SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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) JANUARY 24, 1997
COMPSCRIPT, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 0-20594 65-0506539
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(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
1225 BROKEN SOUND PARKWAY N.W., SUITE A, BOCA RATON, FLORIDA 33487
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (561) 994-8585
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On January 24, 1997, CompScript, Inc. (the "Registrant") entered into a Letter
of Intent with Hytree Pharmacy, Inc. ("Hytree") for the purchase by the
Registrant of all of the stock of Hytree (the "Acquisition"). The proposed
Acquisition is conditioned on, among other things, the preparation of a mutually
satisfactory definitive agreement of Acquisition on or before March 31, 1997,
the Registrant's completion of a satisfactory due diligence review of Hytree,
the Registrant assuming indebtedness of Hytree in an amount of approximately $1
million, and the entering into employment agreements with each of David Hytree,
Robert Hytree and Dennis Wollschleger.
The foregoing summary of the Letter of Intent is qualified in its entirety by
the copy of Letter of Intent attached hereto as an exhibit.
On January 30, 1997, the Registrant entered into a Letter of Intent with Campo
Medical Pharmacy, Inc. ("Campo") for the purchase by the Registrant of all of
the Stock of Campo (the "Acquisition"). The proposed Acquisition is conditioned
on, among other things, the preparation of a mutually satisfactory definitive
agreement of Acquisition on or before February 28, 1997, the Registrant's
completion of a satisfactory due diligence review of Campo, and the entering
into employment agreements with each of Joe Campo and Steve Campo.
The foregoing summary of the Letter of Intent is qualified in its entirety by
the copy of Letter of Intent attached hereto as an exhibit.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
EXHIBITS
2.1 Letter of Intent, dated January 24, 1997, between Registrant and
Hytree Pharmacy, Inc.
2.2 Letter of Intent, dated January 30, 1997, between Registrant and Campo
Medical Pharmacy, Inc.
2
<PAGE>
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 hereunto duly authorized.
COMPSCRIPT, INC.
By: /S/ BRIAN A. KAHAN
------------------------
Brian A. Kahan
Chief Executive Officer
DATED: February 7, 1997
3
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
2.1 Letter of Intent, dated January 24, 1997, between Registrant and
Hytree Pharmacy, Inc.
2.2 Letter of Intent, dated January 30, 1997, between Registrant and
Campo Medical Pharmacy, Inc.
EXHIBIT 2.1
January 9, 1997
Hytree Pharmacy, Inc.
8909 East Avenue
Mentor, Ohio 44060
Gentlemen:
This Letter of Intent (the "Letter of Intent") is designed to set forth a
proposal of CompScript, Inc., a Florida corporation ("CompScript") concerning
CompScript's proposed acquisition of all the stock of Hytree Pharmacy, Inc.
("Hytree"). The principal terms of the proposed acquisition are set forth below:
1. STRUCTURE. The transaction will be structured as a purchase by
CompScript of all the stock of Hytree (the "Acquisition). The consideration to
be paid by CompScript shall consist of 715,000 shares of CompScript's Common
Stock.
2. INSPECTION AND ACCESS TO INFORMATION. After the date of
acceptance of this Letter of Intent, Hytree shall permit CompScript and its
representatives access to all books, papers and records relating to Hytree's
assets, stock, ownership, properties, operations, obligations and liabilities,
including, but not limited to, books of account, tax records, minute books of
directors' and shareholders' meetings, Articles of Incorporation and amendments
thereto, By-Laws and amendments thereof, contracts and agreements, filings with
any regulatory authorities, litigation, patent and trademark records,
compensation plans affecting their employees, and any other materials pertaining
to business activities, projects or programs in which CompScript may have an
interest in light of the transactions contemplated herein. Hytree will make its
employees, attorneys and accountants available for consultation by CompScript
and its representatives and permit access to customers or suppliers for
verification of information.
3. CONDITIONS PRECEDENT. Consummation of the Acquisition
contemplated herein will be subject to:
(a) The preparation, execution and delivery of a mutually
satisfactory definitive acquisition agreement on or before March 31, 1997 (the
"Acquisition Agreement"), and other related agreements containing, among other
things, terms, agreements, representations, warranties, opinions of counsel and
conditions providing for disclosure schedules containing information concerning
the properties, assets, businesses, employee plans, liabilities and obligations
of CompScript and Hytree as are reasonably customary for such transactions; the
approval of the Boards of Directors of CompScript and Hytree; the approval of
the shareholders of Hytree; the giving of all
<PAGE>
Hytree Pharmacy, Inc.
