ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") has been made this ____ day
of November, 2003, by and between XxXxx Business Services, Inc. (hereafter
"Seller"), a Kentucky corporation in good standing, by and through Xxxxxxx
XxXxx, its President, and Omni Medical Services, Inc. (hereafter "Buyer"), a
South Dakota corporation in good standing, by and through its Chief Executive
Officer, Xxxxxx X. Xxxxx.
Whereas, the purpose of this Agreement is to set forth the conditions
under which the Seller agrees to sell and the Buyer agrees to purchase the
Seller's tangible assets personal and mixed, related to medical transcription
services, and regardless of where located, including those located at the
business address of, 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000,
and to assume the Seller's lease for its office space, for the price and upon
the terms set forth in this agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
of the parties, and in consideration of the representations, warranties,
covenants and agreements contained herein, it is hereby agreed as follows:
ASSETS BEING SOLD AND PURCHASED:
Subject to the provisions of this Agreement, Buyer hereby agrees to
purchase, and Seller hereby agrees to sell, transfer and assign to Buyer, all
of Seller's right, title and interest in and to the tangible assets of
Seller's business described hereinbelow (the "Purchased Assets"), including,
without limitation, those tangible assets related to and used in the operation
of the business related to medical transcription services, and all existing
contracts and proposals with all of Seller's medical transcription clients
(e.g. hospitals, clinics, etc.), and as shown on Seller's September 30, 2003
balance sheet, subject to changes occurring in the normal and ordinary course
of business between that date and the date of closing, and excepting the
Seller's cash, accounts receivable, and unbilled work-in-progress, excepting
any and all accrued, contingent and existing Company debts and liabilities
associated with the Purchased Assets or Seller's business prior to closing on
this agreement. The Purchased Assets shall, however, include a certain lease
agreement by and between Liberty Centre I and Seller dated November 8, 2000,
and the obligations under that lease agreement shall be assumed by Buyer.
The personal property, tangible and intangible, are specifically listed
on Exhibit A and further generally described as follows:
a) All furniture, equipment, machinery, all computers and
computer software, office supplies, phone systems, existing
contracts and proposals with all clients of the Seller, and
all other personal property being at and used in connection
with carrying on the medical transcription business;
b) Signage (to the extent currently owned by Seller) wherever
now located and relating to the medical transcription
business;
c) The exclusive use of the business name "XxXxx Business
Services" as a fictitious name of Buyer for a period of five
(5) years commencing at the Closing Date;
d) The transfer of any existing municipal, state or federal
licenses of the business, and if any of the same requires
the approval of an issuing authority, then this agreement is
subject to the approval of the issuing authorities;
e) Any other contracts between the Seller and vendors or
service providers that are in existence and which Buyer
desires to obtain for the benefit of the ongoing
transcription business, including a customer list of prior
and current customers.
PURCHASE PRICE:
Consideration for Purchased Assets. In consideration for the Purchased
Assets and Seller's covenants herein, Buyer agrees to pay Seller three hundred
sixty thousand dollars ($360,000) subject to the following conditions and
schedule:
1) Cash at closing: $120,000.00
2) Eight quarterly payments of $30,000,
each payment subject to earn out
provision described below $240,000.00
The quarterly payments referred to in 2) above ("Deferred Payments")
shall be allocated to Xxxxxxx XxXxx'x obligations under the Section below
entitled "Covenant Not to Compete/Confidentiality," and shall be payable
directly to Xx. XxXxx.
Earn-out Provision.
Each of the Deferred Payments referred to in the preceding paragraph
shall be subject to adjustments as follows: Deferred Payments due at the end
of any one quarter shall be adjusted by an amount equal to one-sixth (1/6) of
the variance, if any, between (a) the sum of One Hundred Sixty-two Thousand
Five Hundred Dollars ($162,500) and (b) the revenues invoiced during that
quarter from the customers listed on Exhibit B to this Agreement, irrespective
of where the work resulting in the invoice was performed. For the purposes of
this provision, revenues shall be determined on an accrual basis. The base
amount of each of the Deferred Payments shall be $30,000, and the payments
shall be (i) reduced by one-sixth of the amount (if any) by which revenues
during the preceding quarter are less than $162,500, and (ii) increased by
one-sixth of the amount (if any) by which revenues during that quarter exceed
$162,500. Each Deferred Payment shall be made within 30 days after the
conclusion of the quarter to which it applies, and each payment shall be
accompanied by an accounting showing how the amount of the Deferred Payment
was determined.
Throughout the period that Deferred Payments are calculated, Buyer shall
operate the business in a manner that is calculated to maximize the revenues
of the business and retain the loyalty and business of the customers listed on
Exhibit B.
All consideration identified herein is hereafter referred to as the
"Purchase Price".
