Partners Pharmacy Service - Chapter 11 Asset Purchase Agreement Summary

Asset Purchase Agreement Summary

Parties Involved

• Sellers: Partners Pharmacy Services, LLC; Arrow Envoy Holdings, LLC; Arrow Pharmacy Holdings, LLC; and various "Partners of" entities (collectively, the Debtors).
• Purchaser: CS One, LLC, as the Stalking Horse Bidder.
• The Sellers selected the Purchaser to serve as the Stalking Horse Bidder subject to higher or better competing bids in accordance with the Bidding Procedures Order.

Assets Being Sold

• The transaction contemplates the sale of substantially all of the Debtors’ assets related to their Hospice Business and Long-Term Care (LTC) Business.
• Purchased Assets generally include:
  • All right, title, and interest in assets used in the Hospice and LTC Businesses, including machinery, equipment, furniture, computer hardware, fixtures, motor vehicles, and other tangible personal property.
  • Inventory, including pharmaceutical products, finished goods, and medical supplies (subject to controlled substance exclusions detailed below).
  • Intellectual Property, including Seller Intellectual Property, goodwill, customer lists, and rights to sue for infringement.
  • Assumed Contracts and Assumed Leases, including rights under leases governing Leased Real Property and related permits.
  • Patient files (subject to Sellers' retention rights for audit/legal purposes) and business records.
  • Causes of action, warranties, and guarantees relating to Assumed Liabilities or Purchased Assets.
  • Accounts receivable and prepaid expenses relating exclusively to the operation of the business.
• Controlled Substances Exclusion:
  • Controlled substances (Schedules II-V) are not immediately transferred to the Purchaser. The applicable Seller retains title, custody, and control of such inventory post-closing and will dispense it under the Seller’s DEA registration pursuant to a Transition Services Agreement until the Purchaser obtains its own registration and licenses.
• Excluded Assets include:
  • Cash, marketable securities, and intercompany receivables.
  • Assets held by or with respect to any Seller Benefit Plan.
  • Corporate organizational documents, minute books, and tax records.
  • Avoidance Actions and causes of action relating to Excluded Liabilities.
  • Non-transferable permits.

Assumed and Excluded Liabilities

• Assumed Liabilities consist of:
  • Liabilities and obligations arising under the Purchased Assets required to be performed solely on and after the Closing Date.
  • Liabilities for paid time off (PTO) hours of employees hired by the Purchaser.
• Excluded Liabilities include:
  • Liabilities arising prior to the Closing Date or resulting from breaches/defaults occurring prior to Closing.
  • Product liability claims for conduct occurring on or prior to the Closing Date.
  • Liabilities related to Seller Benefit Plans, Environmental Laws, or Healthcare Laws (including violations or releases of hazardous substances) occurring prior to Closing.
  • Accounts payable and Tax liabilities of the Sellers.
  • Liabilities to any Seller's Affiliates or related to Excluded Assets.

Stalking Horse Bid / Purchase Price

• The aggregate consideration (Purchase Price) consists of:
  • A Credit Bid pursuant to section 363(k) of the Bankruptcy Code comprised of:
    • Indebtedness held by the Purchaser under the Prepetition Credit Agreement ($44,524,814); plus
    • The full amount of obligations under the DIP Facility ($6.5 million).
  • The assumption of Assumed Liabilities.
• The sale is on an "As Is, Where Is" basis, with the Purchaser relying solely on its own inspections.

Bid Requirements and Auction

• The sale was subject to higher and better bids and Bankruptcy Court approval.
• No bidder was permitted to bid less than the Purchase Price plus any minimum bid increment established by the Bidding Procedures Order.
• The Sellers were required to conduct an Auction if additional qualified prospective bidders desired to bid.

Assumption and Assignment

• The Sellers sought authority to assume and assign Assumed Contracts and Assumed Leases to the Purchaser pursuant to section 365 of the Bankruptcy Code.
• The Purchaser is responsible for paying Cure Amounts unless otherwise agreed.
• Procedures were established for handling Disputed Amount Contracts, allowing for post-closing determination of cure amounts and potential redesignation of contracts as Excluded Assets.

Post-Closing Arrangements

• Transition Services Agreement (TSA):
  • The parties entered into a TSA effective on the Closing Date with an initial term of 12 months.
  • The Sellers agree to engage the Purchaser to provide Management Services under the Sellers' direction and control.
  • The Purchaser grants the Sellers a license to use trade names and marks necessary to perform under the TSA.
  • Sellers will maintain pharmacy licensure and permits until the Purchaser obtains its own necessary regulatory consents.

Key Dates

• Motion Filed: August 15, 2025
• Bidding Procedures Order Entered: September 15, 2025
• Sale Order Entered: November 4, 2025
• Partial Closing Date: January 6, 2026
• Final Closing Date: February 1, 2026