EXHIBIT 10.9
EXECUTION COPY
SECOND AMENDMENT TO THE
ASSET PURCHASE AGREEMENT
SECOND AMENDMENT (this "Amendment"), dated June 13, 1997, to the Asset
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Purchase Agreement (the "Agreement"), dated January 31, 1997, as amended, among
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STYLES ON VIDEO, INC., a Delaware corporation ("Parent"), XXXXXXX XXXXX, INC., a
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California corporation (the "Seller"), HASCO INTERNATIONAL, INC., a Missouri
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corporation (the "Buyer"), and HASCO HOLDINGS CORP., a Delaware corporation
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("Holdings"). Any word, term or phrase which is defined in the Agreement and
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not otherwise defined herein shall, when used in this First Amendment, have the
same meaning as used in the Agreement.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree to the following:
I. Amendments.
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(a) Section 4.2(c) is hereby amended to read in entirety as follows:
If, after the Test Date, the Seller receives a notice of termination of any
Current Contract (also a "Terminated Contract"), (i) first, the Credit
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Amount shall be reduced (but not below zero) by the Reduction Amount
(defined below) and (ii) then, the consideration payable under Section 4.1
(a)(ii) shall be reduced by the excess, if any, of the Reduction Amount
over the reduction to the Credit Amount pursuant to clause (i). The
"Reduction Amount" means the product of (x) the amount set forth opposite
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such Current Contract on Schedule 2.1(a) times (y) the Applicable
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Percentage. The "Applicable Percentage" equals 100% for any Terminated
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Contract where notice of termination is received on or prior to the 3rd
month anniversary of the Test Date, 75% for any Terminated Contract where
notice of termination is received after the 3rd and on or prior to the 6th
month anniversary of the Test Date, 50% for any Terminated Contract where
notice of termination is received after the 6th and on or prior to the 9th
month anniversary of the Test Date and 25% for any Terminated Contract
where notice of termination is received after the 9th and on or prior to
the 12th month anniversary of the Test Date. "Test Date" means, with
respect to any hospital subject to a Current Contract, the earlier of (x)
the date such hospital is converted from a Xxxxxxx Xxxxx hospital to a
First Foto Hospital and (y) the Closing Date.
(b) Section 4.4(a) is hereby amended to read in its entirety as follows:
On the Closing Date, the Buyer and Seller shall agree on good faith
estimates of the Adjustments (defined below) as of the Closing Date based
on the Seller's most recently available (unaudited) monthly balance sheets
and Seller's good faith estimates of the changes thereto, which estimate
shall be reasonably acceptable to Buyer (the "Estimated Adjustment
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Amount"). The cash payable pursuant to Section 4.1(a)(i) shall be reduced
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by the amount of the Estimated Adjustment Amount. "Adjustments" means the
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sum of (i) the amount of Payables on the Closing Date, (ii) the amount by
which the principal amount of the Hasco Loans exceed $540,000, (iii) the
amount, if any, by which the liabilities of the Seller
(whether Assumed Liabilities or Excluded Liabilities, but excluding
the Hasco Loans) on the Closing Date (as reflected on the Final
Closing Balance Sheet) are less than the liabilities of the Seller
(whether Assumed Liabilities or Excluded Liabilities but excluding the
Hasco Loans) on January 31, 1997 (as reflected on the Final Closing
Balance Sheet) adjusted to (x) exclude specific converted hospital
commission, sales tax and BPR costs and other to be mutually agreed
upon sections impacted by the converted hospitals from the Preliminary
Signing Balance Sheet and Preliminary Closing Balance Sheet, (iv) the
amount of any non-ordinary course expenses (including any legal fees
or expenses and interest to Affiliates (other than Dycam)) paid by the
Seller between the date hereof and the Closing Date and (v) the
amount, if any, by which "accounts receivables," "pre-paid expenses,"
"inventory" and "deposits" (as such terms are used on the Financial
Statements) of the Seller on the Closing Date (as reflected on the
Final Closing Balance Sheet) are less than $115,000, $40,000, $20,000
and $30,000, respectively, adjusted for the effect on the beginning
and ending receivable balances for the estimated receivable amounts
related to the hospitals of the Seller that were converted by Buyer.
II. Conversion. Prior to the date of this Amendment, Hasco converted
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certain hospitals of the Seller, and has paid or will pay to the Seller $6.80
per each Xxxxxxx Xxxxx package that was shipped by Hasco prior to and on the
Closing Date with respect to any such converted hospital, within 15 days
of the Closing Date (which payments, the parties agree are not part of the
Assets that the Buyer is receiving under the Agreement). Such amount represents
the sole obligation, other the purchase consideration specifically contemplated
by the Agreement, of Hasco with respect to such converted hospitals.