EXCLUDED LIABILITIES:
Except as expressly set forth herein, Buyer does not assume and shall
not be liable for any of the debts, obligations or liabilities of Seller or
Seller's business of any nature whatsoever. In particular, but without
limiting the foregoing, Buyer shall not assume, and shall not be deemed by
anything contained in this Agreement or any other related Agreement, to have
assumed, and shall not be liable for any debts, obligations or liabilities of
Seller or Seller's business, whether known or unknown, contingent, absolute or
otherwise, including without limitation debts, liabilities and obligations:
1) Under any contract or agreement to which Seller is bound
excepting the real estate lease being assigned to Buyer herein,
2) For the payment of any wages, salary, accrued vacation pay,
severance pay, or accrued sick pay accrued by any employee of
Seller and arising prior to the Closing by contract, by law, or
otherwise, and whether or not related to this Agreement or to
consummation of the transactions contemplated hereunder, or for
any unemployment compensation benefits or premiums for the
period ending as of the closing date,
3) For any other payment or compensation to employees of Seller
including any severance pay liabilities under federal or state
law or under any welfare, compensation, pension or benefit plan
or agreement, or under the Consolidate Omnibus Budget
Reconciliation Act of 1985 ("COBRA") or under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
for the period ending on the closing date,
4) For any foreign, federal, state or local income, franchise,
excise, value added, sales, use, payroll, worker's
compensation, property or other tax or taxes of any type,
nature or description, which such tax liability is based on
Seller's actions or operations prior to the closing date or as
a result of this transaction, and for any liability for local
or state taxes, use or transfer tax, which such tax liability
is based on Seller's actions or operations prior to the closing
date or as a result of this transaction or taxes that may be
imposed upon the purchase and sale of the assets pursuant to
the Agreement,
5) For any damages or injuries to persons or property or for any
tort or strict liability arising from events, actions, or
inactions or the operation of Seller's business on or prior to
the closing date,
6) For any liability arising at any time from or relating to
injuries arising from events occurring on or prior to the
closing date, even if a claim for any such injury is first
asserted after the closing date.
7) For any liability or obligation (contingent or otherwise) of
Seller arising out of any litigation arising in any way on
account of the period prior to the closing date, whether or not
now threatened or pending,
8) Incurred by Seller or Seller's business for borrowed money,
9) Arising from any contract assigned to and assumed by Buyer
hereunder provided, however, that such exclusion shall be
limited to liabilities and obligations for all periods prior to
and including the closing date, whether arising before or after
the closing date, and
10) For any other liability or obligation of Seller that is not
expressly assumed by Buyer whether or not such liability or
obligation has been disclosed to or is known to Buyer.
Seller further warrants to Buyer that any known accrued liabilities of
the Seller will be paid as and when they become due after closing. On or
before the date of closing, Seller will execute and provide to Buyer a
statement of all known liabilities of Seller's business.
ALLOCATION OF PURCHASE PRICE:
The purchase price shall be allocated as follows:
1) Equipment, Furniture and
other depreciable assets $60,000
2) Covenant Not to Compete: $240,000
3) Goodwill: $60,000
Treasury Regulation 1.1060-1T Reporting Requirement. The parties hereby
agree that they shall each use the allocation made by them pursuant to Section
2.3 as an agreed allocation of the consideration paid for the Purchased Assets
in accordance with the provisions of Treasury Regulation Section 1.1060-1T,
etseq. The parties each covenant and agree to use such allocation to complete
and file Internal Revenue Service Form 8594, Asset Acquisition Statement Under
Section 1060, if applicable.
CLOSING DATE:
Closing. The closing date for the transactions contemplated by this
Agreement shall be December 1, 2003 (the "Closing").
Obligations of Seller at Closing. At the Closing, Seller shall:
1) Execute and deliver to Buyer a Xxxx of Sale and other documents
necessary for transfer of title to all assets being purchased.
2) Execute and deliver to Buyer such other documents as may be
necessary to vest Seller's right, title and interest in and to any
location leased by Seller at the time of closing where it has done
business, all at Buyer's option.
Obligations of Buyer at Closing. At the Closing, Buyer shall deliver all
funds to be tendered at closing by a cashier's check, promissory note and
security agreement to the Seller.
Post-Closing Acts, Deeds and Undertakings. Following the Closing, the
parties shall fully and faithfully undertake all such further acts, deeds and
undertakings as may be necessary or required to consummate the transactions
contemplated by this Agreement in accordance with the terms herein.
Sales Taxes. Buyer acknowledges that a Kentucky Sales Tax may be
payable on that portion of the Purchase Price allocated to Equipment,
Furniture, and other Depreciable Assets above. In addition to the sum payable
in cash at the Closing, Buyer shall pay to Seller the applicable amount of
that tax, and Seller shall pay the tax when it becomes due. In the event of
any subsequent adjustment in the sales tax payable in respect of this
transaction, due to a sales tax audit or for any other reason, the Buyer shall
promptly remit to Seller the amount of any additional tax payable as a result
of that adjustment.
CONDITIONS PRECEDENT:
Contingencies.
In the event that any of the following events occur, the parties
agree that this agreement shall be voidable at the election of either party
hereto:
1) In the event that the Seller does not obtain and provide to Buyer
the written consent to assignment of any lease of Seller's
existing business locations that Buyer desires to maintain, or, in
the event that the remaining lease term is of such limited
duration that Buyer wishes to enter into a new lease agreement
with the Lessor of said location, and the Buyer is unable to
obtain said new lease agreement at such terms and conditions that
are substantially as the Seller's lease;
2) In the event that Buyer and Seller do not consummate an employment
agreement between Buyer, as employer, and Xxxxxxx XxXxx, as
employee;
3) In the event the parties have not closed this transaction by
December 15, 2003.
