-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D4u2e7be+v5ulsd89jWHK3DXSuLpnRB34siWdG5tsy40zNVpao2dNAXHHohlpceh oLiBJ3xp1jLlZQ3NWh85CQ== 0000950109-99-004037.txt : 19991115 0000950109-99-004037.hdr.sgml : 19991115 ACCESSION NUMBER: 0000950109-99-004037 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991101 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOOPER HOLMES INC CENTRAL INDEX KEY: 0000741815 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 221659359 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09972 FILM NUMBER: 99748748 BUSINESS ADDRESS: STREET 1: 170 MT AIRY RD CITY: BASKING RIDGE STATE: NJ ZIP: 07920 BUSINESS PHONE: 9087665000 MAIL ADDRESS: STREET 1: 170 MT AIRY ROAD CITY: BASKING RIDGE STATE: NJ ZIP: 07920 8-K 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) November 1, 1999 -------------------------- Hooper Holmes, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) New York - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-9972 22-1659359 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 170 Mt. Airy Road, Basking Ridge, NJ 07920 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (908) 766-5000 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) None - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) FORM 8-K Item 2. Acquisition or Disposition of Assets As of November 1, 1999, pursuant to an Asset Purchase Agreement dated as of August 30, 1999, as amended by an Amendment to Asset Purchase Agreement dated as of November 1, 1999, the Company purchased substantially all of the assets and assumed certain of the liabilities of Paramedical Services of America, Inc. ("PSAI") from Pediatric Services of America, Inc. ("PSA") and its wholly owned subsidiary PSAI. The assets purchased comprised PSAI's business of providing medical testing and examination services for the life and health insurance industries. The assets generally include: contract rights, goodwill, sales and client data, leases, inventory, intellectual property and accounts receivable. The Company intends to continue to use the assets acquired in a manner consistent with their use prior to their acquisition by the Company. The purchase price of $81 million, payable in cash, was determined through arms-length negotiations between the parties and was adjusted at closing based on: (1) the business condition of PSAI at closing, and (2) the value of PSAI's current accounts receivable at closing. The Company placed a portion of the purchase price, $10,187,500, into escrow to be distributed to the Company if: (a) it does not receive audited financial statements of PSAI for its 1998 and 1999 fiscal years by February 15, 2000, (b) it does not receive, by February 15, 2000, a consent of PSAI's auditors to use PSAI's auditor's opinion on the audited financial statements in its registration statements, and (c) PSAI's audited net revenues for the year ended September 30, 1999 are less than $80 million. A portion of the escrow will also be distributed to certain contract affiliates of PSAI who remain with the Company through May 1, 2000. The Company financed the acquisition of PSAI's assets through existing cash and a $65 million term loan from a group of lenders of which First Union National Bank is lead arranger and administrative agent. Prior to the execution of the Asset Purchase Agreement, the Company had no material relationship with PSA, PSAI or any of their affiliates. Item 7. Financial Statements and Exhibits (a) Financial statements of business acquired The financial statements required by this item are not included herewith and will be filed within 60 days of the required filing date of this Form 8-K. (b) Pro-forma financial information The financial statements required by this item are not included herewith and will be filed within 60 days of the required filing date of this Form 8-K. (c) Exhibits 2.1 Asset Purchase Agreement dated as of August 30, 1999 by and among Pediatric Services of America, Inc., Paramedical Services of America, Inc. and Hooper Holmes, Inc. 2.2 Amendment to Asset Purchase Agreement dated as of November 1, 1999 by and among Pediatric Services of America, Inc., Paramedical Services of America, Inc. and Hooper Holmes, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HOOPER HOLMES, INC. Date: November 12, 1999 By: /s/ Robert William Jewett ----------------------------- Robert William Jewett Senior Vice President, General Counsel & Secretary -3- EXHIBIT INDEX Exhibit Number Description of Exhibit - -------------- ---------------------- 2.1 Asset Purchase Agreement dated as of August 30, 1999 by and among Pediatric Services of America, Inc., Paramedical Services of America, Inc. and Hooper Holmes, Inc., (Incorporated by reference to Exhibit 99.2 of the Company's Current Report on Form 8-K, dated August 30, 1999, File No. 1-9972) 2.2 Amendment to Asset Purchase Agreement dated as of November 1, 1999 by and among Pediatric Services of America, Inc., Paramedical Services of America, Inc. and Hooper Holmes, Inc. EX-2.2 2 AMENDMENT TO ASSET PURCHASE AGREEMENT Exhibit 2.2 - ----------- AMENDMENT TO ASSET PURCHASE AGREEMENT THIS AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment"), dated as of November 1, 1999 by and among Pediatric Services of America, Inc., a Delaware corporation ("PSA"), Paramedical Services of American, Inc., a California corporation ("PSA SUB") and Hooper Holmes, Inc., a New York corporation ("Purchaser"). All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement as hereinafter defined. W I T N E S S E T H: ------------------- WHEREAS, PSA, PSA SUB and Purchaser are parties to an asset purchase agreement dated as of August 30, 1999 (the "Agreement"), pursuant to which Purchaser agreed to purchase from PSA and PSA SUB, certain of the assets and properties of PSA, PSA SUB and their affiliates which principally relate to the Business; WHEREAS, Purchaser, PSA and PSA SUB have determined, as provided in Section 1.2(b) of the Purchase Agreement, that the "Performance Adjustment", as described in Section 1.2(b), must be made to the Purchase Price; WHEREAS, Purchaser, PSA and PSA SUB have determined that because the Estimated Accounts Receivable is $12,000,000, a reduction of $4,000,000 must be made to the Purchase Price as provided in Section 1.2(d) of the Agreement; WHEREAS, the parties have agreed to make certain amendments to the Agreement; NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby mutually agree as follows: 1. Section 1.2(a) of the Agreement is hereby deleted in its entirety and replaced with the following: (a) In consideration for the Assets, Purchaser shall pay to PSA SUB Eighty-Five Million Dollars ($85,000,000), subject to the adjustments set forth in Section 1.2(b), as amended below, Section 1.2(d) of the Agreement (the parties agree that the adjustment in the purchase price required by Section 1.2(d) shall be a reduction of Four Million Dollars ($4,000,000)), and Section 1.2(e) of the Agreement (the "Purchase Price"), plus the Assumed Liabilities. 2. Section 1.2(b) of the Agreement is hereby deleted in its entirety and replaced with the following: (b) Purchaser shall deposit Ten Million One Hundred Eighty-Seven Thousand Five Hundred Dollars ($10,187,500) of the Purchase Price into an escrow account (the "Escrow Account") at First Union National Bank, Richmond, Virginia (the "Escrow Agent"), pursuant to an escrow agreement in substantially the form attached hereto as Exhibit 1.2(b) (the "Escrow Agreement"), which shall be distributed pursuant to such Escrow Agreement by the Escrow Agent as follows: (i) In the event that PSA delivers to Purchaser the Audited Financial Statements and related report of Ernst & Young LLP (the "Auditor") on or before 5:00 p.m. EST on December 17, 1999, then Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent as required to effect the transfer to PSA SUB of Three Million Dollars ($3,000,000). In the event that PSA does not deliver to Purchaser the Audited Financial Statements and related Auditor's report on or before 5:00 p.m. EST on December 17, 1999, then Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent as required to effect the transfer to Purchaser of Three Million Dollars ($3,000,000). The parties acknowledge that the PMI 1997 Financial Statements have been delivered; (ii) In the event that PSA has delivered to Purchaser the Audited Financial Statements and related Auditor's report on or before 5:00 p.m. EST on February 15, 2000, then to the extent that the net revenues of the Business for its 1999 fiscal year as reflected in the Audited Financial Statements are less than Eighty Million Dollars ($80,000,000), Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent to transfer to Purchaser One Dollar ($1) for every One Dollar ($1) that such revenues are less than Eighty Million Dollars ($80,000,000), provided, however, that the amount to be distributed to Purchaser pursuant to this clause shall not exceed Five Million Dollars ($5,000,000); in the event that the net revenues of the Business for its 1999 fiscal year, as reflected in the Audited Financial Statements exceed Seventy-Five Million Dollars ($75,000,000), then Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent to transfer to PSA SUB One Dollar ($1) for every One Dollar ($1) that such revenues exceed Seventy-Five Million Dollars ($75,000,000), provided, however, that the amount to be distributed to PSA SUB pursuant to this clause shall not exceed Five Million Dollars ($5,000,000); in the event that the Audited Financial Statements and related Auditor's report have not 2 been delivered on or before 5:00 p.m. EST on February 15, 2000, then Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent to transfer to Purchaser Five Million Dollars ($5,000,000); (iii) Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent to distribute One Million Five Hundred Thousand Dollars ($1,500,000) to: (A) PSA SUB, if Purchaser requests and receives, no later than 5:00 p.m. EST on February 15, 2000, a consent of the Auditor to Purchaser's use of the Audited Financial Statements and related Auditor's report in any of Purchaser's registration statements and/or any amendments thereto filed with the Securities and Exchange Commission (the "Auditor's Consent"); or (B) PSA SUB, if Purchaser does not request the Auditor's Consent prior to 5:00 p.m. EST on February 8, 2000; or (C) to Purchaser, if Purchaser requests the Auditor's Consent on or prior to February 8, 2000 and does not receive the Auditor's Consent by 5:00 p.m. EST on February 15, 2000; (iv) No later than June 1, 