January 9, 1997
Page 2
required notices and the obtaining of all required approvals, consents, waivers
and clearances from governmental and other regulatory authorities, lenders and
others. The Acquisition Agreement shall provide that CompScript shall assume
long-term indebtedness of Hytree in an amount of approximately $1 million;
(b) The satisfactory completion of a due diligence, tax and
accounting review by CompScript of the financial condition, assets and business
of Hytree (and that the only evidence that such review has been completed in
satisfaction of this condition shall be a written statement to that effect
signed by the CEO of CompScript);
(c) At the closing of the Acquisition, CompScript or a
subsidiary thereof shall have entered into employment agreements with each of
David Hytree, Robert Hytree and Dennis Wollschleger on terms reasonably
acceptable to all parties. The employment agreements shall further provide for
stock options, annual adjustments in compensation, discretionary bonuses and
benefits generally consistent with the employment agreements of other like
employees of CompScript. Non-compete agreements shall be executed by all
shareholders of Hytree;
(d) Receipt by CompScript of (i) balance sheets, related
statements of income, retained earnings and changes in financial position of
Hytree required by CompScript for regulatory purposes, including the Securities
and Exchange Commission, audited by an independent public accounting firm
acceptable to CompScript, which CompScript may choose, and (ii) an unaudited
balance sheet and related statements of income retained earnings and changes in
financial position of Hytree for an interim period since the date of such
audited financial statement, in each case which are not materially adverse
compared to the tax returns and unaudited financial statements provided by
Hytree to CompScript for the relevant periods;
(e) The Acquisition shall be accounted for as a pooling of
interests; and
(f) There shall have been no material adverse change with
respect to Hytree from the date hereof until Closing.
4. FEES AND EXPENSES. No commission, broker's fees, finder's fee
or similar fee or expense has been incurred or is or will be payable by either
Hytree or CompScript with respect to the transactions contemplated herein. Each
party shall bear its own out-of-pocket costs and expenses (including but not
limited to, counsel fees) incurred in
<PAGE>
Hytree Pharmacy, Inc.
January 9, 1997
Page 3
connection with the transactions contemplated herein, provided CompScript shall
pay for the cost of Hytree's audited financial statements.
5. CONFIDENTIAL TREATMENT, PUBLICITY. All information furnished by any
party hereto shall be treated as the sole property of the party furnishing the
information until consummation of the transactions contemplated herein and, if
such transaction shall not occur, each party shall return to the party which
furnished such information all documents or other material containing, or
reflecting or referring to such information and all copies thereof. The parties
shall use their best efforts to keep confidential all such information, and
shall not directly or indirectly use such information for any competitive or
other commercial purpose. The obligation to keep such information confidential
shall not apply to (a) any information which (i) any party can establish was
already in its possession prior to disclosure thereof by the party furnishing
the information; or (ii) was then generally known to the public; or (iii) became
known to the public through no fault of such party; or (b) disclosures in
accordance with an order of a court of competent jurisdiction. The existing
confidentiality agreement between CompScript and Hytree previously entered into
shall remain in full force and effect.
It is understood that the parties hereto will promptly
commence to incur substantial expenses and efforts to consummate this
transaction and any premature news release or other disclosure may jeopardize
such efforts. Therefore, no news release or other written public communications
relating to the subject matter of this Letter of Intent shall be made by either
party prior to entering into the Acquisition Agreement unless counsel to any
party hereto has advised such party that disclosure is required under applicable
law. CompScript and Hytree agree to cooperate with each other in the development
and distribution of all news releases and other public information and
disclosure relating to the transactions contemplated herein, including any news
release or other disclosure made in response to a requirement of applicable law.