4) After execution of this agreement, and prior to closing, and after
Buyer shall complete its due diligence, which shall include a
review of the Seller's company books, records, tax returns, and
financial statements prior to closing, and after Seller has
provided Buyer with all documents necessary to complete a
certified audit and receive an unqualified opinion as to the
condition of the Seller's business, and if Buyer finds that such
review and opinion do not support and verify all financial and
other information previously provided by Seller to Buyer upon
which Buyer has relied upon in offering the Purchase Price.
REPRESENTATIONS AND WARRANTIES:
Representations and Warranties of Seller. Seller represents and warrants
to, and covenants with, Buyer that the following statements are true, correct
and complete as of the date of this Agreement, and that the same shall be
true, correct and complete on the Closing:
1) Seller is a duly organized and validly existing corporation formed
under the laws of the State of Kentucky and is in good standing in
such jurisdiction.
2) Seller has the right, power, and authority to enter into and
perform its obligations under this Agreement.
3) The execution of this Agreement by Seller and the transactions
contemplated by this Agreement have been duly authorized by all
necessary action required for such authorization by the Seller
corporation.
4) Seller is not, nor at any time will be, a party to any contract or
other arrangement of any nature that will materially interfere
with its full, due, and complete performance of this Agreement,
and neither Seller nor XxXxx will solicit or entertain any offer
from any other person and will not enter into any negotiations for
the sale of the business or assets of Seller's business with any
third party.
5) Seller is not, nor at any time will it be, in knowing violation of
any existing law, statute or regulation, by entering into and
undertaking the performance of this Agreement.
6) To the best knowledge and belief of Seller, there is no litigation
or proceeding pending, nor is any litigation threatened or pending
involving Seller which could, if adversely determined, materially
and adversely affect the performance of its obligations under this
Agreement.
Representations and Warranties of Buyer. Buyer represents and warrants
to, and covenants with, Seller that the following statements are true, correct
and complete as of the date of this Agreement, and that the same shall be
true, correct and complete on the Closing:
1) Buyer has the right, power, and authority to enter into and
perform its obligations under this Agreement.
2) The execution of this Agreement by Buyer and the transactions
contemplated by this Agreement have been duly authorized by all
necessary action required for such authorization by the Buyer
corporation.
3) Buyer is not, nor at any time will it be, a party to any contract
or other arrangement of any nature that will materially interfere
with its full, due, and complete performance of this Agreement.
4) Buyer is not, nor at any time will it be, in knowing violation of
any existing law, statute or regulation, by entering into and
undertaking the performance of this Agreement.
5) To Buyer's best knowledge and belief, there is no litigation or
proceeding pending, nor is any litigation threatened or pending
involving Buyer which could, if adversely determined, materially
and adversely affect the performance of Buyer's obligations under
this Agreement.
REPRESENTATIONS AND WARRANTIES CONCERNING PURCHASED ASSETS:
Except as otherwise expressly provided herein, Seller makes no
representations or warranties, either express or implied, concerning the
Purchased Assets.
INDEMNIFICATION:
1) Seller shall indemnify, defend and hold Buyer harmless from and
against, and reimburse Buyer with respect to, any and all losses,
damages, liabilities, claims, judgments, costs and expenses
(including attorneys' fees and costs) of any nature whatsoever
that Buyer shall suffer as a result of a breach of any
representation, warranty, covenant or agreement contained herein.
2) Buyer shall indemnify, defend and hold Seller harmless from and
against, and reimburse Seller with respect to, any and all losses,
damages, liabilities, claims, judgments, costs and expenses
(including attorneys' fees and costs) of any nature whatsoever
that Seller shall suffer as a result of a breach of any
representation, warranty, covenant or agreement contained herein.
COVENANT NOT TO COMPETE/CONFIDENTIALITY:
As further compensation for Buyer's Purchase Price, Seller agrees and
covenants that for a period of two (2) years after the Closing ("Restricted
Period"), Seller, its principals, and their representatives, agents, officers
or stockholders (hereinafter collectively referred to as "Seller") will not
directly or indirectly engage in the the offering of medical transcription,
billing or related services business within a 000-xxxx xxxxxxxxxxxx xxxxxx xx
Xxxxxxxxxx, Xxxxxxxx or of the location of any other business operated by
Buyer, nor will it or they use it or their influence or experience in the
interest of any other medical transcription services business in such areas,
nor will it or they act as an employee or subcontractor, shareholder, officer
or director of any transcription service company that directly or indirectly
competes with or for the accounts and prospective accounts being transferred
to Buyer or for so long as the Company continues to be in said business (or
for such maximum time allowed by Kentucky law, if less). The Seller agrees
that Seller will not, during the Restricted Period, engage, directly or
indirectly, in medical transcription services of any type within the
restricted area. Throughout the Restricted Period, Seller will not in such
locality, solicit customers for, or otherwise aid or assist, anyone engaged in
such business or businesses, or communicate to any such person or corporation
any customer lists or any other business data or secrets of the medical
transcription services business, as all non-public information will be treated
as confidential in accordance with that separate Confidential Information
Agreement previously executed by the parties. The parties agree that this
covenant not to compete does not extend to the Seller and its principals
regarding the writing, publishing, distributing and selling of textbooks or
similar written materials relating to medical transcription services.
