Exhibit 99.7
ASSET PURCHASE AGREEMENT
This Agreement is made and entered into as of this 5th day of October
1995, by and between DLLW Investment Group, a Michigan corporation ("BUYER") and
Medical Surgical Specialties Inc., a Delaware corporation ("SELLER").
RECITALS
WHEREAS, Seller is primarily engaged in two distinct businesses which
are (a) the reconditioning of fiberoptic and surgical medical products (the
"FIBEROPTICS DIVISION") and (b) the distribution of specialty products to aid
disabled individuals (the "DOOR-AID").
WHEREAS, on September 28, 1995, the Seller filed a voluntary petition
for relief under Chapter 00, Xxxxx 00, Xxxxxx Xxxxxx Code ("Bankruptcy Code")
with the United States Bankruptcy Court for the District of Delaware; and
WHEREAS, Seller desires to sell to Buyer substantially all of Seller's
assets related to the Fiberoptics Division and Buyer desires to purchase said
assets, all on the terms and subject to the conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
Purchase and Sale of Assets
1.1. Purchased Assets. At Closing, Buyer shall purchase and Seller
shall sell, transfer, assign and deliver to Buyer for the consideration and upon
the terms and conditions hereinafter set forth, all assets of the Fiberoptics
Division (the "PURCHASED ASSETS") not otherwise expressly excluded pursuant to
Section 1.2 of this Agreement. The Purchased Assets shall include, but not be
limited to, the following:
(a) All outstanding and uncollected accounts and notes receivable
listed on Seller's Aged Receivables Report attached hereto as Schedule
1.1(a) (the "ACCOUNTS RECEIVABLE");
(b) All inventory listed on the Inventory Report attached hereto as
Schedule 1.1(b) (the "INVENTORY");
(c) All trademarks, trade names, trade styles and logos (and all
goodwill associated therewith), registered or unregistered, and all
applications and registrations therefor used in the Fiberoptics Division,
and all licenses and patents relating to intellectual property used in the
Fiberoptics Division and all telephone numbers used in the Fiberoptics
Division, the foregoing items including without limitation those listed on
Schedule 1(c) hereto;
(d) The contracts and leases identified on Schedule 1(d) hereto;
(e) All customer files and records relating to the Fiberoptics
Division; and
(f) All personal property such as furniture, equipment, tools,
machinery used in the Fiberoptics Division (the "PERSONAL PROPERTY"),
including those items listed on Schedule 1.1(e).
EXCEPT AS SPECIFICALLY PROVIDED IN ARTICLE III, SELLER IS SELLING THE
PURCHASED ASSETS TO BUYER IN AS IS, WHERE IS CONDITION. ALL WARRANTIES, EXPRESS
OR IMPLIED WITH RESPECT TO THE PURCHASED ASSETS AND THE DIVISION, INCLUDING
WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE EXPRESSLY DISCLAIMED.
1.2. Excluded Assets. The Excluded Assets are as follows:
(a) all assets not related to the Fiberoptics Division;
(b) all stocks, partnership interests and other equity investments of
Seller;
(c) all stock of Seller, including treasury stock and authorized, but
unissued stock;
(d) any asset which is property of a subsidiary or affiliate or
parent of Seller;
(e) all cash on hand and in banks, cash equivalents, investments,
utility deposits, advance payments and professional retainers;
(f) all avoidance actions, claims (and benefits arising therefrom)
and litigation against third parties to the extent such actions, claims and
litigation are not related directly to continuation of the Fiberoptics
Division; including, without limitation, actions, claims and litigations
against Seller's current and former officers, directors, shareholders,
employees, agents and auditors;
(g) all tax refunds;
(h) Seller's rights under this Agreement;
(i) Seller's corporate charter, minute and stock record books, and
corporate seal; and
(j) all rights under any insurance policies, including policies on
the life of individuals, property casualty and director and officer
liability.
1.3. Assumed Obligations. At Closing, Seller shall assign, and Buyer
shall assume and agree to discharge in a timely fashion, all of Seller's
liabilities and obligations arising under the agreements purchased under
Sections 1.1(c) and 1.1(d) hereof and all unpaid personal property taxes
relating to the Purchased Assets. Further, Buyer shall agree to assume and
discharge all obligations, whether arising by contract, course of dealing or
otherwise, to customers of the Fiberoptics Division with respect to the return
of Products or credits for unsold merchandise. Buyer is expressly not assuming
any other obligations or liabilities, whether accrued, absolute, contingent,
matured, unmatured or other of Seller.