6. EXCLUSIVITY. From the date hereof until the earlier to occur of the
execution and delivery of the Acquisition Agreement or March 31, 1997, neither
Hytree or its directors, officers, employees, representatives, advisors or
agents shall directly or indirectly (a) take any action to solicit, initiate or
encourage any Proposal (as defined herein) or (b) continue, initiate or engage
in negotiations with, or disclose any information relating to Hytree, its assets
or properties, or afford access to the properties, books and records of Hytree,
to any entity or individual that is known to be considering or has made a
Proposal. Hytree shall promptly notify CompScript after receipt of any Proposal
or indication that any entity is considering making a Proposal and whether any
entity has
<PAGE>
Hytree Pharmacy, Inc.
January 9, 1997
Page 4
made a request for access to the properties, books or records of that party, and
Hytree shall keep CompScript informed of the status of any such situation. The
term "Proposal" means any offer or proposal or indication of interest in a
merger, consolidation or other business combination, or the purchase of a
substantial portion of the assets or capital stock of Hytree.
7. CONDUCT OF THE BUSINESS. From the date hereof until the earlier to
occur of the execution and delivery of the Acquisition Agreement or March 31,
1997, Hytree shall not, without the written consent of CompScript, acquire or
dispose of any substantial assets, make any dividend or distribution, enter into
any material transaction or incur any material obligation or otherwise take any
action other than the ordinary course of business consistent with Hytree's past
business practice.
8. NON-BINDING NATURE OF LETTER. It is understood that the Letter of
Intent is a statement of the parties' present intent, that the rights and
obligations of the parties shall only be as set forth in the executed
Acquisition Agreement, and that this Letter of Intent is not to be binding on
either party (except for the provisions of Paragraph 5 with respect to
confidentiality, return of documents and publicity, Paragraph 6 with respect to
Exclusivity, Paragraph 4 with respect to payment of fees and expenses and
Paragraph 7 with respect to conduct of business) and shall terminate and be of
no further effect at 5:00 p.m. Eastern Time, on March 31, 1997, and thereafter
neither party shall have any obligation to the other party (except the
provisions of Paragraph 5 with respect to confidentiality and return of
documents) and Paragraph 4 (with respect to the payment of expenses).
If the foregoing correctly reflects the understanding between us, please
sign, date and return the enclosed copy of this letter, which will then
constitute an agreement with respect to the foregoing matters. We will then
proceed promptly with our investigation and the preparation of the Acquisition
Agreement. This letter may be executed
<PAGE>
Hytree Pharmacy, Inc.
January 9, 1997
Page 5
simultaneously in two or more counterparts, each of which shall constitute an
original, but all of which together shall constitute one and the same
instrument.
COMPSCRIPT, INC.
By: /S/ BRIAN A. KAHAN
-------------------------
Brian A. Kahan, President
ACCEPTED AND AGREED TO THIS
24 DAY OF JANUARY , 1997.
HYTREE PHARMACY, INC.
By: /S/ DAVID C. HYTREE
-----------------------
Name: DAVID C. HYTREE
-----------------------
Title: PRESIDENT
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EXHIBIT 2.2
January 29, 1997
Messrs. Joe and Steve Campo
Campo Medical Pharmacy, Inc.
4421 Chastant Street
Metarie, Louisiana 70036
Gentlemen:
This Letter of Intent (the "Letter of Intent") is designed to set forth a
proposal of CompScript, Inc., a Florida corporation ("CompScript") concerning
CompScript's proposed acquisition of all the stock of Campo Medical Pharmacy,
Inc. ("Campo"). The principal terms of the proposed acquisition are set forth
below:
1. STRUCTURE. The transaction will be structured as a purchase by
CompScript of all the stock of Campo (the "Acquisition). The consideration to be
paid by CompScript shall consist of 375,000 shares of CompScript's Common Stock.
Compscript agrees that the shares to the Campo shareholders shall be included in
a registration statement to be filed with the Securities and Exchange Commission
within sixty (60) days from the date that the shares are eligible to be
transferred pursuant to the rules governing "pooling of interest" transactions.
2. INSPECTION AND ACCESS TO INFORMATION. After the date of acceptance
of this Letter of Intent, Campo shall permit CompScript and its representatives
access to all books, papers and records relating to Campo's assets, stock,
ownership, properties, operations, obligations and liabilities, including, but
not limited to, books of directors' and shareholders' meetings, Articles of
Incorporation and amendments thereto, By-Laws and amendments thereof, contracts
and agreements, filings with any regulatory authorities, litigation, patent and
trademark records, compensation plans affecting their employees, and any other
materials pertaining to business activities, projects or programs in which
CompScript may have an interest in light of the transactions contemplated
herein. Campo will make its employees, attorneys and accountants available for
consultation by CompScript and its representatives and permit access to
customers or suppliers for verification of information.