AGREEMENT TO EMPLOY CERTAIN EMPLOYEES:
The Buyer agrees, as consideration for Seller's agreements made herein,
to enter into a 24-month employment agreement with Xxxxxxx XxXxx ("XxXxx"),
renewable annually, as long as terms and conditions are met that are agreeable
to both parties. During this period of employment, XxXxx will assist Buyer in
the transition of the business along with certain management and sales
responsibilities. In consideration for these services, XxXxx will be
compensated with an annual base salary of $30,000.00, plus standard company
benefits and a commission based on sales, all as is more specifically defined
in the separate Employment Agreement to be entered into by XxXxx and Buyer and
substantially in the form attached hereto as Exhibit C.
The Buyer also agrees to make no personnel reductions from the present
staff level, throughout the term of Xx. XxXxx'x term of employment, providing
revenues continue to be billed at a minimum quarterly rate of $162,500
(annualized rate of $650,000).
DISPUTES:
Resolution of Disputes.
1) Arbitration. All disputes between or among parties relating to
this Agreement (a "Dispute"), which have not been otherwise
resolved (such unresolved Dispute hereafter referred to as an
"Arbitrable Matter"), shall be exclusively and finally resolved by
arbitration by a single arbitrator agreed upon by the parties to
the Arbitrable Matter (the "Arbitrator"). If the parties are
unable to agree upon a single arbitrator, each of the parties to
the Arbitrable Matter shall select an arbitrator, with a third
(3rd) arbitrator selected by the arbitrators chosen by the
parties. In this event, the third (3rd) arbitrator shall decide
the Arbitrable Matter by his or her sole decision. All arbitration
proceedings shall occur in Louisville, Kentucky.
2) Direct Negotiation and Mediation Prior to Undertaking Mandatory
Arbitration. Notwithstanding the provisions of the above section,
prior to arbitrating any Dispute, the parties agree that they
initially shall attempt to resolve the Dispute through direct
negotiation. If the Dispute is not resolved within fourteen (14)
days after written demand for direct negotiation, the parties
shall attempt to resolve the Dispute through mediation, with a
mediator jointly chosen by the parties, and the cost borne equally
by the parties. If the mediator is unable to facilitate a
settlement of the Dispute within a reasonable period of time, as
determined by the mediator, the mediator shall issue a written
statement to the parties to that effect and any unresolved Dispute
shall be resolved through binding arbitration in accordance with
the provisions of this Section.
3) Rules Governing Arbitration. Any arbitration (an "Arbitration")
shall be governed by the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") then pertaining. The
existence and resolution of the Arbitration proceedings shall be
kept confidential by the parties and by the Arbitrator except as
required by law, regulation or a court of competent jurisdiction.
4) Notice of Arbitration. Any party to this Agreement may initiate an
Arbitration of any Arbitrable Matter. The initiating party shall
do so by providing written notice of the Arbitration to the other
party or parties to the Arbitrable Matter. The notice shall bear a
current date, shall state the name of the initiating party and
shall briefly state the matter to be arbitrated.
5) No Appeal, Etc. Except as otherwise permitted by the Commercial
Arbitration Rules of the AAA or Kentucky law, no party shall
appeal to any court an order of an Arbitrator, and the decision of
the Arbitrator, and the order entered, shall be the final, binding
and conclusive resolution of the Arbitrable Matter. Any party to
the Arbitrable Matter may enter such order in any court of
competent jurisdiction.
6) Allocations of Costs, Fees, Etc. The Arbitrator may allocate among
the parties to the dispute the costs, fees and other expenses
relating to an Arbitration in any manner that the Arbitrator shall
determine to be appropriate in his/her absolute discretion;
provided, that if the Arbitrator determines that a party has
initiated an Arbitration without reasonable basis for doing so,
the Arbitrator shall assess against that party the costs of the
other parties relating to the Arbitration, including the
reasonable attorney's fees of these parties.
MISCELLANEOUS:
1) Agreement Binding. This Agreement shall be binding upon and inure
to the benefit of the parties named herein and their respective
successors and assigns.
2) Title and Captions. All section titles or captions contained in
this Agreement are for convenience only and shall not be deemed
part of the context nor effect the interpretation of this
Agreement.
3) Incorporation of Exhibits. The exhibits identified in this
Agreement are incorporated herein by reference and made a part of
this Agreement.
4) Advice Concerning Legal, Tax and Accounting Consequences of
Transaction. Each of the parties to this Agreement represents and
warrants that prior to entering into this Agreement, that they
have had the opportunity to seek the advice of professional
advisors concerning the legal, tax and accounting consequences of
the transactions contemplated by this Agreement, that both have
had this agreement reviewed by legal counsel licensed to practice
law in the commonwealth of Kentucky, and Buyer further represents
that this agreement has been drafted by legal counsel licensed to
practice in the state of South Dakota, and the parties execute
this Agreement with full knowledge and understanding of all legal,
tax and accounting consequences. Regardless of whether or not the
transaction contemplated herein is consummated, each of the
parties are responsible for the payment of any and all expenses
that they incur as a result hereof, and that Seller shall be
solely responsible for any broker fees in connection with this
transaction payable to Xxxx Xxxxxx & Associates and Buyer shall be
solely responsible for any broker fees payable to Corporate
Finance Advisors, Inc.
