Exhibit 10.5
ASSET PURCHASE AGREEMENT
between
GREAT LAKES HOME MEDICAL, INC.
("Seller")
and
XXXXXXX XXXXXXX
and
XXXXX XXXXXX
and
XXXXXX XXXXXXXXX
and
LIFE CRITICAL CARE CORPORATION
("Purchaser")
March 1, 1996
TABLE OF CONTENTS
Page
RECITALS......................................................... 1
ARTICLE 1. PURCHASE AND SALE OF ASSETS........................... 1
SECTION 1.1 Closing Date.................................... 1
SECTION 1.2 Purchase and Sale of Assets..................... 2
SECTION 1.3 Excluded Assets................................. 2
SECTION 1.4 Purchase Price.................................. 2
SECTION 1.5 Payment of Purchase Price....................... 2
SECTION 1.6 Debts, Liabilities and Other Obligations
Assumed by Purchaser........................ 3
SECTION 1.7 Allocation of Purchase Price.................... 3
SECTION 1.8 Change and Use of Name.......................... 3
SECTION 1.9 Accounts Receivable............................. 3
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF SELLER,
XXXXXXX, XXXXXX AND MAINHARDT.......... 4
SECTION 2.1 Organization and Qualification, Etc............. 4
SECTION 2.2 Authority Relative to Agreement................. 4
SECTION 2.3 No Breach; Consents............................. 4
SECTION 2.4 No Material Adverse Change...................... 5
SECTION 2.5 Title to Purchased Assets....................... 5
SECTION 2.6 Tax Matters..................................... 5
SECTION 2.7 Contracts and Commitments....................... 6
SECTION 2.8 Litigation, Etc................................. 7
SECTION 2.9 Brokerage....................................... 7
SECTION 2.10 Insurance....................................... 8
SECTION 2.11 Compliance with Laws............................ 8
SECTION 2.12 Employees....................................... 8
SECTION 2.13 Licenses and Permits............................ 8
SECTION 2.14 Business Records................................ 8
SECTION 2.15 Environmental Matters........................... 8
SECTION 2.16 Financial Statements............................ 9
SECTION 2.17 Material Misstatements or Omissions............. 9
SECTION 2.18 Effective Date of Warranties, Representations
and Covenants................................ 9
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER .... 10
SECTION 3.1 Organization, Etc............................... 10
SECTION 3.2 Authority Relative to Agreement ................ 10
SECTION 3.3 No Breach; Consents............................. 10
SECTION 3.4 Litigation...................................... 10
SECTION 3.5 Brokerage....................................... 11
ARTICLE 4. CLOSING CONDITIONS.................................... 11
SECTION 4.1 Closing Conditions Relating to Purchaser........ 11
SECTION 4.2 Closing Conditions Relating to Seller........... 12
ARTICLE 5. PRE-CLOSING AGREEMENTS................................ 13
SECTION 5.1 Due Diligence................................... 13
SECTION 5.2 Operation of Business........................... 13
SECTION 5.3 Best Efforts.................................... 14
SECTION 5.4 Confidentiality................................. 14
SECTION 5.5 Public Announcements............................ 14
ARTICLE 6. POST-CLOSING AGREEMENTS............................... 15
SECTION 6.1 Indemnification by Seller, Xxxxxxx,
Xxxxxx and Mainhardt........................... 15
SECTION 6.2 Further Assurances.............................. 16
SECTION 6.3 Books and Records............................... 17
SECTION 6.4 Employees ...................................... 17
ARTICLE 7. MISCELLANEOUS......................................... 18
SECTION 7.1 Survival ....................................... 18
SECTION 7.2 Termination .................................... 18
SECTION 7.3 Expenses ....................................... 18
SECTION 7.4 Amendments, Waivers and Remedies................ 19
SECTION 7.5 Notices ........................................ 19
SECTION 7.6 Assignment ..................................... 20
SECTION 7.7 Severability ................................... 20
SECTION 7.8 Complete Agreement ............................. 20
SECTION 7.9 No Third-Party Beneficiaries ................... 20
SECTION 7.10 Waiver of Bulk Sales Act ....................... 20
SECTION 7.11 Singular and Plural; Gender .................... 21
SECTION 7.12 Governing Law .................................. 21
-ii-
SECTION 7.13 Counterparts ................................... 21
SECTION 7.14 Schedules....................................... 21
SECTION 7.15 Headings........................................ 21
SECTION 7.16 Further Documents............................... 21
SECTION 7.17 Arbitration..................................... 21
EXHIBITS AND SCHEDULES
Exhibit 1.2.......Xxxx of Sale and Assignment of Assets
Schedule 1.3......Excluded Assets
Schedule 1.6......Liabilities Assumed
Schedule 1.7......Allocation of Purchase Price
Schedule 2.7......Contracts and Commitments
Schedule 2.8......Litigation
Schedule 2.10.....Insurance
Schedule 2.13.....Licenses and Permits
Exhibit 4.1.1.2...Assignments of Leases
Exhibit 4.1.1.3...Covenant Not to Compete
Exhibit 4.1.1.6...Opinion of Counsel for Seller
Exhibit 4.1.1.7...Articles of Transfer
Exhibit 4.2.1.3...Assignment and Assumption Agreement
-iii-
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 1st day of March, 1996 by and between GREAT LAKES HOME MEDICAL,
INC., a Michigan corporation ("Seller"); and LIFE CRITICAL CARE
CORPORATION, a Delaware corporation ("Purchaser"); and XXXXXXX XXXXXXX, a
Michigan resident ("Xxxxxxx"), XXXXX XXXXXX, a Michigan resident ("Xxxxxx")
and XXXXXX XXXXXXXXX, a Florida resident ("Mainhardt").
