Exhibit 2.6
EXECUTION VERSION
STOCK PURCHASE AGREEMENT
by and among
TRHC MEC Holdings, llc,
the Sellers (as defined herein),
and
mace wolf, as SellerS’ Representative
dated as of October 19, 2018
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ARTICLE I DEFINITIONS |
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ARTICLE II SALE AND PURCHASE OF THE SHARES |
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| 2.1 | Sale and Purchase. |
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| 2.2 | Estimated Closing Payment Statement. |
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| 2.3 | Closing Payments. |
| 17 |
| 2.4 | Purchase Price Adjustment. |
| 18 |
| 2.5 | Contingent Amount. |
| 20 |
| 2.6 | Parent Stockholder Vote Override Provisions. |
| 23 |
| 2.7 | Withholding. |
| 23 |
ARTICLE III THE CLOSING |
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| 3.1 | Location; Date. |
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| 3.2 | Deliveries. |
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| 3.3 | No Further Ownership in the Shares. |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS |
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| 4.1 | Authority and Binding Effect. |
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| 4.2 | Validity of the Transactions. |
| 26 |
| 4.3 | Restrictions. |
| 26 |
| 4.4 | The Shares. |
| 26 |
| 4.5 | Investment Representations. |
| 26 |
| 4.6 | Absence of Litigation. |
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| 4.7 | Brokers. |
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| 4.8 | U.S. Status of Seller. |
| 28 |
ARTICLE V REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY |
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| 5.1 | Organization and Standing. |
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| 5.2 | Capitalization and Ownership; No Subsidiaries. |
| 28 |
| 5.3 | Authority and Binding Effect. |
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| 5.4 | Validity of the Transactions. |
| 29 |
| 5.5 | Restrictions. |
| 29 |
| 5.6 | Third Party Options. |
| 29 |
| 5.7 | Financial Statements; Books of Account. |
| 30 |
| 5.8 | Taxes. |
| 31 |
| 5.9 | Undisclosed Liabilities. |
| 33 |
| 5.10 | Banking Relationships. |
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| 5.11 | Accounts Receivable. |
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| 5.12 | Title to Assets; All Tangible Assets. |
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| 5.13 | Condition of Assets. |
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| 5.14 | Real Property. |
| 34 |
| 5.15 | Intellectual Property. |
| 35 |
| 5.16 | Contracts. |
| 38 |
| 5.17 | Employees/Independent Contractors. |
| 39 |
| 5.18 | Governmental Permits. |
| 40 |
| 5.19 | Compliance with Law and Orders. |
| 40 |
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| 5.20 | Insurance. |
| 42 |
| 5.21 | Labor Matters. |
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| 5.22 | Employee Benefit Plans. |
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| 5.23 | Transactions with Affiliates. |
| 45 |
| 5.24 | Absence of Certain Changes. |
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| 5.25 | Environmental Matters. |
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| 5.26 | Additional Information. |
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| 5.27 | Brokers. |
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| 5.28 | Relationship With Customers and Suppliers. |
| 47 |
| 5.29 | Privacy Matters; IT System. |
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| 5.30 | Corporate Records. |
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| 5.31 | Statements and Other Documents Not Misleading. |
| 49 |
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER |
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| 6.1 | Organization and Standing. |
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| 6.2 | Authority and Binding Effect. |
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| 6.3 | No Conflicts; Consents. |
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| 6.4 | Stock Consideration. |
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| 6.5 | Brokers. |
| 50 |
| 6.6 | SEC Documents. |
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| 6.7 | Disposition of the Company During Contingent Period. |
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| 6.8 | Independent Investigation; No Reliance. |
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ARTICLE VII COVENANTS |
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| 7.1 | Further Assurances. |
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| 7.2 | Certain Tax Matters. |
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| 7.3 | Tail Policy. |
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| 7.4 | Termination of Company Benefit Plans. |
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| 7.5 | Restrictive Covenants. |
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| 7.6 | Confidentiality. |
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| 7.7 | Termination of Related Party Arrangements. |
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| 7.8 | Public Announcements. |
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| 7.9 | Release. |
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| 7.10 | Lock-Ups. |
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ARTICLE VIII CONDITIONS TO CLOSING |
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| 8.1 | Conditions to Obligations of Purchaser. |
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| 8.2 | Conditions to Obligations of Sellers. |
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ARTICLE IX INDEMNIFICATION |
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| 9.1 | By the Sellers. |
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| 9.2 | By Purchaser. |
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| 9.3 | Certain Limitations; Calculation and Satisfaction of Claims. |
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| 9.4 | Survival; Claims Period. |
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| 9.5 | Third Party Claims. |
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| 9.6 | Procedure for Direct Claims. |
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| 9.7 | No Contribution/Indemnification. |
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| 9.8 | Contingent Claims. |
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| 9.9 | Indemnification Payments. |
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ARTICLE X GENERAL MATTERS |
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| 10.1 | Entire Agreement. |
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| 10.2 | Amendments and Waiver. |
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| 10.3 | Successors and Assigns. |
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| 10.4 | Governing Law. |
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| 10.5 | Consent to Jurisdiction. |
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| 10.6 | Interpretation. |
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| 10.7 | Counterparts. |
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| 10.8 | Disclosure Schedules. |
| 69 |
| 10.9 | Negotiated Agreement. |
| 69 |
| 10.10 | Severability. |
| 69 |
| 10.11 | Specific Performance. |
| 70 |
| 10.12 | No Third Party Beneficiaries. |
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| 10.13 | Expenses. |
| 70 |
| 10.14 | Notices. |
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| 10.15 | Legal Counsel; Privilege Matters. |
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ARTICLE XI SELLER REPRESENTATIVE |
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| 11.1 | Appointment. |
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| 11.2 | Obligations. |
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| 11.3 | Successor. |
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| 11.4 | Reliance. |
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EXHIBITS
Exhibit ASeller List
Exhibit BForm of Escrow Agreement
Exhibit CContingent Payment Calculations
This STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of October 19, 2018, by and among (a) TRHC MEC Holdings, LLC, a Delaware limited liability company (“Purchaser”), (b) the stockholders of Cognify, Inc., a California corporation (the “Company”), set forth on the signature page hereto under the heading “Sellers” (each, a “Seller”, and collectively, the “Sellers”), and (c) Mace Wolf, solely in his capacity as the Sellers’ Representative (the “Sellers’ Representative” and, together with Purchaser, the Company and the Sellers, each a “Party” and collectively, the “Parties”).
The Sellers collectively own all of the issued and outstanding capital stock of the Company (the “Shares”).
Each Seller is the record and beneficial owner of the number of Shares set forth opposite each such Seller’s name on Exhibit A hereto.
Subject to the terms and conditions set forth herein, each Seller desires to assign, transfer and sell to Purchaser, and Purchaser desires to purchase, all of the Shares.
NOW, THEREFORE, in consideration of the respective covenants, agreements, representations and warranties herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the Parties hereby agree as follows:
For convenience, certain terms used in more than one part of this Agreement are listed in alphabetical order and defined or referred to below (such terms as well as any other terms defined elsewhere in this Agreement shall be equally applicable to both the singular and plural forms of the terms defined).
“ACA” is defined in Section 5.22(g)(vii).
“Accelerated Contingent Payment Amount” is defined in Section 2.5(e)(i).
“Accelerated Contingent Payment Date” is defined in Section 2.5(e)(i).
“Accelerated Contingent Payment Notice” is defined in Section 2.5(e)(i).
“Accelerated Contingent Stock Consideration” is defined in Section 2.5(e)(i).
“Accounts Receivable” means, as of any specified date, any trade accounts receivable, notes receivable, bid, lease or performance deposits, employee advances and other miscellaneous
receivables of the Company (whether or not arising out of the ordinary course of business), together with, in each case, the full benefit of any security interest of the Company therein and any claim, remedy or other right related to the foregoing.
“Accredited Investor” means a Seller that is an “Accredited Investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
“Action” means any claim, proceeding, litigation, lawsuit, action, cause of action, demand, suit, arbitration, inquiry, audit, notice of violation, citation, summons, subpoena, investigation, administrative, quasi-administrative or other proceeding, of any nature, civil, criminal, administrative, regulatory or otherwise, whether at Law or in equity.
“Adjusted EBITDA” means EBITDA as adjusted in the same manner as set forth in Parent’s earning press release for the 2018 second fiscal quarter issued on August 7, 2018.
“Adjustment Escrow Amount” means an amount equal to $100,000.
“Adjustment Escrow Fund” means the Adjustment Escrow Amount paid to the Escrow Agent, and any interest earned thereon, which shall be maintained and administered by the Escrow Agent in accordance with the Escrow Agreement to provide a source of funds for the payment of the amounts owing to Purchaser or the Sellers, as applicable, under Section 2.4(d).
“Affiliates” means, with respect to a particular Party, (a) Persons controlling, controlled by or under common control with that Party, as well as any officers, directors and majority-owned entities of that Party and of its other Affiliates, and (b) an Immediate Family Member of that Party. For the purposes of control, ownership, directly or indirectly, of 20% or more of the voting stock or other Equity Interest shall be deemed to constitute control.
“Agreement” means this Agreement, including all schedules, annexes and exhibits hereto.
“Assets” means, collectively, all of the assets, including inventory, properties, business, goodwill and rights of every kind and description, real and personal, tangible and intangible, wherever situated of the Company, whether or not reflected on the Financial Statements.
