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EXHIBIT 10.6
[EXECUTION COPY]
ASSET PURCHASE AGREEMENT
by
and among
OMNICARE, INC.,
STANDARD MANAGEMENT CORPORATION,
and
LONG TERM RX, INC.
Dated as of October 20, 2006
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TABLE OF CONTENTS
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Article I DEFINITIONS AND DEFINED
TERMS.................................. 1
Section 1.1
Definitions and Defined Terms......................... 1
Article II
PURCHASE OF ASSETS..........................................
1
Section 2.1
Purchase and Sale of Transferred Assets............... 1
Section 2.2
Excluded Assets....................................... 3
Article III ASSUMPTION OF
LIABILITIES.................................... 3
Section 3.1
Assumed Liabilities................................... 3
Section 3.2
Retained Liabilities.................................. 3
Article IV PURCHASE
PRICE................................................ 4
Section 4.1
Purchase Price........................................ 4
Section 4.2
Post-Closing Purchase Price Adjustment................ 4
Section 4.3
Contingent Payment.................................... 6
Section 4.4
Allocation of Consideration........................... 7
Section 4.5
Prorations............................................ 8
Section 4.6
Withholding Taxes..................................... 8
Section 4.7
Optional Consideration................................ 8
Article V
CLOSING........................................................
8
Section 5.1
Closing............................................... 8
Section 5.2
Deliveries at Closing................................. 9
Section 5.3
Conditions Precedent to Obligations of Each Party..... 11
Section 5.4
Conditions Precedent to Obligations of Purchaser...... 11
Section 5.5
Conditions Precedent to Obligations of Seller and/or
Parent................................................ 13
Article VI REPRESENTATIONS AND WARRANTIES OF SELLER AND
PARENT........... 14
Section 6.1
Organization and Good Standing........................ 14
Section 6.2
Authorization and Effect of Agreement................. 14
Section 6.3
Consents and Approvals; No Violations................. 14
Section 6.4
No
Third-Party Options................................ 15
Section 6.5
Permits; Compliance with Law.......................... 15
Section 6.6
Litigation............................................ 15
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Section 6.7
Assets Necessary to Business.......................... 16
Section 6.8
Financial Statements.................................. 16
Section 6.9
Absence of Certain Changes............................ 16
Section 6.10
No
Default............................................ 17
Section 6.11
Transactions with Affiliates.......................... 17
Section 6.12
Contracts............................................. 17
Section 6.13
Labor
Relations....................................... 18
Section 6.14
Title to
Assets....................................... 18
Section 6.15
Insurance............................................. 19
Section 6.16
Inventory............................................. 19
Section 6.17
Accounts
Receivable................................... 19
Section 6.18
Product
Returns and Warranties........................ 20
Section 6.19
Customers;
Suppliers.................................. 20
Section 6.20
Absence of
Certain Business Practices................. 20
Section 6.21
Certain
Healthcare Legal Matters...................... 21
Section 6.22
Real
Property......................................... 22
Section 6.23
Environmental......................................... 22
Section 6.24
No
Broker............................................. 24
Section 6.25
No
Misleading Statements.............................. 24
Section 6.26
Employee
Benefits..................................... 24
Section 6.27
Taxes................................................. 25
Section 6.28
Proprietary Rights.................................... 26
Section 6.29
Information Technology................................ 27
Section 6.30
Solvency
of Parent and Sellers........................ 28
Article VII REPRESENTATIONS AND WARRANTIES OF
PURCHASER.................. 28
Section 7.1
Corporate Organization................................ 28
Section 7.2
Authorization and Effect of Agreement................. 28
Section 7.3
Consents and Approvals; No Violations................. 29
Section 7.4
No
Broker............................................. 29
Article VIII
COVENANTS...................................................
29
Section 8.1
Conduct of Business................................... 29
Section 8.2
Access................................................ 31
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Section 8.3
Notification.......................................... 31
Section 8.4
No
Inconsistent Action................................ 31
Section 8.5
Reasonable Best Efforts............................... 31
Section 8.6
Further Assurances.................................... 32
Section 8.7
Transfer Taxes........................................ 32
Section 8.8
Release of Liens...................................... 33
Section 8.9
Consents to Transferred Assets........................ 33
Section 8.10
Employment
Matters.................................... 33
Section 8.11
Bulk Sales
Laws....................................... 34
Section 8.12
No
Solicitation....................................... 34
Section 8.13
Confidentiality....................................... 34
Section 8.14
No
Solicitation of Employees.......................... 34
Section 8.15
Non-Competition....................................... 35
Section 8.16
Collection of Accounts
Receivable..................... 35
Section 8.17
Post-Closing Agreements............................... 35
Section 8.18
Change of
Name........................................ 36
Section 8.19
Payment of
Indebtedness............................... 36
Section 8.20
Satisfaction of Leases................................ 36
Article IX
TERMINATION...................................................
36
Section 9.1
Termination........................................... 36
Section 9.2
Procedure and Effect of Termination................... 37
Article X SURVIVAL;
INDEMNIFICATION...................................... 38
Section 10.1
Survival
of Indemnification Rights.................... 38
Section 10.2
Indemnification Obligations of Seller and Parent...... 38
Section 10.3
Indemnification Obligations of Purchaser.............. 39
Section 10.4
Indemnification Procedure............................. 40
Section 10.5
Calculation of Indemnity Payments..................... 40
Section 10.6
Tax
Treatment of Indemnification...................... 41
Section 10.7
Relation
of Indemnity to Holdback Payment............. 41
Section 10.8
Exclusive
Remedy...................................... 41
Article XI MISCELLANEOUS
PROVISIONS...................................... 41
Section 11.1
Notices............................................... 41
Section 11.2
Expenses.............................................. 42
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Section 11.3
Successors
and Assigns................................ 42
Section 11.4
Extension;
Waiver..................................... 43
Section 11.5
Entire
Agreement; Disclosure Schedules................ 43
Section 11.6
Amendments, Supplements, Etc.......................... 43
Section 11.7
Applicable
Law; Waiver of Jury Trial.................. 43
Section 11.8
Actions by
Seller or Parent........................... 43
Section 11.9
Execution
in Counterparts............................. 44
Section 11.10
Titles and
Headings................................... 44
Section 11.11
Invalid
Provisions.................................... 44
Section 11.12
Publicity............................................. 44
Section 11.13
Specific
Performance.................................. 44
Section 11.14
No Third-Party
Beneficiaries.......................... 44
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Exhibits
Exhibit A --
Definitions and Defined Terms
Exhibit B -- Form of
Bill of Sale
Exhibit C -- Form of
Assignment and Assumption Agreement
Exhibit D -- Form of
Power of Attorney
Exhibit E -- Form of
Pharmacy Letter
Exhibit F -- Form of
Trademark Assignment Agreement
Exhibit G -- Form of
Domain Name Assignment Agreement
Schedule 1 -- Contingent Facilities
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and
entered
into as of October 20, 2006 by and among Omnicare, Inc., a
Delaware
corporation ("Purchaser"), Standard Management Corporation, an
Indiana
corporation ("Parent"), and Long Term Rx, Inc., an Indiana
corporation
("Seller").