W I T N E S S E T H
WHEREAS, Seller is engaged in the business of operating a home medical
equipment business at facilities located in Escanaba, Michigan and other
locations in Michigan, Wisconsin and Florida (the "Business");
WHEREAS, Purchaser desires to purchase, and Seller desires to sell,
substantially all of the assets and properties of Seller, including the
goodwill and all assets used in or necessary for the operation of the
Business on the terms and conditions set forth in this Agreement, but
excluding the assets of Seller used in connection with the Medwest business
conducted in Wisconsin in the discretion of Seller; and
WHEREAS, Xxxxxxx, Xxxxxx and Mainhardt (collectively, the
"Stockholders") are the sole Stockholders of Seller and will materially benefit
from the consummation of this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
promises, agreements, representations and warranties hereinafter set forth,
Seller and Purchaser hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
SECTION 1.1. Closing Date. Subject to the terms and conditions
hereof, the consummation of the transactions described herein (the
"Closing") will take place at 10:00 a.m., on or prior to March 31, 1996, at
the offices of Vader & Vader, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000, or at such other location reasonably selected by Purchaser upon
advance notice to Seller, or at such other time and date as the parties
mutually may determine (the "Closing Date").
SECTION 1.2. Purchase and Sale of Assets. Subject to Section 1.3,
at the Closing, Seller will sell, convey, transfer and deliver to Purchaser,
and Purchaser will purchase and receive from Seller, all of the assets,
rights, and tangible and intangible property of Seller owned by Seller and
used in the Business on the Closing Date (all of the assets described in this
Section 1.2 are collectively referred to as the "Purchased Assets"). Subject
to Section 1.3, the Purchased Assets shall include all property and assets
owned by Seller and used in the Business, of every kind and description,
wherever located, including all property, tangible or intangible, real,
personal or mixed, inventory, accounts receivable, equipment, improvements,
fixtures, deposits on contractual obligations or otherwise, Seller's right
to use the name "Great Lakes Home Medical" and any derivatives or
combinations thereof, and all books and records of Seller relating to the
Business, including without limitation trade secret rights in any information,
computer hardware and software, and all trade titles, marketing materials and
direct mail systems developed to promote the Business, and all customer
lists (past, present and prospective), all as the same shall exist on the
Closing Date, including, without limitation, the assets and property
listed or described in the Xxxx of Sale and Assignment of Assets (the
"Xxxx of Sale") attached hereto as Exhibit 1.2.
SECTION 1.3. Excluded Assets. The Purchased Assets shall not
include those assets of Seller, if any, listed or described on Schedule 1.3
attached hereto.
SECTION 1.4. Purchase Price. Subject to the provisions and
adjustments set forth in Section 1.5 hereof, the purchase price (the
"Purchase Price") for the Purchased Assets, and for the benefits and rights
conferred upon Purchaser hereunder, shall be an amount equal to Eight
Million Seven Hundred Ninety Thousand Dollars ($8,790,000); provided,
however, that if, as a result of such adjustments, the Purchase Price is in an
amount less than $6,400,000 then Seller shall be entitled to terminate this
Agreement unless Purchaser agrees to pay a Purchase Price of $6,400,000.
SECTION 1.5. Payment of Purchase Price. The Purchase Price
described in Section 1.4 shall be paid as follows:
(i) The Purchase Price shall be paid in cash by wire
transfer of immediately available funds to such bank account as shall be
designated by Seller or, at Seller's option, by delivery of a cashier's check
to Seller at Closing; and
(ii) In addition to the payment of the Purchase Price,
Purchaser shall assume and agree to pay certain debt and trade payables of
Seller at Closing as set forth in Section 1.6 hereof;
(iii) The Purchase Price is conditioned upon the book value
of the Purchased Assets being at least equal to $570,000 as of the Closing
Date (the "Target Book Value"). To the extent the book value of the
Purchased Assets on Seller's books is less than the Target Book Value on the
Closing Date, the Purchase Price shall be reduced by One Dollar ($1.00)
for each One Dollar ($1.00) that the actual book value is less than the
Target Book Value; provided, however, that the book value shall be
estimated in good faith by Seller and Purchaser on the Closing Date and any
adjustments thereto following
-2-
an audit by Purchaser's accountants shall be adjusted by payments, within
ninety (90) days after Closing, to Seller by Purchaser or by payments by
Purchaser to Seller, as appropriate;
(iv) The Purchase Price is further conditioned upon
Seller's earnings before interest, taxes, depreciation and amortization and
adjusted for extraordinary owners' compensation ("Adjusted EBITDA") for the
twelve-month period ending November 30, 1995 being at least equal to
$1,758,000. In the event Seller's Adjusted EBITDA for the twelve-month
period ending November 30, 1995 is less than $1,758,000 then the Purchase
Price shall be adjusted downward by Five Dollars ($5.00) for each One Dollar
($1.00) of the amount of shortfall, if any, between $1,758,000 and the actual
Adjusted EBITDA of Seller for the twelve-month period ending November 30,
1995; provided, however, any adjustment to the Purchase Price shall be the
greater of the adjustment set forth in Section 1.5(iii) or Section 1.5(iv),
and shall not be adjusted by both Sections; and
(v) If the Closing shall not have been completed on or before
the scheduled Closing Date, Purchaser shall be entitled to extend the
Closing Date for sixty (60) days upon the payment to Seller of a deposit of
$50,000 (the "Deposit") on or before the scheduled Closing Date, which Deposit
shall be applied to the Purchase Price at Closing.
