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EXHIBIT 10.28
ASSET PURCHASE AGREEMENT
THIS AGREEMENT by and among DOCTOR'S PRACTICE MANAGEMENT, INC., a
Texas Corporation (the "Purchaser") and MEDTEK MANAGEMENT, INC., a Texas
corporation (the "Seller").
W I T N E S S E T H:
WHEREAS, the parties hereto desire to memorialize the purchase of the
property and assets of the Seller by the Purchaser in exchange for certain
stock of the Purchaser and the assumption of certain liabilities of the Seller
by the Purchaser, all on the terms and conditions herein set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. TRANSFER OF ASSETS: CONSIDERATION, ASSUMPTION OF LIABILITIES,
AND OTHER MATTERS.
1.1 SALE OF TANGIBLE AND INTANGIBLE ASSETS. The Seller,
at the Closing referred to in Section 2 hereof, will grant, sell,
transfer, convey and deliver to the Purchaser all of the Seller's
furniture, fixtures, leasehold improvements, equipment, signs,
manuals, inventories (including office supplies), accounts receivable,
rights under contracts, "Logo" licensing agreement, agreements,
operating permits, goodwill, inventions, processes, know-how, patient
histories and records, current and prospective client information,
existing clientele, computer equipment, company specific software and
databases, forms, brochures, client relations procedures, practice
development resources and methods, fee schedules, operating systems,
information bases, telephone listings, and all other similar
properties and rights used by the Seller in connection with the
conduct of Seller's business, all as the same shall exist on the
Closing Date (as herein defined,) including but not limited to the
items listed on the attached Schedule 1, excepting, however, (i) all
of the corporate records of the Seller containing records of Seller's
director's, and shareholder's meetings and Seller's stock transfer and
issuance records and any other corporate records of Seller that do not
pertain to the assets, properties and business of the Seller to be
transferred pursuant to this Agreement, (ii) all rights in any fund
relating to unemployment compensation, retirement, pension, profits
sharing, bonus and savings funds, (iii) any of Seller's prepaid
federal and state income taxes on the Closing Date, all of any of
Seller's rights to, and claims for, federal and state income tax
refunds and refunds of other taxes paid, and (iv) Seller's leasehold
interest in and to the premises at 0000 Xxxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000, which Purchaser expressly is not assuming. The assets,
properties and business of the Seller to be transferred hereunder are
hereinafter sometimes called the "Assets."
1.2 CONSIDERATION. Based upon the terms and subject to
the conditions of this agreement, the total consideration to be paid
by the purchaser for the tangible and intangible assets referred to in
Section 1.1 shall be as follows:
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(A) 180,000 restricted common shares of Dynacq
International, Inc. ("the shares"), said
shares to be issued on or before November 14,
1997;
(B) A two-year option (to expire at 11:59 p.m. on
October 22, 1999) to purchase an additional
150,000 restricted shares of Dynacq
International, Inc. stock for the market
price existing at the close of trading on
the date of the closing (said price subject
to future splits, including reverse splits,
and equity changes);
(C) Immediate assumption by the Purchaser of
liability on the Seller's note owed to
Compass Bank, in the approximate current
amount of $63,000;
(D) The assumption by Purchaser of all of
Seller's accounts receivable and only those
accounts payable listed on the attached
Exhibit 2.
1.3 ALLOCATION OF PURCHASE PRICE. The Seller and the
Purchaser both expressly acknowledge and agree that the consideration
to be paid and received for the tangible and intangible Assets and
assumption of liabilities is fair and reasonable and represents
equivalent value given for the transfer and sale of the Assets from
the Seller to the Purchaser. Each of the Seller and Purchaser shall,
for their respective accounting and tax reporting purposes, allocate
the total consideration for the tangible and intangible Assets
(including the Assumed Liabilities) among the tangible and intangible
Assets to be sold and transferred by the Seller to the Purchaser in
accordance with Schedule 4 attached hereto and for all purposes
incorporated herein.
1.4 CONTRACTS, RECORDS. At the Closing, the Seller will
deliver to the Purchaser a copy of the Compass Bank Note Agreement of
the Seller to be assumed by the Purchaser. It is understood that the
Seller has delivered to the Purchaser all books, records and other
data relating to the Assets and the Assumed Liabilities. Seller
agrees to take all such additional steps as may be required to put the
Purchaser in full possession and control of the tangible and
intangible Assets.