“Balance Sheet” is defined in Section 5.7(a).
“Balance Sheet Date” is defined in Section 5.7(a).
“Baseline Amount” is defined in Section 2.1.
“Baseline Cash Amount” means $10,800,000.
“Business” means, collectively, the business of providing software as a service (SaaS) for electronic health records and third party administrator services which in either event pertain to PACE organizations.
“Business Day” means a day other than a Saturday, Sunday or other day on which banks located in New York, New York are authorized or required by Law to close.
“Business Intellectual Property” means the Licensed Intellectual Property and the Owned Intellectual Property.
“Buyer Releasing Person” is defined in Section 7.9(f).
“Cash Consideration” is defined in Section 2.1.
“Claim Notice” is defined in Section 9.6(a).
“Claim Response” is defined in Section 9.6(a).
“Closing” is defined in Section 3.1.
“Closing Date” is defined in Section 3.1.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Company” is defined in the Preamble.
“Company Cash” means, collectively, all cash and cash equivalents held by the Company, less (a) any and all restricted cash (including any amounts that are not freely available) and cash necessary to cover all outstanding checks and wire transfers that have been mailed, transmitted or otherwise delivered by the Company but have not cleared its bank or other accounts, all as determined in accordance with GAAP; less (b) any overdrafts or related fees, in each case as of the close of business on the day immediately preceding the Closing Date.
“Company Confidential Information” is defined in Section 7.6.
“Company Contracts” is defined in Section 5.16(b).
“Company Disclosure Schedule” is defined in the preamble to ARTICLE V.
“Company Products” means, each product (including any Software product) or service developed, under development, manufactured, sold, licensed, leased or delivered by the Company, and other products sold, marketed, promoted, or distributed by or on behalf of the Company, including those set forth on Schedule 1.1(a) hereto.
“Company Security” means all outstanding Shares and any other Equity Interest in the Company.
“Company Software” means all Software (including any firmware or other Software embedded in hardware devices) owned, developed (or currently being developed), used, marketed, distributed, licensed or sold at any time by the Company (excluding Software licensed to the Company under Off-the-Shelf Software Licenses solely for internal use).
“Compliance Certificate” is defined in Section 8.1(c).
“Confidential Information” means any information of a Party, including a list, compilation, method, technique or process that derives independent economic value, actual or potential, from
not being generally known to the public or to other Persons who can obtain economic value from its disclosure or use.
“Contingent Business” means, collectively, the Company, Mediture, eClusive and Parent’s Peak PACE division, whether operating together or as separate subsidiaries, business units or divisions of Parent or any subsidiary of Parent.
“Contingent Cash Consideration” is defined in Section 2.5(c)(i).
“Contingent Claim” is defined in Section 9.8.
“Contingent Payment” means, on the Contingent Payment Measurement Date, an amount equal to (PMCE Combined Ending Adjusted Revenue – PMCE Combined Starting Adjusted Revenue + PMCE Combined Ending Adjusted EBITDA – PMCE Combined Starting Adjusted EBITDA) multiplied by two.
“Contingent Payment Measurement Date” means December 31, 2021.
“Contingent Period” means the twelve (12)-month period ending on the Contingent Payment Measurement Date.
“Contingent Statement” is defined in Section 2.5(a).
“Contingent Stock Consideration” is defined in Section 2.5(c)(i).
“Contract” means any written or oral contract, agreement, lease, plan, instrument or other document, commitment, arrangement, undertaking, practice or authorization that is or may be binding on any Person or its property under applicable Law, including any purchase orders or statements of work authorized or issued pursuant to the terms of a contract.
“Customer Contracts” means any Contracts pursuant to which the Company has provided or will provide products or services in connection with the Business.
“Damages” means any and all Liabilities, claims, demands, judgments, losses, Taxes, costs, damages or expenses whatsoever (including reasonable attorneys’, consultants’ and other professional fees and disbursements of every kind, nature and description incurred by such Indemnified Purchaser Party in connection therewith). In no event shall “Damages” be deemed to include any losses, Liabilities, or damages for any “multiple of profits”, “multiple of cash flow” or similar valuation methodology used in calculating the amount of Damages, unless such matter (i) overstates the recurring revenue (or similar revenue streams), EBITDA or cash flows of the Company prior to the Closing, (ii) affects the recurring revenue (or similar revenue streams), EBITDA or cash flows of the Company following the Closing, (iii) understates the recurring expenses (or similar expense line items) or capital expenditures of the Company prior to the Closing or (iv) affects the recurring expenses (or similar expense line items) or capital expenditures of the Company following the Closing.
“Debt Amount” means, collectively, the amount of all Indebtedness of the Company that is outstanding as of the Closing, determined immediately prior to giving effect to the Closing.
“Deductible” is defined in Section 9.3(a).
“Default” means (a) a breach, default or violation, (b) the occurrence of an event that with or without the passage of time or the giving of notice, or both, could constitute a breach, default or violation or (c) with respect to any Contract, the occurrence of an event that with or without the passage of time or the giving of notice, or both, could give rise to a right of termination, renegotiation, acceleration or a right to receive Damages or a payment of penalties.
“Disputed Amounts” is defined in Section 2.5(b).
“Divestiture” means the sale or other disposition of equity or other ownership interests in Excellent Harvest LLC, a Florida limited liability company.
“EBITDA” means earnings before interest, tax, depreciation and amortization.
“eClusive” means eClusive L.L.C., a Minnesota limited liability company.
“Environmental Laws” means all Laws, Environmental Permits, policies, guidance documents, Orders and Contracts with any Governmental Body related to protection of the environment, natural resources, safety or health or the handling, use, recycle, generation, treatment, storage, transportation or disposal of hazardous materials, and any common law cause of action relating to the environment, natural resources, safety, health or the management of or exposure to hazardous materials.
“Environmental Permit” means all permits, licenses, approvals, authorizations or consents required by any Governmental Body under any applicable Environmental Law and includes any and all Orders, consent orders or binding Contracts issued or entered into by a Governmental Body under any applicable Environmental Law.
“Equity Interest” means, in respect of any Person, (a) any capital stock or similar security of (or other ownership or profit interests in) such Person, (b) any security convertible into or exchangeable for any security (or other ownership or profit interests) described in clause (a), (c) any option, warrant, or other right to purchase or otherwise acquire any security described in clauses (a) or (b), (d) any other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination, and (e) any “equity security” within the meaning of the Exchange Act and the rules and regulations promulgated thereunder.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and all regulations and rules promulgated thereunder, or any successor Law.
“ERISA Affiliate” means any Person that, together with the Company, is or was at any time treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.
“Escrow Agreement” means the Escrow Agreement to be entered into on the date hereof by Purchaser, the Sellers’ Representative and the Escrow Agent, in the form attached as Exhibit B hereto.
“Escrow Funds” means the Adjustment Escrow Fund and the Indemnification Escrow Fund.
“Estimated Closing Cash Payment” is defined in Section 2.3.
“Estimated Closing Payment” is defined in Section 2.3.
“Estimated Closing Payment Calculation Statement” is defined in Section 2.2.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Excluded Claim” is defined in Section 7.9.
“Expiration Date” is defined in Section 9.4.
“Final Company Transaction Expenses” means the Transaction Expenses, as finally determined pursuant to Section 2.4(b).
“Final Debt Amount” means the Debt Amount, as finally determined pursuant to Section 2.4(b).
“Final Determination” means, with respect to any issue, (a) an Order by any court of competent jurisdiction, which decision, judgment, decree or other order has become final and not subject to further appeal, (b) a closing agreement entered into under Section 7121 of the Code or any other binding settlement agreement entered into in connection with or in contemplation of an administrative or judicial proceeding, or (c) the completion of the highest level of administrative proceedings if a judicial contest is not or is no longer available.
“Final Net Working Capital” means the Net Working Capital, as finally determined pursuant to Section 2.4(b).
“Final Purchase Price” is defined in Section 2.4(c).
“Final Purchase Price Calculation Statement” is defined in Section 2.4(c).
“Financial Statements” is defined in Section 5.7(a).
“Fundamental Representations” means the representations and warranties set forth in ARTICLE IV (Representations and Warranties of the Sellers), Sections 5.1 (Organization and Standing), 5.2 (Capitalization and Ownership; No Subsidiaries), 5.3 (Authority and Binding Effect), 5.4 (Validity of the Transactions), 5.8 (Taxes), 5.23 (Transactions with Affiliates), and 5.27 (Brokers).
“GAAP” means U.S. generally accepted accounting principles, consistently applied.
“General Cap Claim” is defined in Section 9.3(b).
“Governmental Body” means any (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature, or any political subdivision thereof, (b) federal, state, local, municipal, foreign or other government or (c) governmental or quasi-governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, organization, regulatory body or other entity and any court, arbitrator or other tribunal).
“Governmental Permit Action” is defined in Section 5.18.
“Governmental Permits” means any permits, licenses, registrations, listings, certificates of occupancy, approvals, privileges or other authorizations of any nature whatsoever, granted, approved, accepted or allowed by any Governmental Body.
