured (if capable of being
cured) or waived within 30 days after written notice to Parent or Purchaser (as
applicable) specifying in reasonable detail such claimed default, breach or
inaccuracy and demanding its cure or satisfaction and such default, breach or
misrepresentation would, if not cured, have a Material Adverse Effect on the
Sellers, provided that if and to the extent that a misrepresentation consists
of the failure to provide information relative to certain facts, circumstances
or matters, the provision of the
40
information in question shall not constitute cure if the facts, circumstances or
matters previously undisclosed, individually or in the aggregate, would have a
Material Adverse Effect on the Sellers;
(ii) if any of the conditions set forth in
Sections 3.1 shall have become incapable of fulfillment or cure and shall not
have been waived by MPAN, MHG, or any Seller (provided MPAN, MHG and Sellers
shall have provided written notice to Parent and Purchaser specifying, in
reasonable detail, the basis for the decision to terminate); or
(iii) if any of the conditions set forth in
Section 3.2 shall have become incapable of fulfillment or cure and shall not
have been waived by MPAN, MHG, or any Seller (provided MPAN, MHG and Sellers
shall have provided written notice to Parent and Purchaser specifying, in
reasonable detail, the basis for the decision to terminate).
8.2 Termination Payments.
(a) If this Agreement is terminated (i) by MPAN, MHG, or
Sellers other than as permitted in this Agreement, (ii) or by Parent and
Purchaser pursuant to Section 8.1(c)(i), then MPAN, MHG, and Sellers, jointly
and severally, shall forthwith pay Purchaser, in cash, an amount equal to
$1,700,000 as liquidated damages in addition to the return of the Bid Deposit
as provided for in Section 8.2(d), and the payment of such liquidated damages
shall constitute full discharge of any liability of MPAN, MHG, and Sellers
pursuant to this Agreement. The Parties acknowledge and agree that the damages
which Parent and Purchaser would suffer upon any such termination of this
Agreement as described in clauses (i) and (ii) above would be difficult to
calculate, and that the foregoing liquidated damages amount represents the
Parties' reasonable estimate of the actual damages that would be incurred by
Parent and Purchaser in the event of any such termination.
(b) If this Agreement is terminated (i) by Parent or
Purchaser other than as permitted in this Agreement, or (ii) by MPAN, MHG, and
Sellers, collectively, pursuant to Section 8.1(d)(i) then Sellers may pursue
all remedies available at law or in equity pursuant to this Agreement or
otherwise and Parent and Purchaser shall be liable for all damages arising from
such termination, including consequential and punitive damages, if awarded.
(c) If this Agreement is terminated pursuant to Section
8.1 for any reason other than those specified in Sections 8.2(a), and (b)
above, no Party shall be entitled to any payment hereunder and each Party shall
bear its own costs and expenses.
(d) If this Agreement is terminated for any reason,
other than as a result of termination pursuant to Section 8.1(d)(i), MHG, MPAN,
and Sellers shall return, or cause to be returned, to Parent and Purchaser the
Bid Deposit as promptly as practicable.
8.3 Procedure and Effect of Termination.
(a) If this Agreement is terminated by MHG, MPAN,
Sellers, or by Parent and Purchaser, under Section 8.1, written notice thereof
shall forthwith be given by the terminating Parties to the other Parties to
this Agreement and this Agreement shall terminate
41
(subject to the provisions of Section 8.2 and this Section 8.3) and the
transactions contemplated hereby shall be abandoned without further action by
any of the Parties hereto.
(b) If this Agreement is terminated as provided herein,
then the Parties shall be released from future performance and no Party hereto
shall have any liability or further obligation to any other Party resulting
from such termination under this Agreement or otherwise except (x) for the
pursuit of remedies by Sellers, liabilities with respect thereto of Buyer, if
any, and the enforcement of the obligation to pay damages pursuant to this
Section 8; and (y) such obligations arising under Sections 7.12, 9 and 10 which
shall survive such termination.
SECTION 9
INDEMNIFICATION
9.1 MPAN's, MHG's, and Sellers' Obligation to Indemnify. MPAN and
the MPAN Sellers jointly and severally with respect to MPAN and the MPAN
Sellers, and MHG and the MHG Sellers jointly and severally with respect to MHG
and the MHG Sellers, shall indemnify, defend, and hold harmless Parent and
Purchaser (and their successors, assigns, directors, officers, and Affiliates)
(the "Purchaser Indemnitees") from and against any and all actions, suits,
claims, demands, Liabilities, losses, damages, costs and expenses including
reasonable attorneys' fees and court costs (collectively, "Losses") arising out
of or caused by, directly or indirectly, any or all of the following:
(a) Any misrepresentation, breach or failure of any
warranty, representation, or certification made by MHG or any MHG Seller in
this Agreement or pursuant hereto;
(b) Any misrepresentation, breach or failure of any
warranty, representation, or certification made by MPAN or any MPAN Seller in
this Agreement or pursuant hereto;
(c) Any Liability of MHG or any MHG Seller in connection
with the Excluded Liabilities;
(d) Any Liability of MPAN or any MPAN Seller in
connection with the Excluded Liabilities;
(e) Any failure or refusal by any of MHG, any MHG Seller
or any Selling Affiliate of MHG to satisfy or perform any term, covenant or
condition of this Agreement to be satisfied or performed by one or more of
them;
(f) Any failure or refusal by any of MPAN, any MPAN
Seller or any Selling Affiliate of MPAN to satisfy or perform any term,
covenant or condition of this Agreement to be satisfied or performed by one or
more of them; and
(g) Any defense, right of set off or right of recoupment
of a Governmental Authority with respect to the Government Payment Program
Proceeds included in the Acquired Assets (or with respect to the accounts
receivable that underlie such Government Payment Program Proceeds) as a
consequence of any act or omission of the Sellers.
42
9.2 Parent's and Purchaser's Obligation to Indemnify. Parent and
Purchaser shall, jointly and severally, indemnify and hold harmless MPAN, MHG,
and Sellers (and their successors, assigns, directors, officers, and
Affiliates) (the "Sellers' Indemnitees") from and against any and all Losses
arising out of or caused by, directly or indirectly, any or all of the
following:
(a) Any misrepresentation, breach, or failure of any
warranty, representation, or certification made by Parent or Purchaser in this
Agreement or pursuant hereto;
(b) Any Liability in connection with the Assumed
Liabilities; and
(c) Any failure or refusal by Parent or Purchaser to
satisfy or perform any term, covenant, or condition of this Agreement to be
satisfied or performed by Parent or Purchaser.