5) Final, Complete and Exclusive Agreement. This Agreement contains
the final, complete and exclusive agreement between the parties
and supersedes any prior understandings and agreements among them
respecting the subject matter of this Agreement.
6) Governing Law/Jurisdiction. This Agreement has been executed by
Buyer in South Dakota and shall be governed by and shall be
construed in accordance with the law of the State of South Dakota,
excepting that South Dakota shall apply the laws of Kentucky for
issues regarding the personal property being purchased herein. The
parties consent to the jurisdiction of the courts of the State of
South Dakota and agree that any action arising out of or to
enforce this Agreement must be brought and maintained in the state
of South Dakota.
7) Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given:
a) upon personal delivery to the party to be notified;
b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the
next business day;
c) five (5) days after having been sent by registered or
certified mail, return receipt, postage prepaid; or
d) two (2) days after deposit with a nationally recognized
overnight courier, specifying next day delivery, with
written verification of receipt.
All communications shall be sent to the parties hereto at the
respective addresses set forth below, or as notified by such party
from time to time at least ten (10) days prior to the
effectiveness of such notice:
If to Seller:
Xxxxxxx XxXxx
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
With Copy to:
J. Xxxxxxx Xxxxxx
Woodward, Hobson, and Xxxxxx, L.L.P.
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
If to Buyer:
Xxxxxx X. Xxxxx, CEO
0000 Xx. Xxxxxxxx Xxxx
Xxxxx 0
Xxxxx Xxxx, XX 00000
8) Waiver. No waiver by any party of any default, misrepresentation,
or breach of warranty hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty hereunder or affect in
any way rights arising by virtue of any prior or subsequent such
occurrence.
9) Severability. Any term or provision of this Agreement that is
invalid or unenforceable shall not affect the validity or
enforceability of the remaining terms and provisions of this
Agreement.
10) Terms. Common nouns and pronouns shall be deemed to refer to the
masculine, feminine, neuter, singular and plural, as the identity
of the party may in the context require.
11) Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation and execution
of this Agreement and, therefore, waive the application of any
law, regulation, holding or rule of construction providing that
ambiguities in an agreement or other document will be construed
against the party drafting such agreement or document.
12) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and
signed by the parties.
13) Counterparts. This Agreement may be executed simultaneously in two
or more counterparts each of which shall be deemed an original,
and all of which, when taken together, constitute one and the same
document. The signature of any party to any counterpart shall be
deemed a signature to, and may be appended to, any other
counterpart.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first written above.
SELLER:
XxXxx Business Services, Inc.
By:/s/Xxxxxxx XxXxx
Xxxxxxx XxXxx
Commonwealth of Kentucky :
SS
County of Jefferson :
On this the _____ day of November, 2003, before me, the undersigned
officer, personally appeared Xxxxxxx XxXxx, who acknowledged herself to be the
President of XxXxx Business Services, Inc., a Kentucky corporation, and that
she, as such President, being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by herself as such President.
In witness whereof I hereunto set my hand and official seal.
__________________________________
Notary Public
Kentucky State-at-Large
(SEAL) My Commission Expires: __________
/s/Xxxxxxx XxXxx
Xxxxxxx XxXxx, individually, solely for the
purpose of evidencing her agreement to the
provisions of the Section hereof entitled
"Covenant Not to Compete/Confidentiality"
Commonwealth of Kentucky :
SS
County of Jefferson :
On this the _____ day of ___________, 2003, before me, the undersigned
officer, personally appeared Xxxxxxx XxXxx, who acknowledged her execution of
the foregoing instrument to be her lawful act and deed for the purposes
described above..
In witness whereof I hereunto set my hand and official seal.
__________________________________
Notary Public
Kentucky State-at-Large
(SEAL) My Commission Expires: _________
BUYER:
OMNI MEDICAL SERVICES, INC.,
BY:/s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, President
OMNI MEDICAL HOLDINGS, INC.
BY:/s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, President
Omni Medical Holdings, Inc. executes this
Agreement solely or the purpose of
guaranteeing the payment by the Buyer of
the deferred portion of the Purchase Price
State of South Dakota :
SS
County of Xxxxxxxxxx :
On this the _____ day of November, 2003, before me, the undersigned
officer, personally appeared Xxxxxx X. Xxxxx who acknowledged himself to be
the Chief Executive Officer of Omni Medical Services, Inc., a corporation, and
that he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by himself as such officer.
In witness whereof I hereunto set my hand and official seal.
__________________________________ Notary
Public, South Dakota
(SEAL) My Commission Expires: ___________
Exhibits
Exhibit A Asset List
Exhibit B Customer List
Exhibit C Employment Agreement
EXHIBIT A (Part One - Capitalized Equipment)XXXXX BUSINESS SERVICES, INC.