ARTICLE II
Consideration, Manner of Payment and Closing
2.1. Consideration. The purchase price consideration (the "PURCHASE
PRICE") for the Purchased Assets is approximately $375,000 consisting of (i) 90%
of the face value of those Accounts Receivable which at Closing are 89 days old
or less; (ii) 10% of the face value of those Accounts Receivable which at
Closing are 90 days old or older, however this category of accounts does not
include government accounts and accounts in collection (the "Excluded
Accounts"); and (iii) 50% of the Excluded Receivables as actually collected
during year immediately following the Closing.
2.2. Payment of Consideration. At execution of this Agreement, Buyer
shall deliver a deposit of $37,500 which shall be non-refundable in the event
Closing does not occur due to Buyer's breach of this Agreement. At Closing,
Buyer shall deliver the balance of the Purchase Price to Michigan National Bank
in immediately available funds for immediate credit against Seller's account.
At execution of this Agreement, Buyer shall also deliver to Michigan National
Bank a commitment letter for purchase financing from an institutional lender in
the amount of the balance of the Purchase Price. In respect of the Excluded
Receivables, Buyer shall pay amounts due thereon each month on or before the
30th day of the month with the final amount payable on the 30th day of the
thirteenth month after the Closing.
2.3. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets in the manner required by Section 1060 of
the Internal Revenue Code of 1986, as amended, as shall be agreed prior to
Closing.
2.4. Closing. The transaction contemplated by this Agreement shall be
consummated (the "CLOSING") at 9:30 a.m., at Seller's corporate office in
Mattawan, Michigan on the date (the CLOSING DATE") that is 10 days after
approval of the United States Bankruptcy Court for the District of Delaware, or
such other court of competent jurisdiction (the "COURT").
ARTICLE III
Representations and Warranties of Seller
Seller hereby represents and warrants to Buyer as of the date hereof
as follows:
3.1. Due Organization. Seller is a corporation validly existing and
in good standing under the laws of Delaware with full power and authority to
carry on the Fiberoptics Division as it is now conducted.
3.2. Authority. Except for the consent of the Court, Seller has all
requisite power and authority, without the consent of any other person (except
those which have been obtained), to execute and deliver this Agreement and to
carry out the transactions contemplated hereby. All actions required to be
taken by Seller to permit the proper execution, delivery and performance of this
Agreement and all transactions contemplated hereby have been duly and properly
taken.
3.3. Valid and Binding Obligation. This Agreement has been duly
executed and delivered and, subject to the approval of the Court, constitutes
the valid and legally binding obligation of Seller, enforceable against Seller
in accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium and other laws affecting
creditors' rights generally and by general equitable principles.
ARTICLE IV
Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller as of the date hereof
as follows:
4.1. Due Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Michigan, and has full
power and authority to carry on the business in which it is engaged.
4.2. Authority. Buyer has all requisite power and authority, without
the consent of any other person (except those which have been obtained), to
execute and deliver this Agreement and to carry out the transactions
contemplated hereby. All actions required to be taken by Buyer to permit the
proper execution, delivery and performance of this Agreement and all
transactions contemplated hereby have been duly and properly taken.
4.3. Valid and Binding Obligation. This Agreement has been duly
executed and delivered and constitutes the valid and legally binding obligations
of Buyer, enforceable against Buyer in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors' rights generally and by general
equitable principles.
ARTICLE V
Additional Covenants and Agreements
5.1. Access to Records. Buyer shall acquire the books and records
relating to the Fiberoptics Division (other than permanent records required for
tax and accounting purposes); provided, however, that each party shall have
reasonable access to the books and records retained by the other party and its
agents or affiliates.
5.2. Access to Employees. Buyer shall authorize and direct its
employees to provide such reasonable assistance to Seller following Closing as
is necessary for Seller to consummate the transactions contemplated by this
Agreement, including, but not limited to, Seller's final accounting.
ARTICLE VI
Conduct Prior to Closing
6.1. Joint Obligations. The following shall apply with equal force to
Seller and Buyer:
(a) Seller and Buyer shall use all reasonable efforts to take,
or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable to consummate the transaction
contemplated hereby as soon as practicable, subject to Seller's
fiduciary duties.
(b) Each party shall promptly give the other party written
notice of the existence or occurrence of any condition which would
make any representation or warranty herein contained of either party
untrue or which might reasonably be expected to prevent the
consummation of the transaction contemplated hereby.
