EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of September
16, 1996, is by and among Southern Medical Mart, Inc., a Louisiana corporation
(the "Seller"); Xxx Xxxxx and Xxx Xxxxxxxx (collectively referred to as the
"Principals"); and HealthCor Oxygen and Medical Equipment, Inc. or an affiliate
thereof, a Texas corporation ("Purchaser").
WITNESSETH:
WHEREAS, Seller is engaged in the business of selling and leasing home
respiratory/medical equipment used in the home health care industry (the
"Business"); and
WHEREAS, the Principals own all of the issued and outstanding shares of
capital stock of the Seller; and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, substantially all of the Seller's properties and assets
under the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and certain other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. PURCHASE AND SALE OF ASSETS
1.1 PURCHASE AND SALE OF ASSETS.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing (as defined hereinafter), the Seller shall assign,
transfer, convey and deliver to Purchaser, and Purchaser shall purchase from the
Seller, all right, title and interest in and to the following assets (the
"Assets"), together with replacements thereof and additions thereto made between
the date hereof and the Closing Date (as defined herein), whether or not on the
books and records of the Seller (exclusive of the Excluded Assets described in
Section 1.1 (b) below, the "Excluded Assets"), free and clear of all liens,
security interests, charges, encumbrances and rights of others:
(i) All personal property, tangible or intangible, owned
by the Seller, which is used or useful in the operation of Seller's
business,
including, but not limited to, accounts receivable, equipment,
inventories, prepaid expenses, fixed assets and including, but not
limited to, the assets listed on Schedule 1.1(a)(i) attached hereto;
(ii) All of the Seller's (A) proprietary information,
trade secrets and confidential information, technical information and
data, trademarks, trade names and service marks, including any rights
of the Seller in and to the business name "Southern Medical Mart";
(B) machinery and equipment warranties related to the Assets; (C)
rights in any causes of action related to or in connection with the
Assets; (D) all other documentation relating to the operation of the
Seller, including all license, permits and approvals issued by any
governmental authority or otherwise necessary or relating to the
operation of Seller's business; and (E) the goodwill and going
concern value of Seller's business;
(iii) All of the Seller's books and records, including all
financial, accounting and property tax records, computer data and
programs, market data and all correspondence with and documents
pertaining to suppliers, governmental authorities and other third
parties; provided, however, that Seller and the Principals may retain
copies of such financial records of the Seller as may be necessary to
complete their federal, state and local tax returns; and
(iv) the Seller's customers, customer lists, work orders,
file and computer copies of customer invoices, customer files and
other customer records.
(b) The parties acknowledge that the assets (the "Excluded Assets")
listed on Schedule 1.1 (b) hereto are not being acquired by Purchaser.
1.2 ASSUMED LIABILITIES.
(a) At the Closing, the Purchaser agrees to assume and discharge
those specified contractual obligations of Seller listed on Schedule 1.2 hereto
(the "Assumed Liabilities), except that Purchaser shall not assume or agree to
pay, discharge or perform any liabilities or obligations arising out of any
breach by Seller of any provision of any of the contracts, agreements or
documents entered into in connection with the Assumed Liabilities, including but
not limited to liabilities or obligations arising out of penalties, late charges
or Seller's failure to perform under any such Assumed Liability prior to the
Closing Date.
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(b) All items of income and expense arising from the operation of the
Business relating to the Assets and the Assumed Liabilities set forth on
Schedule 1.2 hereof shall be adjusted between the Seller and Purchaser as of the
Effective Date. Those items arising before the Effective Date shall be allocated
to the account of Seller and those items arising on or after the Effective Date
shall be allocated to the account of Purchaser. Proration of the items described
herein between Seller and Purchaser shall be effective as of 12:01 a.m., local
time, on the Effective Date. Liability for state and local taxes assessed on the
Assets payable with respect to the tax year in which the Effective Date falls
shall be prorated as between Seller and Purchaser on the basis of the number of
days of the tax year elapsed to and including such date. All prorations shall be
made and paid insofar as feasible on the Closing Date with a final settlement to
be made no later than 60 days thereafter. Seller and Purchaser agree to assume,
pay and perform all costs, liabilities and expenses allocated to each of them
pursuant to this Section 1.2.
1.3 EXCLUDED LIABILITIES. Except for the Assumed Liabilities,
Purchaser does not assume and shall in no event be liable for any debt,
obligation, responsibility or liability of Seller's business, the Seller, any
subsidiary or any affiliate or successor of the Seller, or any claim against any
of the foregoing, whether known or unknown, contingent or absolute, or otherwise
(the "Excluded Liabilities"). The Excluded Liabilities shall include but shall
not be limited to the liabilities set forth on Schedule 1.3 hereof.
1.4 EMPLOYMENT AGREEMENT. At the Closing, Purchaser and Xxx Xxxxx
shall enter into an employment, confidentiality and non-competition agreement
substantially in the form of Exhibit "A" hereto (the "Employment Agreement").
1.5 NON-COMPETITION AGREEMENT. At the Closing, Purchaser and Xxx
Xxxxxxxx shall enter into a confidentiality and non-competition agreement
substantially in the form of Exhibit "B" hereto (the "Non-Competition
Agreement").
2. CONSIDERATION; CLOSING
2.1 CONSIDERATION FOR THE ASSETS.
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(A) The consideration to be received by Seller at the
Closing in exchange for the Assets shall be an amount equal to the sum of (i)
$4,762,191.99 payable by wire transfer in immediately available funds to an
account specified by the Seller, (ii) $237,808.01 payable by wire transfer in
immediately available funds to Hibernia National Bank on behalf of the Seller
and (iii) a promissory note guaranteed by the parent of the Purchaser of
$600,000 payable to Seller in thirty-six monthly payments of principal and
interest, substantially in the form of Exhibit "C" attached hereto.
(B) At Closing, Seller shall pay to Purchaser cash in an
amount equal to the aggregate amount of payables outstanding in excess of 30
days listed on item 2 of Schedule 1.2 hereto.
(C) At Closing, Seller shall pay to Purchaser cash in an
amount equal to the accrued value of employee benefit days listed on item 4 of
schedule 1.2 hereto.
2.2 TIME OF CLOSING. A closing (the "Closing") for the sale and
purchase of the Assets shall be held on or before September 16, 1996 or on such
other date as may be agreed upon by the parties (the "Closing Date"). The
Closing shall be deemed effective as of the open of business on September 1,
1996 (the "Effective Date"). The Closing shall take place at the Purchaser's
executive offices or the offices of its counsel or by mail or at such other
place or places as the parties may agree.