9.3 Notice to Indemnifying Party. If any Party (the "Indemnitee")
receives notice of any claim, occurrence or matter ("Indemnification Matter")
with respect to which any other Party (or Parties) is obligated to provide
indemnification (collectively, the "Indemnifying Party") pursuant to Section
9.1 or Section 9.2, the Indemnitee shall promptly give written notice thereof
(the "Indemnification Notice") to the Indemnifying Party (including supporting
documentation, if any). Such notice shall be a condition precedent to any
Liability of the Indemnifying Party under the provisions for indemnification
contained in this Agreement. Except as provided below, the Indemnifying Party
may compromise, settle or defend, at such Indemnifying Party's own expense and
by such Indemnifying Party's own counsel, any such matter involving the
asserted Liability of the Indemnitee. In any event, the Indemnitee, the
Indemnifying Party and the Indemnifying Party's counsel, as the case may be,
shall cooperate in the compromise of, settlement or defense against, any such
asserted Liability. The Indemnifying Party shall defend and control the defense
of any asserted Liability. The Indemnitee may participate, at its own cost, in
the compromise, settlement or defense of any such asserted Liability with
counsel of its own choosing. Moreover, if the Indemnifying Party fails to
assume the defense of any such matter, the Indemnitee may defend (and control
the defense of) such matter with counsel of its own choosing at the sole cost
and expense of the Indemnifying Party. In connection with the Indemnifying
Party's defense of any claim, the Indemnitee shall make available to the
Indemnifying Party any books, records or other documents within its control
that are necessary or appropriate for such defense.
9.4 Time Limitations. With respect to any Indemnification Matter
under this Section 9, the Indemnifying Party shall have no Liability unless the
Indemnitee gives an Indemnification Notice by the date which is the later of
(i) the date by which the last of the Earnout Payments is scheduled to be paid,
and (ii) the date that the last of any disputes regarding the Earnout Payments
has been finally resolved in accordance with the provisions of this Agreement.
Notwithstanding the preceding sentence, with respect to any Indemnification
Matter involving intentional misrepresentation or fraud or the failure of
Sellers to remit accounts receivable or Government Payment Program Proceeds
pursuant to Section 2.10 hereof, there shall be no such time limitation with
respect to the Indemnification Notice or the Indemnifying Party's obligations
to indemnify the Indemnitee.
43
9.5 Set off as Exclusive Remedy. Other than with respect to
Indemnification Matters involving intentional misrepresentation or fraud of
Sellers, the failure of Sellers to remit accounts receivable or Government
Payment Program Proceeds pursuant to Section 2.10 hereof, Sellers' cure and
correction of Deficiencies, or the payment of, the Deficiency Expenses pursuant
to Section 7.16(b) hereof, the sole source of recovery for Losses for which
Purchaser Indemnitees are entitled to indemnification hereunder shall be to set
off such Losses against any and all monies owed to Sellers by Purchaser in
respect of the unpaid Earnout Payments. Purchaser Indemnitees may set off all
such Losses against the unpaid Earnout Payments without regard to the portion
of such Losses for which any of MPAN, the MPAN Sellers, MHG or the MHG Sellers
is responsible; provided, however, that the total amount of such Losses which
Purchaser shall be entitled to set off against unpaid Earnout Payments shall in
no event exceed (i) $18,000,000 for claims made from and after the Closing Date
to the first anniversary of the Closing Date, (ii) $12,000,000 for claims made
from and after the first anniversary of the Closing Date to the second
anniversary of the Closing Date, and (iii) $6,000,000 for claims made from and
after the second anniversary of the Closing Date until the third anniversary of
the Closing Date. With respect to Losses arising out of (i) the intentional
misrepresentation or fraud of MPAN, MHG or Sellers, or (ii) the failure of
Sellers to remit accounts receivable or Government Payment Program Proceeds
pursuant to Section 2.10 hereof, in each such instance that are not set off
against Earnout Payments, the Purchaser Indemnitees acknowledge that they can
only recover Losses from MPAN and the MPAN Sellers, jointly and severally, and
MHG and the MHG Sellers, jointly and severally, as to their respective
obligations in respect of such Losses.
9.6 Threshold. Neither the Purchaser Indemnitees, on the one
hand, nor the Sellers' Indemnitees, on the other hand, shall be entitled to
indemnification under this Section 9 until the aggregate Losses incurred and/or
suffered by such Parties exceed $250,000 (the "Threshold"). At such time, if
any, as either the Purchaser Indemnitees, or the Sellers' Indemnitees, incur
and/or suffer aggregate Losses that exceed the Threshold, such Parties shall be
entitled to indemnification under this Section 9 for the aggregate Losses
incurred and/or suffered by them that exceed the amount of the Threshold.
Notwithstanding the foregoing, neither the Purchaser Indemnitees nor the
Sellers' Indemnitees shall enjoy the protections of the Threshold with respect
to Indemnification Matters involving (i) intentional misrepresentation or
fraud, (ii) the failure to remit accounts receivable or Government Payment
Program Proceeds pursuant to Section 2.10, (iii) Sellers' cure and correction
of Deficiencies, or (iv) the payment of, Deficiency Expenses pursuant to
Section 7.16(b) hereof.
9.7 Additional Limitation Regarding Waivers of Conditions. In the
event that, prior to the Closing, any Party (the "Notifying Party") notifies
any other Party (the "Notified Party") in writing of a breach of a
representation, warranty, covenant or obligation of such Notifying Party
including any notification provided by a Notifying Party, pursuant to Section
7.6, and the Notified Party consummates the Closing notwithstanding such
notification, the Notified Party shall not be entitled to pursue a claim under
this Section 9 for Losses that result from such breach and any such breach
shall be deemed to have been waived.
9.8 Remedies Exclusive. It is understood and agreed that the
remedies provided for by this Section 9 shall be exclusive and in lieu of any
other rights and remedies available to the
44
Parties hereunder, at law or in equity, to which a Party may be entitled.