ARTICLE VII
Conditions to Closing
7.1. Conditions to Seller's Obligations. The obligation of Seller to
consummate the transaction contemplated hereby is subject to the fulfillment of
all of the following conditions on or prior to the Closing Date, upon the non-
fulfillment of any of which this Agreement may, at Seller's option, be
terminated pursuant to and with the effect set forth in Article IX:
(a) Each and every representation and warranty made by Buyer shall be
true and correct in all material respects as if originally made on and as
of the Closing Date;
(b) All obligations of Buyer to be performed hereunder through the
Closing Date shall have been performed;
(c) Approval of this Agreement by the Court;
(d) Approval of this Agreement by Seller's Board of Directors;
(e) No suit, proceeding or investigation shall have been commenced by
any governmental authority or private person on any grounds to restrain,
enjoin or hinder, or to seek material damages on account of, the
consummation of the transaction contemplated hereby which is not disposed
of by the Order; and
(f) The receipt by Seller of an offer which is higher than the
Purchase Price or on better terms.
7.2. Conditions to Buyer's Obligations. The obligation of Buyer to
consummate the transaction contemplated hereby is subject to the fulfillment of
all of the following conditions on or prior to the Closing Date, upon the non-
fulfillment of any of which this Agreement may, at Buyer's option, be terminated
pursuant to and with the effect set forth in Article IX:
(a) Each and every representation and warranty made by Seller shall
be true and correct in all material respects as if originally made on and
as of the Closing Date;
(b) All obligations of Seller to be performed hereunder through,
and including on, the Closing Date shall have been performed;
(c) Seller shall have filed pleadings no later than October 15, 1995
seeking the Court's approval of this Agreement;
(d) The Court shall have entered an order in substantially the
form attached hereto (the "ORDER") in the Bankruptcy Case authorizing
the purchase and sale of the Purchased Assets under this Agreement,
upon the terms and conditions set forth in this Agreement, and
otherwise free and clear of: (i) all liens, title claims, encumbrances
and security interests; (ii) all contracts, agreements and employment
agreements, other than those purchased under Section 1.1(c) hereof and
any real property taxes relating to the real property; and (iii) all
obligations and liabilities. The Order shall contain a finding of
fact that Buyer is making its purchase in good faith within the
meaning of Section 363(m) of the Bankruptcy Code. No stay of the
Order shall have been issued by the Court or any other court. As of
the Closing Date, the Order shall not have been modified, amended,
dissolved, revoked or rescinded in any way materially adverse to the
Buyer; and
(e) No suit, proceeding or investigation shall have been commenced by
any governmental authority or private person on any grounds to restrain,
enjoin or hinder, or to seek material damages on account of, the
consummation of the transaction contemplated hereby which is not disposed
of by the Order.
ARTICLE VIII
Closing
8.1. Form of Documents. At Closing, the parties shall deliver the
documents, and shall perform the acts, which are set forth in this Article VIII.
8.2. Buyer's Deliveries. Subject to the fulfillment or waiver of the
conditions set forth in Section 7.2 of this Agreement, Buyer shall execute
and/or deliver to Seller all of the following:
(a) the Purchase Price;
(b) a certified copy of Buyer's Certificate of Incorporation and
By-laws;
(c) a certificate of good standing of Buyer, issued not earlier than
ten days prior to the Closing Date by the Secretary of State of Michigan;
(d) an incumbency and specimen signature certificate with respect to
the officers of Buyer executing this Agreement and all agreements
contemplated hereby and on behalf of Buyer;
(e) an agreement of assumption of all liabilities and obligations to
be assumed by Buyer as provided herein, in a form reasonably acceptable to
all parties;
(f) a certified copy of resolutions of Buyer's board of
directors, authorizing the execution, delivery and performance of this
Agreement and all agreements contemplated hereby; and
(g) a closing certificate executed by Buyer, pursuant to which
Buyer represents and warrants to Seller that Buyer's representations
and warranties to Seller are true and correct in all material respects
as of the Closing Date as if then originally made, that all covenants
required by the terms hereof to be performed by Buyer on or before the
Closing Date, to the extent not waived by Seller in writing, have been
so performed, and that all documents to be executed and delivered by
Buyer at Closing have been executed by duly authorized officers of
Buyer.
8.3. Seller's Deliveries. Subject to the fulfillment or waiver of the
conditions set forth in Section 7.1 hereof, Seller shall deliver to Buyer
physical possession of all tangible Purchased Assets, and shall execute and/or
deliver or cause to be executed and/or delivered to Buyer all of the following:
(a) certified copies of Seller's Articles of Incorporation and
Bylaws;
(b) certificate of good standing of Seller, issued not earlier
than ten days prior to the Closing Date by the Secretary of State of
Delaware;
(c) an incumbency and specimen signature certificate with respect to
the officers of Seller executing this Agreement and all documents
contemplated hereby;
(d) a certified copy of resolutions of Seller's board of directors
and stockholders, authorizing the execution, delivery and performance of
this Agreement and all documents contemplated hereby;
(e) a xxxx of sale, executed by Seller, conveying all of the
Purchased Assets to Buyer;
(f) a closing certificate duly executed by Seller, pursuant to which
Seller represents and warrants to Buyer that Seller's representations and
warranties to Buyer are true and correct in all material respects as of the
Closing Date as if then originally made, that all covenants required by the
terms hereof to be performed by Seller on or before the Closing Date, to
the extent not waived by Buyer in writing, have been so performed, and that
all documents to be executed and delivered by Seller at Closing have been
executed by duly authorized officers of Seller; and
(g) a certified copy of the Order.