2.3 CLOSING PROCEDURE. At the Closing, the Seller shall deliver to
Purchaser such bills of sale, instruments of assignment, transfer and conveyance
and similar documents as Purchaser shall reasonably request. Against such
delivery, Purchaser shall deliver to the Seller the purchase price to be paid at
the Closing in accordance with Section 2.1(a) above. Each party will cause to be
prepared, executed and delivered all other documents required to be delivered by
such party pursuant to this Agreement and all other appropriate and customary
documents as another party or its counsel may reasonably request for the purpose
of consummating the transactions contemplated by this Agreement. All actions
taken at the Closing shall be deemed to have been taken simultaneously at the
time the last of any such actions is taken or completed.
2.4 ALLOCATION OF PURCHASE PRICE. The purchase price shall be
allocated to the Assets in accordance with Schedule 2.4 hereof. The Seller, the
Principals and the Purchaser each hereby covenant and agree that they will not
take a position on any income tax return, before any governmental agency charged
with
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the collection of any income tax or in any judicial proceeding that is in any
way inconsistent with the terms of this Section 2.4.
2.5 POST-CLOSING PURCHASE PRICE ADJUSTMENT.
(a) No later than 120 days after the Closing Date, Purchaser shall
prepare and deliver to the Seller an unaudited balance sheet of the Seller as of
the Closing Date (the "Closing Balance Sheet") prepared in accordance with
accounting principles used to prepare the Seller Financial Statements (as
defined in Section 3.13 hereof). The Purchaser shall permit the Seller and its
accountants to participate in the preparation thereof and shall promptly make
available to them all work papers and other pertinent information used in
connection therewith.
(b) Within 30 days after the Closing Balance Sheet is delivered to
the Seller pursuant to subsection (a) above, the Seller shall complete its
examination thereof and shall deliver to Purchaser either (i) a written
acknowledgment accepting the Closing Balance Sheet or (ii) a written report (the
"Objection Report") setting forth in reasonable detail any proposed objections
to the Closing Balance Sheet. A failure by the Seller to deliver the Objection
Report within the required 30 day period shall constitute its acceptance of the
calculations set forth in the Closing Balance Sheet.
(c) During a period of 20 days following the receipt by Purchaser of
the Objection Report, Seller and Purchaser shall attempt to resolve any
differences they may have with respect to the matters raised in the Objection
Report. In the event Seller and Purchaser fail to agree on any of the Seller's
proposed adjustments contained in the Objection Report within such 20 day
period, then the parties will request that the Dallas, Texas office of Price
Waterhouse, certified public accountants ("Independent Auditors"), make the
final determination with respect to the correctness of the proposed adjustments
in the Objection Report in light of the terms and provisions of this Agreement.
Each of the parties hereto represents and warrants that such party has not
engaged Price Waterhouse and that Price Waterhouse is not affiliated with such
party, and such party further agrees not to engage Price Waterhouse until such
time as any post-closing price adjustment has been determined. The decision of
the Independent Auditors shall be final and binding on the parties. The costs
and expenses of the Independent Auditors and their services rendered pursuant to
this subsection shall be borne equally by the Seller, on the one hand, and the
Purchaser, on the other.
(d) If after finalization of the Closing Balance Sheet (which shall
be deemed to mean either the failure of the Seller to deliver an Objection
Report within
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the 30-day period referred to in Section 2.5(b) above or, if the Seller delivers
an Objection Report, upon receipt by Purchaser and the Seller of the written
final determination rendered pursuant to Section 2.5(c) concerning the
resolution of the matters raised in the Objection Report pursuant to Section
2.5(c) above), the Adjusted Tangible Net Worth (defined hereinafter) of the
Seller as set forth on the Closing Balance Sheet is less than the amount of
Tangible Net Worth set forth on Schedule 2.5 hereto (which schedule is to be
attached to this Agreement at the Closing), the Principals amount of the Note
issued pursuant to Section 2.1 hereof shall be immediately decreased, effective
as of the Closing Date, by the amount of any such decrease in the Adjusted
Tangible Net Worth. For purposes of this Agreement, "Adjusted Tangible Net
Worth" shall mean the Seller's net worth after giving effect to the exclusion of
the Excluded Assets and the Excluded Liabilities.
(e) The parties hereto agree that the rights and remedies of
Purchaser described in this Section 2.5 are not exclusive and are in addition to
the rights and remedies of Purchaser provided elsewhere herein.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE PRINCIPALS.
The Principals and the Seller, jointly and severally, hereby
represent and warrant to Purchaser as follows (except as qualified by the
Disclosure Schedule attached hereto as Exhibit "C"):
3.1 ORGANIZATION; GOOD STANDING. The Seller is a corporation, duly
incorporated, validly existing and in good standing under the laws of the State
of Louisiana and has all requisite corporate power and authority to own and
lease its properties and assets and to carry on its business as currently
conducted. Except as set forth on the Disclosure Schedule, the Seller has no
subsidiaries and no equity, profit sharing, participation or other ownership
interest (including any general partnership interest) in any corporation,
partnership, limited partnership or other entity. The Seller is duly qualified
and licensed to do business and is in good standing in all jurisdictions where
the nature of its business makes such qualification necessary, which such
jurisdictions are set forth on the Disclosure Schedule.
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3.2 DUE AUTHORIZATION; EXECUTION AND DELIVERY. The Seller and the
Principals have full power and authority to enter into and perform this
Agreement and the other agreements contemplated hereby (collectively, the
"Transaction Agreements") and to carry out the transactions contemplated
thereby. The Seller has taken all requisite action to approve the execution and
delivery of the Transaction Agreements and the transactions contemplated
thereby. The Transaction Agreements constitute the legal, valid and binding
obligation of the Seller and the Principals, enforceable against them in
accordance with its terms, except as may be limited by the availability of
equitable remedies or by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally. Neither the
execution and delivery by the Seller or the Principals of the Transaction
Agreements nor the consummation of the transactions contemplated hereby will:
(a) conflict with or result in a breach of the articles of incorporation or
bylaws of the Seller; (b) violate any statute, law, rule or regulation or any
order, writ, injunction or decree of any court or governmental authority, which
violation, either individually or in the aggregate, might reasonably be expected
to have a material adverse effect on the business or operations of the Seller or
Purchaser's ownership of the Assets; or (c) violate or conflict with or
constitute a default under (or give rise to any right of termination,
cancellation or acceleration under), or result in the creation of any lien on
the Assets or any of the properties or assets of the Seller pursuant to any
material agreement, indenture, mortgage or other instrument to which the Seller
or the Principals are a party or by which their assets may be bound or affected.