1.5 ASSUMPTION OF LIABILITIES. Purchaser assumes
liability only for those accounts payable attached hereto as Exhibit 2
and for the Compass Bank indebtedness referenced above . Purchaser
and Seller expressly agree that Purchaser assumes no other liabilities
of Seller.
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2. THE CLOSING.
2.1 THE CLOSING. The purchase and sale of the Assets
shall take place simultaneously with the execution of this Agreement
as contemplated in Section 1 of this Agreement (herein called the
"Closing") and shall take place at the offices of the Purchaser no
later than on October 22, 1997, unless mutually extended by the
parties hereto. The date of the Closing is referred to in this
Agreement as the "Closing Date."
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants to the Purchaser that:
3.1 ORGANIZATION AND EXISTENCE. The Seller is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and has all requisite legal and
corporate power to carry on its business as now conducted and to enter
into and perform this Agreement. The Seller is not qualified to do
business as a foreign corporation in any state and neither the
character or location of the assets owned by the Seller nor the nature
of the business transacted by the Seller requires any such
qualification. A true and correct copy of the Articles of
Incorporation and Bylaws of the Seller, as in effect at the date
hereof, have been delivered to the Purchaser.
3.2 TAX MATTERS. To the best of Seller's knowledge, all
foreign, federal, state, county, local and other taxes, including
without limitation, income taxes, occupation taxes, corporate
franchise taxes, employment and withholding taxes, and sales and ad
valorem taxes, due and payable by the Seller on or before the date of
this Agreement have been paid and the Seller has filed all tax returns
and reports required to be filled by it, with all such taxing
authorities. Seller has made reasonable and adequate provision for
the payment of all accrued and unpaid foreign, federal, state, county,
local and other taxes of the Seller for all periods ended on or prior
to the date hereof, whether or not disputed. No assessment of
deficiencies has been made against the Seller and no extensions of
time are in effect for the assessment of deficiencies.
3.3 INVENTORIES. Seller has previously delivered to
Purchaser and Purchaser has reviewed and confirmed the list and
description of all inventories of the Seller at the date hereof.
3.4 EQUIPMENT. Seller has previously delivered to
Purchaser and Purchaser has reviewed and confirmed the list setting
forth a description of all items of equipment owned or leased by the
Seller at the date hereof. Seller has also informed Purchaser which,
if any, of the items listed thereon is leased rather than owned by the
Seller.
3.5 COMPLIANCE WITH LAWS. The Seller has complied in all
material respects with all applicable foreign, federal, state,
municipal and other political subdivision or governmental agency
statutes, ordinances and regulations, including, without limitation,
those imposing taxes, in every applicable jurisdiction, in respect of
the ownership of the Seller's properties and conduct of the Seller's
business.
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3.6 BROKERS. The Seller in not a party to or in any way
obligated under any contract or other agreement for, and there are no
outstanding claims against them for, the payment of any broker's or
finder's fee in connection with the origin, negotiation, execution or
performance of this Agreement.
3.7 PATENTS AND TRADE-MARKS. The Seller does not own,
and neither have applied for, any patent, patent application, patent
license, trade-xxxx, trade-xxxx application or trade-xxxx license.
The Seller has no knowledge of any infringement or claimed
infringement by the Seller of any patent right or trade-xxxx right of
others.
3.8 FINANCIAL STATEMENTS. The Seller has delivered to
the Purchaser all necessary financial statements and related
information and Purchaser has assisted in obtaining such material.
Purchaser has independently verified such financial information.