RECITALS:
WHEREAS, Seller is engaged in the business of providing (i)
pharmaceutical products, including, without limitation,
prescription and
non-prescription drugs, infusion medication and related medical
products and
pharmacy-related services, including, without limitation,
consultant
pharmacists, services to nursing homes, assisted living facilities
and other
long-term care facilities (collectively, "Facilities") and (ii)
durable medical
equipment and respiratory equipment and supplies to Facilities and
the retail
public (collectively, the "Business"); and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires
to
purchase, certain of the rights, properties and assets relating to
the Business.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained, the parties
hereto agree
as follows:
ARTICLE I
DEFINITIONS AND DEFINED TERMS
Section 1.1 Definitions and Defined Terms. Unless the context
otherwise requires or as otherwise defined herein, capitalized
terms used in
this Agreement shall have the meanings set forth in Exhibit A
hereto.
ARTICLE II
PURCHASE OF ASSETS
Section 2.1 Purchase and Sale of Transferred Assets. On the terms
and
subject to the conditions set forth herein, at the Closing as
described in
Article V hereto, Seller shall, and Parent shall cause Seller to,
sell,
transfer, convey, assign and deliver to Purchaser (or one or more
direct or
indirect subsidiaries of Purchaser as Purchaser may designate), and
Purchaser
(or one or more designees of Purchaser) shall purchase and acquire
from Seller,
good and valid title to, and all rights and interests in, all of
the rights,
properties and assets used in or held for use in, necessary for or
otherwise
relating to the Business, other than the Excluded Assets
(collectively, the
"Transferred Assets"), free and clear of all Liens (other than
Permitted Liens),
including, without limitation, good and valid title to, and all
rights and
interests in, the following:
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(a) All assets reflected on the balance sheet as of and for the
seven
(7) months ended July 31, 2006 relating to the Business (the
"Balance Sheet")
and all assets used to generate revenue and income reflected on the
income
statement relating to the Business for the seven (7) months ended
July 31, 2006
(the "Income Statement"), which Balance Sheet and Income Statement
are set forth
in Section 6.8(a) of the Disclosure Schedule, other than, in each
case, assets
disposed of after the date of such Balance Sheet and Income
Statement and on or
prior to the Closing in the ordinary course of business consistent
with past
practice as permitted under Section 8.1 hereto.
(b) All assets used, or held for use in, necessary for or
otherwise
relating to the Business acquired in the ordinary course of
business consistent
with past practice after July 31, 2006 and on or prior to the
Closing Date.
(c)
All Contracts relating to the Business, including, without
limitation, Contracts relating to the provision of services to (i)
Facilities,
(ii) to hospice agencies and home health care companies and (iii)
insurers,
managed care organizations and other payor organizations (including
Medicare
Part D Plans).
(d) Subject to Section 8.20 hereto, all leases, including,
without
limitation, real property leases for the operating facilities,
relating to the
Business and any improvements thereunder.
(e) All rights under Contracts relating to the Business to the
extent
that such rights relate to non-competition, confidentiality or
non-solicitation
obligations enforceable against a third party.
(f) All inventory, accounts receivable, rebates receivable
earned
after July 31, 2006, other current, fixed or prepaid assets,
prepaid items and
plant, property and equipment used or held for use in, necessary
for or
otherwise relating to the Business.
(g) All intangibles and intangible property, including, without
limitation, all Proprietary Rights and agreements relating thereto
that are used
or held for use in, necessary for or otherwise relating to the
Business,
including, without limitation, all of the Seller's Rights and
goodwill included
in any of the foregoing.
(h) All Permits used or held for use in, necessary for or
otherwise
relating to the Business, except to the extent that the transfer
thereof would
violate or would not be permitted or effective under applicable
Law.
(i) Subject to applicable Law, all patient medical records relating
to
the Business; provided that Purchaser shall promptly provide Seller
with copies
thereof as reasonably requested by Seller in writing after the
Closing.
(j) Except to the extent solely related to an Excluded Asset,
all
books and records relating to the Business or the Transferred
Assets.
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(k) All manufacturer or vendor warranties, service life
policies,
customer support agreements and similar items relating to the
Business or the
Transferred Assets (or to the extent such items are not assignable,
subrogation
rights to such items).
(l) All motor vehicles and other rolling stock, including,
without
limitation, those items listed in Section 2.1(l) of the Disclosure
Schedule
(collectively, the "Motor Vehicles").
(m) All Trade Names.
The Contracts included in the Transferred Assets, all of which
are
listed on Section 6.12(a), and include, without limitation, those
listed above,
are hereinafter collectively referred to as the "Assumed
Contracts."
Section 2.2 Excluded Assets. Notwithstanding anything contained
in
this Agreement to the contrary, the rights, properties and assets
identified in
Section 2.2 of the Disclosure Schedule (collectively, the "Excluded
Assets")
will not be included in the Transferred Assets, and all right,
title and
interest thereto shall be retained by Seller or Parent, as
applicable.
ARTICLE III
ASSUMPTION OF LIABILITIES
Section 3.1 Assumed Liabilities. At the Closing, Purchaser will
not
assume or agree to undertake to pay, satisfy, discharge or perform,
and will not
be deemed by virtue of the execution and delivery of this Agreement
or any
document delivered at the Closing pursuant to this Agreement, or as
a result of
the consummation of the transactions contemplated by this
Agreement, to have
assumed, or to have agreed to pay, satisfy, discharge or perform,
any liability,
obligation, indebtedness or Taxes (except as expressly set forth in
Section
4.5(b) hereto) of Seller or of any other Person or in any way
relating to the
Business (whether primary or secondary, direct or indirect, known
or unknown,
absolute or contingent, matured or unmatured, or otherwise), other
than the
following obligations and liabilities of Seller: (a) the
obligations and
liabilities from and after the Closing Date pursuant to the terms
of the Assumed
Contracts, to the extent, and only to the extent, that such Assumed
Contracts
are actually assigned to Purchaser and such obligations and
liabilities relate
to the period from and after the Closing and (b) current
liabilities, which
would not otherwise be Assumed Liabilities, of Seller, which may be
paid off by
Purchaser at the Closing; provided, that any amounts paid by
Purchaser in
connection with the payment of such current liabilities shall cause
a
corresponding reduction in the Closing Date Cash Payment (clauses
(a) and (b)
together, the "Assumed Liabilities").