3.3 GOVERNMENTAL CONSENTS. No approval, authorization, consent, order
or other action of, or filing with, any governmental authority or administrative
agency is required in connection with the execution and delivery by the Seller
or the Principals of the Transaction Agreements or the consummation of the
transactions contemplated thereby. Except as set forth in the Disclosure
Schedule, no approval, authorization or consent of any other third party is
required in connection with the execution and delivery by the Seller or the
Principals of the Transaction Agreement and the consummation of the transactions
contemplated hereby.
3.4 TRANSACTIONS WITH AFFILIATES. At the time of the Closing, neither
the Principals, nor any Affiliate of the Principals or of Seller, will have any
interest in or will own any property or right used principally in the conduct of
the Seller's business. The term "Affiliate" shall mean the Principals or any
other officer, employee, director or shareholder of the Seller; any partner of
the foregoing persons; or any member of the immediate family (including brother,
sister, descendant, ancestor or in-law) of such persons; or any corporation,
partnership, trust or other
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entity in which any of such persons has a substantial interest or is a director,
officer, partner or trustee.
3.5 TITLE TO ASSETS. The Seller is the sole and exclusive legal owner
of all right, title and interest in and has good and marketable title to all of
the Assets, free and clear of liens, claims and encumbrances.
3.6 REAL ESTATE.
(a) Seller does not own any real property used in
connection with the Business. With respect to the Seller's leased
real property (the "Real Estate"), (i) applicable zoning ordinances
permit the operation of the Business at the Real Estate; (ii) the
Seller has all easements and rights, including easements for all
utilities, services, roadways and other means of ingress and egress,
necessary to operate the Business; (iii) the Real Estate is not
located within a flood or lakeshore erosion hazard area; and (iv)
neither the whole nor any portion of the Real Estate has been
condemned, requisitioned or otherwise taken by any public authority,
and no notice of any such condemnation, requisition or taking has
been received. No such condemnation, requisition or taking is
threatened or contemplated, and there are no pending public
improvements which may result in special assessments against or which
may otherwise affect the Real Estate so far as known to the Seller
and the Principals. The Seller has provided Purchaser with accurate
and complete copies of all lease agreements evidencing Seller's
leasehold interests in the Real Estate.
(b) The Seller has received no notice of, and has no
actual knowledge of, any material violation of any zoning, building,
health, fire, water use or similar statute, ordinance, law,
regulation or code in connection with the Real Estate.
(c) The Seller has received no notice of, and has no
actual knowledge of, any hazardous or toxic material (as hereinafter
defined) existing in any structure located on, or exists on or under
the surface of, any of the Real Estate which is, in any case, in
material violation of applicable environmental law. For purposes of
this Section, "hazardous or toxic material" shall mean waste,
substance, materials, smoke, gas or particulate matter designated as
hazardous, toxic or dangerous under any environmental law. For
purposes of this Section, "environmental law" shall included the
Comprehensive Environmental Response Compensation and Liability Act,
the Clean Air Act, the Clean Water Act and any other
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applicable federal, state or local environmental, health or safety
law, rule or regulation relating to or imposing liability or
standards concerning or in connection with hazardous, toxic or
dangerous waste, substance, materials, smoke, gas or particulate
matter.
3.7 CONDITION OF ASSETS.
(a) All of the Assets viewed as a whole and not on an
asset by asset basis are in good condition and working order,
ordinary wear and tear excepted, and are suitable for the uses for
which intended, free from any known defects except such minor defects
as do not substantially interfere with the continued use thereof. The
fixed assets of the Seller as of the date hereof are set forth on the
Disclosure Schedule.
(b) The accounts receivable of the Seller as set forth on
the Seller Balance Sheet (as defined in Section 3.13) and arising
since the date thereof are valid and genuine; have arisen solely out
of bona fide sales and deliveries of goods, performance of services
and other business transactions in the ordinary course of business
consistent with past practice; are not subject to valid defenses,
set-offs or counterclaims; and (i) 75% of the full recorded amount
thereof are collectible within 180 days after the Closing Date and
(ii) 95% of the full recorded amount thereof are collectible within
360 days of the Closing Date, in each case less the allowance for
doubtful accounts calculated consistent with prior periods.
(c) All inventory of the Seller used in the conduct of the
Business reflected on the Seller Balance Sheet or acquired since the
date thereof was acquired and has been maintained in the ordinary
course of business; is of good and merchantable quality; consists
substantially of a quality, quantity and condition usable, leasable
or saleable in the ordinary course of business; is valued at
reasonable amounts based on the ordinary course of business of the
Seller during the past six months; and is not subject to any
write-down or write-off.
3.8 GOVERNMENTAL LICENSES. The Disclosure Schedule lists and
accurately describes all licenses, permits, orders, approvals, authorizations
and filings issued to the Seller by a governmental or regulatory authority in
connection with the lawful ownership and operation of the Business (the
"Governmental Licenses"), except where the failure to hold such Governmental
License would not have a material adverse effect on Seller. The Seller has
furnished to Purchaser true and accurate copies of all such Governmental
Licenses, and each Governmental License
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is in full force and effect and is valid under applicable federal, state and
local laws. The Seller has not violated any rule or regulation of the U.S.
Department of Health and Human Services, the U.S. Health Care Finance
Administration, the U.S. Food and Drug Administration, applicable state health
care agencies, any provider or intermediary manual, the State Medicaid Manual,
and Medicare or Medicaid program instruction or memorandum, the result of which
violation could result in the revocation or termination of any Governmental
License or the imposition of any financial penalty or restriction of such a
nature as might materially and adversely affect the operation of Seller as now
conducted.
3.9 TAXES. All tax reports and returns required to be filed by or
relating to the Seller's assets and operations (including sales, use, income,
property, franchise and employment taxes) have been filed with the appropriate
federal, state and local governmental agencies. All taxes, penalties, interest,
deficiencies, assessments or other charges, including without limitation those
that are reflected on such reports and returns, that have been or will be
claimed to be due by any taxing authority from the Seller have been or will be
paid. There are no examinations or audits pending or unresolved examinations or
audit issues with respect to the Seller's federal, state or local tax returns.
All additional taxes, if any, assessed as a result of such examinations or
audits have been paid. There are no pending claims or proceedings relating to,
or asserted for, taxes, penalties, interest, deficiencies or assessments against
the Seller.