SECTION 1.6. Debts, Liabilities and Other Obligations Assumed by
Purchaser. Purchaser shall assume all liabilities relating to the Purchased
Assets or the operation of the Business arising on or after the Closing Date.
Purchaser shall assume no debts, obligations, contracts, leases or
liabilities of Seller, except as expressly set forth, which are, as at
Closing, shown in Schedule 1.6 attached hereto and Seller shall hold
Purchaser harmless from, and indemnify Purchaser against, any debt, obligation,
contract, lease or liability not expressly assumed by Purchaser hereunder.
SECTION 1.7. Allocation of Purchase Price. After due
negotiation, the parties agree that the consideration described in
Section 1.4 shall be allocated among the Purchased Assets in the manner set
forth in Schedule 1.7.
SECTION 1.8. Change and Use of Name. Concurrently with the
Closing, Seller shall take all actions required by the Michigan Corporation
and Securities Bureau to enable Purchaser to receive permission from such
governmental agency to use the name "Great Lakes Home Medical" in Michigan,
and Seller shall make no further use of such name.
SECTION 1.9. Accounts Receivable. A list of Accounts Receivable
(i.e., any right to payment for goods sold or leased or for services rendered
whether or not they have been earned by performance) of Seller which shall
include the names and addresses of the
-3-
customer from whom the Account Receivable is owing and the age and respective
amount of each such Account Receivable shall be provided by Seller to
Purchaser at Closing (the "Accounts Receivable List") and such Accounts
Receivable shall be assigned by Seller to Purchaser at Closing as part of the
Purchased Assets.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF
SELLER, XXXXXXX, XXXXXX AND MAINHARDT
As a material inducement to Purchaser to enter into and perform its
obligations under this Agreement, Seller, Xxxxxxx, Xxxxxx and Mainhardt
hereby, jointly and severally, represent and warrant to Purchaser as
follows:
SECTION 2.1. Organization and Qualification, Etc. Seller is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Michigan, and has the corporate power to own, lease
or operate all of its properties and assets and to carry on the Business as
and where it is now being conducted. Copies of Seller's Articles of
Incorporation and By-Laws, previously delivered to Purchaser and certified by
the Secretary of Seller, are true, correct and complete copies of such
documents and will not be amended prior to the Closing Date without the prior
written consent of Purchaser.
SECTION 2.2. Authority Relative to Agreement. The Seller has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by the Seller and the consummation of the transactions
contemplated on its part have been authorized by its Board of Directors and
stockholders. No other corporate proceedings on the part of the Seller are
necessary to authorize the execution and delivery of this Agreement by it or the
consummation by it of the transactions contemplated on its part hereby. This
Agreement has been duly executed and delivered by each of Seller, Xxxxxxx,
Xxxxxx and Mainhardt and is a valid and binding agreement of Seller,
Xxxxxxx, Xxxxxx and Mainhardt, enforceable in accordance with its terms,
except as the enforceability may be affected by bankruptcy, insolvency,
reorganization or other similar laws presently or hereafter in effect
affecting the enforcement of creditors' rights generally.
SECTION 2.3. No Breach; Consents. The negotiation, execution,
delivery and performance of this Agreement by Seller, and the
consummation of the transactions contemplated hereby, (a) do not and will
not conflict with or result in any breach of any of the provisions of,
constitute a default under, result in a violation of, result in the creation
of any lien, security interest, charge, encumbrance or other restriction
upon the Purchased Assets under, or require any authorization, consent,
approval, exemption or other action
-4-
by or notice to any third party, under the provisions of the Articles of
Incorporation or By-Laws of Seller or any license, permit, contract,
franchise, indenture, mortgage, lease, loan agreement or other agreement
(oral or written) or instrument to which Seller is a party or under which its
properties are bound, and (b) do not require any authorization, consent,
approval, exemption or other action by or notice to any court or governmental
body under any law, statute, rule, regulation or decree to which Seller is
subject.
SECTION 2.4. No Material Adverse Change. Since September 30, 1995,
there has been no material adverse change in the financial condition,
properties, assets, business or prospects of Seller, including the Purchased
Assets.
SECTION 2.5. Title to Purchased Assets.
2.5.1 Seller owns, or will at Closing own, good and
marketable title, free and clear of all liens and encumbrances to all of the
Purchased Assets, and on the Closing Date and upon conveyance, assignment
and delivery to Purchaser as provided herein, Purchaser shall have
(subject to compliance with applicable registration, filing and recording
requirements) good and marketable title, or valid, binding and enforceable
rights as contracting party or licensee, as the case may be, to all the
Purchased Assets, except software licenses or, without implied limitation,
other agreements or licenses which, by their express terms, are not
transferable.
2.5.2 Seller is not in violation of any applicable
zoning ordinance or other law, regulation or requirement relating to the
operation of owned or leased properties and Seller has not received any notice
of any such violations within the three years prior to the date hereof.
2.5.3 Seller leases, licenses or owns all of the properties
and assets used in the Business.
SECTION 2.6. Tax Matters. All tax returns and related information
required to be filed by or on behalf of Seller prior to the date hereof have
been prepared and filed in accordance with applicable law, and all taxes,
interest, penalties, assessments or deficiencies that have become due pursuant
to such returns or any assessments or otherwise have been paid in full. All
such returns are true and correct in all material respects. There is no
unresolved claim concerning Seller's federal, state and local tax liabilities.
-5-
SECTION 2.7. Contracts and Commitments.