Section 3.2 Retained Liabilities. Notwithstanding anything
contained
in this Agreement to the contrary, Purchaser does not assume or
agree or
undertake to pay, satisfy, discharge or perform, and will not be
deemed by
virtue of the execution and delivery of this Agreement or any
document delivered
at the Closing pursuant to this
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Agreement, or as a result of the consummation of the transactions
contemplated
by this Agreement, to have assumed, or to have agreed to pay,
satisfy, discharge
or perform, and, as between Purchaser and Seller, Seller shall
retain any
liability, obligation, indebtedness or Taxes (except as expressly
set forth in
Section 4.5(b) hereto) of Seller or of any other Person or in any
way relating
to the Business or the Transferred Assets (whether primary or
secondary, direct
or indirect, known or unknown, absolute or contingent, matured or
unmatured, or
otherwise) other than the Assumed Liabilities (such liabilities and
obligations
retained by Seller, including, without limitation, all liabilities
and
obligations with respect to the Excluded Assets, being referred to
herein as the
"Retained Liabilities"). It is specifically agreed that Seller
shall be and
remain liable for all of the Retained Liabilities.
ARTICLE IV
PURCHASE PRICE
Section 4.1 Purchase Price. In consideration of the conveyance
to
Purchaser of all right, title and interest in and to the
Transferred Assets and
the other rights granted to Purchaser hereunder, and subject to the
terms and
conditions hereof, Purchaser shall:
(a) at Closing, assume the Assumed Liabilities; and
(b) pay an aggregate purchase price (the "Purchase Price") of up
to
$5,139,000, adjusted in accordance with the terms of this Article
IV, Section
3.1(b) and Section 10.6 hereto, which shall be delivered as
follows:
(i) at Closing, Purchaser shall pay to Seller an aggregate of
$4,164,400 in cash (the "Closing Date Cash Payment") or such lesser
amount
determined in accordance with Section 3.1(b);
(ii) Subject to the terms of Section 4.2 hereto, Purchaser shall
pay
to
Seller, within thirty (30) calendar days of the six (6) month
anniversary of the Closing Date (the "Six Month Anniversary") (or
such
later date as set forth in Section 4.2 hereto), an aggregate amount
of
$749,600, or such lesser amount as determined in accordance with
Section
4.2(b), Section 4.2(c) and Section 10.6 hereto, in immediately
available
funds (the "Holdback Payment"); and
(iii) Subject to the terms of Section 4.3 hereto, Purchaser shall
pay
to Seller the
Contingent Payment; provided that the Contingent Payment
shall not to exceed $225,000.
Section 4.2 Post-Closing Purchase Price Adjustment.
(a) The parties agree that, on the Closing Date, the Net Asset
Value
of the Business should be $1,250,000. "Net Asset Value," as used
herein, shall
be defined as the value of the tangible assets of the Business,
including the
inventory, accounts
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receivable, rebates receivable, prepaid expenses, Motor Vehicles
(net of
depreciation) and fixed assets (less accumulated depreciation,
depletion and
amortization) net of the Assumed Liabilities. In the event the
actual Net Asset
Value as of the Closing Date, as finally determined pursuant to the
terms of
this Section 4.2(a) (the "Actual Net Asset Value"), is (i) less
than $1,250,000,
the Purchase Price shall be adjusted downward, dollar-for-dollar,
by the extent
to which $1,250,000 exceeds the Actual Net Asset Value or (ii)
greater than
$1,250,000, the Purchase Price shall be adjusted upward,
dollar-for-dollar, by
the extent to which the Actual Net Asset Value exceeds $1,250,000
(the "Purchase
Price Adjustment"). The balance sheet establishing the Actual Net
Asset Value,
as finally determined pursuant to the terms of this Section 4.2(a),
is
hereinafter referred to as the "Final Closing Date Statement." All
items on the
Final Closing Date Statement shall be (i) determined consistent
with the
methodology of Net Asset Value used to calculate the $1,250,000
base number,
(ii) computed in accordance with this Section 4.2(a) and U.S.
generally accepted
accounting principles, consistently applied ("GAAP"), and (iii)
audited or
reviewed by an independent accounting firm at Purchaser's expense.
Purchaser, in
conjunction with its independent accountants (and in concurrence
with Seller's
independent accountants), shall prepare and present to Seller a
draft of the
Final Closing Date Statement (the "Preliminary Closing Date
Statement")
promptly, but not more than sixty (60) calendar days after the
Closing Date.
Seller, together with its representatives and accountants, shall
have the right
to review the workpapers of Purchaser and Purchaser's accountants
utilized in
preparing the Preliminary Closing Date Statement for purposes of
verifying the
accuracy and fairness of the presentation of the Preliminary
Closing Date
Statement. Seller shall notify Purchaser of any dispute with the
Preliminary
Closing Date Statement promptly, but not more than thirty (30)
calendar days
after its receipt by Seller ("Dispute Notice"). If Seller timely
delivers a
Dispute Notice to Purchaser, Seller and Purchaser shall, for a
period of thirty
(30) calendar days from the date the Dispute Notice is delivered to
Purchaser,
attempt in good faith to resolve the items in dispute. The
Preliminary Closing
Date Statement, together with any adjustments or corrections agreed
upon by
Purchaser and Seller, shall comprise the Final Closing Date
Statement. If the
parties cannot agree on the Final Closing Date Statement within
thirty (30)
calendar days after the later of (x) the delivery of the
Preliminary Closing
Date Statement to Seller by Purchaser and (y) the delivery of a
Dispute Notice
to Purchaser by Seller, as applicable, the parties shall submit the
dispute to a
mutually acceptable "Big Four" accounting firm (the "Reviewing
Accountants"),
whose determination shall be binding on the parties. The fees of
such Reviewing
Accountants shall be divided equally between Purchaser and
Seller.
(b) In satisfaction of a downward Purchase Price Adjustment, if
any,
as finally determined pursuant to Section 4.2(a) hereto, Purchaser
shall reduce
accordingly the Holdback Payment. If the amount of the Purchase
Price Adjustment
exceeds the Holdback Payment, Purchaser shall not be obligated to
pay the
Holdback Payment and Seller shall pay to Purchaser such amount in
excess of the
Holdback Payment in immediately available funds within thirty (30)
calendar days
of the Six Month Anniversary or, if there is a disagreement with
respect to the
Final Closing Date Statement which is not resolved prior to the Six
Month
Anniversary, within thirty (30) calendar days after such
disagreement is finally
resolved pursuant to the terms of Section 4.2(a) hereto, and
subject to the
terms of this Article IV and Section 10.6. In satisfaction
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of an upward Purchase Price Adjustment, if any, as finally
determined pursuant
to Section 4.2(a) hereto, Purchaser shall pay to Seller such amount
in excess
$1,250,000 in immediately available funds within thirty (30)
calendar days of
the Six Month Anniversary or, if there is a disagreement with
respect to the
Final Closing Date Statement which is not resolved prior to the Six
Month
Anniversary, within thirty (30) calendar days after such
disagreement is finally
resolved pursuant to the terms of Section 4.2(a) hereto.