3.10 LITIGATION. There is no order of any court, governmental agency
or authority and no action, suit, proceeding or investigation, judicial,
administrative or otherwise, pending or, to the knowledge of the Seller or the
Principals, threatened against or affecting the Seller which, if adversely
determined, might materially and adversely affect the business, operations,
properties, assets or conditions (financial or otherwise) of Seller or which
challenges the validity or propriety of any of the transactions contemplated by
this Agreement.
3.11 REPORTS AND GOVERNMENTAL COMPLIANCE.
(a) The Seller has duly filed all reports required to be
filed by law or applicable rule, regulation, order, writ or decree of
any court, governmental commission, body or instrumentality and have
made payment of all charges and other payments, if any, shown by such
reports to be due and payable.
(b) The Seller and its officers, directors, agents and
employees have not engaged in any activities that are prohibited
under 42
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U.S.C. ss.1320a-7b, known as the anti-kickback statute, or the
regulations promulgated thereunder, or related or similar state or
local statutes or regulations.
(c) The Seller and its officers, directors, agents and
employees have not: (i) made or caused to be made a false statement
or representation of a material fact in any application for any
benefit or payment; (ii) made or caused to be made any false
statement or representation of a material fact for use in determining
rights to any benefit or payment; (iii) failed to disclose knowledge
by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on its own behalf or on
behalf of another; (iv) knowingly and willfully solicited or received
any remuneration (including any kickback, bribe or rebate), directly
or indirectly, overtly or covertly, in cash or in kind or knowingly
and willfully offered or paid such remuneration as an inducement (A)
in return for referring an individual to any person or entity for the
furnishing or arranging for the furnishing of any item or service for
which payment may be made in whole or in part by Medicare, Medicaid
or other government program, or (B) in return for purchasing, leasing
or ordering or arranging for or recommending purchasing, leasing or
ordering any good, facility, service or item for which payment may be
made in whole or in part by Medicare, Medicaid or other government
program.
(d) The Seller and its officers, directors, agents and
employees have not engaged in any activities that are prohibited
under 42 U.S.C. ss.1395nn, known as the self-referral or Xxxxx
statute, or the regulations promulgated thereunder, or related or
similar state or local statutes or regulations. The Business
currently is conducted in a manner that will not violate 42 U.S.C.
ss. 1395nn as amended.
3.12 EMPLOYEE BENEFIT PLANS; LABOR CONTROVERSIES.
(a) The Disclosure Schedule sets forth all liabilities of
the Seller under ERISA or similar laws with respect to employee
benefit plans. There are no labor disputes of a material nature
pending between the Seller and any of its employees and there are no
known organizational efforts presently being made involving any of
such employees. Seller has complied in all material respects with all
laws relating to the employment of labor, including any provisions
thereof relating to wages, hours, collective bargaining and the
payment of social security and other taxes, and is not
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liable for any material arrearages of wages or any taxes or penalties
for failure to comply with any of the foregoing.
(b) The Disclosure Schedule sets forth the accrued
vacation, sick and personal days or other related obligations
("Benefit Days") owing to or accrued for the benefit of the employees
of the Seller. As of the Closing Date, there will be no accrued
Benefit Days.
3.13 FINANCIAL STATEMENTS AND RECORDS OF THE SELLER.
(a) The Seller has delivered to Purchaser true, correct
and complete copies of the following financial statements (the
"Seller Financial Statements"): (i) Seller's audited balance sheet as
of December 1995 (the "Seller Balance Sheet") and the related
statements of income, cash flow and shareholder's equity for the year
then ended, accompanied by the report of [an independent firm of
certified public accountants] and (ii) Seller's unaudited balance
sheet as of June 30, 1996 and the related statement of income for the
six months then ended.
(b) The Seller Financial Statements present fairly the
assets, liabilities and financial position of the Seller as of the
dates thereof and the results of operations thereof for the periods
then ended and have been prepared in conformity with generally
accepted accounting principles consistent with prior periods. The
books and records of the Seller have been and are being maintained in
accordance with good business practice, reflect only valid
transactions, are complete and correct in all material respects and
present fairly in all material respects the basis for the financial
position and results of operations of the Seller set forth in the
Seller Financial Statements.
3.14 ABSENCE OF CERTAIN CHANGES. Since June 30, 1996, the Seller has
not (a) suffered any change in its financial condition or results of operations
other than changes in the ordinary course of business that, individually or in
the aggregate, have not had a material adverse effect on the Seller, (b)
acquired or disposed of any asset, or incurred, assumed, guaranteed or endorsed
any liability or obligation, or subjected or permitted to be subjected any
material amount of assets to any lien, claim or encumbrance of any kind, except
in the ordinary course of business or as contemplated by this Agreement, (c)
entered into or terminated any Material Contract (as hereinafter defined), or
agreed or made any material changes in any Material Contract, other than
renewals and extensions thereof in the ordinary course of business, (d)
declared, paid or set aside for payment any dividend or
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distribution with respect to its capital stock, (e) entered into any collective
bargaining, employment, consulting, compensation or similar agreement with any
person or group or (f) entered into, adopted or amended any employee benefit
plan. At all times from the date of this Agreement through the Closing Date, the
Principals will cause the Seller to be operated in the ordinary course of
business, except for such changes as are contemplated by this Agreement.
3.15 MATERIAL UNDISCLOSED LIABILITIES. The Disclosure Schedule sets
forth all of the material liabilities of the Seller which are known to the
Seller or the Principals, and which are not reflected in the Seller Financial
Statements.
3.16 CONTRACTS AND AGREEMENTS. The Disclosure Schedule contains a
list, complete and accurate in all material respects, of all of the following
categories of contracts and agreements to which the Seller is bound at the date
hereof: (i) employee benefit plans, employment, consulting or similar contracts;
(ii) contracts that involve remaining aggregate payments by the Seller in excess
of $10,000 or which have a term in excess of one year; (iii) insurance policies;
(iv) managed care contracts; and (v) other contracts not made in the ordinary
course of business (collectively the "Material Contracts"). The Seller is not in
default with respect to any of the Material Contracts.
3.17 COMPLETENESS OF DISCLOSURE. No representation or warranty by the
Seller or the Principals in this Agreement nor any certificate, schedule,
document or instrument furnished or to be furnished to Purchaser pursuant
hereto, or in connection with the negotiation, execution or performance of this
Agreement, contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact required to be stated herein or
therein or necessary to make any statement herein or therein not misleading.
3.18 FINDERS AND BROKERS. Other than Value Alternatives, no person
has as a result of any agreement or action of the Seller or the Principals any
valid claim against any of the parties hereto for a brokerage commission,
finder's fee or other like payment. The Seller will pay any fees, expenses,
commissions or other liabilities of Value Alternatives arising in connection
with the transaction contemplated hereby.