ARTICLE IX
Termination
9.1. Right to Terminate. This Agreement and the transaction contemplated
hereby may be terminated by either of the parties to this Agreement if the Court
shall not have issued the Order at or before November 14, 1995; provided,
however, that the right to terminate this Agreement under this Section 9.1 shall
not be available to any party whose failure to fulfill any material obligation
under this Agreement has been the cause of or resulted in the failure of Closing
to occur.
9.2. Certain Effects of Termination. In the event of the termination of
this Agreement by either Seller or Buyer as provided in Section 9.1, each party,
if so requested by the other party, will promptly return every document
furnished to it by the other party (or its subsidiary, division, associate or
affiliate) in connection with the transaction contemplated hereby, whether so
obtained before or after the execution of this Agreement, and any copies thereof
(except for copies of documents publicly available) which may have been made,
and will use reasonable efforts to cause its representatives and any
representatives of financial institutions and others to whom such documents were
furnished to promptly return such documents and any copies thereof.
This Section 9.2 shall survive any termination of this Agreement.
9.3. Other Offers / Bidding Procedures. Buyer understands and agrees that
Seller's obligations under this Agreement and Buyer's right to acquire the
Purchased Assets for the Purchase Price are expressly subject Seller's right to
seek higher and better offers. Seller shall seek an order from the Court
establishing procedures governing any subsequent offers by third parties for the
Purchased Assets. Seller shall request the Court order any such subsequent
offers exceed the Buyer's offer set forth in this Agreement by an amount not
less than $20,000.
ARTICLE X
Miscellaneous
10.1. Expenses; Taxes. Buyer and Seller shall each bear their own
respective expenses incurred in connection with this Agreement and in connection
with all obligations required to be performed by each of them under this
Agreement. Buyer shall pay all sales, use and transfer taxes with respect to
the transfer of the Purchased Assets.
10.2. Reimbursement of Expenses. If this Agreement has not been
terminated pursuant to Section 9.1 and the Purchased Assets are sold to another
buyer, Buyer shall be paid from the initial proceeds of such sale an amount
equal to the fees and expenses expended by Buyer in connection with the
negotiation and performance of this Agreement (including without limitation, all
accounting and legal fees), but such amount shall not exceed the lesser of
$5,000 or the amount by which the successful bid exceeds the consideration due
hereunder. Buyer and Seller agree that this is reasonable, considering all of
the circumstances existing on the date of this Agreement.
10.3. Publicity. Neither Buyer nor Seller shall issue any press
release or public announcement of any kind concerning the transactions
contemplated by this Agreement without the prior written consent of the other
party, except with respect to disclosures which either party is advised by
counsel are appropriate under applicable laws, and as to which each party will
consult with the other.
10.4. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be delivered in person or
sent by registered or certified mail, postage prepaid, commercial overnight
courier (such as Express Mail, Federal Express, etc.) with written verification
of receipt or by telecopy. A notice shall be deemed given: (a) when delivered
by personal delivery (as evidenced by the receipt); (b) five days after
deposit in the mail if sent by registered or certified mail; (c) one (1) day
after having been sent by commercial overnight courier as evidenced by the
written verification of receipt; or (d) on the date of confirmation if
telecopied.
(a) If to Buyer:
DLLW Investment Group
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
(b) If to Seller:
Medical Surgical Specialties, Inc.
c/o International Research and
Development Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
With a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
Either party may change its address for receiving notice by written notice given
to the other party.
10.5. Benefit and Assignment. All of the terms and provisions of
this Agreement shall bind and benefit, and be enforceable by, the successors and
assigns of the parties hereto.
10.6. Entire Agreement. This Agreement constitutes the entire
agreement between the parties relating to the subject matter hereof and
supersedes any previous written or oral agreements or understandings in
connection therewith.
10.7. Severability. If any term, provision, covenant or condition
of this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remainder of the provisions hereof shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
10.8. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
10.9. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
10.10. Governing Law. This Agreement is made pursuant to, and
shall be governed by, the internal substantive laws of the State of Delaware.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf all as of the date first written above.
DLLW INVESTMENT GROUP
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Mgng. Prt.
MEDICAL SURGICAL SPECIALTIES, LTD.
By: /s Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Acting President