(c) Purchaser shall deliver to Seller promptly, but not more
than
thirty (30) calendar days after the Six Month Anniversary, a
detailed
calculation of the Lost Bed Reduction Amount, an amount by which
the Holdback
Payment shall be reduced. Seller shall notify Purchaser of any
dispute with such
calculation of the Lost Bed Reduction Amount promptly, but not more
than thirty
(30) calendar days, after its receipt by Seller. If Seller timely
delivers a
notice of disagreement to Purchaser, Seller and Purchaser shall,
for a period of
thirty (30) calendar days from the date notice is delivered to
Purchaser,
attempt in good faith to resolve the dispute with respect to the
Lost Bed
Reduction Amount. If the parties cannot agree on the Lost Bed
Reduction Amount
within thirty (30) calendar days after the delivery of a notice of
disagreement
to Purchaser by Seller, the parties shall submit the dispute to a
mutually
acceptable third party, whose determination shall be binding on the
parties. The
fees of such reviewing third party shall be divided equally between
Purchaser
and Seller. In the instance of a dispute regarding the calculation
of the
Cancelled Reduction Amount, Purchaser shall pay the Holdback
Payment, as
adjusted if necessary in accordance with this Section 4.2,
promptly, but not
more than five (5) Business Days, after final resolution of the
calculation of
the Lost Bed Reduction Amount.
The "Lost Bed Reduction Amount" shall be equal to:
($2,354) x (# of Lost Beds)
"Lost Beds" for purposes of the above formula shall represent a
reduction in the
number of residents serviced versus the current account base of
1,699
licensed-bed equivalents defined as (i) the number of licensed beds
in
Facilities that have terminated services, or for which Purchaser
has received a
notice of termination of services, prior to the Six Month
Anniversary and (ii)
with respect to individuals participating in Medicare waiver
programs, the
decrease, if any, in the number of patients actively served as of
the Six Month
Anniversary based on the average monthly patient count for the
three (3) months
prior to the Closing Date, provided that the average monthly
patient count for
patients in Medicaid waiver programs that have terminated service,
or given
notice of termination of service, as of the Six Month Anniversary
shall be
considered to equal zero. For purposes of this Section 4.2(c),
Purchaser agrees
to continue to operate the Business in its current location from
the Closing
Date through the Six Month Anniversary. Should Purchaser cease to
operate the
Business in its current location through the Six Month Anniversary
the number of
Lost Beds shall be deemed to equal zero.
Section 4.3 Contingent Payment. At any time prior to January 1,
2007,
within ten (10) Business Days of the day Purchaser begins providing
services to
a
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Contingent Payment Facility (such day being the applicable
"Contingent Payment
Determination Date") pursuant to a written contract that is
consistent with the
terms of Seller's current contracts with similar Facilities
(including, but not
limited to, consistent provisions regarding pricing, payment terms,
dispensing
systems and service requirements generally), Purchaser shall pay to
Seller, in
readily available funds, the applicable amount of the Contingent
Payment owed to
the Seller in connection with such Contingent Payment Facility.
The "Contingent Payment" shall be equal to:
($1,800) x (# of Contingent Beds)
"Contingent Beds" for purposes of the above formula shall mean the
number of
licensed beds in the applicable Contingent Payment Facility that
are being
serviced by the Business as of the Contingent Payment Determination
Date.
Section 4.4 Allocation of Consideration. All capitalizable costs
and
other amounts constituting consideration within the meaning of, and
for the
purposes of, Section 1060 of the Code and the regulations
thereunder shall be
allocated among the Transferred Assets, the non-solicitation
obligations
contained in Section 8.14 hereto, the non-competition obligations
contained in
Section 8.15 hereto and any other assets or rights acquired by
Purchaser
hereunder, as applicable, in the manner required by Section 1060 of
the Code and
the regulations thereunder and all applicable Laws. Within sixty
(60) calendar
days after the Closing Date, Purchaser shall provide Seller with a
proposed
schedule (the "Allocation Schedule") allocating all such amounts as
provided
herein. The Allocation Schedule shall become final and binding on
the parties
hereto fifteen (15) calendar days after Purchaser provides such
schedule to
Seller, unless Seller objects in writing to Purchaser, specifying
the basis for
its objection and preparing an alternative allocation. If Seller
does object,
Purchaser and Seller shall in good faith attempt to resolve the
dispute within
fifteen (15) calendar days of receipt by Purchaser of written
notice of Seller's
objection. Any such resolution shall be final and binding on the
parties hereto.
Any unresolved disputes shall be promptly submitted to the
Reviewing Accountants
for determination, which determination shall be final and binding
on the parties
hereto. Purchaser and Seller will each pay one-half of the fees and
expenses of
the Reviewing Accountants. Seller and Purchaser shall cooperate
with each other
and the Reviewing Accountants in connection with the matters
contemplated by
this Section 4.4, including, without limitation, by furnishing such
information
and access to books, records (including, without limitation,
accountants work
papers), personnel and properties as may be reasonably requested.
Each of the
parties hereto agrees to (a) prepare and timely file all Tax
Returns, including,
without limitation, Form 8594 (and all supplements thereto) in a
manner
consistent with the Allocation Schedule as finalized and (b) act in
accordance
with the Allocation Schedule for all tax purposes. The parties
hereto will
revise the Allocation Schedule to the extent necessary to reflect
any Purchase
Price Adjustment, any payment made under Article X hereto or other
post-Closing
payment made pursuant to or in connection with this Agreement. In
the case of
any such payment, Purchaser shall propose a revised Allocation
Schedule, and the
parties hereto shall follow the
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procedures outlined above with respect to review, dispute and
resolution in
respect of such revision.
Section 4.5 Prorations.
(a) All payments under or pursuant to the Assumed Contracts
relating
to periods both before and after the Closing Date, whether payable
before or
after the Closing Date, shall be prorated between Purchaser and
Seller, on the
basis of a 365-day year and the number of days elapsed in calendar
year 2006 as
of the Closing Date. With respect to any products sold (or services
rendered) to
Seller pursuant to the Assumed Contracts or other obligations
pursuant to which
Seller purchases products (for example, purchase orders), Seller
and Purchaser
shall use reasonable commercial efforts to arrange for vendors to
bill Seller
directly on or prior to the Closing Date and Purchaser directly
after the
Closing Date. Notwithstanding anything to the contrary contained in
this
Agreement or any Collateral Agreement, amounts due for supplies
received from or
services rendered by third-party vendors to Seller on or prior to
the Closing
Date shall be for the account of and paid by Seller, except to the
extent such
amounts are Assumed Liabilities as contemplated in Section
3.1(b).