III. Attached Certificates. Attached hereto are certificates that set
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forth (i) the Terminated Contracts pursuant to Section 4.2(b) of the Agreement,
(ii) the Hospital Contracts executed meeting the requirements of Section 4.2(d)
of the Agreement, (iii) the hospitals of the Seller that were converted by Buyer
prior to or on the date of this Amendment and (iv) the cash payable at Closing
by Buyer to Seller (after giving effect to the payment by wire transfer of
$150,000.00 from Seller to Buyer in partial payment of the Hasco Loans). Seller
hereby acknowledges the receipt of the $2,994,820.00 closing payment from Buyer,
and Buyer hereby acknowledges the receipt of the $150,000.00 Hasco Loans payment
from Seller.
IV. Waivers by Buyer and Holdings. Buyer and Holdings hereby waive
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Section 11.1(g) of the Agreement. Buyer and Holdings hereby waive consent to the
contracts described on Attachment A hereto.
V. Waiver and Amendments. This Amendment may be amended, superseded,
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canceled, renewed or extended and the terms hereof may be waived only by a
written instrument signed by parties or, in the case of a waiver, by the party
waiving compliance.
VI. Notice. Notwithstanding any provision in the Agreement or any
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other document delivered thereunder or in connection therewith, the parties
hereto agree that the address for notice in the Agreement and/or any such
document of any party may be changed by such party by written notice sent to
other parties pursuant to the notice provisions of the Agreement or such
document.
VII. Counterparts. This Amendment may be executed by the parties hereto in
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separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
VIII. No Third Party Beneficiaries. This Amendment shall not confer any
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rights or remedies upon any person other than the parties hereto and their
respective successors and permitted assigns.
IX. Entire Amendment. This Amendment constitutes the entire agreement of
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the parties with respect to the subject matter hereof, and shall supersede all
prior agreements or understandings relating thereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
signed on the date and year first above written.
HASCO INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: CEO
HASCO HOLDINGS CORP.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: CHAIRMAN OF THE BOARD
XXXXXXX XXXXX, INC.
By: /s/ Xxxxx X. X'Xxxxx
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Name: Xxxxx X. X'Xxxxx
Title:
STYLES ON VIDEO, INC.
By: /s/ K. Xxxxxx Xxxxxxx
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Name: K. Xxxxxx Xxxxxxx
Title:
ATTACHMENT A TO
AMENDMENT NO. 2 TO
ASSET PURCHASE AGREEMENT
1. Sienna photographic printer leases for five machines.
2. Pitney Xxxxx postage machine, agreement signed 2/24/96 through 5/23/99.
3. Sprint telephone minimum usage agreement dated 4/20/95 through 4/19/98.
4. Ameritech fax maintenance agreement 527945 dated 6/6/96 through 6/6/97.
5. Ameritech copier maintenance agreement 602946 dated 6/6/96 through 6/6/97.
6. Ameritech copier maintenance agreement dated 8/2/96.
Purchase Price Adjustment - Hospital Contracts.
4.2 (b) Terminated Contracts - notice to cancel
Hospital Birthrate Effective Date Adjustment
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of Cancellation to Price
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Lavaca Med. Ctr 50 2-1-97 ($ 1,000)
Hallettsville, TX
St. Xxxxxx Med. Ctr. 700 9-1-97 ($14,000)
Stamford, CT
Presbyterian 4,847 6-23-97 ($96,940)
Charlotte, NC
Presbyterian 1,800 6-23-97 ($36,000)
Matthews, NC
Univ. Med. Ctr. 3,600 6-27-97 ($72,000)
Las Vegas, NV
**Waukesha Memorial 1,945 0-00-00
Xxxxxxxx, XX
**Columbia Conroe
Reg. Med. Ctr. 1,509 2-16-97
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Total Births 14,451
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Total Terminated Contracts Adjustment 4.2 (b) ($219,940)
**Went with F.F. after FYI
Purchase Price Adjustment - Hospital Contracts.
4.2 (d) Contracts - Active Hospitals
Hospitals Birthrate Contract Date/ Adjustment
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Active Date to Price
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*Columbia Plaza Med. Ctr.
Ft. Worth, TX 000 Xxxxxxx 0-0-00
Xxxxx Xxxx. Hosp. 897 2-1-97 2-1-97 $17,940
Lansdale, PA
Columbia Lawnwood
Reg. Med. Ctr. 1,200 1-22-97 1-13-97 $24,000
Ft. Xxxxxx, FL
Columbia Largo 1,550 12-26-96 1-15-97 $31,000
Reg. Med. Ctr.
Columbia Ocala 625 1-23-97 1-23-97 $12,500
Reg. Med. Ctr.
*Condell Med. Ctr. 1,504 Xxxxxxx 0-00-00
Xxxxxxxxxxxx, XX
Xxxxxx-Xxxxxx Med. Ctr.