“Health Care Laws” means Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395-1395hhh (the Medicare statute); Title XIX of the Social Security Act, 42 U.S.C. §§ 1396-1396v (the Medicaid statute); the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b); the False Claims Act, 31 U.S.C. §§ 3729-3733 (as amended); the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812; the Anti-Kickback Act of 1986, 41 U.S.C. §§ 51-58; the Civil Monetary Penalties Law, 42 U.S.C. §§ 1320a-7a and 1320a-7b; the Exclusion Laws, 42 U.S.C. § 1320a-7; HIPAA; and any similar state and local Laws; and all applicable federal, state, and local licensing, state anti-kickback and regulatory and Laws applicable to the services provided by the Sellers.
“HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended from time to time, and the implementing regulations at 45 CFR Parts 160 and 164, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009.
“Immediate Family Member” means spouse (including wife or husband during marriage and widow or widower whether or not remarried, same sex partner, live-in partner during such time as the same reside at the same address), mother, father, brother, sister, lineal descendent, or other named beneficiary under any trusts established by or under the will, testamentary trust or other estate planning document of such Person.
“Indebtedness” as applied to any Person means (without duplication) (a) all indebtedness of such Person for borrowed money, whether current or funded, or secured or unsecured, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or debt securities, (c) all indebtedness of such Person created or arising under any conditional sale or other title retention Contract with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such Contract in the event of Default are limited to repossession or sale of such property), (d) all indebtedness of such Person secured by a mortgage or other Lien to secure all or part of the purchase price of the property subject to such Lien, (e) all obligations under capital leases and those arrangements which should have been recorded as capital leases in respect of which such Person is liable as lessee, (f) any Liability of such Person in respect of banker’s acceptances or letters of credit, (g) all obligations of such Person in respect of the deferred purchase price of property or services (other than current trade accounts payable in the ordinary course of business), (h) obligations of such Person to purchase, redeem, retire, defease
or otherwise make any payment prior to the Closing Date in respect of any Equity Interest in such Person or any other Person or any warrant, right or option to acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the maximum liquidation preference that such Person may be required to pay plus, without duplication, accrued and unpaid dividends, (i) any deferred revenue, (j) any amounts owed to Affiliates of such Person, (k) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by the Company, (l) all interest, fees, prepayment premiums and other expenses owed with respect to the indebtedness referred to in clauses (a) through (k), and (m) all indebtedness referred to above which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.
“Indemnification Escrow Amount” means an amount equal to $1,800,000.
“Indemnification Escrow Fund” means the Indemnification Escrow Amount paid to the Escrow Agent, and any interest earned thereon, which shall be maintained and administered by the Escrow Agent in accordance with the Escrow Agreement to provide a source of funds for the payment of the indemnification obligations set forth in Section 9.1.
“Indemnified Party” means any Person that is seeking indemnification pursuant to the provisions of this Agreement.
“Indemnified Purchaser Party” is defined in Section 9.1(a).
“Indemnified Seller Party” is defined in Section 9.2(a).
“Indemnitor” means any Party from which any Indemnified Party is seeking indemnification pursuant to the provisions of this Agreement.
“Independent Accounting Firm” is defined in Section 2.4(c).
“Intellectual Property” means all intellectual property and industrial property rights and assets, and all rights, interests and protections that are associated with, similar to, or required for the exercise of, any of the foregoing, however arising, pursuant to the Laws of any jurisdiction throughout the world, including any and all: (a) inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereon, and all patents, patent applications and patent disclosures, together with all provisionals, reissues, continuations, continuations-in-part, divisions, renewals, extensions and reexaminations thereof, and all industrial designs and registrations and applications therefor, (b) trademarks, service marks, trade dress, logos, slogans, trade names, domain names, URLs, brand names, and corporate names, user names, screen names, internet and mobile account names (including social media names, “tags,” and “handles”) or other designations of source, origin, sponsorship, endorsement or certification, together with all goodwill associated with any of the foregoing, whether or not applied for or registered and all applications, registrations and renewals in connection therewith, (c) all copyrights and copyrightable works and all applications, registrations and renewals in connection therewith, together with all translations, adaptations, derivations and combinations thereof and all website content, documentation, advertising copy, marketing materials, specifications, drawings,
graphics, databases, and recordings, (d) all trade secrets and Confidential Information (including ideas, source code, object code, invention disclosure statements, databases, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, methods, schematics, technology, tools, methods, product road maps, technical data, designs, drawings, flowcharts, block diagrams, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals) (“Trade Secrets”), (e) all computer software (including data and related documentation) and databases, and any and all software implementations of algorithms, specifications, models and methodologies, application programming interfaces, user interfaces, assemblers, applets, compilers, compiled code, binaries, design tools, development tools, operating systems, in each case whether in source code or object code, design documents, flow-charts, user manuals and training materials relating thereto and any translations, compilations, arrangements, adaptations, and derivative works thereof (“Software”), (f) all other proprietary rights and rights of publicity relating to any of the foregoing, including rights to priority, causes of action, damages and remedies for past, present and future infringements, misappropriations or other violations thereof and rights of protection of an interest therein under the Laws of any jurisdiction, and (g) all copies and tangible embodiments of any of the foregoing (in whatever form or medium).
“IRS” means the U.S. Internal Revenue Service.
“IT Systems” means the hardware, Software (other than proprietary software developed for or by the Company for its own internal use or providing to Persons), databases (but not including any data contained therein or associated therewith), data communication lines, network and telecommunications equipment, Internet-related information technology infrastructure, wide area network and other information technology equipment, owned, leased or licensed by the Company, or any of them, but excluding such lines or infrastructure owned or operated by third parties (e.g., internet service providers, telecommunications carriers, and the like) to which the Company has access under a Contract.
“Knowledge,” “to the knowledge of,” or phrases of similar import, with respect to an individual, means the actual knowledge of an individual after due inquiry. A Person other than an individual shall be deemed to have “Knowledge” of a fact or matter if any individual who is serving as a director, manager or officer of that Person (or in any similar capacity) has, or at any time had, Knowledge of a fact or matter.
“Law” means any federal, state, local or municipal law, statute, constitution, ordinance, code, decree, rule, regulation, ruling, requirement, policy or guideline issued, enacted, adopted or promulgated by or under the authority of any Governmental Body.
“Liability” means any direct or indirect liability, indebtedness, obligation, commitment, expense, debt, claim, loss, damage, deficiency, guaranty or endorsement of any nature whatsoever, of or by any Person, whether absolute or contingent, asserted or unasserted, known or unknown, secured or unsecured, recourse or non-recourse, filed or unfiled, accrued or unaccrued, due or to become due, or liquidated or unliquidated.
“Licensed Intellectual Property” means all Intellectual Property owned by a third party and used or held for use by the Company under a license, sublicense or permission.
“Liens” means any lien, mortgage, security interest, pledge, restriction on transferability, defect of title or other claim, charge or encumbrance of any nature whatsoever on any property or property interest, including any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.
“Liquidated Claim Notice” is defined in Section 9.6(a).
“Malware” means computer instructions or code that can alter, destroy, shut down, lock out, lock up, encrypt, inhibit or interfere with the operation of or access to computer software, databases, data, network, servers, or any related computer environment, including but not limited to other programs’ data storage and computer libraries; programs that self-replicate without manual intervention; instructions programmed to activate at a predetermined time upon a specified event; programs that permit unauthorized access to computer software or hardware or databases; programs that purport to do a meaningful function but are designed for a different and harmful function; and programs that perform no useful function but utilize substantial computer, telecommunications, memory, or other resources, including viruses, Trojan horses, botnets, spiders, time bombs, protect codes, data destruction keys, trap doors, kill switches, and similar codes or devices.
“Material Adverse Effect” means any change, effect event, violation, inaccuracy, circumstance or other matter that, individually or in the aggregate, is or could reasonably be expected to be materially adverse to (i) the Liabilities, financial condition, assets, results of operations, prospects, liquidity, products, competitive position, customers or customer relations of the Company or the Business or (ii) the ability of the Sellers or the Company to consummate the Transactions or to perform any of their respective obligations under this Agreement, in each case other than any such effect or change resulting from or arising in connection with (a) general economic or industry-wide conditions which do not disproportionately affect the Company or the Business, (b) acts of terrorism or military action or the threat thereof which do not disproportionately affect the Company or the Business or (c) any change in accounting requirements or principles or any change in applicable Law.
“Maximum Share Number” means 19.9% of the issued and outstanding shares of Parent Stock as of the close of trading on the last trading day immediately prior to the Closing Date, rounded down to the nearest whole share.
“Mediture” means Mediture LLC, a Minnesota limited liability company.
“Net Working Capital” means the current assets of the Company (including the Company Cash, but excluding prepaid software licenses) less the current liabilities of the Company (excluding the Transaction Expenses and the current portion of any Indebtedness), each determined as of the close of business on the day immediately preceding the Closing Date in a manner consistent with the preparation of the Financial Statements, the Net Working Capital Schedule and the Target Net Working Capital, including the application of GAAP therein, consistently applied, and, to the extent consistent with GAAP, shall be consistent in all material respects with the books and records of the Company.
“Net Working Capital Schedule” means the schedule attached hereto as Schedule 2, which schedule contains the calculations and principles used to determine the Net Working Capital.
“Non-Qualified Deferred Compensation Plan” is defined in Section 5.22(g)(vi).
“Notice of Objection” is defined in Section 2.5(b).
“Notice of Third Party Claim” is defined in Section 9.5(a).
“Off-the-Shelf Software License” means any license or other Contract for generally commercially available, off-the-shelf Software that in each case has incurred license fees of less than $5,000.