(b) After the Closing, any ad valorem, use, real and personal
property
and similar Taxes, installments or special assessments arising
from, or relating
to, the Transferred Assets or the conduct of the Business, which
become due and
payable on or after the Closing Date and relate to periods both
before and after
the Closing Date, shall be prorated and adjusted between Seller and
Purchaser as
of the Closing Date on a per diem basis and Seller shall be
responsible for and,
in any case where payment to the applicable taxing authority is to
be made by
Purchaser, shall pay such amount to Purchaser, the portion of such
amounts
allocable to the period or portion thereof ending on the Closing
Date for which
payment is due after the Closing Date at least ten (10) Business
Days prior to
the date such Taxes become due and payable.
Section 4.6
Withholding Taxes. All payments made by Purchaser pursuant
to or in connection with this Agreement shall be net of applicable
withholding
taxes, if any.
Section 4.7 Optional Consideration. Purchaser may, in its sole
discretion, elect to purchase from Seller at Closing a Pac Med
pharmacy
packaging machine for an additional payment at Closing equal to
$200,000 in
consideration of the conveyance to Purchaser of all right, title
and interest in
and to such Pac Med pharmacy packing machine.
ARTICLE V
CLOSING
Section 5.1 Closing. Upon the terms and subject to the conditions
of
this Agreement, the closing of the transactions contemplated by
this Agreement
(the "Closing") will take place at the offices of Dewey Ballantine
LLP, 1301
Avenue of the
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Americas, New York, New York 10019, on the later of October 20,
2006 or a date
that is no more than two (2) Business Days following the
satisfaction or waiver
of all of the conditions to the Closing (other than those
conditions that by
their nature are to be satisfied at the Closing, but subject to the
satisfaction
or waiver of those conditions) or at such other time and place and
on such other
date as Purchaser and Seller shall agree in writing (the "Closing
Date");
provided that the effective time of the Closing shall be 12:01 a.m.
on the
Closing Date.
Section 5.2 Deliveries at Closing. At the Closing:
(a) Seller shall, and Parent shall cause Seller to, deliver or
cause
to be delivered to Purchaser, the following:
(i) a Bill of Sale, duly executed by Seller and Parent, in
substantially the form attached hereto as Exhibit B (the "Bill of
Sale");
(ii) an Assignment and Assumption Agreement, duly executed by
Seller
and
Parent, in substantially the form attached hereto as Exhibit C
(the
"Assignment and Assumption Agreement");
(iii) a Power of Attorney from Seller, duly executed by Seller
and
duly
notarized, in substantially the form attached hereto as Exhibit D
(the
"Power of Attorney");
(iv) a Pharmacy Letter from each pharmacy of Seller, each duly
executed by Seller and duly notarized, in substantially the form
attached
hereto as Exhibit E (the "Pharmacy Letter");
(v) releases, in form and substance reasonably satisfactory to
Purchaser, evidencing discharge, removal and termination of all
Liens
(other than Permitted Liens) to which any Transferred Assets being
conveyed
at
the Closing are subject, which releases shall be effective at or
prior
to
the Closing;
(vi) the officer's certificate referenced in Section 5.4(c)
hereto;
(vii) a
certification from Seller in accordance with United States
Treasury Regulation Section 1.1445-2(b)(2)(i) and in the form
provided in
United States Treasury Regulation Section 1.1445-2(b)(2)(iii)(B)
(the
"FIRPTA Certificate");
(viii) Certificates of Title to the Motor Vehicles, duly
endorsed,
completed and acknowledged for transfer;
(ix) copies of the "pay-off" letters in connection with the
repayment
of
the indebtedness of Seller pursuant to Section 8.19(a) and Section
8.20
hereto and the letters confirming that all Liens relating to
such
indebtedness will be removed effective upon payment of the amount
set forth
in
the pay-off letters;
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(x) a Trademark Assignment Agreement, duly executed by Seller
and
Parent and duly notarized, in substantially the form attached
hereto as
Exhibit F (the "Trademark Assignment Agreement");
(xi) a Domain Name Assignment Agreement, duly executed by Seller,
in
substantially the form attached hereto as Exhibit G;
(xii) the Employment Agreements and/or Consulting Agreements
contemplated in Section 5.4(l) hereto;
(xiii) the Non-Competition Agreements contemplated in Section
5.4(m)
hereto; and
(xiv) such other duly executed documents and certificates as may
be
required to be delivered by Seller pursuant to the terms of this
Agreement
or
as may be reasonably requested by Purchaser prior to the
Closing.
(b) Parent shall deliver, or cause to be delivered to Purchaser,
the
following:
(i) the certificates referenced in Section 5.4(d) hereto; and
(ii) such other duly executed documents and certificates as may
be
required to be delivered by Parent pursuant to the terms of this
Agreement
or
as may be reasonably requested by Purchaser prior to the
Closing.
(c) Purchaser shall deliver, or cause to be delivered to Seller,
the
following:
(i) the Closing Date Cash Payment by wire transfer of
immediately
available funds to the account or accounts of Seller designated by
Seller
no
later than twenty-four (24) hours prior to the Closing;
(ii) the Bill of Sale, duly executed by Purchaser (or any
wholly
owned, direct or indirect subsidiaries of Purchaser to which an
Assumed
Contract is assigned);
(iii) the Assignment and Assumption Agreement, duly executed by
Purchaser (or any wholly owned, direct or indirect subsidiaries
of
Purchaser to which an Assumed Contract is assigned);
(iv) the Power of Attorney, duly executed by Purchaser;
(v) the officer's certificate referenced in Section 5.5(c)
hereto;
(vi) a Domain Name Assignment Agreement, duly executed by
Purchaser;
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(vii) the Trademark Assignment Agreement, duly executed by
Purchaser;
and
(viii) such other duly executed documents and certificates as may
be
required to be delivered by Purchaser pursuant to the terms of
this
Agreement or as may be reasonably requested by Seller prior to the
Closing.
(d) Purchaser shall deliver, or cause to be delivered to Parent,
the
following:
(i) the officer's certificate referenced in Section 5.5(c) hereto;
and
(ii) such other duly executed documents and certificates as may
be
required to be delivered by Purchaser pursuant to the terms of
this
Agreement or as may be
reasonably requested by Parent prior to the Closing.
Section 5.3 Conditions Precedent to Obligations of Each Party.