3.9 SELLER'S AUTHORITY RELATIVE TO THIS AGREEMENT. The
execution, delivery and performance of this Agreement by the Seller
has been duly authorized and approved by the Board of Directors of the
Seller of more than 2/3 of the outstanding shares of the Seller and no
further corporate action is necessary on the part of the Seller to
make this Agreement valid and binding upon the Seller in accordance
with its terms. Evidence of such approvals, satisfactory to the
Purchaser, will be provided on or before November 14, 1997. Neither
the execution, delivery nor performance of this Agreement by the
Seller will result in a violation or breach of any term or provision
under the Articles of Association or Bylaws of the Seller or,
constitute a default or breach of, or accelerate the performance
required under, any indenture, mortgage, deed of trust or other
contract or agreement to which the Seller is a party or by which it or
any of its respective assets are bound, or, violate any order, writ,
injunction or decree of any court, administrative agency or
governmental body.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser represents and warrants to and agrees with the Seller that:
4.1 ORGANIZATION AND EXISTENCE. The Purchaser is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and has all requisite legal and
corporate power to enter into and perform this Agreement.
4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. The execution,
delivery and performance of this Agreement by the Purchaser have been
duly authorized by the Board of Directors of the Purchaser, and no
further corporate action is necessary on the part of the Purchaser to
make this Agreement valid and binding upon the Purchaser in accordance
of its terms. The Purchaser will provide to the Seller at the Closing
copies of the resolutions of the Board of Directors of the Purchaser
approving this Agreement, certified by an officer of the Purchaser.
Neither the execution, deliver nor performance of this Agreement by
the Purchaser will result in a violation or breach of any term or
provision under the Articles of Incorporation or Bylaws of the
Purchaser or constitute a default or breach of, or accelerate
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the performance required under any indenture, mortgage, deed of trust
or other contract or agreement to which the Purchaser is a party or by
which it or its properties are bound, or violate any order, writ,
injunction or decree of any court, administrative agency or
governmental body.
4.3 BROKERS. The Purchaser is not a party to or in any
way obligated under any contract or agreement for, and there are no
outstanding claims against it for, the payment of any broker's or
finder's fee in connection with the origin, negotiation, execution, or
performance of this agreement.
4.4 ISSUANCE OF SHARES. The Shares to be delivered
herein as consideration for the acquisition of the Tangible and
Intangible Assets pursuant to this Agreement will, when delivered, be
validly issued and outstanding, fully paid and non-assessable, and
will be delivered on or before November 14, 1997.
5. INFORMATION.
5.1 ACCESS TO INFORMATION. Purchaser, its counsel,
accountants, and other representatives, have been provided full
and free access to all the properties, books, contracts, commitments,
and records of the Seller and the work papers of the Seller's
independent certified public accountants.
5.2 CONFIDENTIAL INFORMATION. The Seller acknowledges
that in the course of its previous involvement with the business
conducted by the Seller, it has had and will continue to have access
to certain know-how, formulae, processes, data, proprietary
information, supplier and patient records and information and other
confidential knowledge of the business and operations of the Seller
and Purchaser. Seller understands that all such information is
confidential and has been or will be conceived or learned by them in
confidence, and it agrees not to reveal any such information to any
third person for any reason or under any circumstances. Seller
further agrees that it will at no time use any such information for
the purpose of competing with or assisting others in competing with
the practice of the Purchaser or for any purpose which may be harmful
or detrimental to the practice or interests of the Purchaser. The
restrictions in this Section 5.2 shall not apply and shall not
prohibit the use or disclosure of such confidential information (I) to
the extent required by law or court order, or other administrative
order in any litigation, arbitration, or similar proceeding; (ii) to
the extent such information becomes publicly available other than
through a breach of this Section 5.2; or (iii) to the extent such
information would become necessary to support any claim arising
between the parties; or (iv) with the written agreement of the
Purchaser. The Seller agrees that any remedy at law for actual or
threatened breach of the provisions of Section 5.2 would be inadequate
and that the Purchaser shall be entitled to specific performance
thereof or injunctive relief by temporary or permanent injunction or
such other appropriate judicial remedy, writ or order as may be
entered by a court of competent jurisdiction. Any such remedy shall
be in addition to any damages which the
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Purchaser may be legally entitled to recover as a result of any breach
by the Seller of the provisions of this Section 5.2, and the Seller
hereby waives any requirement for the securing or posting of any bond
in connection with obtaining any such injunctive or other equitable
relief.
5.3 AGREEMENT CONCERNING EMPLOYEES. It is agreed that
effective the Closing Date, the Purchaser shall not have any
responsibility or obligation to retain any employees employed by the
Seller prior to the Closing Date.