Notwithstanding the exclusive nature of the remedies provided by this Section
9, in the event that a third party brings a claim or action of any kind against
one or more of the Purchaser Indemnitees in connection with one or more
Excluded Liabilities at any time hereafter, the Purchaser Indemnitees shall not
be prohibited from defending such claims or actions (i) on the basis that they
did not assume such Excluded Liabilities under this Agreement, and/or (ii) by
joining MPAN, MHG and the Sellers, or any thereof, as third party defendants
(and taking other actions consistent therewith) in light of the continued
responsibility of MPAN, MHG and the Sellers for such Excluded Liabilities. To
the extent a Purchaser Indemnitee is sued by a third party in a court (or
becomes subject to a proceeding of any kind), other than in the Bankruptcy
Court, the limitation set forth in Section 10.8 shall not prevent such
Purchaser Indemnitee from joining MPAN, MHG or any Seller as a third party
defendant or otherwise in such action; provided, however, that MPAN, MHG or any
Seller shall retain any and all defenses it may have to such claim, including
defenses based on any discharge obtained under the Bankruptcy Code.
SECTION 10
GENERAL PROVISIONS
10.1 Notices. All notices, claims, demands, and other
communications hereunder shall be in writing and shall be deemed given upon (a)
confirmation of receipt of a facsimile transmission, (b) confirmed delivery by
a standard overnight carrier or when delivered by hand, or (c) the expiration
of 5 Business Days after the day when mailed by registered or certified mail
(postage prepaid, return receipt requested), addressed to the respective
Parties at the following addresses (or such other address for a Party as shall
be specified by like notice):
(a) If to Parent or Purchaser, to
Omnicare, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
and
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
45
(b) If to MPAN, MHG or Sellers, to
Mariner Post-Acute Network
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
and Treasurer
and to:
Mariner Post-Acute Network
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.,
Executive Vice President and General Counsel
with a copy to
▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
Powell, Goldstein, ▇▇▇▇▇▇
& ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
46
10.2 Survival of Representations, Warranties, and Covenants. All
representations and warranties made by any Party in this Agreement and in any
instrument delivered pursuant to this Agreement shall survive the date of this
Agreement, the Closing Date and the consummation of the transactions
contemplated by this Agreement, subject to the provisions of Section 9;
provided, however, that the covenants contained in this Agreement and in any
instrument delivered pursuant to this Agreement shall survive the date of this
Agreement, the Closing Date and the consummation of the transactions
contemplated by this Agreement, in accordance with their terms.
10.3 No Implied Warranties; No Liability of Agents.
(a) Except for the specific representations and
warranties of each of the Parties in this Agreement, none of the Parties, and
none of their respective directors, officers, employees, Affiliates, agents,
advisors or representatives makes or shall be deemed to have made any
representation or warranty, either express or implied, to any Person who is not
a party to this Agreement.
(b) The directors, officers, employees, Affiliates,
agents, advisors or representatives of MPAN, MHG, and Sellers shall not have
any liability whatsoever to Parent or Purchaser or any of their directors,
officers, employees, Affiliates, agents, advisors or representatives in respect
of the specific representations and warranties of MPAN, MHG, and Sellers in
this Agreement.
(c) The directors, officers, employees, Affiliates,
controlling Persons, agents, advisors or representatives of Parent and
Purchaser shall not have any liability whatsoever to any of MPAN, MHG, or
Sellers or any of their respective directors, officers, employees, Affiliates,
controlling Persons, agents, advisors or representatives in respect of the
specific representations and warranties of Parent and Purchaser in this
Agreement.
10.4 Insurance Proceeds. From the date of signing of this
Agreement, in the event any of the Acquired Assets or Additional Assets are
damaged, destroyed or in any other way lost in circumstances giving rise to a
claim for the value thereof under a policy of insurance, any amounts so
recoverable shall, in the event the transactions contemplated hereby are
consummated, be paid to Purchaser and, if such sums are paid after the Closing
Date, MPAN, MHG, Sellers shall direct, and shall cause the Selling Affiliates
to direct, the relevant insurer to pay the amount directly to Purchaser. MPAN,
MHG, Sellers shall maintain, and shall cause the Selling Affiliates to
maintain, their real and personal property insurance policies in effect until
Closing.
10.5 Public Announcements. Subject to the requirements of
applicable Law, and the content of pleadings in the Mariner Bankruptcy Cases,
the timing and content of any press releases, public announcements, or other
public communications concerning this Agreement or the transactions
contemplated hereby shall be subject to the mutual agreement of MPAN, MHG,
Sellers, Parent and Purchaser.
47
10.6 Descriptive Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.7 Entire Agreement; Assignment. This Agreement (including the
Annexes, Schedules, Exhibits, and the other documents and instruments referred
to herein) (i) constitutes the entire agreement and supersedes all other prior
agreements and understandings, both written and oral, among the Parties or any
of them, with respect to the subject matter hereof, including any transaction
between or among the Parties hereto, and (ii) shall not be assigned by
operation of Law or otherwise without the prior written consent of all Parties
except that Parent and Purchaser may effect any such assignment to any of their
Affiliates, but any such assignment shall not relieve Parent and Purchaser of
any of their respective duties and obligations contained in this Agreement.