2.7.1. Attached hereto as Schedule 2.7 is a separate
schedule containing an accurate and complete list of:
(i) any contract, agreement, purchase order or other
commitment for the purchase, sale or provision to or by Seller of
goods, property or services;
(ii) any pension, profit sharing, stock option,
employee stock purchase or other plan providing for deferred
compensation or other employee benefit plan, or any contract with
any labor union;
(iii) any agreement or indenture relating to the
borrowing of money or to the mortgaging, pledging or otherwise
placing a lien on any material asset or material group of assets of
Seller;
(iv) any lease or agreement under which it is lessee of
or holds or operates any property, real or personal, owned by any
other party, except for any lease of personal property under which the
aggregate annual rental payments do not exceed $1,000;
(v) any lease or agreement under which it is lessor of
or permits any third party to hold or operate any property, real or
personal, owned or controlled by it;
(vi) all agreements providing for the services of an
independent contractor to which Seller is a party or by which it is
bound;
(vii) as of a date no earlier than December 31, 1995,
all of Seller's Accounts Receivables, together with detailed
information as to each such listed receivable which has been
outstanding more than thirty (30) days;
(viii) any and all other or additional contracts,
commitments, agreements, arrangements, writings, guarantees,
leases and licenses to which Seller is a party or by which Seller or
any of its property is bound.
Each of the contracts, agreements, leases, licenses and commitments
required to be listed on Schedule 2.7 (the "Contracts") is valid and binding,
enforceable in accordance with its respective terms, in full force and effect
and, except as otherwise specified in Schedule 2.7, validly assignable to
Purchaser without the consent, approval or act of, or the making of any filing
with, any other person so that, after the assignment thereof to Purchaser
pursuant hereto, Purchaser will be entitled to the full benefits thereof.
True
-6-
and complete copies of all of the Contracts (together with any and all
amendments thereto) have been delivered to Purchaser and initialed by
Seller's Secretary and identified with a reference to this Section of this
Agreement. Seller has performed all obligations required to be performed
by it and is not in default under or is in breach of or in receipt of any claim
of default or breach under any of the Contracts and no event has occurred
which with the passage of time or the giving of notice or both would result in a
default, breach or event of noncompliance under any such Contract; and
Seller has no knowledge of any breach or anticipated breach by the other
parties to any such Contract; and Seller is not a party to any Contract
for the purchase of goods or services at a rate currently above market
prices.
2.7.2. (i) Seller has performed in all material respects
all obligations required to be performed by it and is not in default under
or in breach of nor in receipt of any claim of default or breach under any
agreement referred to in Section 2.7.1, (ii) no event has occurred which
with the passage of time or the giving of notice or both would result in
a default, breach or event of noncompliance under any such agreement,
(iii) Seller does not have any knowledge of any breach or anticipated
breach by any other party to such agreements, and (iv) Seller is not a party
to any material contract or commitment for the purchase of goods or services at
a rate currently above market prices.
2.7.3 Purchaser has been heretofore supplied with a true
and correct copy of each of the written contracts which are referred to in
Section 2.7.1, together with all amendments, waivers or other changes thereto.
SECTION 2.8. Litigation, Etc. Except as set forth on Schedule
2.8, there are no actions, suits, proceedings, orders, investigations or
claims pending, or to the best knowledge of Seller, threatened, against
Seller, or to which Seller is a party, at law or in equity, before or by
any court, tribunal, governmental department, commission, board, bureau,
agency or instrumentality, or any arbitration proceedings pending under
collective bargaining agreements or otherwise. To the knowledge of
Seller, except for pending legislation regarding medicare and medicaid
reimbursement that might affect the Business generally, there is no proposed
law, rule, regulation, ordinance, order, judgment, decree or award that
would be applicable to Seller that would reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
business, assets, liabilities, capitalization, financial position, results of
operations or prospects of Seller.
SECTION 2.9. Brokerage. Except for Telesis, Inc., as to which
Seller shall be solely responsible, there are no claims for brokerage
commissions, finders' fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement (oral or written) binding upon Seller or any stockholder of Seller.
Seller will pay, and hold Purchaser harmless against, any liability,
-7-
loss or expenses (including, without limitation, attorneys' fees and
out-of-pocket expenses) arising in connection with any such claim.
SECTION 2.10. Insurance. Schedule 2.10 contains an abstract or
summary of each outstanding insurance policy maintained by Seller. Seller
has given to Purchaser a copy of each such insurance policy maintained with
respect to Seller's properties, assets and the Business, and each such
policy is in full force and effect. Purchaser, at its election at Closing,
shall be entitled to assume any and all outstanding insurance upon payment to
Seller of a prorated amount of the premium for such insurance for the remaining
term thereof.
SECTION 2.11. Compliance with Laws. To its best knowledge, Seller
has complied with all laws, rules, regulations, ordinances, orders,
judgments, and decrees applicable to its business or properties, and to its best
knowledge is not in violation of any law or any regulation or requirement
which might have a material adverse effect upon its financial condition,
operating results or business prospects, and Seller has not received notice of
any such violation.
SECTION 2.12. Employees. To the best knowledge, information and
belief of Seller, Seller has complied with all laws relating to the employment
of labor, including provisions thereof relating to wages, hours, equal
opportunity, collective bargaining and the payment of social security and other
taxes.
SECTION 2.13. Licenses and Permits. All permits, licenses and
franchises held by Seller, or by its officers, employees or agents, with
respect to the Business are listed on Schedule 2.13. Except as set forth on
Schedule 2.13, such licenses, permits and franchises are freely transferable by
Seller.
SECTION 2.14. Business Records. Seller's personnel files,
accounting records, financial statements, operating statements and customer
correspondence files shall be made available to Purchaser promptly upon the
execution of this Agreement and are complete and correct in all material
respects, and accurately reflect Seller's business operations for a period of
not less than three (3) years.