3. CONDITIONS PRECEDENT. Consummation of the Acquisition contemplated
herein will be subject to:
(a) The preparation, execution and delivery of a mutually
satisfactory definitive acquisition agreement on or before February 28, 1997
(the "Acquisition Agreement"), and other related agreements containing, among
other things, terms, agreements, representations, warranties, opinions of
counsel and conditions providing for disclosure schedules containing information
concerning the properties, assets, businesses, employee plans, liabilities and
obligations of CompScript and Campo as are
<PAGE>
Campo Medical Pharmacy, Inc.
January 29, 1997
Page No. 2
reasonably customary for such transactions; the approval of the Boards of
Directors of CompScript and Campo; the approval of the shareholders of Campo;
the giving of all required notices and the obtaining of all required approvals,
consents, waivers and clearances from governmental and other regulatory
authorities, lenders and others. The Acquisition Agreement shall provide that
Compscript will lease the premises currently used by Campo at a cost of $2,500
per month or $3,000 per month if additional space not currently utilized by
Campo in the building is occupied, provided, however, the actual square footage
and market evaluation will determine the terms of the final lease.
(b) The satisfactory completion of a due diligence, tax and
accounting review by CompScript of the financial condition, assets and business
of Campo (and that the only evidence that such review has been completed in
satisfaction of this condition shall be a written statement to that effect
signed by the CEO of CompScript); all costs of audit or review shall be borne by
CompScript.
(c) At the closing of the Acquisition, CompScript or a
subsidiary thereof shall have entered into employment agreements with each of
Joe Campo and Steve Campo on terms mutually acceptable to all parties. The
employment agreements shall provide for base salary of $100,000 for the first
year with minimum increases of $5,000 each succeeding year, stock options, and
benefits generally consistent with the employment agreements of other like
employees of CompScript. In addition, a performance bonus of $10,000 if sales
attributable to Campo, within the State of Louisiana, are equal to or exceed
$3,000,000 and an additional one-half of one percent for every $500,000
increment thereafter. The employment agreements will also provide that
CompScript will continue to pay the costs associated with Joe Campo's and Steve
Campo's health insurance premiums on the same basis as historically provided to
them, as long as they remain employed by the Company. Non-compete agreements
shall be executed by all shareholders of Campo;
(d) Receipt by CompScript of (i) balance sheets, related
statements of income, retained earnings and changes in financial position of
Campo required by CompScript for regulatory purposes, including the Securities
and Exchange Commission, audited by an independent public accounting firm
acceptable to CompScript, which CompScript may choose, and (ii) an unaudited
balance sheet and related statements of income retained earnings and changes in
financial position of Campo for an interim period since the date of such audited
financial statement, in each case which are not materially adverse compared to
the tax returns and unaudited financial statements provided by Campo to
CompScript for the relevant periods;
<PAGE>
Campo Medical Pharmacy, Inc.
January 29, 1997
Page No. 3
(e) The Acquisition shall be accounted for as a pooling of
interests; and
(f) There shall have been no material adverse change with
respect to Campo from the date hereof until Closing.
4. FEES AND EXPENSES. No commission, broker's fees, finder's fee or
similar fee or expense has been incurred or is or will be payable by either
Campo or CompScript with respect to the transactions contemplated herein.
Compscript and the Campo shareholders shall bear their own out-of-pocket costs
and expenses (including but not limited to, counsel fees) incurred in connection
with the transactions contemplated herein, provided CompScript shall pay the
costs of an audit or accounting due diligence. The Campo shareholders will cause
Campo not to incur any fees or expenses in connection with the Acquisition
Agreement and the transactions contemplated thereby.