“Open Source Software” means any Software subject to a license agreement that (a) requires the licensor to permit reverse-engineering of the licensed Software or other Software incorporated into, derived from, or distributed with such licensed Software (except to the extent required by law for interoperability purposes), or (b) requires the licensed Software or other Software incorporated into, derived from, or distributed with such licensed Software to (i) be distributed in source code form; (ii) be licensed for the purpose of making derivative works; or (iii) be distributed at no charge. Open Source Software license agreements include, but are not limited to: (a) GNU’s General Public License (GPL) or Lesser/Library GPL (LGPL), (b) The Artistic License (e.g. PERL), (c) the Mozilla Public License, (d) the Netscape Public License, (e) the Sun Community Source License (SCSL), (f) the Sun Industry Standards Source License (SISSL), (g) the Apache Server license, (h) the QT Free Edition License, (i) the IBM Public License, (j) BitKeeper and (k) the Common Public License.
“Order” means any judgment, decree, injunction, order, ruling, writ, citation or award of any nature of any Governmental Body or other authority that is binding on any Person or its property under applicable Law.
“Ordinary course” or “ordinary course of business” means, with respect to an action taken by any Person, an action that (a) is consistent in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary course of the normal, day-to-day operations of such Person, (b) does not require authorization by the board of directors or shareholders of such Person (or by any Person or group of Persons exercising similar authority) and does not require any other separate or special authorization of any nature and (c) is similar in nature, scope and magnitude to actions customarily taken, without any separate or special authorization, in the ordinary course of the normal, day-to-day operations of other Persons that are in the same line of business as such Person.
“Organizational Documents” means an entity’s certificate or articles of incorporation, formation or organization, certificate defining the rights and preferences of securities, general or limited partnership agreement, bylaws or operating agreement, certificate of limited partnership, joint venture agreement or similar document governing the entity.
“OSS License” means any license or other Contract pursuant to which Software is licensed or distributed that requires licensees or recipients to (i) disclose or otherwise make available the source code for any Software incorporating or using such licensed or distributed Software, or that
is a derivative work of such licensed distributed Software, or that was otherwise authored or developed using such licensed or distributed Software, or (ii) distribute or make available the Software described in item (i) on terms specified in such license or other Contract, including, but not limited to, the GNU General Public License (GPL) (any version) or other open source code license.
“OSS Modifications” means any and all modifications to or derivative works of any Open Source Software made by or on behalf of the Company.
“Owned Intellectual Property” means all Intellectual Property owned or purported to be owned by the Company.
“Parent” means Tabula Rasa HealthCare, Inc., a Delaware corporation.
“Parent Stock” means the common stock, par value $0.0001 per share, of Parent.
“Parent Stock Value” means, as of an applicable date, an amount per share of Parent Stock equal to the arithmetic average of the volume-weighted average (rounded to two decimal places) trading price per share of Parent Stock for the fifteen (15) full trading days ended on and including the trading day immediately prior to such applicable date, using trading prices reported on (a) the NASDAQ Global Market based or (b) such other trading market that Parent Stock is trading on as of such applicable date, in each case based on all trades in Parent Stock on the NASDAQ Global Market (or such other trading market) during the primary trading sessions from 9:30 a.m., Eastern Time, to 4:00 p.m., Eastern Time (and not an average of the daily averages during such fifteen (15) trading days).
“Party” is defined in the Preamble.
“Payoff Letters” is defined in Section 3.2(a)(vi).
“Peak” means Parent’s Peak Health Plan Management Services division.
“Permitted Liens” means (a) Liens for Taxes, assessments or similar charges not yet due and payable, (b) Liens of mechanics, materialmen, warehousemen, carriers, or other like Liens securing obligations incurred in the ordinary course of the Business not yet due and payable or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been set aside therefor, and (c) easements, rights of way, restrictions, and the like affecting any real property, in each case of record, visible upon a physical inspection of the real property or otherwise made known to Purchaser and which, individually or in the aggregate, do not materially affect the use and enjoyment of the real property.
“Person” means any natural person, corporation, limited liability company, partnership, proprietorship, association, joint venture, trust or other legal entity.
“Personal Information” means (i) any information or data that alone or together with any other data or information relates to an identified or identifiable natural person and (ii) any other information or data considered to be personally identifiable information or data under applicable
Laws (including financial information and protected health information, as such term is defined under HIPAA).
“Plans” means (a) any pension plan, 401(k) plan, profit-sharing plan, health or welfare plan, and any other employee benefit plan (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA) that is maintained or sponsored by the Company or to which the Company contributes or for which the Company otherwise has or may have any Liability, either directly or as a result of an ERISA Affiliate, and (b) any other benefit arrangement, obligation, or practice, whether or not legally enforceable, to provide benefits as compensation for services rendered, to one or more present or former employees, directors, agents, or independent contractors, that is maintained or sponsored by the Company or to which the Company contributes or for which the Company otherwise has or may have any Liability either directly or as a result of an ERISA Affiliate, including employment Contracts, offer letters, severance policies or Contracts, retention or change in control compensation agreements, executive compensation arrangements, bonus, commission or other incentive arrangements, equity-based compensation, deferred compensation arrangements, welfare or fringe benefits, and each other employee benefit plan, fund, program, Contract or arrangement.
“PMCE Combined Ending Adjusted EBITDA” means the combined Adjusted EBITDA of Peak, Mediture, eClusive and the Company at year end 2021.
“PMCE Combined Ending Adjusted Revenue” means the combined revenue of Peak, Mediture, eClusive and the Company at year end 2021 but excluding (i) inter-company billings (for example, fees charged by Cognify to Peak) and (ii) the applicable percentage of revenue earned from the clients set forth on Schedule 1.1(b).
“PMCE Combined Starting Adjusted EBITDA” means the annualized combined Adjusted EBITDA of Peak, Mediture, eClusive and the Company based on such combined Adjusted EBITDA for that portion of the fourth quarter of fiscal year ended December 31, 2018 for which each of Peak, Mediture, eClusive and the Company are, respectively, a subsidiary or division of Parent.
“PMCE Combined Starting Adjusted Revenue” means the annualized combined revenue of Peak, Mediture, eClusive and the Company based on such combined revenue for that portion of the fourth quarter of fiscal year ended December 31, 2018 for which each of Peak, Mediture, eClusive and the Company are, respectively, a subsidiary or division of Parent, but excluding (i) inter-company billings (for example, fees charged by Cognify to Peak) and (ii) the applicable percentage of revenue earned from the clients set forth on Schedule 1.1(b).
“Post-Closing Tax Period” means any taxable period beginning after the Closing Date.
“Pre-Closing Tax Period” means any taxable period ending prior to or on the Closing Date and the portion of any Straddle Period ending on the Closing Date.
“Prime Rate” means the prime lending rate as reported in The Wall Street Journal from time to time as the base rate on corporate loans.
“Privacy Laws” is defined in Section 5.29(a).
“Purchase Price” is defined in Section 2.1.
“Purchaser” is defined in the Preamble.
“Purchaser’s Closing Payment” is defined in Section 2.4(a).
“Purchaser’s Closing Payment Calculation Statement” is defined in Section 2.4(a).
“Purchaser’s Proposed Calculations” is defined in Section 2.4(a).
“Qualified Plan” is defined in Section 5.22(c).
“Real Estate Agreements” is defined in Section 5.14(b).
“Real Estate Lease” is defined in Section 5.14(a).
“Real Estate License” is defined in Section 5.14(b).
“Real Property” means all rights and interests in or to real property (including any real estate, land, building, condominium, town house or other real property of any nature), including all shares of stock or other ownership interests in cooperative or condominium associations, fee estates, leaseholds and subleaseholds, purchase and leasehold options, easements, licenses, rights of use and occupancy, privileges, hereditaments, appurtenances thereto, rights to access and rights of way, easement or prescriptive right and all structures, owned by the Company or used in the operation of the Business, together with any additions thereto or replacements thereof.
“Registered IP” is defined in Section 5.15(a).
“Release” means any release, spill, emission, leaching, leaking, migration, dumping, emptying, pumping, injection, deposit, disposal, discharge or dispersal into the indoor or outdoor environment, or into or out of any property.
“Released Claims” is defined in Section 7.9(a).
“Releasee” is defined in Section 7.9(a).
“Releasor” is defined in Section 7.9(a).
“Remaining Disputed Items” is defined in Section 2.4(c).
“Response Period” is defined in Section 9.6(a).
“Restricted Party” is defined in Section 7.5.
“Restricted Period” is defined in Section 7.5.
“Review Period” is defined in Section 2.4(b).
“Scheduled IP” is defined in Section 5.15(a).
“SEC” means the United States Securities and Exchange Commission.
“SEC Documents” is defined in Section 6.6.
“SEC Effective Date” is defined in Section 6.6.
“Securities Act” means the Securities Act of 1933, as amended.
“Seller Released Person” is defined in Section 7.9(f).
“Sellers” is defined in the Preamble.
“Sellers’ Proposed Calculations” is defined in Section 2.4(b).
“Sellers’ Representative” is defined in the Preamble.
“Setoff Notice” is defined in Section 9.3(g).
“Shares” is defined in the Background.
“Software” is defined in the definition of “Intellectual Property.”
“State Privacy Laws” is defined in Section 5.29(a).