10.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware without regard
to the rules of conflict of Laws of the State of Delaware or any other
jurisdiction. Each of the Parties hereto irrevocably and unconditionally
consents to the determination by the MPAN Bankruptcy Court, without a jury
trial and in a contested matter as a "core proceeding" ( as such term is
defined in 28 U.S.C. Section 157 or any successor provision) of any and all
disputes concerning this Agreement, including disputes involving the validity,
interpretation, effect, or enforcement of this Agreement, and each of the
Parties hereto agrees that the MPAN Bankruptcy Court shall be the exclusive
forum to hear, determine, and enter appropriate orders and judgments regarding
all such disputes until the closing of the MPAN Bankruptcy Case, after which
any and all disputes arising out of or under this Agreement shall be submitted
to the MHG Bankruptcy Court, to the extent that the MHG Bankruptcy Case has not
been closed, after which any and all disputes arising out of or under this
Agreement shall be submitted to and determined by arbitration (in accordance
with this Section as set forth below) for any litigation arising out of or
relating to this Agreement and the transactions contemplated thereby, waives
any objection to the laying of venue of any such litigation therein, and agrees
not to plead or claim that such litigation has been brought in an inconvenient
forum. In the event a dispute is submitted to arbitration in accordance with
the preceding sentence, Purchaser shall select one arbitrator, Sellers shall
collectively select one arbitrator and the two selected arbitrators shall
together select a third arbitrator who is neutral and unbiased, and who shall
serve as the chairman of the panel. If the two arbitrators selected by
Purchaser and Sellers are unable to agree upon the third arbitrator, or if (i)
Purchaser is unable to or fails to select an arbitrator in accordance with this
Section, or (ii) Sellers are unable to or fail to select an arbitrator in
accordance with this Section, then the American Arbitration Association ("AAA")
shall be designated by the parties to the dispute to appoint such arbitrator(s)
to arbitrate the matter in accordance with this Section. The matter shall be
arbitrated under the rules of the AAA applicable to commercial arbitrations
then in effect, such arbitration to be held in Wilmington, Delaware. At any
time before a decision of the arbitration panel has been rendered, the parties
to the dispute may resolve the dispute by settlement. Each Party shall bear the
fees and expenses of its own counsel, witnesses and the arbitrator selected by
such Party. The decision of a majority of arbitrators shall be the award of the
panel of arbitrators and shall be made in writing setting forth the award, the
reasons for the decision and award and any dissenting opinion of the panel;
shall be binding, final and
48
conclusive on all Parties; shall not be appealable and shall include a finding
for payment of the costs of such arbitration. Judgment of a court of competent
jurisdiction may be entered upon the award and may be enforced as such in
accordance with the provisions of the award. This agreement to arbitrate is
specifically enforceable by the Parties to this Agreement.
10.9 Expenses. Except as expressly provided herein, whether or not
the transactions contemplated by this Agreement are consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated thereby shall be paid by the Party incurring such expenses. The
foregoing shall not affect the legal right, if any, that any Party hereto may
have to recover expenses from any other party that breaches its obligations
hereunder.
10.10 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the Parties hereto.
10.11 Waiver. At any time prior to the Closing Date, the Parties
hereto may (i) extend the time for the performance of any of the obligations or
other acts of the other Parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a Party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such Party.
10.12 Counterparts; Effectiveness. This Agreement may be executed
in two or more counterparts, each of which shall be deemed to be an original
but all of which shall constitute one and the same agreement. This Agreement
shall become effective when each Party hereto shall have received counterparts
thereof signed by the other Parties hereto.
10.13 Severability; Validity; Parties in Interest. If any provision
of this Agreement or the application thereof to any Person or circumstance is
held invalid or unenforceable, the remainder of this Agreement, and the
application of such provision to other Persons or circumstances, shall not be
affected thereby, and to such end, the provisions of this Agreement are agreed
to be severable. Nothing in this Agreement, express or implied, is intended to
confer upon any Person (other than a permitted assignee) not a party to this
Agreement any rights or remedies of any nature whatsoever under or by reason of
this Agreement.
10.14 Court Approval. The consummation of the transactions
contemplated by this Agreement is subject to the Sellers' Approval Orders
becoming a Final Order and the Closing thereof shall occur promptly following
the date (i) on which all conditions precedent to the Closing shall have been
satisfied or waived, and (ii) that is at least one Business Day after the later
of the Sellers' Approval Orders shall have entered on the docket of the
appropriate Bankruptcy Court for 10 days (as calculated in accordance with
Bankruptcy Rule 9006(a), so long as a court of competent jurisdiction has not
issued a stay order pending appeal of the Sellers' Approval Orders prior to the
Closing Date, in which case the Closing Date shall occur promptly following the
date that any such stay pending appeal order is dissolved, abrogated, or
otherwise rendered unenforceable by a court of competent jurisdiction (subject
to the terms hereof and the satisfaction or waiver of all conditions to
Closing). If the entry of the Sellers' Approval Orders is
49
denied by the Bankruptcy Court, this Agreement shall be of no force and effect,
at law or in equity.
10.15 Guaranty of Performance; Proportionate Liability. Parent
hereby ensures and guarantees the full and timely performance by Purchaser of
all of its duties, responsibilities and obligations under and pursuant to this
Agreement. MPAN hereby ensures and guarantees the full and timely performance
by the MPAN Sellers of all of their respective duties, responsibilities and
obligations under and pursuant to this Agreement. MHG hereby ensures and
guarantees the full and timely performance by the MHG Sellers of all of their
respective duties, responsibilities, and obligations under and pursuant to this
Agreement. Whenever, in or pursuant to this Agreement, MPAN, MHG, and Sellers
have any joint and several obligation to indemnify any other Party for any
Losses or to otherwise pay any costs, expenses, fees, Losses and the like, the
joint and several obligation of MPAN, MHG, and each Seller to indemnify any
other Party for any such Losses or to otherwise pay any such costs, expenses,
fees, Losses and the like, shall be in proportion to their respective rights
and interests in and to the Purchaser Price, or as the Mariner Bankruptcy
Courts may otherwise determine.
10.16 Representation by Counsel. The Parties acknowledge that they
have been represented by independent legal counsel of their own choosing
throughout all of the negotiations which preceded the execution and delivery of
this Agreement. This Agreement is a fully negotiated document. As a result, any
rule of construction providing for any ambiguity in the terms of the Agreement
to be construed against the draftsperson of this Agreement shall be
inapplicable to the interpretation of this Agreement.
10.17 Successors and Assigns. This Agreement shall be binding upon,
and shall inure to the benefit of, the Parties to this Agreement and their
respective legal representatives, successors and permitted assigns, including
any trustee appointed under chapters 11 or 7 of the Bankruptcy Code and any
responsible officer or examiner appointed for any of the Parties.
10.18 References to Knowledge. All references in this Agreement to
the "knowledge" of MPAN, MHG, and/or Sellers shall mean, with respect to a
specified matter or fact, the actual knowledge of one or more of ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ (the "Relevant Executive Officers") with
regard to such specified fact or matter.