The
respective obligation of each party to effect the transactions
contemplated by
this Agreement is subject to the satisfaction or waiver of the
following
conditions:
(a) All necessary Consents of any Governmental Authority required
for
consummation of the transactions contemplated by this Agreement,
which are set
forth in Section 5.3(a) of the Disclosure Schedule, shall have been
obtained.
(b) There shall not be in effect any Law of any Governmental
Authority
of competent jurisdiction restraining, enjoining or otherwise
preventing the
consummation of the transactions contemplated by this
Agreement.
Section 5.4 Conditions Precedent to Obligations of Purchaser.
The
obligation of Purchaser to effect the transactions contemplated by
this
Agreement is subject to the satisfaction or waiver of the following
conditions
(in addition to those set forth in Section 5.3 above):
(a) The representations and warranties of Seller and Parent in
this
Agreement shall be true and correct in all material respects
(without regard for
any materiality qualifiers therein) as of the date hereof and at
and as of the
Closing with the same effect as though such representations and
warranties had
been made at and as of such time, other than representations and
warranties that
speak as of another specific date or time prior to the date hereof
(which need
only be true and correct as of such date or time).
(b) All of the terms, covenants and conditions to be complied with
and
performed by Seller and Parent on or prior to the Closing Date
shall have been
complied with or performed in all material respects.
(c) Purchaser shall have received a certificate, dated as of
the
Closing Date, executed on behalf of Seller, by an authorized
executive officer
thereof, certifying
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in such detail as Purchaser may reasonably request that the
conditions specified
in Section 5.4(a) and Section 5.4(b) hereto have been
fulfilled.
(d) Purchaser shall have received a certificate, dated as of
the
Closing Date, executed by Parent, certifying in such detail as
Purchaser may
reasonably request that the conditions specified in Section 5.4(a)
and Section
5.4(b) hereto have been fulfilled.
(e) All Consents necessary for the assignment of any Contracts
Requiring Consent that Purchaser has agreed to assume shall have
been obtained
("Required Third-Party Consents") (without any limitation,
restriction or
condition not already applicable to Seller or Parent being imposed
on Purchaser
or its ownership or use of any of the Transferred Assets or the
conduct or
operation of the Business) in written instruments reasonably
satisfactory to
Purchaser, unless otherwise agreed to by Purchaser and subject to
the terms of
Section 8.9 hereto.
(f) All Liens (other than Permitted Liens) on the Transferred
Assets
shall have been released and evidence thereof delivered to
Purchaser.
(g) Purchaser shall have obtained all Permits necessary to own or
use
the Transferred Assets and operate the Business.
(h) All notifications, applications and other documents required
under
applicable Law to be given, made or filed prior to Closing in
connection with
any Permits necessary for Purchaser's ownership or use of the
Transferred Assets
and the conduct or operation of the Business shall have been given,
made or
filed and all periods which are required to pass between the
giving, making or
filing of such notifications, applications and other documents and
the Closing
in connection with such Permits under applicable Law shall have
passed.
(i) There
shall not have occurred any events that have had, or are,
individually or in the aggregate, reasonably likely to have a
Material Adverse
Effect.
(j) Seller shall have delivered to Purchaser, on or prior to
the
Closing Date, the Collateral Agreements and the FIRPTA Certificate,
in each
case, duly executed, and, in the case of the Power of Attorney, the
FIRPTA
Certificate and the Trademark Assignment Agreement, duly notarized,
and in full
force and effect.
(k) Each pharmacy of Seller shall have delivered to Purchaser and
the
National Council for Prescription Drug Programs, on or prior to the
Closing
Date, the Pharmacy Letter, in each case duly executed and notarized
and in full
force and effect.
(l) Seller shall have delivered to Purchaser, on or prior to
the
Closing Date, employment agreements and/or consulting agreements on
the terms
and with the individuals specified by Purchaser (the "Employment
Agreements"),
which shall be in full force and effect as of the Closing Date.
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(m) Seller and Parent shall have delivered to Purchaser, on or
prior
to the Closing Date, non-competition agreements on the terms and
with the
individuals specified by Purchaser (the "Non-Competition
Agreements"), which
shall be in full force and effect as of the Closing Date.
(n) Seller shall have, on or prior to the Closing Date, filed with
the
appropriate Governmental Authority the necessary documentation for
the transfer
of any Trade Names.
(o) An opinion delivered to Seller, as of the Closing Date,
stating
that Seller is receiving fair and reasonably equivalent value for
the
Transferred Assets has not been withdrawn.
(p) The board of directors of Purchaser, or a sub-committee of
its
board of directors with authority to act on the board of director's
behalf for
matters such those contemplated by this Agreement and to consider
the
transaction contemplated by this Agreement, shall, on or prior to
the Closing
Date, have approved consummation of the transactions contemplated
hereby.
Section 5.5 Conditions Precedent to Obligations of Seller
and/or
Parent. The obligation of each of Seller and Parent to effect the
transactions
contemplated by this Agreement are subject to the satisfaction or
waiver of the
following conditions (in addition to those set forth in Section 5.3
above):
(a) The representations and warranties of Purchaser in this
Agreement
shall be true and correct in all material respects (without regard
for any
materiality qualifiers therein) as of the date hereof and at and as
of the
Closing with the same effect as though such representations and
warranties had
been made at and as of such time, other than representations and
warranties that
speak as of another specific date or time prior to the date hereof
(which need
only be true and correct as of such date or time).
(b) All of the terms, covenants and conditions to be complied with
and
performed by Purchaser on or prior to the Closing Date shall have
been complied
with or performed in all material respects.
(c) Seller and Parent shall have received a certificate, dated as
of
the Closing Date, executed on behalf of Purchaser by an authorized
executive
officer thereof, certifying in such detail as Seller may reasonably
request that
the conditions specified in Section 5.5(a) and Section 5.5(b)
hereto have been
fulfilled.
(d) Purchaser shall have delivered to Seller and/or Purchaser,
as
applicable, on or prior to the Closing Date the Collateral
Agreements, in each
case duly executed and in full force and effect.
(e) All Liens (other than Permitted Liens) on the Transferred
Assets
shall have been released and evidence thereof delivered to
Purchaser.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT
Except as otherwise disclosed to Purchaser in a schedule delivered
to
Purchaser by Seller and Parent prior to the execution of this
Agreement (with
specific reference to the representations and warranties in this
Article VI to
which the information in such schedule relate) (the "Disclosure
Schedule"),
Seller and Parent, jointly and severally, represent and warrant to
Purchaser as
follows:
Section 6.1 Organization and Good Standing. Seller is a
corporation
duly organized, validly existing and in good standing under the
Laws of the
State of Indiana. Parent is a corporation duly organized and
validly existing
under the Laws of the State of Indiana. Each of Seller and Parent
has all
requisite corporate power and authority to own, lease, operate and
otherwise
hold its properties and assets and to carry on its business
(including, without
limitation, the Business) as presently conducted. Seller is duly
qualified or
licensed to do business as a foreign corporation and is in good
standing in
every jurisdiction in which the nature of the business conducted by
it
(including, without limitation, the Business) or the assets or
properties owned
or leased by it requires qualification, except where the failure to
be so
qualified, licensed or in good standing would not, individually or
in the
aggregate, be reasonably likely to have a Material Adverse
Effect.