SECTION 2.15. Environmental Matters. There is no condition,
circumstance, or set of facts (including without limitation the presence,
either past or present, of any underground storage tanks) that constitutes a
significant hazard to health, safety, property, or the environment relating
to the Business or any real property owned or leased by Seller for which the
Business, Seller or the owner or operator of such real property would be
responsible.
-8-
SECTION 2.16. Financial Statements. Seller's financial statements
and notes thereto as at and for the fiscal years ended December 31, 1993 and
1994, and for the ten months ended October 31, 1995, consisting of balance
sheets and statements of income and cash flow, are to be audited by the
certified public accounting firm of Ernst & Young LLP, independent
certified public accountants, on or before March 15, 1996. All such financial
statements, copies of which will, upon completion, be attached hereto as
Exhibit 2.16 (the "Statements"), will fairly present the financial
condition and results of the operations of Seller as at the date indicated and
for the period indicated, will have been prepared in accordance with
generally accepted accounting principles consistently applied, and will be
in accordance with the books and records of Seller. Time is of the essence in
completing the audit and both Seller and Purchaser agree to cooperate
fully to expedite the audit process. Seller shall provide Purchaser with
monthly financial statements for the periods following September 30, 1995, as
they become available. Purchaser shall pay the auditors for the preparation
of the Statements provided that Purchaser shall have the right to select the
auditors and further provided that Seller pays its accountants to prepare
the books and records for audit.
SECTION 2.17. Material Misstatements or Omissions. Seller has
not knowingly made any material misstatements of fact or omitted to state
any material fact necessary or desirable to make complete, accurate, and not
misleading every representation, warranty, schedule, and agreement set
forth, described or referred to herein. Seller has disclosed to Purchaser
all material adverse facts relating to the condition or operation, whether
past, present or future, financial or otherwise, of the Purchased Assets and
of the Business, and shall disclose promptly to Purchaser, in writing, any
material adverse facts arising after the date hereof and prior to Closing.
SECTION 2.18. Effective Date of Warranties, Representations
and Covenants. Each warranty, representation, and covenant set forth in
this Article 2 shall be deemed to be made on and as of and speak on and as of
the date hereof and as of the Closing Date (except as otherwise specifically
provided herein). Prior to the Closing Date, Seller will notify Purchaser
of any change since the date hereof in any fact, condition or circumstance
of which it becomes aware and which would require a modification of the
foregoing representations and warranties (including any schedule thereto) to
make such representation or warranty (or schedule thereto) complete,
accurate and not misleading in all respects. The representations and
warranties contained in this Article 2 shall not be affected or deemed waived
by reason of the fact that Purchaser and/or its representatives knew or
should have known that any such representation or warranty is or might be
inaccurate in any respect.
-9-
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
As a material inducement to Seller to enter into and perform its
obligations under this Agreement, Purchaser represents and warrants to Seller
as follows:
SECTION 3.1. Organization, Etc. Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware.
SECTION 3.2. Authority Relative to Agreement. Purchaser has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated on its part hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Purchaser. No other corporate proceedings on its part or the part of the
stockholders of Purchaser are necessary to authorize the execution and delivery
of this Agreement by it or the consummation by it of the transactions
contemplated on its part hereby. This Agreement has been duly executed
and delivered by Purchaser and is the valid and binding agreement of
Purchaser except as the enforceability may be affected by bankruptcy,
insolvency, reorganization or other similar laws presently or hereafter in
effect affecting the enforcement of creditors' rights generally.
SECTION 3.3. No Breach; Consents. The execution, delivery and
performance of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby (a) do not and will not conflict with or
result in any breach of any of the provisions of, constitute a default under,
result in a violation of, result in the creation of any lien, security
interest, charge or encumbrance upon the assets of either of Purchaser under,
or require any authorization, consent, approval, exemption or other action by
or notice to any third party under the provisions of the Charter or By-Laws of
Purchaser or any license, indenture, mortgage, lease, loan agreement or other
agreement (oral or written) or instrument to which Purchaser is a party,
and (b) do not require any authorization, consent, approval, exemption or
other action by or notice to any court or governmental body under any law,
statute, rule, regulation or decree to which Purchaser is subject.
SECTION 3.4. Litigation. There is no claim, action, suit or
proceeding pending or, to the knowledge of Purchaser, threatened against
Purchaser or any of its properties which seeks to prohibit, restrict or delay
consummation of the transactions contemplated hereby or to limit in any
manner the right of Purchaser to control Seller or any material aspect of the
Business of Seller after the Closing Date, and there is no judgment, decree,
injunction, ruling or order of any court, governmental department,
commission, agency
-10-
or instrumentality or arbitrator outstanding against Purchaser having, or
which Purchaser believes may in the future have, any such effect.
SECTION 3.5. Brokerage. There are no claims for brokerage
commissions, finders' fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of Purchaser.
ARTICLE 4
CLOSING CONDITIONS
SECTION 4.1. Closing Conditions Relating to Purchaser. The
obligation of Purchaser to consummate the purchase of the Purchased Assets
will be subject to the satisfaction of the following conditions, any of
which may be waived by Purchaser in its sole and absolute discretion:
4.1.0 Contingencies.
4.1.0.1. Purchaser intends to register
certain of its securities under the Securities Act of 1933, as amended (the
"Securities Act") as part of an initial public offering of its securities (the
"IPO"). Accordingly, Purchaser agrees to use its reasonable best efforts to do
as follows:
(a) Prepare and file with such
amendments and supplements to the registration statement and the
prospectus used in connection therewith as may be necessary to keep said
registration statement effective and to comply with the provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Securities Act, with respect to the sale of securities covered by said
registration statement for the period necessary to complete the proposed public
offering;
(b) Enter into an underwriting
agreement with customary provisions reasonably required by the underwriter,
if any, of the offering; and
(c) Register its securities covered by
said registration statement under the securities or "blue sky" laws of
appropriate jurisdictions.