10.19 Certain Terminations of Services Contracts.
(a) Notwithstanding any provision in any Services
Contract to the contrary, it is hereby understood and agreed by all Parties
that, in the event any Services Contract applicable to the Mariner Facilities
is terminated prior to the expiration of its then current term (a "Terminated
Services Contract") as a result of, or in connection with (i) a sale,
divestiture, or other disposition of the Mariner Facility which is party to
such contract to a third party which is neither a debtor nor revested debtor in
the Mariner Bankruptcy Cases nor the successor in interest under a confirmed
plan of reorganization to the assets of a debtor in the Mariner Bankruptcy
Cases, (ii) the rejection of the real property lease applicable to the Mariner
Facility which is party to such contract pursuant to the MHG Bankruptcy Cases
or the MPAN Bankruptcy Cases (as the case may be), or (iii) the closure or
cessation of the operation of the
50
Mariner Facility which is party to such contract (each Mariner Facility where
any such event referenced in (i), (ii) or (iii) above occurs, a "Terminated
Mariner Facility"), then, in any such event, except as specifically provided in
Section 10.19(b) below, none of MPAN, MHG, or any of their respective
Affiliates (including the Affiliate of MPAN or MHG which is the owner and/or
operator of the Mariner Facility in question), shall be deemed to be in breach
of, or default under, any such Terminated Services Contract by virtue of such
termination and shall therefore have no liability whatsoever to Parent,
Purchaser, or any of their respective Affiliates, successors, or assigns, as a
result of such termination of such Terminated Services Contract.
(b) Notwithstanding the provisions of Section 10.19(a)
above, in the event that as of the first day of each calendar month through
that date which is 30 months after the Closing Date (the "Calculation Period")
on which date there are less than 172 Mariner Facilities (the "Mariner
Facilities Threshold") which are party to Services Contracts covering the Line
of Business identified in clause (i) of Section 2.2(b)(i)(G) (each, an "Active
Mariner Facility") then MHG and MPAN, jointly and severally, shall promptly pay
Purchaser liquidated damages monthly in an amount equal to the product of (i)
$12,500 multiplied by (ii) the number by which the then-existing number of
Active Mariner Facilities is less than the Mariner Facilities Threshold;
provided, however, that the payment of such liquidated damages will continue
only for such period as would have remained on the Services Contract to which
each Terminated Mariner Facility was a party had such Services Contract not
become a Terminated Services Contract by virtue of Section 10.19(a) above. For
the purposes of calculating liquidated damages pursuant to the preceding
sentence, if the successor operator (if any) of a Terminated Mariner Facility
either: (x) assumes the Services Contract in effect at such Mariner Facility,
or (y) enters into a Contract with Purchaser or its Affiliate with a term of
one year or more (or a shorter period if less than one year remains on the
Terminated Services Contracts, provided that the term of the new Contract is
coterminous with that which remained on the Terminated Services Contract) for
the provision of some or all of the Services, then such Terminated Mariner
Facility shall continue to be deemed an Active Mariner Facility. MHG and MPAN
shall have no obligation to pay any liquidated damages pursuant to this Section
10.19(b) with respect to periods following the expiration of the Calculation
Period. In addition, the number of Active Mariner Facilities shall be increased
by each facility owned, managed or operated by an affiliate of Mariner which:
(1) (a) is not currently subject to a Services Contract, or (b) does not
currently receive the Services described in clause (i) of Section 2.2(b)(i)(G)
from Purchaser or any Affiliate of Purchaser, (2) enters into a Contract for
the provision of Services described in clause (i) of Section 2.2(b)(i)(G), and
which is coterminous with the Terminated Services Contract which such Contract
is intended to replace and (3) in such Contract or accompanying transmittal it
is specifically stated that such Contract is intended to be treated as an
Active Mariner Facility under this Agreement.
(c) So long as this Agreement has not been terminated
pursuant to Section 8.1, MPAN, MHG and the Sellers hereby agree to (i) suspend
and not to exercise their rights under Paragraph 4 of the "Order Authorizing
Certain Debtors To Enter Into Master Amendment To Various Pharmacy Service
Agreements With Debtor American Pharmaceutical Services, Inc. and Affiliates,"
entered in each of their respective Bankruptcy Cases, to terminate the Services
Contracts approved by such Order pursuant to confirmation of a plan or plans or
reorganization, and (ii) waive such right of termination pursuant to
confirmation of a plan or plans of reorganization effective upon Closing.
51
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed on their behalf by their officers thereunto duly authorized, as of the
date first above written.
MPAN, MHG AND SELLERS:
MARINER POST-ACUTE NETWORK, INC.
By:
----------------------------------------
Name:
Title:
MARINER HEALTH GROUP, INC.
By:
----------------------------------------
Name:
Title:
AMERICAN PHARMACEUTICAL SERVICES, INC.
By:
----------------------------------------
Name:
Title:
COMPASS PHARMACY SERVICES, INC.
By:
----------------------------------------
Name:
Title:
PINNACLE PHARMACEUTICAL SERVICES, INC.
By:
----------------------------------------
Name:
Title:
[SIGNATURES CONTINUE ON NEXT PAGE]
52
OCEAN PHARMACY, INC.
By:
----------------------------------------
Name:
Title:
COMPASS PHARMACY SERVICES OF MARYLAND, INC.
By:
----------------------------------------
Name:
Title:
AMERICAN MEDICAL INSURANCE BILLING
SERVICES, INC.
By:
----------------------------------------
Name:
Title:
APS PHARMACY MANAGEMENT, INC.
By:
----------------------------------------
Name:
Title:
COMPASS PHARMACY SERVICES OF TEXAS, INC.
By:
----------------------------------------
Name:
Title:
[SIGNATURES CONTINUE ON NEXT PAGE]
53
PARENT AND PURCHASER:
OMNICARE, INC.
By:
----------------------------------------
Name:
Title:
APS ACQUISITION LLC
By:
----------------------------------------
Name:
Title:
54
ANNEX A
Unless otherwise defined herein, terms used herein shall have the meanings set
forth below:
"AAA" shall have the meaning set forth in Section 10.8 hereof.
"Accrued Revenues" shall have the meaning set forth in Section
2.2(b)(i)B hereof.
"Acquired Assets" shall have the meaning set forth in Section 2.1(a)
hereof.