Section 6.2 Authorization and Effect of Agreement. Seller and
Parent
has all requisite corporate power and authority to execute and
deliver this
Agreement and the Collateral Agreements to which they are or are
proposed to be
a party and to perform their respective obligations hereunder and
under any such
Collateral Agreements. The execution and delivery of this Agreement
and the
Collateral Agreements by Seller and Parent and the performance by
Seller and
Parent of their respective obligations hereunder and thereunder, as
the case may
be, and the consummation by Seller and Parent of the transactions
contemplated
hereby and thereby, as the case may be, have been duly authorized
by their
boards of directors and no other corporate or other action on the
part of any of
Seller or Parent is necessary to authorize the execution and
delivery of this
Agreement and the Collateral Agreements to which they are or are
proposed to be
a party or the consummation of the transactions to which they are
or are
proposed to be a party contemplated hereby or thereby. This
Agreement has been
duly and validly executed and delivered by Seller and Parent and
constitutes a
legal, valid and binding obligation of Seller and Parent,
enforceable against
Seller and Parent in accordance with its terms, subject to
applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and
similar laws affecting creditors' rights and remedies
generally.
Section 6.3 Consents and Approvals; No Violations. No filing with,
and
no Permit or Consent of any Governmental Authority or any other
Person is
necessary for consummation of the transactions contemplated by this
Agreement or
any Collateral Agreement. Neither the execution and delivery of
this Agreement
or any Collateral Agreement by Seller or Parent who is or is
proposed to be a
party nor the consummation by Seller or Parent of the transactions
contemplated
by this Agreement or
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any Collateral Agreement to which they are or are proposed to be a
party nor
compliance by Seller or Parent with any of the provisions hereto or
thereto will
(a) conflict with or result in any breach of any provision of the
certificate or
articles of incorporation or by-laws of Seller or Parent, (b)
result in a
violation or breach of, or constitute (with or without due notice
or lapse of
time or both) a default (or give rise to any right of termination,
modification,
cancellation or acceleration or loss of material benefits) under,
any of the
terms, conditions or provisions of any Contract to which Seller or
Parent is a
party or may be subject or which is included in the Transferred
Assets or the
Assumed Liabilities or (c) violate any Permit or Law applicable to
Seller or
Parent, the Transferred Assets, the Assumed Liabilities or the
Business.
Section 6.4 No Third-Party Options. There are no existing
agreements,
options, commitments or other rights granting any Person the right
to acquire
Seller's or Parent's right, title or interest in or to any of the
Transferred
Assets or any interest therein.
Section 6.5 Permits; Compliance with Law.
(a) Section 6.5(a) of the Disclosure Schedule lists all Permits
held
by Seller that are used, or held for use in, necessary for or
otherwise relating
to the Business. Seller holds all Permits necessary for the lawful
conduct of
the Business under and pursuant to all applicable Laws. All Permits
have been
legally obtained and maintained and are valid and in full force and
effect.
Seller is duly licensed to conduct the Business as presently
conducted in all
states in which the Business is conducted and is in compliance in
all material
respects with all of the terms and conditions of such licenses.
There has been
no material change in the facts or circumstances reported or
assumed in the
application for or granting of any Permits. No outstanding
violations are or
have been recorded in respect of any of the Permits. No proceeding
is pending
or, to Seller's and Parent's Knowledge, threatened to suspend,
revoke, withdraw,
modify or limit any Permit, and, to Seller's and Parent's
Knowledge, there is no
fact, error or admission relevant to any Permit that would permit
the
suspension, revocation, withdrawal, modification or limitation of,
or result in
the threatened suspension, revocation, withdrawal, modification or
limitation
of, or in the loss of any Permit.
(b) The Business is being, and has been conducted in compliance,
in
all material respects, with all Permits and applicable Laws. To the
Knowledge of
Seller and Parent, there are no Laws proposed, as of the date of
this Agreement,
which are reasonably likely, individually or in the aggregate, to
have an
adverse impact on the Business or the timely consummation of the
transactions
contemplated hereby.
Section 6.6 Litigation. There is no action, proceeding, claim,
suit,
opposition, challenge, cancellation proceeding, charge or
investigation
(collectively, "Proceedings") pending or, to Seller's and Parent's
Knowledge,
threatened, that questions the validity of this Agreement or any
Collateral
Agreement or any action taken or to be taken in connection with
this Agreement
or any Collateral Agreement. There are no Proceedings pending or,
to Seller's
and Parent's Knowledge, threatened that relate to the Transferred
Assets, the
Assumed Liabilities or the Business. There are no
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outstanding judgments, writs, injunctions, orders, decrees or
settlements that
apply, in whole or in part, to the Transferred Assets, the Assumed
Liabilities
or the Business that restrict the ownership or use of the
Transferred Assets,
the Assumed Liabilities or the Business in any way.
Section 6.7 Assets Necessary to Business. The Transferred
Assets
constitute all of the rights, properties and assets used, or held
for use in,
necessary for or otherwise relating to the conduct or operation of
the Business
as presently conducted. Seller is the sole owner of the Transferred
Assets and
the sole obligor with respect to the Assumed Liabilities.
Immediately following
the Closing, none of Seller or Parent (or any of their respective
Affiliates)
will own or lease any rights, properties or assets which are used
or held for
use in or necessary for the conduct of the Business as presently
conducted,
except for the Excluded Assets.
Section 6.8 Financial Statements.
(a) Section 6.8(a) of the Disclosure Schedule sets forth the
audited
consolidated balance sheets and statements of income for the
Business as of the
year ended December 31, 2005, respectively (the "Financial
Statements"), and the
unaudited consolidated balance sheets and statements of income for
the Business
as of and for the seven (7) months ended July 31, 2006,
respectively (the
"Interim Financial Statements").
(b) The consolidated balance sheets (including, without
limitation,
the related notes) included in the Financial Statements and the
balance sheet
(including, without limitation, the related notes) included in the
Interim
Financial Statements fairly present in all material respects the
financial
condition of the Business as of the respective dates thereof and
the statements
of income (including, without limitation, the related notes)
included in the
Financial Statements and the statement of income (including,
without limitation,
the related notes) included in the Interim Financial Statements
fairly present
in all material respects the financial condition and the results of
operations
of the Business as of and for the respective periods then ended.