It shall be a condition precedent to Purchaser's
obligation to close hereunder that the IPO shall have been completed on
terms and conditions reasonably satisfactory to Purchaser; provided,
however, that this condition precedent may be waived by Purchaser in its
sole and absolute discretion in which event it may close and pay the Purchase
Price all in cash.
-11-
4.1.1. Deliveries. At or prior to the Closing, Seller
shall deliver, or cause to be delivered to Purchaser, the following items,
fully executed by all appropriate parties and in form and substance acceptable
to Purchaser:
4.1.1.1. Xxxx of Sale. A Xxxx of Sale in the form
of Exhibit 1.2 attached hereto together with any and all other evidences
of conveyance reasonably requested by Purchaser to obtain clear title to the
Purchased Assets.
4.1.1.2. Assignments of Leases. Assignments of
Leases in the form of Exhibit 4.1.1.2.
4.1.1.3. Covenants Not to Compete. Covenants Not
to Compete in the form of Exhibit 4.1.1.3 attached hereto executed by each of
the stockholders of Seller.
4.1.1.4. Corporate Resolutions. Seller shall
deliver to Purchaser certified copies of the resolutions of its Board of
Directors and certified copies of the resolutions of its stockholder(s)
authorizing the transactions contemplated herein.
4.1.1.5. Consents. Seller shall deliver to
Purchaser copies of all necessary third party and governmental consents, in
a form satisfactory to Purchaser, that Seller is required to obtain in order to
consummate the transactions contemplated by this Agreement.
4.1.1.6. Opinion of Counsel for Seller. Purchaser
shall receive an opinion dated the Closing Date of Vader & Vader of Escanaba,
Michigan, counsel for the Seller, in the form of Exhibit 4.1.1.6 attached
hereto.
4.1.1.7. Articles of Transfer. Articles of
Transfer in the form of Exhibit 4.1.1.7 attached hereto.
4.1.2. Due Diligence Results. Nothing shall have come to
the attention of Purchaser, in the course of its due diligence investigation
pursuant to Section 5.1 or otherwise, which demonstrates that any of the
representations or warranties of Seller is inaccurate or incomplete in any
material manner.
4.1.3. No Injunction. The consummation of the
transactions contemplated hereby shall not have been enjoined by any court of
competent jurisdiction and no proceeding seeking such an injunction shall be
pending.
SECTION 4.2. Closing Conditions Relating to Seller. The obligation
of Seller to consummate the sale of the Purchased Assets will be subject to
the satisfaction of the following conditions:
-12-
4.2.1. Deliveries. At or prior to the Closing, Purchaser
shall deliver, or cause to be delivered to Seller, the following items:
4.2.1.1. The Purchase Price;
4.2.1.2. Assignments of Leases in the form of Exhibit
4.2.1.2.; and
4.2.1.3. An Assignment and Assumption Agreement
in the form of Exhibit 4.2.1.3 attached hereto.
4.2.2. No Injunction. The consummation of the transactions
contemplated hereby shall not be enjoined by any court of competent
jurisdiction and no proceeding seeking such an injunction shall be pending.
ARTICLE 5
PRE-CLOSING AGREEMENTS
SECTION 5.1. Due Diligence. Seller shall grant to Purchaser, and its
employees, counsel, accountants and other representatives, full and complete
access to Seller, its facilities, management, employees and records and its
outside accountants and counsel for purposes of a due diligence investigation
in connection with the transactions contemplated hereby. Purchaser agrees
to exercise its reasonable best efforts in conducting such due diligence in a
manner that will not significantly interfere with or disrupt the normal
operations of Seller or arouse suspicions of Seller's employees, customers or
suppliers that either the capital stock or the assets of Seller are for sale.
Seller will provide Purchaser and its representatives full access to all
relevant financial information, personnel, service and contractual
information. The cost of any such due diligence shall be borne by Purchaser.
SECTION 5.2. Operation of Business. Seller shall continue to
operate the Business in the ordinary course in such manner that each and every
warranty and representation of Seller made herein as of the date hereof will
be true, complete and accurate in all respects as of the date of the Closing
hereunder, without substantial change, and will maintain or cause to be
maintained all existing insurance coverage on the Purchased Assets of Seller
until the Closing. Until the Closing, all risk of loss, damage, or
destruction to the Purchased Assets shall be upon Seller, and in the event of
any loss, damage, or destruction to the Purchased Assets, Purchaser shall
be entitled to terminate this Agreement within thirty (30) days of learning of
the same. Prior to Closing, Seller shall not increase any current
compensation levels of employees or pay any bonuses or other direct or
indirect compensation without the prior written consent of Purchaser.
Seller
-13-
agrees to provide to Purchaser monthly financial statements for the periods
following September 30, 1995, as they become available.
SECTION 5.3. Best Efforts. The parties hereto agree to use their
best efforts to cause all conditions to Closing to be satisfied and to cause
the transactions contemplated hereby to be consummated not later than April
30, 1996.
SECTION 5.4. Confidentiality. Purchaser and Seller agree that
they, and their respective officers, directors and other representatives,
will hold in strict confidence the negotiations relating to the transactions
contemplated by this Agreement, and all information exchanged pursuant
thereto. If, for any reason, Closing does not occur, all information
exchanged by Purchaser and Seller shall promptly be returned to the other party.