"Acquired Business" means the businesses of the Sellers and their
Affiliates with respect to the sale or provision of Services and other similar
or closely related products and services to Facilities and the general public.
"Acquired Business Employees" shall have the meaning set forth in
Section 5.7 hereof.
"Acquired Medicare Part B Business and Assets" shall have the meaning
set forth in Section 2.1(a) hereof.
"Active Mariner Facility" shall have the meaning set forth in Section
10.19(b) hereof.
"Affiliate" shall mean, with respect to a Person, another Person who
controls, is controlled by or is under common control with the Person in
question.
"Agreement" shall have the meaning set forth in the first paragraph
hereof.
"Assignment and Assumption Agreement" shall have the meaning set forth
in Section 4.2(f) hereof.
"Assumed Liabilities" shall have the meaning set forth in Section 2.6
hereof.
"Assumed Reserved Liabilities" shall have the meaning set forth in
Section 2.3(a)(iii) hereof.
"Austin Joint Venture" shall have the meaning set forth in Section
2.3(a)(ii) hereof.
"Average Monthly Revenues" shall have the meaning set forth in Section
2(b)(i)(A) hereof.
"Back-Up Offer" shall have the meaning set forth in Section 8.2(b)
hereof.
"Bankruptcy Code" means title 11 of the United States Code ▇▇.▇▇.
101-1330.
"Bankruptcy Court" shall have the meaning set forth in the Recitals
hereof.
"Benefit Plans" means each Pension Plan, each "employee welfare
benefit plan" (as defined in section 3(1) of ERISA) and each stock option or
other equity based, bonus, incentive or deferred compensation or severance plan
or arrangement maintained, contributed to or
required to be contributed to by MPAN, MHG, and Sellers, or any thereof, for
the benefit of any current or former employees of the Acquired Business or
their beneficiaries.
"Bid Deposit" means the deposit of $1,700,000 by Parent and Purchaser
pursuant to the bid procedures order.
"▇▇▇▇ of Sale" shall have the meaning set forth in Section 4.2(a)
hereof.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required
by Law to close.
"Calculation Period" shall have the meaning set forth in Section
10.19(b) hereof.
"Cash Purchase Price" shall have the meaning set forth in Section
2.3(e) hereof.
"Closing" shall have the meaning set forth in Section 4.1 hereof.
"Closing Balance Sheet" shall have the meaning set forth in Section
2.3(c)(i) hereof.
"Closing Date" shall have the meaning set forth in Section 4.1 hereof.
"Closing Inventory" shall have the meaning set forth in Section 2.3(b)
hereof.
"Closing Net Current Assets" shall have the meaning set forth in
Section 2.3(c)(ii) hereof.
"Closing Payment" shall have the meaning set forth in Section 2.2(a)
hereof.
"Closing Statement of Net Current Assets" shall have the meaning set
forth in Section 2.3(c)(ii) hereof.
"Closing Statements" shall have the meaning set forth in Section
2.3(d) hereof.
"Closing Statements Objection Notice" shall have the meaning set forth
in Section 2.3(d) hereof.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Contract" means any agreement, contract, commitment, or other binding
arrangement or understanding, whether written or oral. Any Contract that takes
the form of a lease, including any capitalized lease, shall be treated as a
Contract under this Agreement and not as an owned asset subject to Liens.
"Cure Costs" shall have the meaning set forth in Section 2.4(a)
hereof.
"Current Assets Holdback" shall have the meaning set forth in Section
2.3(a)(iv) hereof.
"Current Assets Reduction" shall have the meaning set forth in Section
2.3(c)(iii) hereof.
"DEA" means the Federal Drug Enforcement Agency.
"Deficiency" and "Deficiencies" shall have the respective meanings set
forth in Section 7.16(b)hereof.
"Deficiency Expenses" shall have the meaning set forth in Section
7.16(b) hereof.
"Designated Contracts" shall have the meaning set forth in Section
2.4(a) hereof.
"Dollars" or "$" means dollars of the United States of America.
"Earnout Audit" shall have the meaning set forth in Section
2.2(b)(ii)(F) hereof.
"Earnout Deficiency Amount" shall have the meaning set forth in
Section 2.2(b)(ii)(E) hereof.
"Earnout Payment Objection Notice" shall have the meaning set forth in
Section 2.2(b)(ii)(E) hereof.
"Earnout Payment Resolution Period" shall have the meaning set forth
in Section 2.2(b)(ii)(E) hereof.
"Earnout Payment Statement" shall have the meaning set forth in
Section 2.2(b)(ii)(D) hereof.
"Earnout Payments" shall have the meaning set forth in Section
2.2(b)(ii)(A) hereof.
"Environmental Laws" means all applicable Laws (including consent
decrees and administrative orders) relating to the public health and safety and
protection of the environment including those governing the use, generation,
handling, storage and disposal or cleanup of Hazardous Substances, all as
amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" shall have the meaning set forth in Section 2.1(b)
hereof.
"Excluded Employees" shall have the meaning set forth in Section
7.9(a) hereof.
"Excluded Leases" shall have the meaning set forth in Section 2.4(c)
hereof.
"Excluded Liabilities" shall have the meaning set forth in Section 2.6
hereof.
"Excluded Medicare Part B Business and Assets" shall have the meaning
set forth in Section 2.1(b)(vi) hereof.
"Extended Earnout Payout Objection Notice Date" shall have the meaning
set forth in Section 2.2(b)(ii)(E) hereof.
"Facility" and "Facilities" shall have the meanings set forth in
Section 2.2(b)(i)(C) hereof.
"Facility Persons" shall have the meaning set forth in Section
2.2(b)(i)(C)1 hereof.
"FDA" means the Food and Drug Administration.
"Final Current Assets Reduction" shall have the meaning set forth in
Section 2.3(e) hereof.
"Final Order" means an order or judgment of the Bankruptcy Court as to
which the time to appeal, petition for certiorari, or move for reargument or
rehearing has expired and as to which no appeal, petition for certiorari, or
other proceedings for reargument or rehearing shall then be pending, or, in the
event that an appeal, writ of certiorari, reargument, or rehearing thereof has
been sought, such order or judgment of the Bankruptcy Court shall have been
affirmed by the highest court to which such order or judgment of the Bankruptcy
Court was appealed, or from which reargument or rehearing was sought, or
certiorari has been denied, and the time to take any further appeal, petition
for certiorari, or move for reargument or rehearing shall have expired, but
shall not require the expiration of rights under Federal Rule of Bankruptcy
Procedure 9024.