5. CONFIDENTIAL TREATMENT, PUBLICITY. All information furnished by any
party hereto shall be treated as the sole property of the party furnishing the
information until consummation of the transactions contemplated herein and, if
such transaction shall not occur, each party shall return to the party which
furnished such information all documents or other material containing, or
reflecting or referring to such information and all copies thereof. The parties
shall use their best efforts to keep confidential all such information, and
shall not directly or indirectly use such information for any competitive or
other commercial purpose. The obligation to keep such information confidential
shall not apply to (a) any information which (i) any party can establish was
already in its possession prior to disclosure thereof by the party furnishing
the information; or (ii) was then generally known to the public; or (iii) became
known to the public through no fault of such party; or (b) disclosures in
accordance with an order of a court of competent jurisdiction. The existing
confidentiality agreement between CompScript and Campo previously entered into
shall remain in full force and effect.
It is understood that the parties hereto will promptly
commence to incur substantial expenses and efforts to consummate this
transaction and any premature news release or other disclosure may jeopardize
such efforts. Therefore, no news release or other written public communications
relating to the subject matter of this Letter of Intent shall be made by either
party prior to entering into the Acquisition Agreement unless counsel to any
party hereto has advised such party that disclosure is required under applicable
law. CompScript and Campo agree to cooperate with each other in the development
and distribution of all news releases and other public information and
<PAGE>
Campo Medical Pharmacy, Inc.
January 29, 1997
Page No. 4
disclosure relating to the transactions contemplated herein, including any news
release or other disclosure made in response to a requirement of applicable law.
6. EXCLUSIVITY. From the date hereof until the earlier to occur of the
execution and delivery of the Acquisition Agreement or February 28, 1997,
neither Campo or its directors, officers, employees, representatives, advisors
or agents shall directly or indirectly (a) take any action to solicit, initiate
or encourage any Proposal (as defined herein) or (b) continue, initiate or
engage in negotiations with, or disclose any information relating to Campo, its
assets or properties, or afford access to the properties, books and records of
Campo, to any entity or individual that is known to be considering or has made a
Proposal. Campo shall promptly notify CompScript after receipt of any Proposal
or indication that any entity is considering making a Proposal and whether any
entity has made a request for access to the properties, books or records of that
party, and Campo shall keep CompScript informed of the status of any such
situation. The term "Proposal" means any offer or proposal or indication of
interest in a merger, consolidation or other business combination, or the
purchase of a substantial portion of the assets or capital stock of Campo.
7. CONDUCT OF THE BUSINESS. From the date hereof until the earlier to
occur of the execution and delivery of the Acquisition Agreement or February 28,
1997, Campo shall not, without the written consent of CompScript, acquire or
dispose of any substantial assets, make any dividend or distribution, enter into
any material transaction or incur any material obligation or otherwise take any
action other than the ordinary course of business consistent with Campo's past
business practice.
8. NON-BINDING NATURE OF LETTER. It is understood that the Letter of
Intent is a statement of the parties' present intent, that the rights and
obligations of the parties shall only be as set forth in the executed
Acquisition Agreement, and that this Letter of Intent is not to be binding on
either party (except for the provisions of Paragraph 5 with respect to
confidentiality, return of documents and publicity, Paragraph 6 with respect to
Exclusivity, Paragraph 4 with respect to payment of fees and expenses and
Paragraph 7 with respect to conduct of business) and shall terminate and be of
no further effect at 5:00 p.m. Eastern Time, on February 28, 1997, and
thereafter neither party shall have any obligation to the other party (except
the provisions of Paragraph 5 with respect to confidentiality and return of
documents) and Paragraph 4 (with respect to the payment of expenses).
<PAGE>
Campo Medical Pharmacy, Inc.
January 29, 1997
Page No. 5
If the foregoing correctly reflects the understanding between us, please sign,
date and return the enclosed copy of this letter, which will then constitute an
agreement with respect to the foregoing matters. We will then proceed promptly
with our investigation and the preparation of the Acquisition Agreement. This
letter may be executed simultaneously in two or more counterparts, each of which
shall constitute an original, but all of which together shall constitute one and
the same instrument.
COMPSCRIPT, INC. ACCEPTED AND AGREED TO THIS
30TH DAY OF JANUARY, 1997.
CAMPO MEDICAL PHARMACY, INC.
By: /S/ BRIAN KAHAN
----------------------------------------
Brian A. Kahan, Chief Executive Officer By: /S/ STEVE CAMPO
Name: STEVE CAMPO
Title: PRESIDENT