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4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to the Seller and the Principals as
follows:
4.1 ORGANIZATION AND GOOD STANDING. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite corporate power and authority to own and lease its
properties and carry on its business as currently conducted.
4.2 DUE AUTHORIZATION. Purchaser has full power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the Employment Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement has been duly executed and delivered by Purchaser and constitutes the
legal, valid and binding obligation of it, enforceable against it in accordance
with their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally or general equitable principles.
4.3 EXECUTION AND DELIVERY. The execution and delivery by Purchaser
of this Agreement and the Employment Agreement and the consummation of the
transactions contemplated hereby and thereby will not: (i) conflict with or
result in a breach of the Articles of Incorporation or Bylaws of Purchaser; (ii)
violate any law, statute, rule or regulation or any order, writ, injunction or
decree of any court or governmental authority; or (iii) violate or conflict with
or constitute a default under (or give rise to any right of termination,
cancellation or acceleration under) any indenture, mortgage, lease, contract or
other instrument to which Purchaser is a party or by which it is bound or
affected.
4.4 FINDERS AND BROKERS. All negotiations relative to this Agreement
and the transaction contemplated hereby have been carried on by Purchaser
directly with the Principals, the Seller and Value Alternatives, the Seller's
broker. No person has as a result of any agreement or actions of Purchaser any
valid claim against any of the parties hereto for a brokerage commission,
finder's fee or other like payment.
5. CERTAIN COVENANTS AND AGREEMENTS
The Principals and the Seller, jointly and severally, covenant and
agree that from and after the execution and delivery of this Agreement to and
including the Closing Date (and thereafter as reflected below), it shall comply
(with respect to the Seller), and he shall cause the Seller to comply (with
respect to the Principals) with the covenants set forth below, and Purchaser
covenants and agrees that it shall similarly comply with said covenants to the
extent applicable to it.
5.1 ACCESS. Upon reasonable notice, the Seller and the Principals
will give to Purchaser and its counsel, accountants and other authorized
representatives, full access during reasonable business hours to all of Seller's
properties, books, contracts, documents and records and shall furnish Purchaser
with all such information concerning its affairs, including existing financial
statements of Seller, as the other may reasonably request in order that it may
have full opportunity to make such reasonable investigations as it shall desire
for the purpose of verifying the performance of and compliance with the
representations, warranties, covenants and the conditions contained herein or
for other purposes reasonably related to the transactions contemplated hereby.
Each of the Seller and the Principals will take all action necessary to enable
Purchaser, its counsel, accountants and other representatives to discuss the
affairs, properties, business, operations and records of the other at such times
and as often as the Purchaser may reasonably request with executives,
independent accountants, engineers and counsel of the Seller and the Principals.
The Seller and the Principals acknowledge that Purchaser, at its own expense,
may audit the books and records of the Seller, and the Seller and the Principals
agree to provide such assistance as may be reasonably requested by Purchaser in
conducting such audit. In the event that the Closing does not occur and this
Agreement is terminated, each of the Principals, Seller and Purchaser shall keep
in confidence and shall not use or disclose to others all information provided
hereunder to the other, except such information as is in the public domain.
5.2 BEST EFFORTS. Each of the Seller and Purchaser shall take all
reasonable action necessary to consummate the transactions contemplated by this
Agreement and will use all necessary and reasonable means at its disposal to
obtain all necessary consents and approvals of other persons and governmental
authorities required to enable it to consummate the transactions contemplated by
this Agreement.
5.3 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, all notices to
third parties and other publicity relating to the transactions contemplated by
this Agreement shall be jointly planned and agreed to by the Seller and
Purchaser; provided, however that any required public disclosures related to any
regulatory or
15
governmental filing or requirement may be made by Purchaser without the
Principals's or the Seller's consent.
5.4 ORDINARY COURSE OF BUSINESS. During the period from the execution
and delivery of this Agreement through the Closing Date, the Seller shall (a)
conduct its operations in the ordinary course of business consistent with past
and current practices, (b) use reasonable best efforts to maintain and preserve
intact its goodwill and business relationships, (c) not enter into any agreement
which involves the payment by the Seller of an aggregate amount exceeding
$10,000 or which has a term exceeding one year or (d) take any action which
would cause any representation contained in Article 3 to be untrue as of the
Closing Date.
5.5 USE OF CORPORATE NAME. From and after the Closing Date, the
Seller will sign such consents and take such other action as the Purchaser shall
reasonably request in order to permit the Purchaser to use the name "Southern
Medical Mart" and variations thereof. From and after the Closing Date, the
Seller will not use such names or any names similar thereto and will accordingly
amend its Articles of Incorporation to change its corporate name or dissolve.
5.6 EMPLOYEE BENEFIT DAYS. Prior to the Closing, the Seller will
fully satisfy and discharge the obligations relating to the accrued Benefit Days
by making cash payments to their employees for such Benefit Days or provide a
credit at closing for the value of the accrued benefit days to the Purchaser.
5.7 CERTAIN GOVERNMENTAL FILINGS. The Seller shall make all filings,
applications, statements and reports to all governmental agencies or entities
which are required to be made prior to the Closing Date by or on its behalf
pursuant to any statute, rule or regulation in connection with the transactions
contemplated by this Agreement, and copies of all such filings, applications,
statements and reports shall be provided to the Purchaser.
6. CONDITIONS TO PURCHASER'S CLOSING
All obligations of Purchaser under this Agreement shall be subject to
the fulfillment at or prior to the Closing of the following conditions, it being
understood that Purchaser may, in its sole discretion, waive any or all of such
conditions in whole or in part:
6.1 REPRESENTATIONS, ETC. The Seller and the Principals shall have
performed in all material respects the covenants and agreements contained in
this
16
Agreement that are to be performed by each of them at or prior to the Closing,
and the representations and warranties of the Seller and the Principals
contained in this Agreement shall be true and correct as of the Closing Date
with the same effect as though made at each such time (except as contemplated or
permitted by this Agreement).
6.2 CONSENTS. All consents and approvals of governmental agencies and
from any other third parties required to consummate the transactions
contemplated by this Agreement shall have been obtained without material cost or
other materially adverse consequence to Purchaser and shall be in full force and
effect.
6.3 NO ADVERSE LITIGATION. No order or preliminary or permanent
injunction shall have been entered and no action, suit or other legal or
administrative proceeding by any court or governmental authority, agency or
other person shall be pending or threatened on the Closing Date which may have
the effect of (a) making any of the transactions contemplated hereby illegal,
(b) materially adversely affecting the value of the assets or business of the
Seller or (c) making Purchaser liable for the payment of a material amount of
damages to any person.