"GAAP" means generally accepted accounting principles under current
United States accounting rules and regulations, consistently applied.
"Governmental Authority" means any federal, state, local or foreign
government or any subdivision, agency, instrumentality, authority, department,
commission, board or bureau thereof, provided, in each case, that the relevant
action in any given circumstance has the force of Law, or any federal, state,
local or foreign court, tribunal or arbitrator of competent jurisdiction
(including the Bankruptcy Court).
"Government Payment Program(s)" shall have the meaning set forth in
Section 2.1(b)(v).
"Government Payment Program Proceeds" means the proceeds of accounts
receivable from Government Payment Programs, and all right, title and interest
to payment of such proceeds.
"Hazardous Substances" means any substance, waste, contaminant,
pollutant or material that has been determined by any Governmental Body in,
under or pursuant to any Environmental Law to be capable of posing a risk of
injury or damage to health, safety, property or the environment including (a)
all substances, wastes, contaminants, pollutants and materials defined,
designated or regulated as hazardous, dangerous or toxic pursuant to any Law,
and (b) asbestos, polychlorinated biphenyls ("PCBs"), petroleum, petroleum
products and urea formaldehyde.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvements Act of
1976, as amended.
"Included Mariner Receivables" shall have the meaning set forth in
Section 2.3(a)(iv).
"Indemnification Matter" shall have the meaning set forth in Section
9.3 hereof.
"Indemnification Notice" shall have the meaning set forth in Section
9.3 hereof.
"Indemnifying Party" shall have the meaning set forth in Section 9.3
hereof.
"Indemnitee" shall have the meaning set forth in Section 9.3 hereof.
"Independent Facility" shall have the meaning set forth in Section
2.2(b)(i)(C) hereof.
"Independent Facility Arrangements" shall have the meaning set forth
in Section 2.2(b)(i)(E) hereof.
"Independent Facility Contract" shall have the meaning set forth in
Section 2.2(b)(i)(D) hereof.
"Initial Cash" shall have the meaning set forth in Section 2.2(a)
hereof.
"Intellectual Property Rights" shall mean and include rights relating
to patents, trademarks, service marks, trade names, copyrights, and all
currently pending applications for any thereof, and any inventions, processes,
trade secrets, know-how, confidentiality agreements, consulting agreements,
software, software licenses or options to obtain rights or licenses and any
documentation relating to the manufacture, marketing and maintenance of
products.
"Inventory" means any raw materials, supplies, work-in-progress,
finished goods, parts or other inventory of any nature whatsoever.
"June Balance Sheet" shall have the meaning set forth in Section
2.3(a)(i)(A) hereof.
"June Inventory" shall have the meaning set forth in Section
2.3(a)(i)(A) hereof.
"Law" means any provision of any federal, state, local or foreign law,
statute, ordinance, charter, constitution, treaty, code, rule, regulation or
guidelines (including the Medicare and Medicaid fraud and abuse provisions of
the Social Security Act and the Civil Monetary Penalty Law of the Social
Security Act, the applicable recordkeeping, inventory and other requirements
and regulations of the FDA, the DEA and state pharmacy boards), or any order,
decree or ruling.
"Leased Real Property" means all real property leased and used or held
for use by Sellers in the operation of the Acquired Business.
"Liability" means any debt, liability or obligation of any nature,
whether secured, unsecured, recourse, nonrecourse, liquidated, unliquidated,
accrued, absolute, fixed, contingent, ascertained, unascertained, known,
unknown or otherwise.
"Licenses" shall have the meaning set forth in Section 5.9 hereof.
"Lien" means any security interest, lien, charge, mortgage, deed,
assignment, pledge, hypothecation, claim, encumbrance, easement, restriction,
or interest of another Person of any kind or nature.
"Line of Business" shall have the meaning set forth in Section
2.2(b)(i)(F) hereof.
"Losses" shall have the meaning set forth in Section 9.1 hereof.
"Management Agreement" shall have the meaning set forth in Section
7.16(a) hereof.
"March Financial Statements" shall have the meaning set forth in
Section 2.3(a)(i)(A) hereof.
"Mariner Bankruptcy Cases" shall have the meaning set forth in the
Recitals hereof.
"Mariner Bankruptcy Courts" shall have the meaning set forth in the
Recitals hereof.
"Mariner Facilities" shall have the meaning set forth in Section
2.1(b)(vi) hereof.
"Mariner Facilities Threshold" shall have the meaning set forth in
Section 10.19(b) hereof.
"Mariner Receivables" means all accounts receivable from MPAN, MHG and
their Affiliates (other than Sellers).
"Material Adverse Effect" means, with respect to the businesses or
entities specified, any event, change, condition or matter in respect thereof
that, individually or in the aggregate, results in or would be reasonably
expected to result in, a material adverse effect on the business, results of
operations, assets, or condition (financial or otherwise) of the specified
businesses or entities, taken as a whole, and any reference to Material Adverse
Effect with respect to Sellers, the Acquired Business or the Acquired Assets
shall be interpreted to mean a Material Adverse Effect on Sellers, the Acquired
Business or the Acquired Assets, as the case may be, taken as a whole.
"MCI" shall have the meaning set forth in Section 7.10(b) hereof.
"MCI Agreements" shall have the meaning set forth in Section 7.10(b)
hereof.
"Medicare Part B Business and Assets" means any assets related to the
provision of Medicare Part B Products and Services, including related accounts
receivables, Inventory equipment and fixed assets.
"Medicare Part B Products and Services" means products and services
billed directly to the Medicare Part B program.
"MHG" shall have the meaning set forth in the first paragraph hereof.
"MHG Bank Group" means PNC Bank, in its capacity as Agent for MHG's
and the MHG Sellers' senior secured prepetition lenders and in its capacity as
Agent for MHG's and the MHG Sellers' postpetition debtor in possession lenders.
"MHG Bankruptcy Cases" shall have the meaning set forth in the
Recitals hereof.
"MHG Bankruptcy Court" shall have the meaning set forth in the
Recitals hereof.