“Statements” is defined in Section 2.5(a).
“Stock Amount” is defined in Section 2.1.
“Stock Consideration” is defined in Section 2.1.
“Straddle Period” means any taxable period beginning on or before and ending after the Closing Date.
“Target PMCE Statement” is defined in Section 2.5(a).
“Target Working Capital” means $830,000.
“Tax Returns” means all reports, returns, statements, elections, declarations, disclosures, informational returns or statements (including estimated reports, returns, schedules or statements) and other similar filings required to be filed by a Party with respect to any Taxes (including any schedule or attachment thereto), and including any amendment thereof.
“Taxes” shall mean all U.S. federal, state, local and non-U.S. taxes, assessments and other governmental charges, duties (including stamp duty), impositions and liabilities, including income, gross receipts, value-added, excise, withholding, personal property, real estate, sale, use, ad valorem, license, lease, service, severance, stamp, transfer, payroll, employment, unemployment, windfall, escheat or unclaimed property, environmental, social security (or equivalent), Medicare, customs, duties, alternative, add-on minimum, estimated and franchise taxes (including any interest, penalties or additions attributable to or imposed on or with respect to any such
assessment), whether disputed or not, and including any liability for the payment of the foregoing obligations of another Person as a result of (a) being or having been a member of an affiliated, consolidated, combined, unitary or aggregate group of corporations including by application of Treasury Regulation Section 1.1502‑6 or any similar provision of applicable Law; (b) being or having been a party to any tax sharing agreement or any express or implied obligation to indemnify any Person; and (c) being or having been a transferee, successor, or otherwise assuming the obligations of another Person to pay the foregoing amounts.
“Third Party Claim” is defined in Section 9.5(a).
“Third Party Defense” is defined in Section 9.5(b).
“Trade Secrets” is defined in the definition of “Intellectual Property.”
“Transaction Documents” means this Agreement, the Escrow Agreement and any other certificate, instrument, Contract or document required to be delivered pursuant to the terms hereof.
“Transaction Expenses” means the sum of the following costs and expenses incurred, whether or not such costs or expenses have been paid prior to the date hereof or are paid prior to the Closing: (a) all fees, costs and expenses incurred by any of the Sellers or the Company relating to the Transactions, including legal, accounting, investment banking (including any broker’s fees), Tax, financial advisory and appraisal costs, and all other fees and expenses of third parties incurred in connection with the negotiation, preparation, execution and effectuation of the Transaction Documents, (b) the aggregate amount payable under any change of control, severance, transaction or retention bonuses, golden parachute, Tax gross-up or similar payments which are payable by the Company in connection with the consummation of the Transactions, including all payroll Taxes (including the employer portion of any employment Taxes payable with respect thereto, and other Taxes required to be withheld with respect to such payments or on account of any payment with respect to any Equity Interests), (c) any payments, costs, fees or expenses associated with obtaining any waivers, consents or approvals required in connection with the Transactions, (d) all costs, fees, premiums and expenses of purchasing the tail policy required by Section 7.3, and (e) 50% of the Escrow Agent’s fees and expenses incurred pursuant to the Escrow Agreement.
“Transactions” means the sale and purchase of the Shares, and the other transactions contemplated by the Transaction Documents.
“Transfer Taxes” is defined in Section 7.2(b).
“Unliquidated Claim” is defined in Section 9.6(a).
deliver to Purchaser, free and clear of all Liens, and Purchaser shall purchase from each Seller, all of such Seller’s right, title and interest in, to and under, the Shares in consideration of (a) an aggregate amount of cash equal to the Baseline Cash Amount minus, (i) the Final Debt Amount, minus (ii) the Escrow Funds, minus (iii) the Final Company Transaction Expenses, and, (iv) if the Final Net Working Capital exceeds the Target Working Capital, plus the amount of such excess, and, (v) if the Final Net Working Capital is less than the Target Working Capital, minus the amount of such deficiency (the “Cash Consideration”) and (b) a number of shares of Parent Stock with an aggregate value equal to $7,200,000 (the “Stock Amount,” and together with the Baseline Cash Amount, the “Baseline Amount”) at the Parent Stock Value calculated as of the date of this Agreement (the “Stock Consideration” and together with the Cash Consideration, the “Purchase Price”). |
(a) | to each Seller, the cash amount and number of shares of Parent Stock as are set forth in the Estimated Closing Payment Calculation Statement; |
(b) | to each holder of any Debt Amount, the amount(s) of the applicable Indebtedness owed to such holder pursuant to wire instructions or other payment instructions provided by such holder; |
(c) | to each Person to whom a Transaction Expense is owed, the amount of the applicable Transaction Expense pursuant to wire instructions or other payment instructions provided by such Person; and |
(d) | to the Escrow Agent, the Indemnification Escrow Amount and the Adjustment Escrow Amount pursuant to wire instructions provided by the Escrow Agent. |
(i) If the Final Purchase Price is greater than the Estimated Closing Payment, then Purchaser shall, within five (5) Business Days of the date upon which the Final Purchase Price is determined, pay the amount of any such excess to the Sellers’ Representative (for further distribution to the Sellers) in accordance with written instructions provided by the Sellers’ Representative to Purchaser, and Purchaser and the Sellers’ Representative shall provide joint written instructions to the Escrow Agent to pay the Adjustment Escrow Amount to the Sellers’ Representative (for further distribution to the Sellers); and |
(ii) If the Final Purchase Price is less than the Estimated Closing Payment, then the Sellers’ Representative and Purchaser shall, within five (5) Business Days of the date upon which the Final Purchase Price is determined, provide joint written instructions to the Escrow Agent to pay the amount of any such deficiency to Purchaser; provided that, if such deficiency (stated as a positive number) is (a) greater than the Adjustment Escrow Amount, the |
Sellers’ Representative (on behalf of the Sellers) shall pay Purchaser the amount of such excess, or (b) lesser than the Adjustment Escrow Amount, Purchaser and the Sellers’ Representative shall provide joint written instructions to the Escrow Agent to pay the remaining portion of the Adjustment Escrow Amount to the Sellers’ Representative (for further distribution to the Sellers). |
Purchaser, on the other hand, based on the degree to which the Independent Accounting Firm has accepted the positions of the respective Parties. The determination of the Disputed Amounts by the Independent Accounting Firm shall be final and binding upon Purchaser and the Sellers. |
(ii) Notwithstanding anything to the contrary set forth in this Agreement, in no event shall the aggregate amount of the Contingent Payment, if any, required to be paid by Purchaser to the Sellers pursuant to this Section 2.5 exceed $14,000,000. In the event that the calculation of the Contingent Payment exceeds $14,000,000, the Contingent Payment shall be reduced to $14,000,000. |
(d) | Operation of the Company during Contingent Periods. From the Closing Date until the end of the Contingent Period (or, if earlier, the Accelerated Contingent Payment Date): |
(i) Purchaser will operate the Contingent Business in such a manner that will permit the Parties to maintain sufficiently independent financial information to enable the calculation of the PMCE Combined Starting Adjusted EBITDA and the PMCE Combined Starting Adjusted Revenue during the calendar year ended December 31, 2018, and the PMCE Combined Ending EBITDA and the PMCE Combined Ending Adjusted Revenue during the Contingent Period; |
(iii) Purchaser shall not, directly or indirectly, take any actions in bad faith that would have the purpose of avoiding or reducing any of the Contingent Payments hereunder. |
(ii) At any time following the delivery of an Accelerated Contingent Payment Notice and prior to the Accelerated Contingent Payment Date, Purchaser may, in its sole discretion, elect to rescind such Accelerated Contingent Payment Notice by providing notice to the Sellers’ Representative. For the avoidance of doubt, in the event that Purchaser rescinds an Accelerated Contingent Payment Notice, the provisions of this Section 2.5 shall continue to apply. |
Contingent Payment shall occur with the Contingent Payment payable one hundred percent (100%) in cash. |
(f) | No Security. For the avoidance of doubt, the rights of the Sellers to receive the Contingent Payment shall not be transferable. The Parties understand and agree that (i) the contingent rights to receive the Contingent Payment, if any, shall not be represented by any form of certificate or other instrument, are not transferable, except by operation of Laws relating to descent and distribution, divorce and community property, and do not constitute an equity or ownership interest in Parent, (ii) the Sellers shall not have any rights as a security holder of Parent as a result of the Seller’s contingent right to receive the Contingent Payment, if any, hereunder, and (iii) no interest is payable with respect to the Contingent Payment. |
(h) | Interest. Any unpaid portion of the Contingent Payment that is due and payable in accordance with the terms hereof that is not timely paid or placed into escrow as contemplated by Section 9.3(g), whether as a result of an acceleration or otherwise, shall bear interest at an annual rate equal to the Prime Rate for each day during which the obligation remains unpaid. |
(i) a duly executed counterpart to the Escrow Agreement by the Sellers’ Representative; |
(ii) a certificate of the Secretary of the Company, duly executed and dated the Closing Date, as to the incumbency of each officer of the Company executing a Transaction Document or any document related thereto, attaching and certifying the Organizational Documents of the Company, all of the resolutions adopted by the board of directors of the Company and the Sellers relating to this Agreement, the Transactions or any document related thereto, and a good standing certificate for the Company issued by the Secretary of State of California; |
(iii) all certificates evidencing the Shares in negotiable form free and clear of all Liens, transfer and stamp Tax obligations, duly endorsed in blank for transfer to, or accompanied by duly executed stock transfer powers executed in favor of, Purchaser; |
(iv) spousal consent, if applicable, with respect to the sale of the Shares hereunder for any Seller who is a resident of a state that recognizes such Shares as community property under applicable state statutes, via a counterpart signature to this Agreement; |