6.4 MATERIAL ADVERSE CHANGES. Since March 31, 1996, no material
adverse change has occurred in the business, properties, assets, liabilities,
results of operations or condition, financial or otherwise, of the Seller.
6.5 COMPLETION OF DUE DILIGENCE REVIEW. Purchaser will have completed
its due diligence review of the Seller (including without limitation a review of
Seller's accounting records, major contracts and tax returns), the results of
which shall be satisfactory to Purchaser in its sole discretion.
6.6 CLOSING DELIVERIES. Purchaser shall have received each of the
documents or items required to be delivered to it pursuant to Section 8.1
hereof.
7. CONDITIONS TO THE SELLER'S CLOSING
All obligations of the Seller under this Agreement shall be subject
to the fulfillment at or prior to the Closing of the following conditions, it
being understood that the Seller may, in its sole discretion, waive any or all
of such conditions in whole or in part:
17
7.1 REPRESENTATIONS, ETC. Purchaser shall have performed in all
material respects the covenants and agreements contained in this Agreement that
are to be performed by Purchaser at or prior to the Closing; and the
representations and warranties of Purchaser contained in this Agreement shall be
true and correct as of the Closing Date with the same effect as though made at
each such time (except as contemplated or permitted by this Agreement).
7.2 NO ADVERSE LITIGATION. No order or preliminary or permanent
injunction shall have been entered and no action, suit or other legal or
administrative proceeding by any court or governmental authority, agency or
other person shall be pending or threatened on the Closing Date which may have
the effect of making any of the transactions contemplated hereby illegal.
7.3 CLOSING DELIVERIES. The Principals and the Seller shall have
received each of the documents or items required to be delivered to them
pursuant to Section 8.2 hereof.
8. DOCUMENTS TO BE DELIVERED AT CLOSING
8.1 TO PURCHASER. At the Closing, there shall be delivered to
Purchaser:
(a) The bills of sale, agreements of assignment and
similar instruments of transfer of the Assets contemplated herein
(b) The Employment Agreement;
(c) The Non-Competition Agreement
(d) A certificate, signed by the Seller, as to the
fulfillment of the conditions set forth in Sections 6.1 through 6.4
hereof;
(e) Opinion of counsel to the Seller, dated as of the
Closing Date, in form reasonably acceptable to Purchaser;
(f) A copy of all consents and approvals referred to in
Section 6.2 hereof;
(g) Evidence that the Seller's corporate name will be
promptly changed after the Closing; and
18
(h) All other items reasonably requested by Purchaser.
8.2 TO SELLER. At the Closing, there shall be delivered to the
Seller:
(a) The purchase price as contemplated by Section 2.1(a)
hereof;
(b) The Note;
(c) A certificate, signed by an executive officer of the
Purchaser, as to the fulfillment of the conditions set forth in
Sections 7.1 and 7.2 hereof;
(d) An opinion of Purchaser's counsel, dated the Closing
Date, in form reasonably acceptable to the Seller;
(e) An assumption agreement pursuant to which Purchaser
shall assume the Assumed Liabilities; and
(f) All other items reasonably requested by the Seller.
9. SURVIVAL
All representations, warranties, covenants and agreements made by any
party to this Agreement or pursuant hereto shall be deemed to be material and to
have been relied upon by the parties hereto and shall survive the Closing. The
representations and warranties hereunder shall not be affected or diminished by
any investigation at any time by or on behalf of the party for whose benefit
such representations and warranties were made. All statements contained herein
or in any certificate, exhibit, list or other document delivered pursuant hereto
or in connection with the transactions contemplated hereby shall be deemed to be
representations and warranties.
10. INDEMNIFICATION OF THE SELLER AND THE PRINCIPALS
Purchaser shall indemnify and hold the Seller and the Principals
harmless from, against, for and in respect of:
19
(a) any and all damages, losses, settlement payments,
obligations, liabilities, claims, actions or causes of action and
encumbrances suffered, sustained, incurred or required to be paid by
the Seller or the Principals because of the breach of any written
representation, warranty, agreement or covenant of Purchaser
contained in or made in connection with this Agreement;
(b) any and all liabilities, obligations, claims and
demands arising out of the ownership and operation of the Assets on
and after the Closing Date, except to the extent the same arises from
a breach of any written representation, warranty, agreement or
covenant of the Seller or the Principals contained in or made in
connection with this Agreement or as otherwise provided in Section
11; and
(c) all reasonable costs and expenses (including, without
limitation, attorneys' fees, interest and penalties) incurred by the
Seller or the Principals in connection with any action, suit,
proceeding, demand, assessment or judgment incident to any of the
matters indemnified against in this Section 10.
11. INDEMNIFICATION OF PURCHASER
The Seller and the Principals, jointly and severally, shall indemnify
and hold Purchaser harmless from, against, for and in respect of:
(a) any and all damages, losses, settlement payments,
obligations, liabilities, claims, actions or causes of action and
encumbrances suffered, sustained, incurred or required to be paid by
Purchaser that result from, relate to or arise out of (A) a breach of
any written representation, warranty, agreement or covenant of the
Seller or the Principals contained in this Agreement or (B) the
ownership and operation of the Assets prior to the Closing Date;
(b) any product liability or similar claims for injury to person
or property made prior to the Closing Date and arising out of Seller's
operations, including without limitation any claim related thereto
seeking recovery for consequential damage, lost revenue or income;
20
(c) any product liability or similar claims for injury to person
or property, regardless when made or asserted, that arise out of or are
based upon any service performed by Seller or its agents or employees
(including maintenance services) on or prior to the Closing, including
without limitation any claim related thereto seeking recovery for
consequential damage, lost revenue or income;
(d) any claims, regardless when made or asserted, which arise
out of or are based upon any express or implied representation,
warranty, agreement or guarantee made by the Seller or alleged to have
been made by the Seller or their employees and agents;
(e) any federal, state or local income or other tax (i) payable
with respect to the business, assets, properties or operations of the
Seller or the Principals or any member of any affiliated group of which
any of such parties is a member for any period prior to the Effective
Date; or (ii) incident to or arising as a consequence of the negotiation
or consummation by the Seller or the Principals or any member of any
affiliated group of which any of them is a member of this Agreement and
the transactions contemplated hereby;
(f) any liability or obligation under or in connection with the
Excluded Assets;
(g) any liability or obligation arising prior to or as a result
of the Closing to any employees, agents or independent contractors of
the Seller, whether or not employed by Purchaser after the Closing or
under any benefit arrangement with respect thereto; and
(h) all reasonable costs and expenses (including, without
limitation, attorneys' fees, interest and penalties) incurred by
Purchaser in connection with any action, suit, proceeding, demand,
assessment or judgment incident to any of the matters indemnified
against in this Section 11.