"MHG Sellers" shall have the meaning set forth in the first paragraph
hereof.
"MPAN" shall have the meaning set forth in the first paragraph hereof.
"MPAN Bank Group" means Chase Manhattan Bank, in its capacity as Agent
for MPAN's and the MPAN Sellers' senior secured prepetition lenders and in its
capacity as Agent for MPAN's and the MPAN Sellers' postpetition debtor in
possession lenders.
"MPAN Bankruptcy Cases" shall have the meaning set forth in the
Recitals hereof.
"MPAN Bankruptcy Court" shall have the meaning set forth in the
Recitals hereof.
"MPAN Sellers" shall have the meaning set forth in the first paragraph
hereof.
"NCPDP" shall have the meaning set forth in Section 7.8 hereof.
"Net Current Assets" means the accounts receivable (other than the
Mariner Receivables), rebate accounts receivable, Inventory, and prepaid
expenses (to the extent usable and of benefit to Purchaser in its conduct of
the Acquired Business), all as determined in accordance with Sellers'
Accounting Policies, included in the Acquired Assets, subject to appropriate
reserves.
"Non-Compete Agreements" means the noncompetition agreements in the
form attached at Schedule 3.3(g) to this Agreement.
"Notified Party" shall have the meaning set forth in Section 9.7
hereof.
"Notifying Party" shall have the meaning set forth in Section 9.7
hereof.
"Owned Real Property" means all real property owned by Sellers
relating to the operation of the Acquired Business.
"Paid Included Mariner Receivables" shall have the meaning set forth
in Section 2.3(c)(iii) hereof.
"Parent" means Omnicare, Inc.
"Party" or "Parties" are those Persons listed in the first paragraph
of this Agreement.
"Payment Date" shall have the meaning set forth in Section
2.2(b)(ii)(E) hereof.
"Pension Plan" means each "employee pension benefit plan" as defined
in section 3(2) of ERISA.
"Permitted Liens" means the Liens set forth in Schedule 5.2.
"Person" means any corporation, partnership, joint venture, limited
liability company, organization, entity, authority or individual.
"Pharmacy License" shall have the meaning set forth in Section 5.9(a)
hereof.
"Pre-Closing Balance Sheet" shall have the meaning set forth in
Section 2.3(a)(i)(B) hereof.
"Pre-Closing Balance Sheet Date" shall have the meaning set forth in
Section 2.3(a)(i)(B) hereof.
"Pre-Closing Inventory" shall have the meaning set forth in Section
2.3(a)(i)(B) hereof.
"Pre-Closing Net Current Assets" shall have the meaning set forth in
Section 2.3(a)(ii) hereof.
"Pre-Closing Statement of Net Current Assets" shall have the meaning
set forth in Section 2.3(a)(ii) hereof.
"Purchase Price" shall have the meaning set forth in Section 2.2(a)
hereof.
"Purchaser" means APS Acquisition LLC.
"Purchaser Indemnitees" shall have the meaning set forth in Section
9.1 hereof.
"Purchaser's Calculation of the Current Assets Reduction" shall have
the meaning set forth in Section 2.3(c)(iii) hereof.
"Real Property Leases" means all written and oral leases and subleases
in effect as of the date hereof with respect to the Leased Real Property.
"Relevant Executive Officers" shall have the meaning set forth in
Section 10.18 hereof.
"Required Consents" shall have the meaning set forth in Section 3.3(e)
hereof.
"Resolution Period" shall have the meaning set forth in Section 2.3
(d) hereof.
"Revenues" shall have the meaning set forth in Section 2.2(b)(i)(F)
hereof.
"Sale Hearing" shall have the meaning set forth in Section 4.1 hereof.
"Seller" and "Sellers" shall have the meaning set forth in the first
paragraph of this Agreement.
"Sellers' Accounting Policies" shall have the meaning set forth in
Section 2.3(a)(i)(A) hereof.
"Sellers' Approval Orders" shall have the meaning set forth in the
Recitals hereof.
"Sellers' Calculation of the Current Assets Holdback" shall have the
meaning set forth in Section 2.3(a)(iv) hereof.
"Sellers' Indemnitees" shall have the meaning set forth in Section 9.2
hereof.
"Selling Affiliates" shall have the meaning set forth in Section
2.1(a) hereof.
"Service ▇▇▇▇" shall have the meaning set forth in Section 7.17
hereof.
"Services" shall have the meaning set forth in Section 2.2(b)(i)(G)
hereof.
"Services Contracts" shall have the meaning set forth in Section
5.4(c) hereof.
"Statement of Assumed Reserved Liabilities" shall have the meaning set
forth in Section 2.3(a)(iii) hereof.
"Statement of Estimated Assumed Reserved Liabilities" shall have the
meaning set forth in Section 2.3(a)(iii) hereof.
"Taxes" means all taxes, charges, fees, duties, levies or other
assessments, including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, value added, license, payroll, unemployment, environmental,
customs duties, capital stock, disability, stamp, leasing, lease, user,
transfer, fuel, excess profits, occupational and interest equalization,
windfall profits, severance and employees' income withholding and Social
Security taxes imposed by the United States or any other country or by any
state, municipality, subdivision or instrumentality of the United States or of
any other country or by any other tax authority, including all applicable
penalties and interest, and such term shall include any interest, penalties or
additions to tax attributable to such Taxes.
"Tax Return" means any report, return or other information required to
be supplied to a taxing authority in connection with Taxes.
"Temporary Occupancy Provision" shall have the meaning set forth in
Section 2.4(c) hereof.
"Terminated Mariner Facility" shall have the meaning set forth in
Section 10.19(a) hereof.
"Terminated Services Contract" shall have the meaning set forth in
Section 10.19(a) hereof.
"Transferred Employee" shall have the meaning set forth in Section
7.9(a) hereof.
"Threshold" shall have the meaning set forth in Section 9.6 hereof.
"Undisclosed Contract" shall have the meaning set forth in Section
2.4(b) hereof.
"Undisclosed Contract Designation Date" shall have the meaning set
forth in Section 2.4(b) hereof.
"Unlicensed Business Location" shall have the meaning set forth in
Section 7.16(a) hereof.
"WARN Act" shall have the meaning set forth in Section 7.9(e) hereof.