DESCRIPTION VENDOR PIS COST
Telephone System Expanets of KY 1/01 17811.82
Server & Workstation Service Solutions 1/01 10239.38
(Inv. Dated 12/21/00)
Workstations (4) & Cabling Service Solutions 1/01 14225.67
(Inv. Dated 12/30/00 & 12/31/00)
Modems(3), Battery Backups(2) Service Solutions 1/01 2400.28
& LaserJet Printers (2)
Modem (1) Service Solutions 1/01 156.22
Secretarial Chairs (5) Discount Office Furniture 1/01 3421.72
Chair Mats (7)
Keyboard Trays (5)
2-Drawer Vertical Files (10)
Digital Recorders (8), Voice Network Systems 2/01 5125.00
Flash Cards (20),
SendIT(3), ReceiveIT(14),
Readers (3)
Mailing Machine and Scale MailTronix Inc. 3/01 1261.40
Flash Cards (12) Voice Network Systems 3/01 560.40
Flash Cards (4) Voice Network Systems 4/01 186.80
LaserJet Printer (1) Service Solutions 6/01 556.50
2001 ST 55945.19
DESCRIPTION VENDOR PIS COST
Olympus Digital Recorders(11) Total Office Products 1/02 4401.12
FTP Configuration, Switch to Service Solutions 3/02 270.00
NewSouth
Olympus Digital Recorders (2) Total Office Products 3/02 733.52
Flash Cards (12) Spectrum PC Upgrade 4/02 231.00
Olympus Digital Recorders (2) Business Equipment Company 5/02 809.80
Server, Tape Drive Service Solutions 6/02 7938.26
(Inv. Dated 06/30/02)
Workstation Memory Upgrades(6)Service Solutions 7/02 1039.50
2002 ST 15423.20
Voice IQ VoiceFLOW Software Xxxxxx, Inc. 6/03 4229.00
Upgrade
Server Upgrade, Brooktrout Service Solutions 6/03 5213.13
Cards
Transcription Workflow Polarity Software 7/03 2210.00
Software Upgrades
Server Data Application for Pervasive Software 8/03
VoiceIQ 1205.00
2003 ST 12857.13
TOTAL (As of 9/30/03): $84225.52
Exhibit B
CURRENT CUSTOMER BASE AS OF 12/01/03:
Xxxxxxx, Xxxxx (Two locations)
Xxxxxxx, Xxxxxx
Xxxxxx, Xxxxx
Xxxxxxxxxxxx Urology Group, PSC
Buschemeyer, X. Xxxxxx
Cardiology of Kentucky
Center for Neurosurgical Care, PSC
Chest Medicine Associates, PSC (Three locations)
Dupont Highfield Open MRI Center
Xxx Xxxxxxx, PSC
Xxxxx, Xxxxxx X.
The Xxxxxxx Clinic and Xxxxxxx Clinic-Madison
(Hospital being built and will be added to our transcription base in
2004)
Integrative Psychiatry, PLLC
Louisville Heart Surgery
Louisville Neurological Surgery, PSC
Louisville Oncology (Five Locations)
Xxxxxx, Xxxxxx & Xxxxxxx
Pediatric Endocrinology Specialists, PSC
Xxxxxx, Xxxxxxxx
Rehabilitation Associates (Four locations)
River City Orthopaedic Surgeons, PSC
St. Xxxxxxxx Medical Associates
Xxxxxx X. Xxxxxxxx, MD
Shoulder and Elbow Center, PSC
South Georgia Medical Center
University OB-GYN Associates (Three sites)
University of Louisville Family Medicine
University Physicians Associates
University Surgical Associates
University of Louisville Trauma Group
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made this _____ day of
November, 2003, and is made by and between Xxxxxxx XxXxx (the "Employee") and
Omni Medical Services, Inc., a South Dakota corporation DBA XxXxx Business
Services (the "Company").
Recitals.
The parties to this Agreement acknowledge that said Employee's talents
and services to the Company are of a special, unique and extraordinary
character and are of particular and peculiar benefit and importance to the
Company, and that the purpose of this Agreement is for the Company to employ
Xxxxxxx XxXxx, and as consideration for such employment, for Xxxxxxx XxXxx to
provide the Company with assurances that she will carry out this Agreement.
Therefore, the parties agree as follows:
1. Employment. The Company agrees to employ Employee in the capacity of
general manager as is stated with more specificity hereinbelow, and Employee
agrees to be so employed by the Company, for a period commencing December 1,
2003, and continuing for a 24-month period ending on November 30, 2005,
subject, however, to prior termination as provided in this Agreement.
2. Best Efforts of Employee.
(A) Employee agrees that she will at all times faithfully, industriously and
to the best of her ability, experience and talents, perform all of the duties
that may be required of and from her pursuant to the express and implicit
terms of this Agreement, to the reasonable satisfaction of the Company. The
duties shall be rendered at the Corporation's business location commonly known
as 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000, or at such other
place or places in said city and at such times as the needs of the Corporation
may from time-to-time dictate.
(B) Employee shall devote her normal and regular business time, attention,
knowledge and skill to the business and interests of the Company, and the
Company shall be entitled to all of the benefits, profits or other issue
arising from or incident to all work, services and advice of Employee
performed for the Company. It is acknowledged by Company that the Employee has
other for-profit interests, and Employee agrees that she shall not allow her
other interests to materially interfere with her duties to employer.
3. Compensation.
As compensation for the services to be rendered by Employee, the Company
agrees to provide Employee with the following:
A. Base Compensation. The Employee will receive a base salary of
$30,000.00 per year, payable in accordance with the Corporation's standard
payroll procedures.