21
12. GENERAL RULES REGARDING INDEMNIFICATION
(a) The obligations and liabilities of each indemnifying party
hereunder with respect to claims resulting from the assertion of
liability by the other party or indemnified third parties shall be
subject to the following terms and conditions:
(i) the indemnified party shall give prompt written notice
(which in no event shall exceed 20 days from the date on which the
indemnified party first became aware of such claim or assertion) to the
indemnifying party of any claim which might give rise to a claim by the
indemnified party against the indemnifying party based on the indemnity
agreements contained in Section 10 or 11 hereof, stating the nature and
basis of said claims and the amounts thereof, to the extent known;
(ii) if any action, suit or proceeding is brought against the
indemnified party with respect to which the indemnifying party may have
liability under the indemnity agreements contained in Section 10 or 11
hereof, the action, suit or proceeding shall, upon the written
acknowledgment by the indemnifying party that is obligated to indemnify
under such indemnity agreement, be defended (including all proceedings
on appeal or for review which counsel for the indemnified party shall
deem appropriate) by the indemnifying party. The indemnified party shall
have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the indemnified party's own
expense unless the employment of such counsel and the payment of such
fees and expenses both shall have been specifically authorized in
writing by the indemnifying party in connection with the defense of such
action, suit or proceeding, in which event the indemnifying party shall
not have the right to direct the defense of such action, suit or
proceeding on behalf of the indemnified party. The indemnified party
shall be kept fully informed of such action, suit or proceeding at all
stages thereof whether or not it is represented by separate counsel.
(iii) The indemnified party shall make available to the
indemnifying party and its attorneys and accountants all books and
records of the indemnified party relating to such proceedings or
litigation and the parties hereto agree to render to each other such
22
assistance as they may reasonably require of each other in order to
ensure the proper and adequate defense of any such action, suit or
proceeding.
(iv) The indemnified party shall not make any settlement of any
claims without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld or delayed.
(v) If any claims are made by third parties against an
indemnified party for which an indemnifying party would be liable, and
it appears likely that such claims might also be covered by the
indemnified party's insurance policies, the indemnified party shall make
a timely claim under such policies and to the extent that such party
obtains any recovery from such insurance, such recovery shall be offset
against any sums due from an indemnifying party (or shall be repaid by
the indemnified party to the extent that an indemnifying party has
already paid any such amounts). If the indemnified party files a claim
under any insurance policy, the indemnified party shall waive its rights
of subrogation against the indemnifying party with respect to such claim
and shall use its reasonable best efforts to cause the insurer to waive
its rights of subrogation against the indemnifying party. The parties
acknowledge, however, that if an indemnified party is self-insured as to
any matters, either directly or through an insurer which assesses
retroactive premiums based on loss experience, then to the extent that
the indemnified party bears the economic burden of any claims through
self-insurance or retroactive premiums or insurance ratings, the
indemnifying party's obligation shall only be reduced by any insurance
recovery in excess of the amount paid or to be paid by the indemnified
party in insurance premiums.
(vi) Unless the Seller and the Principals satisfy in full an
indemnification claim payable by them hereunder (the "Claim Amount") in
cash or other consideration acceptable to the Purchaser including,
without limitation, by means of offset pursuant to a Direction to Offset
delivered in accordance with subsection (b) below, Purchaser will be
entitled to offset against amounts payable under the Note whereupon the
monthly payments thereunder will be reduced, and shall so advise the
Seller in writing of such intent to offset (the date of which such
writing is sent by the Purchaser being referred to as the "Offset Notice
Date"), the unpaid balance of the Claim Amount.
23
(b) The Seller and the Principals may, in their sole discretion,
elect to satisfy all or any portion of a Claim Amount, subject to the
provisions in this subsection (b), by delivering a written notice to
Purchaser (a "Direction to Offset") directing it to offset the unpaid
balance of such Claim Amount against amounts payable under the Note in
the manner provided in Section 12(a)(vi) above, provided that "Offset
Notice Date" shall be the date on which the applicable Direction to
Offset is sent by the Seller to Purchaser; provided further, that if the
unpaid balance of the Note is less than the Claim Amount, the Seller and
the Principals shall remain liable for the unsatisfied portion of the
Claim Amount.
(c) Except as herein expressly provided, the remedies provided
in Sections 10 through 12 hereof shall be cumulative and shall not
preclude assertion by any party of any other rights or the seeking of
any other rights or remedies against any other party hereto.
13. FAILURE TO CLOSE BECAUSE OF DEFAULT
In the event that the Closing is not consummated by virtue of a material
default made by a party in the observance or in the due and timely performance
of any of its covenants or agreements herein contained ("Default"), the parties
shall have and retain all of the rights afforded them at law or in equity by
reason of that Default. In addition, the Seller and Purchaser acknowledge that
the Assets and the transactions contemplated hereby are unique, that a failure
by the Seller or Purchaser to complete such transactions will cause irreparable
injury to the other, and that actual damages for any such failure may be
difficult to ascertain and may be inadequate. Consequently, Purchaser and the
Seller agree that each shall be entitled, in the event of a Default by the
other, to specific performance of any of the provisions of this Agreement in
addition to any other legal or equitable remedies to which the non-defaulting
party may otherwise be entitled.
14. TERMINATION RIGHTS
14.1 GENERAL. This Agreement may be terminated by either Purchaser or
the Seller, if either such party is not then in Default, upon written notice to
the other upon the occurrence of any of the following:
(a) If the Closing has not occurred on or before November 1,
1996;
24
(b) If either party Defaults and such Default has not been cured
within 30 days of written notice of such Default by the other party;
(c) Subject to the provisions of Sections 6 and 7 hereof, by the
Seller or Purchaser if on the Closing Date any of the conditions
precedent to the obligations of the Seller or Purchaser, respectively,
set forth in this Agreement have not been satisfied or waived by such
party; or
(d) By mutual consent of the Seller and Purchaser.
15. MISCELLANEOUS PROVISIONS
15.1 EXPENSES. The Purchaser shall pay the fees and expenses incurred by
it in connection with the transactions contemplated by this Agreement and the
Seller and Principals shall pay the fees and expenses incurred by them in
connection with the transactions contemplated by this Agreement. If any action
is brought for breach of this Agreement or to enforce any provision of this
Agreement, the prevailing party shall be entitled to recover court costs,
arbitration expenses and reasonable attorneys' fees.