The parties hereto acknowledge and understand that Purchaser shall
undertake the IPO described in Section 4.1.0 hereof and shall be entitled to
comply with all applicable regulatory and disclosure requirements incident
to such registration of securities. In addition, Seller will refrain from,
and will cause its officers, directors, representatives, agents and
employees to refrain from, directly or indirectly, encouraging,
soliciting, initiating or participating in discussions or negotiations with
or providing any non-public information to any person other than Purchaser
concerning the sale or purchase of the Business (except in the ordinary course
of its business), any merger or consolidation involving Seller or any other
transaction in which Seller's Business would be acquired by a person other than
Purchaser.
SECTION 5.5. Public Announcements. Neither Purchaser nor Seller
shall issue any press release or otherwise make any public statement with
respect to this Agreement or the transactions contemplated hereby unless such
press release or public statement is satisfactory to the other party to this
Agreement, and Purchaser and Seller shall consult with each other as to the
form and substance of any public disclosure related thereto; provided,
however, that nothing contained herein shall prohibit any party from making
any disclosure which is required by law but only after the other party has
been given notice of and a reasonable opportunity to contest any such
disclosure allegedly required by law.
-14-
ARTICLE 6
POST-CLOSING AGREEMENTS
SECTION 6.1. Indemnification by Seller, Xxxxxxx, Xxxxxx and
Xxxxxxxxx.
6.1.1. Indemnification. Without limitation as to the
rights of Purchaser, the Seller, Xxxxxxx, Xxxxxx and Xxxxxxxxx, jointly
and severally, shall indemnify, save and keep Purchaser, its successors and
assigns and its stockholders, directors, officers, affiliates, representatives
and employees and the estates, personal representatives and heirs of such
persons, forever harmless from and against any and all liability, demands,
claims, actions or causes of action, assessments, losses, penalties,
costs, damages or expenses (including interest, penalties, costs of
litigation, reasonable attorneys fees and expert witness fees)
(collectively, the "Losses") sustained or incurred by any of the foregoing
persons as a result of or arising out of or by virtue of (i) any incorrect
representation or warranty made by Seller herein or in any certificate,
exhibit or schedule delivered by Seller to Purchaser in connection
herewith, or (ii) any debt, liability or obligation of Seller (whether
known or unknown, absolute or contingent) not expressly assumed by
Purchaser hereunder.
6.1.2. Without limitation as to the other rights of Seller,
Purchaser shall indemnify, save and keep Seller, its successor and assigns
and its stockholders, directors, officers, affiliates, representatives and
employees and the estates, personal representatives and heirs of such persons
forever harmless against and from all liability, demands, claims, actions or
causes of actions, assessments, losses, penalties, costs, damages or expenses
(including interest, penalties, costs of litigation, reasonable attorneys
and expert witness fees (collectively the "Losses") sustained or incurred by
any of the foregoing persons as a result of or arising out of or by virtue of
any incorrect representation or warranty made by Purchaser herein or in
any certificate, exhibit or schedule delivered by Purchaser to Seller, if any,
in connection herewith.
6.1.3. A party required under this Section 6.1 to
furnish indemnity (the "Indemnifying Party") shall satisfy its obligation of
indemnification under this Section 6.1 within forty-five (45) days after
written notice thereof from any party entitled to such indemnity hereunder
(the "Indemnified Party") to the Indemnifying Party; provided, however,
that a party shall not be deemed in breach hereof for so long as it
contests in good faith its liability for indemnification hereunder.
6.1.4. As soon as practicable after obtaining knowledge
thereof, any Indemnified Party shall notify the Indemnifying Party of any
claim or demand which the Indemnified Party has determined has given or
could give rise to a right of indemnification under this Agreement. A
failure to give such notice shall not negate a right to indemnification
hereunder; provided, however, that the Indemnified Party shall bear any
-15-
amount of Loss resulting directly from a failure to give a timely notice. If
such claim or demand relates to a claim or demand asserted by a third party
against the Indemnified Party and if the Indemnifying Party acknowledges
in writing its obligations to indemnify and hold harmless under this Section
6.1, the Indemnifying Party shall have the right to employ such counsel as is
reasonably acceptable to the Indemnified Party to defend any such claim or
demand asserted against the Indemnified Party. The Indemnified Party shall
have the right to participate in the defense of any said claim or demand at its
own cost and expense, provided that unless the Indemnified Party bears a
greater risk of loss than the Indemnifying Party, the Indemnifying Party
shall control the defense of said claim or demand. So long as the Indemnifying
Party is defending in good faith any such claim or demand, (i) the Indemnified
Party shall not settle such claim or demand without the prior written consent
of the Indemnifying Party, and (ii) any settlement of such claim or demand
made without such consent of the Indemnifying Party shall not be subject to
indemnity under this Section 6.1. If the Indemnifying Party fails to
acknowledge in writing its obligation to defend against or settle such claim
or proceeding within twenty (20) days after receiving notice thereof from
the Indemnified Party (or such shorter time specified in the notice as the
circumstances of the matter may dictate), the Indemnified Party shall be
free to dispose of the matter at the expense of the Indemnifying Party, in
any way in which the Indemnified Party deems to be in its best interest.
Purchaser, in its reasonable discretion to protect its financial interest
may set off the amount of any legitimate claim for which it may be entitled
to indemnification hereunder against any payment to be made to Seller
hereunder. Legitimate claim shall be defined as any legal proceeding filed in
a court having jurisdiction over the subject matter which claim is not older
than three (3) years from the date of the Closing.