Each of the
Financial Statements and the Interim Financial Statements (i) have
been prepared
in accordance with GAAP consistently applied during the periods
involved, except
as otherwise noted therein or in the notes thereto and (ii) have
been prepared
in accordance with the books and records of the Business consistent
with past
practice.
Section 6.9 Absence of Certain Changes. Since December 31, 2005,
(a)
Seller has operated the Business in the ordinary course of business
consistent
with past practice, (b) Seller has not taken, or agreed to take,
any of the
actions set forth in Section 8.1 hereto, (c) there has not occurred
any event or
condition that, individually or in the aggregate, has had or is
reasonably
likely to have a Material Adverse Effect, (d) the Business has not
suffered the
loss of service of any Personnel who are material, individually or
in the
aggregate, to the operations or conduct of the Business, (e) there
have been no
cancellations or terminations by any material supplier, customer or
contractor
with respect to any of the Transferred Assets or the Business and
(f) there has
been no material damage to or loss or theft of any of the
Transferred Assets.
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Section 6.10 No Default. None of Seller or Parent has committed,
or
received notice of, any default or violation (and no event has
occurred which
with notice or lapse of time or both would constitute a default or
violation or
loss of any material benefit) of any term, condition or provision
of (a) any
Contract to which Seller or Parent is a party or may be subject
that is included
in the Transferred Assets or the Assumed Liabilities or otherwise
relates to or
affects the Business or (b) any order, writ or injunction,
applicable to the
Business or any of the Transferred Assets or the Assumed
Liabilities, which in
both cases, is or is reasonably likely to be materially adverse to
the Business.
Section 6.11 Transactions with Affiliates. There are no
outstanding
liabilities or obligations for amounts owing or other commitments
to or from or
Contracts, and within the past year there have been no
transactions, between any
Affiliates of Seller or Parent or any of Seller's directors
(whether a current
or former director), officers or employees on the one hand, and
Seller, Parent,
on the other hand, relating to the Business, the Transferred Assets
or the
Assumed Liabilities.
Section 6.12 Contracts.
(a) Section 6.12(a) of the Disclosure Schedule sets forth a
complete
and accurate list of all Contracts relating to the Business.
(b) Section 6.12(b) of the Disclosure Schedule sets forth a
complete
and accurate list of all Assumed Contracts requiring consent to the
assignment
thereof to Purchaser (individually, a "Contract Requiring Consent"
and,
collectively, the "Contracts Requiring Consent").
(c) (i) Each Assumed Contract is legal, valid, binding and
enforceable
against Seller or Parent, as the case may be, and to Seller's and
Parent's
Knowledge, against each other party thereto, is in full force and
effect and,
subject to obtaining all Required Third-Party Consents, will
continue to be so
legal, valid, binding and enforceable and in full force and effect
following the
assignment of such Contract at the Closing or pursuant to other
arrangements in
accordance with Section 8.9 hereto, as the case may be, and (ii)
none of Seller
or Parent and, to Seller's and Parent's Knowledge, no other party,
is in breach
or default, and no event has occurred which would constitute (with
or without
notice or lapse of time or both) a breach or default (or give rise
to any right
of termination, modification, cancellation or acceleration) or loss
of any
benefits under any such Contract, except in each case as would not,
individually
or in the aggregate, be reasonably likely to have a Material
Adverse Effect.
(d) Seller has delivered to Purchaser complete and accurate copies
of
each Contract, or where they are oral, complete and accurate
written summaries
thereof, listed in Section 6.12(a) of the Disclosure Schedule.
Since December
31, 2005, there has been no material modification, waiver, breach
or termination
of any such Contract or any material provision thereto. To the
Knowledge of
Seller and Parent, no modification, waiver, breach or termination
of any
Contract listed in Section 6.12(a) of the Disclosure Schedule is
contemplated
and no Contract listed in Section 6.12(a) of the Disclosure
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Schedule (other than those so noted in the Disclosure Schedule) is
terminable or
cancelable as a result of the consummation of the transactions
contemplated in
this Agreement.
(e) There are no non-competition or non-solicitation agreements or
any
similar agreements or arrangements that would restrict or hinder
the operation
or conduct of the Business or use of any of the Transferred Assets
or any
"earn-out" agreements or arrangements to which Seller or Parent is
a party or to
which Seller, Parent, the Business or the Transferred Assets is or
may be
subject (other than this Agreement or pursuant to this
Agreement).
Section 6.13 Labor Relations.
(a) Seller is not a party to any collective bargaining agreement
with
respect to any current or former employee of the Business and there
is no
collective bargaining agreement which relates to the Business.
(b) There is no unfair labor practice, charge or complaint or
other
proceeding pending or, to the Knowledge of Seller and Parent,
threatened,
against any of the Transferred Assets or Seller or otherwise
relating to the
Business before the National Labor Relations Board or any other
Governmental
Authority.
(c)
There is no labor strike, slowdown or stoppage pending or, to
the
Knowledge of Seller and Parent, threatened, against or affecting
the Transferred
Assets or Seller or otherwise relating to the Business, nor has
there been any
such activity within the past two (2) years affecting the
Transferred Assets or
Seller or relating to the Business.
(d) There are no pending collective bargaining negotiations
relating
to any employees of the Business.
(e) (i) There are no agreements with, or pending petitions for
recognition of, a labor union or association as the exclusive
bargaining agent
for any or all of the employees of the Business, (ii) to the
Knowledge of Seller
and Parent, no such petitions have been pending within the past
five (5) years
and (iii) to the Knowledge of Seller and Parent, there has not been
any general
solicitation of representation cards by any union seeking to
represent the
employees of Seller or of the Business as their exclusive
bargaining agent at
any time within the past five (5) years.
(f) Seller is in compliance, in all material respects, with all
applicable Laws, rules and regulations respecting employment,
employment
practices, terms and conditions of employment, health and safety,
classification
of employment or service status, withholding and wages and hours,
in each case,
with respect to current and former employees and service providers
of the
Business.
Section 6.14 Title to Assets. Seller is the lawful owner of, or
has
the right to use, and has good, valid and marketable title to, the
Transferred
Assets free and clear of any Liens (other than Permitted Liens).
Seller has
good, legal and valid title to
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all of its assets (including, without limitation, its investment
assets) free
and clear of all Liens (except for Permitted Liens). Seller owns,
has valid
leasehold interests in or valid contractual rights to use, all of
the properties
and assets, tangible and intangible, used or held for use in,
necessary for or
relating to the conduct or operation of, the Business. All of the
property
referenced in t