15.2 AMENDMENT. This Agreement may be amended at any time but only by an
instrument in writing signed by the parties hereto.
15.3 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or mailed by certified
mail, return receipt requested or by nationally recognized "next-day" delivery
service, to the parties at the addresses set forth opposite their names on the
signature page hereto (or at such other address for a party as shall be
specified by like notice).
15.4 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs and
permitted assigns. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the others; provided, however, that Purchaser may
assign its rights under this Agreement to any of its subsidiaries or affiliated
corporations so long as Purchaser guaranties the performance of the rights and
obligations of such subsidiary or affiliated corporation hereunder.
15.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
25
15.6 HEADINGS. The headings of the Sections of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
15.7 ENTIRE AGREEMENT. This Agreement and the documents referred to
herein contain the entire understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
warranties, conveyances or undertakings other than those expressly set forth
herein. This Agreement supersedes any prior agreements and understandings
between the parties with respect to the subject matter.
15.8 WAIVER. No attempted waiver of compliance with any provision or
condition hereof, or consent pursuant to this Agreement, will be effective
unless evidenced by an instrument in writing by the party against whom the
enforcement of any such waiver or consent is sought.
15.9 GOVERNING LAW; VENUE . This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas. The parties
acknowledge that this Agreement is performable in Dallas County, Texas. If any
action is brought to enforce or interpret this Agreement, venue for such action
will be in Dallas County, Texas.
15.10 INTENDED BENEFICIARIES. The rights and obligations contained in
this Agreement are hereby declared by the parties hereto to have been provided
expressly for the exclusive benefit of such entities as set forth herein and
shall not benefit, and do not benefit, any unrelated third parties.
15.11 MUTUAL CONTRIBUTION. The parties to this Agreement and their
counsel have mutually contributed to its drafting. Consequently, no provision of
this Agreement shall be construed against any party on the ground that such
party drafted the provision or caused it to be drafted or the provision contains
a covenant of such party.
(Signature page to follow)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HEALTHCOR OXYGEN AND MEDICAL EQUIPMENT, INC.
By: ______________________________________
S. Xxxxx Xxxxxx, Chief Executive Officer
ADDRESS: 0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
SOUTHERN MEDICAL MART, INC.
By: ______________________________________
Xxx Xxxxx,
President
ADDRESS: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxx 00000
THE PRINCIPALS:
------------------------------------------
Xxx Xxxxx
------------------------------------------
Xxx Xxxxxxxx
ADDRESS: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxx 00000
27
INDEX TO SCHEDULES
1.1(a)(i) Listing of Assets
1.1(b) Excluded Assets
1.2 Assumed Liabilities
1.3 Excluded Liabilities
2.4 Purchase Price Allocation
2.5 Adjusted Tangible Net Worth
3.0 Disclosure Schedules
INDEX TO EXHIBITS
A Employment Agreement
B Non-Competition Agreement
C Promissory Note
SCHEDULE 1.1(A)(I)
ASSETS (JUNE 30, 1996 BALANCES)
-------------------------------
1. Accounts Receivable, Net ........................... $1,071,939.23
=============
2. Inventory .......................................... $ 289,396.64
=============
3. Prepaid Expenses ................................... $ 34,497.16
=============
4. Other Current Assets ............................... $ 846.16
=============
5. Rental Equipment
Rental Equipment ............................... $1,921,239.17
Accumulated Depreciation ....................... (1,239,876.30)
-------------
$ 681,362.87
=============
6. Property and Equipment
Leasehold Improvement .......................... $ 68,052.56
Transportation Equipment ....................... 138,823.25
Furniture and Fixtures ......................... 135,648.86
Office Equipment ............................... 181,212.29
Shop Equipment ................................. 32,814.67
Accumulated Depreciation ....................... (316,041.60)
-------------
$ 240,510.03
=============
7. Other Long-Term Assets ............................. $ 11,563.00
=============
SCHEDULE 1.1(B)
EXCLUDED ASSETS (JUNE 30, 1996 BALANCES)
1. Cash ................................................ $95,479.08
==========
2. Short-Term Investments .............................. $36,142.62
==========
SCHEDULE 1.2
ASSUMED LIABILITIES (JUNE 30, 1996 BALANCES)
1. Accounts Payable (30 days or less portion) .................... $263,745.08
===========
2. Accounts Payable (30 days or more portion at August 31, ....... $350,227.51
to be reimbursed to the Purchaser by the Seller at Closing)
3. Capital Leases, Net (current portion) ......................... $ 34,671.38
===========
4. Capital Leases, Net (long-term portion) ....................... $ 52,286.38
===========
5. Value of employee benefit days ................................ $ 29,699.53
-----------
SCHEDULE 1.3
EXCLUDED LIABILITIES
1. All Notes or amounts payable or obligations including those to the Principals
or any Affiliate of Seller or the Principals.
2. Except as set forth on Schedule 1.2, trade payables and other obligations
arising in the ordinary course of Seller's business for periods prior to the
Effective Date that are dated more than 30 days prior to the Effective Date.
3. Any federal, state or local income or other tax payable with respect to the
business, assets, properties or operations of the Seller or the Principals or
any of their Affiliates for any period prior to the Effective Date, including
but not limited to state and local sales tax liabilities; and
4. Any proceedings, actions, litigation or claims arising out of Seller's
business or operations prior to the Closing.
5. Except as set for on Schedule 1.2, any accrued payroll and employee benefits
including but not limited to accrued salaries, payroll taxes and vacation and
sick leave for any period prior to the Effective Date.
SCHEDULE 2.4
ALLOCATION OF PURCHASE PRICE
The purchase price shall be allocated to the book value of the Assets as
determined in a manner consistent with the Seller's Balance Sheet with the
remaining amount being allocated to goodwill; provided, however, that the entire
original principal amount of the Note shall be allocated to the good will
portion of the purchase price..
SCHEDULE 2.5
ADJUSTED TANGIBLE NET WORTH
1. Acquired Assets (per schedule 1.1(a)(i)) ................ $2,330,115.09
2. Less: Assumed Liabilities (per schedule 1.2)
Accounts Payable (30 days or less portion) .......... $ 263,745.08
Capital Leases, Net (current portion) ............... 34,671.38
Capital Leases, Net (long-term portion) ............. 52,286.38
3. Adjusted Tangible Net Worth ............................. $1,979,412.25
=============
SCHEDULE 3.0
DISCLOSURE SCHEDULE
(To be provided by Seller)