Merced, CA 1,936 9-11-96 9-1-96 $38,720
Columbia Paradise Valley
Reg. Med. Ctr. 1,000 2-24-97 2-28-97 $20,000
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Total Births 9,612
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Total New Contracts Adjustments 4.2 (b) $144,160
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* Were with F.F. before FYI
XXXXXXX XXXXX, INC.
HOSPITALS CONVERTED FROM FYI SYSTEM TO HASCO SYSTEM
AS OF JUNE 13, 1997
1 ANAHEIM MEMORIAL HOSPITAL CA
2 BARBERTON CITIZENS HOSPITAL OH
3 CENTINELA HOSPITAL MEDICAL CENTER CA
4 COLUMBIA LARGO REGIONAL MEDICAL CENTER FL
5 COLUMBIA LAWNWOOD REGIONAL MEDICAL CENTER FL
6 COLUMBIA MEDICAL CENTER OF XXXXXXXX TX
7 COLUMBIA OCALA REGIONAL MEDICAL CENTER FL
8 DESERT HOSPITAL CA
9 FIRELANDS COMMUNITY HOSPITAL OH
10 XXXXXX MEMORIAL HOSPITAL NC
11 HANFORD COMMUNITY MEDICAL CENTER CA
12 XXXX XXXXXXX HOSPITAL CT
13 XXXX XXXX MEDICAL CENTER CA
14 XXXX MEDICAL CENTER CA
15 KING'S DAUGHTERS' MEDICAL CENTER KY
16 XXXXXXXX HOSPITAL CA
17 XXXX XXXXXX HOSPITAL KY
18 MERCY HEALTH CENTER IA
00 XXXXX XXXXXXXX XX XXXXXX XX
20 MIDDLESEX HOSPITAL CT
21 NORTHBAY MEDICAL CENTER CA
22 NORTHSIDE MEDICAL CENTER OH
23 X'XXXXXX HOSPITAL CA
24 ORANGE COAST MEMORIAL MEDICAL CENTER CA
00 XXXXX XXXXXXXXX XXXXXXXX XX
00 XXXXX XXXXXXX MEDICAL CENTER CA
27 SUMMA HEALTH SYSTEM OH
28 XXXXXX XXXXXX MEDICAL CENTER CA
29 XXX CHILDREN'S HOSPITAL OH
30 TORRANCE MEMORIAL MEDICAL CENTER CA
31 WESTERN MEDICAL CENTER, SANTA ANA CA
6/13/97
10:50 AM
XXXXXXX XXXXX, INC.
CASH PAYABLE AT CLOSING SUMMARY
Total Adjusted Purchase Price (see attached) $4,385,140
Less
Loan and Interest Less Payments Received (52,220)
Assumed Payables (Paragraph 4.4(a)(i) (280,000)
Purchase Price Adjustments - Operations
(Paragraph 4.4(a)(iii) and 4.4(a)(v) (9,000)
Acquisition Related Adjustments (Paragraph 3.2(a) (13,310)
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Total Adjusted Purchase Price 4,030,610
Less Three Year Deferred ($1,065,000 - $29,210)* (1,035,790)
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Cash Payable at Closing to Xxxxxxx Xxxxx $2,994,820
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*Computed in accordance with Section 4.2(b)(n).
XXXXXXX XXXXX
CONTRACT SUMMARY
HOSPITALS BIRTHS
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Hospitals per Xxxxxxx Xxxxx Acquisition Document 226,796 x 20 = $4,535,920
Xxxxxx Xxxxxx (missed on original list) 1,936 x 20 = $ 38,720
1 Non First Foto - nonactive with contract* 625 x 20 = $ 12,500
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Total Purchase Price 229,357 4,587,140
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Less:
Commission Adjustment (75,000)
Offset Adjustment (6,350 x $20)(A) (127,000)
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Total Adjusted Purchase Price $4,385,140
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Offset Activity ("Credit" Amount)
Plus Offset
Columbia Lawnwood 1,200
Columbia Largo Regional Med Ctr 1,550
Columbia Paradise Valley 1,000
NorthPenn 897
Columbia Plaza - Ft Worth** --
Condell** --
Less Offset
Lavaca (50)
St. Xxxxxx Medical Center (700)
Presbyterian (Charlotte) (4,847)
Presbyterian (Xxxxxxxx) (1,800)
UMC - Las Vegas (3,600)
Waukesha*** --
Columbia Conroe*** -- (6,350) (A)
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223,007
* Columbia Ocala birth obtained from the AHA Guide
** Acquired from First Foto, no adjustment to "Credit" Amount (see Section
4.2(d) in the Asset Purchase Agreement)
***Returned to First Foto, no reduction to "Credit" Amount (see Sections
4.2(b) and 4.2(e) in the Asset Purchase Agreement