5.4 SUPPLEMENTS TO SCHEDULES. The Seller shall
supplement each schedule attached hereto or delivered herewith as may
be necessary to keep them current and accurate. At the Purchaser's
reasonable request, the Seller shall deliver to the Purchaser copies
of any documents pertaining to the matters listed or described in any
such schedule. The duty to deliver the schedules and any supplements
thereof shall survive the closing.
6. COVENANTS OF THE PURCHASER. The Purchaser covenants with the
Seller that:
6.1 CONFIDENTIALITY OF INFORMATION FURNISHED BY THE
SELLER. The Purchaser has treated all information provided to it
pursuant to Section 5 as confidential.
6.2 ACCESS TO INFORMATION. All books and records of the
Seller delivered to the Purchaser at or after the Closing pursuant to
this Agreement shall be made available to the Seller by the Purchaser
at any reasonable time during regular business hours, or for a period
of not less than two years after the Closing Date, and the Seller may,
at their own expense, make such excerpts therefrom or copies thereof
as they may request, provided, however, that in the event Seller is
audited or required or requested to produce any such records after
such two year period, Purchaser shall upon reasonable notice make any
such existing records available at Seller's expense. Purchaser shall
maintain the confidentiality of the clinical and financial content of
all patient records.
6.3 THIRD PARTY CONSENTS. The Purchaser has used its
best efforts to obtain any necessary consents and approvals of other
persons and governmental authorities to the transactions contemplated
by this Agreement and to the performance by Purchaser of its
obligations under this Agreement.
7. MISCELLANEOUS.
7.1 SALES, TRANSFER AND AD VALOREM TAXES. The Seller
shall pay all sales and transfer taxes which may be payable as a
direct result of the sale of the Assets to Purchaser pursuant to this
Agreement. Ad valorem taxes on the personal property included in the
Assets shall be prorated through the closing, and settlement shall be
made at the closing.
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7.2 SPECIFIC PERFORMANCE. Each party acknowledges that a
remedy at law for any breach or attempted breach of the provisions of
this Agreement will be inadequate, and agrees that each party shall
be entitled to specific performance and injunctive or other equitable
relief in case of any such breach or attempted breach.
7.3 NOTICES. All notices, requests, consents, and other
communications hereunder shall be in writing and shall be deemed to
have been given if personally delivered, telegraphed or telecopied
with receipt confirmed, or mailed, first class, registered or
certified mail, postage prepaid to the following:
If to the Seller: Raja X. Xxxxxxx, M.D.
0000 Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Phone: 000-000-0000
Telefax: 000-000-0000
with a copy to Xx. Xxxx X. Xxxxxxxx
XxXxxx, Xxxxxxxx & Xxxxxx, L.L.P.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Phone (000) 000-0000
Telefax: (000) 000-0000
If to the Purchaser: Doctors Practice Management, Inc.
0000X Xxxxx
Xxxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Telefax: (000) 000-0000
or to such other address as shall be given in writing by any party to
the others.
7.4 ASSIGNMENT. Except as specifically set forth herein,
this Agreement may not be assigned by any party hereto without the
consent of the other parties hereto.
7.5 SUCCESSORS BOUND. Subject to the provisions of
Section 7.5, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
legal representatives, and assigns.
7.6 SECTION AND PARAGRAPH HEADINGS. The section and
paragraph headings in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement. The word "This Agreement," "this instrument," "herein,"
"hereto," "hereunder," and words of similar import refer to this
Agreement as a
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whole and not to a particular article, section, paragraph, or other
subdivision of this Agreement. Whenever the context requires, the
gender of all words used in this Agreement shall include the
masculine, feminine, and neuter, and the number of all words shall
include the singular and the plural.
7.7 AMENDMENT; WAIVER. This Agreement may be amended
only by an instrument in writing executed by the parties hereto. The
waiver of any covenant, condition, or breach of any provision of this
Agreement must be in writing and such waiver shall not operate or be
construed as a waiver of any subsequent or continuing condition.
7.8 ENTIRE AGREEMENT. This Agreement is the entire
agreement among the parties hereto with respect to the subject matter
hereof and thereof; and there are no promises, covenants,
undertakings, representations, or warranties with respect to the
subject matter hereof or thereof, written or oral, except those
expressly set forth or referred to herein.