B. Bonuses. The Employee is eligible for performance-based bonuses,
which are to be paid upon attainment of the following performance indices:
For accounts charged less than $0.13 per line: 5% of gross revenue on
new transcription accounts for which Employee obtains contracts from and
after December 1, 2003 for the first 12 month period of that account
(irrespective of where the contract work is actually performed); then 3%
for the next 12 month period; then 1% thereafter, all conditioned upon
Employee's continued employment and servicing of said account. For
accounts charged above $0.13 per line: 7.5%, 5%, and 3% respectively.
The Employee is eligible for other performance based bonuses, but there is no
assurance or expectation that bonuses will be paid. Said other bonuses will be
paid, if at all, in the sole discretion of the Chief Executive Officer.
C. Benefits. The Employee shall receive medical and any other insurance
or fringe benefits that are currently offered to other full-time employees of
the Company, which benefits may be modified from time to time for the Employee
just as such benefits provided to the other employees of the Company are
modified in the future.
D. Expenses. The Company shall reimburse the Employee for reasonable out
of pocket expenses incurred by the Employee in fulfilling her duties, which
shall be reviewed by the corporate officer assigned to this task for payment
approval. The Company shall, within its financial means and constraints,
provide the Employee with suitable office facilities, equipment, supplies, and
staff. The Company also agrees to make no personnel reductions from the
present staff level, throughout the term of Xx. XxXxx'x term of employment,
providing revenues continue to be billed at a minimum quarterly rate of
$162,500 (annualized rate of $650,000).
4. Termination. This Agreement may be terminated as follows:
(A) The Company may terminate Employee if either: 1) the business location of
the Company shall be destroyed, the business shall decline and fail to make
operating expenses, or if the Company shall fail to have funds to operate the
business, or if the Company decides to close down in whole or in part for any
reason; or 2) The Employee is terminated for cause. Employee shall be deemed
to have been terminated by the Company for cause if she is terminated because
of her acts or conduct which would make it unreasonable to require the Company
to retain Employee in its employment, such as, but not limited to, improper
disclosure of any information concerning any matter affecting or relating to
the Company or the business of the Company, dishonesty, activities harmful to
the reputation of the Company, refusal to perform or neglect of the
substantive duties assigned to her, or breach of any of the provisions of this
Agreement; or 3) in the event of the Employee's total, permanent disability,
or 4) in the event of the Employee's death.
(B) The Employee may terminate this Agreement and seek such remedies as are
available to her at law or in equity if (i) the Company is in material breach
of any of its obligations hereunder and if that breach is not cured within 30
days after receiving written notice of the breach from Employee, or (ii) if
the Company imposes on Employee job responsibilities that are not reasonably
associated with her managerial/sales functions, or (iii) if the Company
engages in acts or conduct which would make it unreasonable for Employee to
remain associated with the Company.
5. Duties. Employee shall be employed as General Manager of the XxXxx
Business Services office. Employee will assist Company in the transition of
the business along with certain management and sales responsibilities, but at
all times shall be subject to the senior management of the Company.
Employee's duties shall include supervision, direction and discretion as
to the termination of existing employees, and the hiring of new employees;
sales and sales management function; and to do all other acts and things which
she may consider necessary or conducive to the best interests of the Company.
6. Covenant not to compete.
6.1 Covenant. For a period of two years from the Effective Date of this
Agreement, and for such period after the two years as the Employee continues
to be employed by the Company, and for a two year period after the Employee's
employment with the Corporation has been terminated by either party (except In
the event of a termination for cause by the Employee), the Employee will not
directly or indirectly:
(A) Enter into or attempt to enter into the "Restricted Business" as defined
below within 200 miles of any business location of the Company;
(B) Induce or attempt to persuade any former, current or future employee,
agent, manager, consultant, director, or other participant in the Company's
business to terminate such employment or other relationship in order to enter
into any relationship with the Employee, any business organization in which
the Employee is a participant in any capacity whatsoever, or any other
business organization in competition with the Corporation's business; or
(C) Use contracts, proprietary information, trade secrets, confidential
information, customer lists, mailing lists, goodwill, or other intangible
property used or useful in connection with the Corporation's business.
6.2 Indirect Activity. The term "indirectly," as used in Section 6.1
above, includes acting as a paid or unpaid director, officer, agent,
representative, employee of, or consultant to any enterprise, or acting as a
proprietor of an enterprise, or holding any direct or indirect participation
in any enterprise as an owner, partner, limited partner, joint venturer,
shareholder, or creditor.
6.3 Restricted Business. The term "Restricted Business" means the
offering of medical transcription, billing or related services or working for
another employer providing medical transcription, billing or related services.
Nevertheless, the Employee may own not more than five percent of the
outstanding equity securities of a corporation that is engaged in the
Restricted Business if the equity securities are listed for trading on a
national stock exchange or are registered under the Securities Exchange Act of
1934.
7. Severability. The covenants set forth in Section 6 above shall be
construed as a series of separate covenants, one for each county in each of
the states of the United States to which such restriction applies. If, in any
judicial proceeding, a court of competent jurisdiction shall refuse to enforce
any of the separate covenants deemed included in this Agreement, or shall find
that the term or geographic scope of one or more of the separate covenants is
unreasonably broad, the parties shall use their best good faith efforts to
attempt to agree on a valid provision which shall be a reasonable substitute
for the invalid provision. The reasonableness of the substitute provision
shall be considered in light of the purpose of the covenants and the
reasonable protectable interests of the Corporation and the Employee. The
substitute provision shall be incorporated into this Agreement. If the parties
are unable to agree on a substitute provision, then the invalid or
unreasonably broad provision shall be deemed deleted or modified to the
minimum extent necessary to permit enforcement.