2000, Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent to distribute Six Hundred Eighty-Seven Thousand Five Hundred Dollars ($687,500) in the manner described in Exhibit A attached hereto; (v) Simultaneously with the distribution to Purchaser, PSA or PSA SUB of any funds from the Escrow Account, Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent to distribute to the party receiving such funds any interest or income earned on such funds. All interest or income earned on funds in the Escrow Account paid to Purchaser for repayment to Contract Affiliates in accordance with Exhibit A hereto shall be distributed to PSA SUB simultaneously with the distribution of such funds from the Escrow Agent; and (vi) With respect to the dates and events identified in the above clauses as conditions to the distribution of any funds from the Escrow Account, Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent, within five Business Days of the date or the completion of the event identified, to distribute such funds. 3. Section 3.5 of the Agreement is amended by adding thereto the following final sentence: 3 "Provided that PSA SUB's net revenues for its 1999 fiscal year, as reflected in the Audited Financial Statements, are equal to or greater than Seventy Million Dollars ($70,000,000), then to the extent that the Audited Financial Statements prepared in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 55 ("SAB 55") differ from the Unaudited Financial Statements solely as a result of SAB 55, the Audited Financial Statements shall control and supercede the Unaudited Financial Statements, but only to the extent that any such difference resulted from SAB 55, and the representations and warranties contained in this Agreement and the schedules thereto shall be modified accordingly." 4. Section 4.6 of the Agreement is hereby amended by replacing the reference to "Within five (5) Business Days of availability, and in no event later than five (5) Business Days prior to the Closing," with "No later than 5:00 p.m. EST on February 15, 2000." 5. Section 4.10(b) of the Agreement is hereby amended by deleting the section in its entirety. 6. Section 6.7 of the Agreement is hereby amended by deleting the phrase: "on the Closing Date" in the third line thereof, and replacing it with the following phrase: "within five (5) Business Days of Purchaser's receipt of a copy of the Audited Financial Statements and related Auditor's report from PSA". 7. Article 6 of the Agreement is hereby amended by inserting the following new section at the end thereof: 6.9 Escrow Agreement. On or before the Closing Date, Purchaser, PSA and PSA SUB shall enter into an Escrow Agreement substantially in the form of Exhibit 1.2(b) hereto. 8. Section 7.3(i) of the Agreement is hereby amended by deleting the section in its entirety. 9. Section 1.6(a) of the Agreement is hereby amended by deleting "11:59 p.m. on the Closing Date" and replacing it with the following: "00:01 a.m. on November 1, 1999." 4 10. The definition of "Effective Time" in the definition section of the Agreement is hereby amended by deleting the definition in its entirety and adding in the following: "Effective Time" means 00:01 a.m. on November 1, 1999. 11. Except as expressly amended in this Amendment, the Agreement shall continue in full force and effect in accordance with the provisions thereof prior to the effectiveness of this Amendment. 12. This Amendment shall become effective as of the date first written above. 13. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF. 14. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. IN WITNESS WHEREOF, Purchaser, PSA, and PSA SUB have caused this Amendment to be signed by their respective officers thereunto duly authorized all as of the date first written above. "Purchaser:" HOOPER HOLMES, INC. By: /s/ Fred Lash Name: Fred Lash Title: SVP/CFO "PSA:" PEDIATRIC SERVICES OF AMERICA, INC. By: /s/ Joseph D. Sansone Joseph D. Sansone Chief Executive Officer [Signatures continued on next page] 5 "PSA SUB:" PARAMEDICAL SERVICES OF AMERICA, INC. By: /s/ Joseph D. Sansone Name: Joseph D. Sansone Title: President 6 Exhibit A --------- Purchaser, PSA and PSA SUB have agreed to pay to each of the Contract Affiliates listed on the following page a bonus of 10% of the amount paid to such Contract Affiliate by Purchaser during the period from the Closing Date until May 1, 2000, provided that such Contract Affiliate has retained its business relationship with Purchaser as of June 1, 2000. If the aggregate amount of bonus payments owed to the Contract Affiliates pursuant to the previous sentence is $375,000 or less, PSA and PSA SUB shall pay the entire amount of the bonus payments. If the aggregate amount of such bonus payments is more than $375,000, (i) PSA and PSA SUB shall pay $375,000 plus one-half of the amount by which the aggregate amount of the bonus payments exceeds $375,000 and (ii) Purchaser shall pay one-half of the amount by which the aggregate amount of the bonus payments exceeds $375,000. PSA and PSA SUB's payment obligations as listed herein shall be made from the Escrow Account to Purchaser for repayment to Contract Affiliates. In no event shall PSA or PSA SUB's payment obligations to the Contract Affiliates exceed $687,500. -----END PRIVACY-ENHANCED MESSAGE-----