(v) resignations, in form and substance reasonably satisfactory to Purchaser, of each director and each officer of the Company, which resignations shall be effective as of the Closing; |
(viii) the Estimated Closing Payment Calculation Statement in accordance with Section 2.2; |
(x) all corporate books and records and other property of the Company in the possession of the Sellers or any Affiliate thereof (other than the Company); |
(xi) the additional deliverables referenced in Section 8.1; and |
(xii) such other documents, instruments, certificates and Contracts as may be reasonably required by Purchaser to consummate and give effect to the Transactions. |
(ii) duly executed counterparts to the Escrow Agreement by Purchaser and the Escrow Agent; and |
(iii) such other documents, instruments, certificates and Contracts as may be reasonably required by the Sellers to consummate and give effect to the Transactions. |
Each of the Sellers, severally but not jointly, and solely with respect to such Seller, hereby represents and warrants to Purchaser as follows:
(d) | Such Seller is aware that no federal or state or other agency has passed upon or made any finding or determination concerning the fairness of the Transactions or the adequacy of the disclosure of the exhibits and schedules hereto and such Seller must forego the security, if any, that such a review would provide. |
(f) | No Seller has been offered Parent Stock by any form of advertisement, article, notice, or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any such media. |
(h) | Purchaser has not given such Seller any investment advice, credit information or opinion on whether the sale of the Shares to Purchaser pursuant to the terms and conditions of this Agreement is prudent. |
Except as set forth in the disclosure schedules accompanying this Agreement (with specific reference to the representations and warranties to which the information in such schedule relates) (collectively, the “Company Disclosure Schedule”), each of the Sellers, jointly and severally, hereby represent and warrant to Purchaser as follows:
(b) | There are no (a) existing Contracts, subscriptions, options, phantom equity rights, equity appreciation rights, warrants, calls, commitments or rights of any character to purchase or otherwise acquire from any Seller or the Company at any time, or upon the happening of any stated event, any Company Securities, whether or not presently issued or outstanding, (b) Equity Interests of the Company that are convertible into or exchangeable for Company Securities, or (c) Contracts, subscriptions, options, warrants, calls or rights to purchase or otherwise acquire from the Company any such convertible or exchangeable securities. |
(d) | The Company does not own or control, directly or indirectly, any membership interest, partnership interest, joint venture interest, other equity or ownership interest or any other capital stock of any Person. |
(e) | Schedule 5.2(e) sets forth a complete and accurate list of all agreements related to or entered into in connection with the Divestiture. |
5.6 Third Party Options. There are no existing Contracts, options or rights with, to or in any third party to acquire the Company, any of the Assets or any interest therein or in the Business. |
(a) | The Company has timely filed with the appropriate Governmental Body all Tax Returns required to be filed by or on behalf of the Company or any affiliated group (within the meaning of Section 1504 of the Code or any similar unitary, combined or consolidated group under state, local or foreign Law) of which the Company is or was a member and all such Tax Returns are true, correct and complete in all respects. Schedule 5.8 contains a list of all jurisdictions (whether foreign or domestic) in which the Company files Tax Returns. The Company is not currently the beneficiary of any extension of time within which to file any Tax Return. The Company has not received a written claim and neither the Company nor any Seller has Knowledge of any other claim by a Governmental Body in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to Tax by that jurisdiction. |
(b) | All Taxes payable by or on behalf of the Company and its respective Affiliates, or any affiliated group of which the Company is or was a member, have been fully and timely paid, whether or not shown on any Tax Return. Taking into account the methodology for allocating Taxes for any Straddle Period set forth in Section 7.2(c), the amount of the Company’s Liability for unpaid Taxes as of the Balance Sheet Date did not exceed the amount of the current Liability accruals for Taxes shown on the Balance Sheet, and the amount of the Company’s Liability for unpaid Taxes for all periods or portions thereof ending on or before the Closing Date will not exceed the amount of the current Liability accruals for Taxes as such accruals are reflected on the books and records of the Company on the Closing Date. |
(c) | There is no audit, examination, suit, proceeding or claim currently pending or threatened against the Company in respect of any Taxes, and no notice of any audit, examination or claim for Taxes, whether pending or threatened, has been received by the Company or any Seller. All deficiencies asserted or assessments made as a result of any examinations by any Governmental Body of the Tax Returns of the Company have been fully paid. |
(d) | The Company has withheld and timely paid over to the proper Governmental Body all Taxes required to have been withheld and paid over by the Company, and the Company has complied with all information reporting and backup withholding requirements, including maintenance of required records with respect thereto. |
(e) | The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. |
(g) | Copies of (i) any Tax examinations, (ii) extensions of statutory limitations for the collection or assessment of Taxes, and (iii) the Tax Returns of the Company for the last three (3) fiscal years have been delivered to Purchaser. |
(h) | There are (and as of immediately following the Closing there will be) no Liens on the Assets of the Company relating to or attributable to Taxes other than Permitted Liens. |
5.9 Undisclosed Liabilities. The Company does not have any Liabilities except for those Liabilities: |
(a) | adequately and specifically set forth or reserved for on the Financial Statements and not heretofore paid or discharged; |
(c) | incurred since the Balance Sheet Date in the ordinary course of business and not heretofore paid or discharged which do not, in the aggregate, exceed $20,000. |
used by the Company in the Business (other than immaterial items of personal property owned by the Company’s employees). |
(c) | The Company has not granted any assignment, sublease, license, concession or other occupancy or right of use agreements to any third party in connection with the Real Estate Agreements. |
(i) Customer Contract; |
(ii) Contract with any present or former employee, contractor, agent or consultant, including any Contract to lend money to any present or former employee, contractor, agent or consultant; |
(iii) Contract to lease or operate any personalty; |
(iv) Contract for the future purchase or licensing of, or payment for, supplies, products, Intellectual Property or services or the use thereof by the Company that involves an amount in excess of $20,000 in the aggregate during any calendar year; |
(v) Representative agency Contract; |
(vi) Note, debenture, bond, conditional sale Contract, equipment trust Contract, letter of credit Contract, reimbursement Contract, loan Contract or other Contract for the borrowing or lending of money (including loans to or from officers, directors, members, partners, shareholders of the Company, any Seller or any members of their respective immediate families), Contract or arrangement for a line of credit or for a guarantee of, or other undertaking in connection with, the Indebtedness of any other Person; |
(viii) Contract with any Governmental Body; |
(ix) Contract involving the acquisition of equity or assets of another Person, including by merger, consolidation or otherwise; |
(x) Broker, finder, dealer, commission, reseller, distributor or other agency Contract; |
(xi) Joint venture, partnership or similar Contract, or any Contract providing for any sharing of revenues, losses or similar arrangement; |
(xii) Contract pursuant to which the Company has granted, or agreed to grant, any rebate; |
(xiii) Contract pursuant to which the Company has granted, or agreed to grant, any rebate or “most favored nation” pricing or any similar provision which grants any right with respect to the modification or adjustment of pricing or other terms of a Contract on the basis of future acts or omissions by the Company; |
(xiv) Contract relating to Licensed Intellectual Property or any other license, franchise, distributorship or other similar Contract; |
(xv) Contract for any capital expenditure or leasehold improvements; |
(xvi) Contract for any charitable or political contribution; |
(xviii) Contract material to the Business (not otherwise set forth on Schedule 5.16(a)). |
(c) | The Company has made all of the filings, reports, submissions, and notifications required to be made by it under any Laws and Governmental Permits applicable to it, the Business or the Assets and has paid all due fees and charges in full. The Company has retained all records required to be retained under applicable Laws and Governmental Permits. At the time of maintenance, filing, submission, or furnishing, all filings, reports, submissions, notifications, and records were timely made and were complete and accurate in all material respects, or were subsequently updated, changed, corrected, or modified. |
(f) | No Seller, nor any Person providing services to the Company, nor their respective officers, directors, partners, employees, or agents have been: |
(i) debarred or suspended pursuant to 21 U.S.C. § 335a; |
(ii) excluded under 42 U.S.C. § 1320a-7 or any similar law, rule or regulation of any Governmental Body; |
(iii) excluded, debarred, suspended or deemed ineligible to participate in federal procurement and non-procurement programs, including those produced by the U.S. General Services Administration; |
(v) disqualified or deemed ineligible pursuant to 21 C.F.R. Parts 312, 511, or 812, or otherwise restricted, in whole or in part, or subject to an assurance; or |
(vi) within the past six (6) years, the subject of an audit, inspection, investigation, inquiry, or review by a Governmental Body, including, without limitation, the Medicare or Medicaid programs. |
(b) | The Company is not delinquent in any material respect in payments to any of its employees or independent contractors for any wages, salaries, commissions, bonuses, profit sharing, benefits, vacation pay or other compensation for any services performed for the Company or amounts required to be reimbursed to such employees. Except as set forth on Schedule 5.21, the Company has the right to terminate the employment of each of its employees at will and to terminate the engagement of any of its independent contractors without payment to such employee or independent contractor other than for services rendered through termination and without incurring any Liability. |
any material Liability or Lien, penalty, or Tax under ERISA or the Code or any other applicable Law, and the Qualified Plans have been timely amended to comply with current Law. |