8. Confidentiality. The Employee acknowledges that she will develop and be
exposed to information that is or will be confidential and proprietary to the
Company. The information includes customer lists, marketing plans, pricing
data, product plans, software, stored data on all forms of media, and other
intangible information. Such information shall be deemed confidential to the
extent not generally known within the trade. The Employee agrees to make use
of such information only in the performance of her duties under this
Agreement, to maintain such information in confidence and to disclose the
information only to persons with a need to know.
9. Remedies. The Employee acknowledges that monetary damages would be
inadequate to compensate the Company for any breach by the Employee of the
covenants set forth in Section 6 above. The Employee agrees that, in addition
to other remedies which may be available, the Company shall be entitled to
obtain injunctive relief against the threatened breach of this Agreement or
the continuation of any breach, or both, without the necessity of proving
actual damages.
10. Waiver. The waiver by the Company of the breach of any provision of this
Agreement by the Employee shall not operate or be construed as a waiver of any
subsequent breach by the Employee.
11. Notices. Any notices permitted or required under this Agreement shall be
deemed given upon the date of personal delivery or forty-eight (48) hours
after deposit in the United States mail, postage fully prepaid, return receipt
requested, addressed to the Company at:
Omni Medical Services, Inc.
0000 Xx. Xxxxxxxx Xxxx
Xxxxx 0
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx, _______________
addressed to the Employee at:
Xxxxxxx XxXxx
0000 Xxxxxxx Xxxx Xxxx Xxx. 000
Xxxxxxxxxx, XX 00000
or at any other address as any party may, from time to time, designate by
notice given in compliance with this Section.
12. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State Kentucky. The parties acknowledge that
this Agreement has been drafted by the Corporate counsel licensed in the state
of South Dakota, and as the law of Kentucky shall dictate, each party has been
advised that they should obtain the advice of legal counsel licensed to
practice in the state of Kentucky, regarding the legality of this Agreement,
and the effect of Kentucky law upon the rights and obligations of the parties
herein, prior to executing the same.
13. Titles and Captions. All section titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the context
nor effect the interpretation of this Agreement.
14. Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
15. Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
16. Attorney Fees. In the event an arbitration, suit or action is brought by
any party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
17. Computation of Time. In computing any period of time pursuant to this
Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday,
Sunday, or a legal holiday, in which event the period shall begin to run on
the next day which is not a Saturday, Sunday, or legal holiday, in which event
the period shall run until the end of the next day thereafter which is not a
Saturday, Sunday, or legal holiday.
18. Pronouns and Plurals. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular, or plural as the
identity of the person or persons may require.
19. Arbitration. If at any time during the term of this Agreement any
dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association, and judgment upon the award rendered
by the arbiter may be entered in any court having jurisdiction thereof. The
parties hereby waive their right to trial on the merits and the right to
appeal, and agree to binding arbitration.
20. Presumption. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
21. Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
22. Parties in Interest. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
23. Savings Clause. If any provision of this Agreement, or the application
of such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons
or circumstances other than those as to which it is held invalid, shall not be
affected thereby.
24. Separate Counsel. The parties acknowledge that the Corporation, as a
valid existing South Dakota corporation, has been represented in this
transaction in the state of South Dakota, and that it has been advised to have
this Agreement reviewed by counsel licensed in the state of Kentucky, for
advice regarding Kentucky's state laws that may apply to the Corporation's
rights, obligations and enforcement of this Agreement, and that the Employee
has not been represented in this transaction by the Corporation's attorneys,
and the Employee has been advised that it is important for the Employee to
seek separate legal advise and representation in this matter.
In Witness whereof, this Agreement is entered into effective as of the date
set forth above.
Omni Medical Services, Inc.
By:/s/Xxxxxx X. Xxxxx
Its: President
By:/s/Xxxxxxx XxXxx
Xxxxxxx XxXxx, Employee
State of _______________ )
)SS
County of ______________ )
On this the _____ day of February, 2004, before me, the undersigned
officer, personally appeared Xxxxxx Xxxxx who acknowledged himself to be the
Chief Executive Officer of Omni Medical Services, Inc., a South Dakota
corporation, and that he, as such _____________________, being authorized so
to do, executed the foregoing instrument for the purposes therein contained,
by signing the name of the Company by himself as such
__________________________.
In witness whereof I hereunto set my hand and official seal.
My commission expires:___________________________.
______________________________________
Notary Public
/s/Xxxxxxx XxXxx
Xxxxxxx XxXxx
State of _______________ )
)SS
County of ______________ )
On this the _____ day of February, 2004, before me the undersigned
officer, personally appeared Xxxxxxx XxXxx, known to me or satisfactorily
proven to be the person whose name is subscribed to the within instrument and
acknowledged that she executed the same for the purposes therein contained.
In witness whereof I hereunto set my hand and official seal.
My commission expires:___________________________.
______________________________________
Notary Public