7.9 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which shall constitute the same instrument.
7.10 GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of Texas
7.11 PUBLIC DISCLOSURE. The parties hereto agree that any
disclosure or press release about the transactions contemplated by
this Agreement may only be made in the manner and at the time mutually
determined by the Purchaser and the Seller.
7.12 TIME. Time is of the essence hereof. If the time
for performance of any obligations set forth in this Agreement falls
on Saturday, Sunday, or legal holiday, compliance with such obligation
on the next business day following such Saturday, Sunday or legal
holiday shall be deemed acceptable. For purposes of this agreement, a
"business day" is any day other than a Saturday, Sunday, or legal
holiday in Texas.
7.13 ATTORNEY'S FEES. In the event of any action at law
or in equity between the parties hereto to enforce any provision or
right hereunder or in any way related hereto or arising herefrom, the
unsuccessful party in such litigation covenants and agrees to pay to
the successful party all costs and expenses, including reasonable
attorney's fees, incurred therein by such successful party. If such
successful party shall recover judgment in any such action or
proceeding, such costs and expenses shall be included as part of such
judgment.
7.14 LANGUAGE. The language of this Agreement shall be
construed as a whole and in accordance with the fair meaning of the
language used. The language of this Agreement shall not be strictly
construed for or against either of the parties hereto based upon who
drafted or was principally responsible for drafting the Agreement or
any specific
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term or condition hereof. This Agreement shall be deemed to have been
drafted by each party hereto, and no party may urge otherwise.
7.15 KNOWLEDGE. Any representation, warranty or covenant
herein which is limited to a party's "knowledge" is made with the
understanding that such party has examined whatever sources of
information that are reasonably accessible to such party in order to
verify the truth and accuracy of such representation, warranty or
covenant.
7.16 OTHER DOCUMENTS. The parties agree to execute all
other documents or instruments necessary to effect the transfers of
property set forth herein and otherwise to implement the provisions of
this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties on October 22, 1997.
SELLER:
MEDTEK MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxx
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RAJA X. XXXXXXX, M.D., PRESIDENT
PURCHASER:
DOCTORS PRACTICE MANAGEMENT, INC.
By: /s/ Xxxx Xxxx
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XXXX XXXX, PRESIDENT
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B I L L O F S A L E
STATE OF TEXAS
KNOW ALL MEN BY THESE PRESENTS
COUNTY OF XXXXXX
THAT MEDTEK MANAGEMENT, INC., Seller, of Xxxxxx County, Texas, for and
in consideration of the sum of TEN DOLLARS ($10.00) and other good and valuable
consideration paid to it by DOCTORS PRACTICE MANAGEMENT, INC., the receipt of
which is hereby acknowledged, has Bargained, Sold, and Delivered and by these
presents does Bargain, Sell and Deliver to DOCTORS PRACTICE MANAGEMENT, INC. of
Xxxxxx County, Texas, all of the personal property described in Exhibit 1 which
is attached hereto and incorporated by reference herein for all purposes.
Seller warrants that it is the lawful owner in every respect of all of
the described property and that it is free and clear of all liens, security
agreements, encumbrances, claims, demands, and charges of every kind
whatsoever.
Seller binds Seller, its heirs, executors, administrators, successors
and/or assigns, to forever Warrant and Defend the title to all of the described
property to Buyer, its heirs, successors and assigns, against the lawful claim
or claims of any and all persons whomsoever.
EXECUTED this 22nd day of October, 1997.
MEDTEK MANAGEMENT, INC.
By: /s/ Xxxxx Xxxxxxx
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RAJA X. XXXXXXX, M.D., PRESIDENT
STATE OF TEXAS
ACKNOWLEDGMENT
COUNTY OF XXXXXX
BEFORE ME, the undersigned authority, on this 22nd of October, 1997,
personally appeared RAJA X. XXXXXXX, M.D., known to me to be the person whose
name is subscribed to the foregoing instrument and acknowledged to me that he
had executed the same for the purposes and the consideration and in the
capacity therein expressed.
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Notary Public, State of TEXAS