(ii) the Company has not incurred any Liability for excise, income or other Tax or penalty with respect to any Plan, and no event has occurred and no circumstance exists or has existed that could reasonably be expected to give rise to any such Liability; |
(iii) no Plan contains any provision or is subject to any Law that would (A) prohibit the Transactions or that would give rise to (B) any vesting or payment of benefits, severance, termination, bonuses or other payments, (C) the enhancement of any benefits or |
(iv) the Company has paid all amounts that it is required to pay as contributions to the Plans as of the Closing Date, and as required in accordance with GAAP, the Financial Statements as of the Balance Sheet Date reflect the approximate total pension, medical and other benefit expense for all Plans as of the date thereof and all monies withheld from employee paychecks with respect to Plans have been transferred to the appropriate Plans in a timely manner as required by applicable Laws; |
(h) | No Seller employs, nor has it ever employed, any person outside the United States, and there are no Plans outside the United States. |
past five (5) years) any business dealings or a financial interest in any transaction with the Company or involving any assets or property of the Company. |
(a) | any change that has had or could reasonably be expected to have a Material Adverse Effect; |
(b) | any declaration, setting aside or payment of any dividend or other distribution (whether in cash, equity or ownership interests or property) with respect to any Company Security, or any repurchase, redemption or other reacquisition of any Company Security; |
(c) | any increase in the compensation payable or to become payable to any director or non-manager employee, except for increases for such directors or employees made in the ordinary course of business; |
(d) | any other change in any employment or consulting arrangement, except for such changes made in the ordinary course; |
(e) | any payment to any agent or management employee not in accordance with such agent’s or employee’s compensation levels currently in effect; |
(f) | any sale, assignment, leasing, subleasing or transfer of Assets, or any additions to or transactions involving any Assets, other than those made in the ordinary course of business; |
(g) | other than in the ordinary course of business, any waiver or release of any claim or right or cancellation of any debt held; |
(h) | any distributions or payments to any Affiliate of the Company; |
(i) | any capital expenditure, except for such capital expenditures made in the ordinary course; |
(j) | any incurrence of any debts for money borrowed; |
(l) | any Contract to do any of the foregoing. |
(b) | the names of all Persons authorized to borrow money or incur or guarantee Indebtedness on behalf of the Company; and |
(c) | all names under which the Company has conducted any Business or which it has otherwise used since its date of incorporation. |
notice of, and neither the Company nor any Seller has Knowledge of any basis for, any material complaint by any customer or supplier of the Company. |
Purchaser hereby represents and warrants to the Sellers as follows:
6.1 Organization and Standing. Purchaser is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware. |
desired by Purchaser. The purchase of the Shares by Purchaser and the consummation of the Transactions by Purchaser are not done in reliance upon any representation or warranty or omission by, or information from, the Sellers, the Company, or any of their respective Affiliates, employees or representatives, whether oral or written, express or implied, including any implied warranty of merchantability or of fitness for a particular purpose, except for the representations and warranties specifically and expressly set forth in ARTICLE IV and ARTICLE V (in each case, as modified by the Schedules), and Purchaser acknowledges that the Company and the Sellers expressly disclaim any other representations and warranties and omissions. Such purchase and consummation are instead done entirely on the basis of Purchaser’s own investigation, analysis, judgment and assessment of the present and potential value and earning power of the Company, as well as those representations and warranties specifically and expressly set forth in ARTICLE IV and ARTICLE V (in each case, as modified by the Schedules). |
(a) | Cooperation on Tax Matters. Each Seller, the Sellers’ Representative and Purchaser shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns and the conduct of any audit, Action or other proceeding with respect to Taxes of the Company. Such cooperation shall include the retention and (upon the other Party’s request) the provision of records and information that are reasonably relevant to any such Tax Return, audit, Action or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Each Seller and the Sellers’ Representative shall (A) retain all books and records with respect to Tax matters pertinent to the Company relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by the Company, Purchaser or the Sellers’ Representative, any extensions thereof) of the respective taxable periods, and to abide by all record retention Contracts entered into with any taxing authority, and (B) give Purchaser reasonable written notice prior to transferring, destroying or discarding any such books and records and, if Purchaser so requests, any Seller or the Sellers’ Representative, as the case may be, shall allow Purchaser to take possession of such books and records. |
(e) | Closing Tax Treatment. For the avoidance of doubt, (a) Treasury Regulation Section 1.1502-76(b) shall apply with respect to the Company’s entrance into Purchaser’s consolidated group, which shall be deemed to occur at the end of the Closing Date pursuant to Treasury Regulation Section 1.1502-76(b)(1)(ii)(A), (b) the Parties shall not make a ratable allocation election under Treasury Regulation Section 1.1502-76(b)(2)(ii)(D), and (c) any Tax Return reflecting the operations of the Company for any Pre-Closing Taxable Period (or, as applicable the portion of any Straddle Period ending on and including the Closing Date) shall reflect any liability taken into account in Net Working Capital, Debt Amount, Transaction Expenses and any compensatory amounts paid on or prior to the Closing Date (or after the Closing Date to the extent required to be paid as a result of the Closing and to the extent permitted by applicable Law), including any amount funded or borne by Sellers or any of their respective Affiliates (and including such items paid by the Company) and payable with respect to any bonuses, option cancelation or termination payments, severance or compensation awards triggered, incurred, accrued or payable to any employee or other service provider of the Company as a result of or contingent upon the consummation of the transactions contemplated in this Agreement (and such amounts shall be attributable to a Pre-Closing Taxable Period). The Parties agree that a Section 338(g) election shall not be made in connection with Purchaser’s acquisition of the Company. |
the individuals covered thereby, such policy to become effective at the Closing and to remain in effect for a period of three (3) years therefrom in the copy of the policy attached as Schedule 7.3(a). |
allowable under applicable Law. Each Restricted Party hereby acknowledges that this Section 7.5 has been negotiated by the Parties and that the geographical and time limitations, as well as the limitation on activities, are reasonable in light of the circumstances pertaining to the Business, and that damages will be an inadequate remedy for any breach of this Section 7.5 and that Purchaser shall, whether or not it is pursuing any potential remedies at Law, be entitled to seek equitable relief in the form of preliminary and permanent injunctions without bond or other security upon any breach or threatened breach of this Section 7.5. Notwithstanding the foregoing, and provided that such activities do not interfere with the fulfillment of each Restricted Party’s obligations, such Restricted Party may acquire solely as an investment not more than two percent (2%) of any class of securities of any entity that has a class of securities registered pursuant to the Exchange Act, so long as such Restricted Party remains a passive investor in such entity. |
(d) | Each Releasor hereby warrants, represents and agrees that such Releasor has not heretofore assigned, subrogated or transferred, or purported to assign, subrogate or transfer |
to any Person any Released Claim hereinabove released. Each Releasor hereby agrees to indemnify, defend and hold harmless each Releasee from any such assignment, subrogation or transfer of Released Claims. |
8.1 Conditions to Obligations of Purchaser. The obligation of Purchaser to consummate the Transactions is subject to the following conditions: |
(d) | There shall not have occurred a Material Adverse Effect, and no event shall have occurred or circumstance exist that, in combination with any other events or circumstances, could reasonably be expected to have a Material Adverse Effect. |
(f) | The Sellers shall have delivered to Purchaser the consents, waivers and approvals of the Persons identified on Schedule 8.1(f), in form and substance reasonably satisfactory to Purchaser. |
(h) | All Liens on the Company’s Assets shall have been released in form and substance reasonably satisfactory to Purchaser. |
(i) | All amounts due and payable or that may become due and payable (including notice periods, repatriation commitments, severance, bonuses and sales commissions) |
with respect to any employee or other person whose relationship with the Company has terminated or expired on or prior to the Closing shall have been paid in full by the Company such that the Company has no obligation to any such Person as of or after the Closing. |
(j) | The Company shall have completed the Divestiture. |
(k) | The Company shall have delivered evidence, reasonably satisfactory to Purchaser, of the cancellation of that certain Promissory Note Secured by Pledge Agreement, in favor of Mark Friedman and April Friedman, entered into in April 2012. |
(l) | Each of the items set forth in Section 3.2(a) shall have been delivered to Purchaser. |
(a) | Each of the representations and warranties of Purchaser contained in this Agreement, the other Transaction Documents and any certificate or other writing delivered pursuant hereto that is qualified by materiality, including the terms “material,” “in all material respects” and “Material Adverse Effect” or words of similar effect, shall be true and correct on and as of the Closing Date, and each of such representations and warranties that is not so qualified shall be true and correct in all material respects on and as of the Closing Date, except to the extent that such representations and warranties refer specifically to an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date. |
(b) | Purchaser shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with at or prior to the Closing Date. |
(c) | No injunction or restraining order shall have been issued by any Governmental Body, and be in effect, which restrains or prohibits any material transaction contemplated hereby. |
(d) | Each of the items set forth in Section 3.2(b) shall have been delivered to the Sellers. |
“Indemnified Purchaser Party”) harmless from and against any Damages that such Indemnified Purchaser Party may sustain, suffer or incur and that, directly or indirectly, result from, are based upon, arise out of, or are attributable or related to: |
(iv) any Transaction Expense in excess of the Final Company Transaction Expenses; |
(v) any Debt Amount in excess of the Final Debt Amount; |
(vii) the Divestiture and the operation, or ownership, of each entity divested in the Divestiture; |
(viii) the items set forth on Schedule 9.1; and |
(ix) any and all Actions, demands or assessments brought by a third party or a Seller against any Seller or any former Affiliate of the Company or any Seller. |
(i) any inaccuracy of any representation or warranty of such Seller set forth in ARTICLE IV of this Agreement or any certificate or similar instrument delivered by or on behalf of such Seller pursuant hereto; |
(iii) any Liability of the Company owing to such Seller, to the extent that such Liability relates to or arises out of, in whole or in part, any activity occurring, condition existing, omission to act or other matter existing prior to or at the Closing; and |
(iv) any and all Actions, allegations, assessments, fines, judgments, costs and other expenses (including reasonable attorneys’ fees and expenses) incident to any of the foregoing or to the enforcement of this Section 9.1(b). |
(i) any inaccuracy or breach of any representation or warranty of Purchaser contained in this Agreement or any certificate or similar instrument delivered by or on behalf of Purchaser pursuant hereto; |
(ii) any breach or nonfulfillment of any covenant or agreement of Purchaser contained in this Agreement; and |
(b) | In no event shall Purchaser be obligated to indemnify the Indemnified Seller Parties in any amount in excess of the Purchase Price. |
(c) | Subject to the limitations set forth in this ARTICLE IX, the Indemnified Purchaser Parties shall first be entitled to recover from the Indemnification Escrow Amount for any Damages for which the Indemnified Purchaser Parties are entitled to indemnification under Section 9.1; provided, however, that after the Indemnification Escrow Amount has been exhausted, an Indemnified Purchaser Party shall be entitled to recover on account of any Damages and seek indemnification from the applicable Seller(s) in accordance with this ARTICLE IX, including directly against one or more Seller or through the exercise of the set-off rights provided in Section 9.3(g), in each case in the sole discretion of the Indemnified Purchaser Parties. |
(e) | Any claim by an Indemnified Purchaser Party for indemnification shall not be adversely affected by any investigation by or opportunity to investigate afforded to Purchaser or any of its agents or representatives, nor shall such a claim be adversely affected by Purchaser’s Knowledge on or before the Closing Date of any breach or Liability of the type specified in Section 9.1 or of any state of facts that may give rise to such a breach or Liability; any such claim shall survive the Closing until the applicable Expiration Date. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with |
any covenant or obligation, will not adversely affect the right to indemnification, payment of Damages or other remedy based on such representations, warranties, covenants or obligations. |
(j) | Notwithstanding anything contained in this Agreement to the contrary, no Indemnified Purchaser Party will have any right to indemnification under this Agreement with respect to any Damages that (i) were specifically reserved or specifically accrued as a liability in the calculation of the Net Working Capital with respect to the facts and circumstances giving rise to such indemnification claim, (ii) arise solely out of changes after the Closing Date in applicable Law or interpretations or applications thereof, or (iii) are duplicative of Damages that have previously been recovered hereunder. |
(l) | Notwithstanding any other provision of this Agreement, Seller will have no obligation to indemnify Purchaser Indemnified Parties for any Taxes arising in a Post-Closing Tax Period. |
(b) | the survival period for a breach of Section 5.8 (Taxes) and the obligation of Sellers to provide indemnity under Section 9.1(a)(iii) which relate to Taxes shall survive for the applicable statute of limitations plus ninety (90) days; and |
(c) | for all other claims, the date that is eighteen (18) months after the Closing Date. |
So long as an Indemnified Party gives a Claim Notice for an Unliquidated Claim on or before the applicable Expiration Date, such Indemnified Party shall be entitled to pursue its rights to indemnification regardless of the date on which such Indemnified Party gives the related Liquidated Claim Notice. The Parties agree and acknowledge that the survival periods set forth herein, to the extent expressly longer than the three (3)-year survival period permitted by Title 10,
Section 8106(a) of the Delaware Code, are expressly intended to survive for such longer periods as permitted by Title 10, Section 8106(c) of the Delaware Code.
within the Response Period, such Indemnitor shall be deemed not to dispute the claim described in the related Claim Notice. If any Indemnitor elects not to dispute a claim described in a Claim Notice, whether by failing to give a timely Claim Response or otherwise, then the amount of such claim shall be conclusively deemed to be an obligation of such Indemnitor. |
(b) | If any Indemnitor shall be obligated to indemnify an Indemnified Party hereunder, such Indemnitor shall pay to such Indemnified Party within thirty (30) days after the last day of the Response Period the amount to which such Indemnified Party shall be entitled. If there shall be a dispute as to the amount or manner of indemnification under this ARTICLE IX, the Indemnified Party may pursue whatever legal remedies may be available for recovery of the Damages claimed from any Indemnitor. If any Indemnitor fails to pay all or part of any indemnification obligation when due, then such Indemnitor shall also be obligated to pay to the applicable Indemnified Party interest on the unpaid amount for each day during which the obligation remains unpaid at an annual rate equal to the Prime Rate, and the Prime Rate in effect on the first Business Day of each calendar quarter shall apply to the amount of the unpaid obligation during such calendar quarter. |
among the Parties regarding those matters. All Exhibits and Schedules referred to herein are intended to be and hereby are specifically made a part of this Agreement. |
hereby in (a) the United States District Court for the District of Delaware, or (b) any state court located in Wilmington, Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF. THE PREVAILING PARTY IN ANY SUCH ACTION OR PROCEEDING WILL BE REIMBURSED ALL FEES AND COSTS INCURRED IN SUCH ACTION OR PROCEEDING BY THE NON-PREVAILING PARTY. |
(b) | The terms “hereof”, “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement. |
(c) | When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article, Section, Exhibit or Schedule of this Agreement unless otherwise specified. |
(d) | The words “include”, “includes”, and “including” when used in this Agreement shall be deemed to be followed by the words “without limitation”, unless otherwise specified. |
(e) | A reference to any Party to this Agreement or any other agreement or document shall include such Party’s predecessors, successors and permitted assigns. |
(f) | All section and other headings contained in this Agreement are for convenience of reference only, do not form a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. |
(g) | Any reference to a Party’s being satisfied with any particular item or to a Party’s determination of a particular item presumes that such standard will not be achieved unless such Party shall be satisfied or shall have made such determination in its sole or complete discretion. |
(h) | The reference to “$” or “dollars” shall be United States Dollars. |
(i) | Each accounting term used herein that is not specifically defined herein shall have the meaning given to it under GAAP. |
(j) | Reference to any Law means such Law as amended, modified, codified, replaced or reenacted, and all rules and regulations promulgated thereunder. |
If to any Seller or the Sellers’ Representative: | |
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14220 N. Honey Bee Trail | |
Oro Valley, AZ 85755 | |
Attention: Mace Wolf Email: mace@cognify.com | |
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with a required copy (which shall not constitute notice) to: | |
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Glaser Weil Fink Howard Avchen & Shapiro LLP | |
520 Newport Center Drive, Suite 420 | |
Newport Beach, CA 92660 Attention: George J. Wall Email: gwall@glaserweil.com |
| |
If to Purchaser: | |
TRHC MEC Holdings, LLC | |
c/o Tabula Rasa HealthCare, Inc. | |
228 Strawbridge Dr. | |
Moorestown, NJ 08057 | |
Attention: Brian Adams, Chief Financial Officer Email: badams@trhc.com | |
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with a required copy (which shall not constitute notice) to: | |
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Morgan, Lewis & Bockius LLP | |
1701 Market Street | |
Philadelphia, PA 19103-2921 | |
Attention: Kevin Shmelzer Email: kevin.shmelzer@morganlewis.com |
(a) | to act for such Seller with regard to matters pertaining to indemnification referred to in this Agreement, including the power to compromise any indemnity claim on behalf of such Seller, to transact matters of litigation; |
(i) to execute and deliver all Transaction Documents to which the Sellers’ Representative is a party or amendments thereto that the Sellers’ Representative deem necessary or appropriate; |
(ii) to receive funds, make payments of funds, and give receipts for funds; |
(iii) to receive funds for the payment of expenses of such Seller and apply such funds in payment for such expenses; |
(iv) to do or refrain from doing any further act or deed on behalf of such Seller that the Sellers’ Representative deems necessary or appropriate in his sole discretion relating to the subject matter of this Agreement as fully and completely as such Seller could do if personally present; and |
(v) to receive service of process in connection with any claims under this Agreement. |
than Damages arising from willful violation of the Law or gross negligence in the performance of such duties under this Agreement. The Sellers’ Representative shall not have any duties or responsibilities except those expressly set forth in this Agreement, and no implied covenants, functions, responsibilities, duties or Liabilities shall be read into this Agreement or shall otherwise exist against the Sellers’ Representative. |
[Signature Pages to Follow]
IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of the day and year first written above.
PURCHASER: |
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TRHC MEC HOLDINGS, LLC |
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By:__/s/ Brian Adams_____________________ |
Name: Brian Adams |
Title: Chief Financial Officer |
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SELLERS: |
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/s/ Mace Wolf |
Mace Wolf |
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/s/ Mark Friedman |
Mark Friedman |
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SELLER REPRESENTATIVE: |
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/s/ Mace Wolf |
Mace Wolf |