6.1.5. The Indemnified Party shall make available to
the Indemnifying Party or its representatives all records and other
materials required for use in contesting any claim or demand asserted by a
third party against any Indemnified Party. Whether or not the Indemnifying
Party so elects to defend any such claim or demand, the Indemnified Party
shall not have any obligation to do so and the Indemnified Party shall not waive
any rights it may have against the Indemnifying Party under this Section 6.1
with respect to any such claim or demand by electing or failing to elect to
defend any such claim, provided that the Indemnified Party against which a
claim or demand is asserted in the first instance shall file in a timely
manner any answer or pleading with respect to a suit or proceeding in such
action as is necessary to avoid default or other adverse results.
SECTION 6.2. Further Assurances. Seller shall, at any time and
from time to time on and after the Closing Date, upon request by Purchaser
and without further consideration, take such actions or cause others to do
so, and execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, all transfers, conveyances, powers of attorney
and assurances, as may be required or desirable for the better conveying,
transferring, assigning, delivering, assuring and confirming to Purchaser,
or its respective successors and assigns, or for aiding and assisting in
collecting or reducing
-16-
to possession, the Purchased Assets. To provide further assurances to
Purchaser of its performance hereunder, Seller agrees that it shall not,
during the one year period after the Closing Date, voluntarily dissolve or
terminate its corporate existence, or seek protection under any bankruptcy,
receivership or other law for the relief of debtors.
SECTION 6.3. Books and Records. At or immediately following the
Closing, Seller shall deliver to Purchaser all records constituting part of
the Purchased Assets; and all of Seller's correspondence, files, books and
records, necessary for Purchaser's conduct and operation of the Business and
the Purchased Assets; and shall instruct any other party in possession of such
materials to release them to Purchaser (except to the extent that Seller is
prohibited from or restricted in providing such information by other
agreements or applicable law). Seller shall retain the original copies of
its tax returns, and other records which it is required by law to maintain.
Purchaser shall safely store at its facilities in Escanaba, Michigan, or
at such other reasonable location of Purchaser upon prior notification to
Seller, all records delivered to it from Seller, and shall grant Seller
reasonable access thereto for legitimate business purposes upon Seller's
request as may be made from time to time for at least five (5) years after
Closing.
SECTION 6.4. Employees. Seller shall have and retain
responsibility for all salaries, accrued bonuses, commissions, vacation
pay, and all other employee welfare plans of Seller, and all payroll taxes
thereon which accrued or were earned prior to the time of Closing. Seller shall
remain responsible for employee severance and termination benefits, if any, and
all other employment benefits, claims of wrongful termination, or the like,
relating to Seller's employees. In the event that Seller shall elect to
terminate the employment of its employees contemporaneously with the
Closing, Seller shall be responsible for giving such notification as may be
required by the Worker Adjustment and Retraining Notification Act of 1988, if
applicable, and shall indemnify and hold Purchaser harmless from and against
all liabilities arising out of the notification or other requirements
thereof. It is expressly understood by the parties that Purchaser is not
assuming any obligations of Seller with respect to employees, and Seller
shall after the Closing Date remain responsible for all amounts owed to, and
claims made by, its employees relating to services provided by them, or to
actions or omissions of Seller, in accordance with applicable law and
contractual obligations of Seller.
-17-
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Survival. The representations and warranties of
Seller and Purchaser shall survive Closing.
SECTION 7.2. Termination. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and abandoned at
any time prior to Closing for any of the following reasons:
7.2.1. By the mutual consent of Purchaser and Seller.
7.2.2. By Purchaser if all of the conditions to Closing
described in Section 4.1 have not been satisfied by March 31, 1996 or within
ten (10) days after the receipt by Purchaser of the Statements referred to in
Section 2.16 hereof.
7.2.3. By Purchaser if the transactions shall not have
been consummated by March 31, 1996, or such later date as may be agreed upon
by the parties.
7.2.4. By Purchaser if Seller has materially breached any
representation or warranty herein or failed to perform any material
obligation or condition hereof and such breach or failure shall not have been
cured in manner, form and substance reasonably satisfactory to Purchaser; and
7.2.5. By Seller if Purchaser has materially breached any
representation or warranty herein or failed to perform any material
obligation or condition hereof and such breach or failure has not been cured in
manner, form and substance reasonably satisfactory to Seller.
Any termination pursuant to this Section 7.2 shall be without liability
on the part of any party, except as provided in Section 7.3 below.
SECTION 7.3. Expenses. Each party will pay all of its expenses in
connection with the negotiation of this Agreement, the performance of
its obligations hereunder, and the consummation of the transactions
contemplated by this Agreement. At Closing, Seller shall pay all sales and/or
transfer tax which may be required to be paid in connection with the
transactions contemplated herein including the transfer from Seller to
Purchaser of the Purchased Assets. Seller agrees that the Purchased Assets
include unique property that cannot be readily obtained on the open market
and that Purchaser will be irreparably injured if this Agreement is not
specifically enforced. In the event Purchaser elects to terminate this
Agreement pursuant to Section 7.2.4 instead of seeking specific performance,
Purchaser shall be entitled to recover Purchaser's actual damages. If Seller
-18-
terminates this Agreement solely as a result of Section 7.2.5 hereof, Seller
shall be entitled to retain the Deposit as the sole remedy of Seller hereunder.
SECTION 7.4. Amendments, Waivers and Remedies. The parties hereto,
by mutual agreement in writing, may amend, modify and supplement this
Agreement. The failure of any party hereto to enforce at any time any
provision of this Agreement shall not be construed to be a waiver of such
provision, nor in any way to affect the validity of this Agreement or any part
hereof or the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach. Pursuit by any party
hereto of any remedy shall not preclude pursuit by it of any other remedy
which may be provided by law or equity nor shall the pursuit of any remedy by a
party hereto constitute a forfeiture or waiver of any amount due such party
or of any damage accruing by reason of the violation of any of the terms,
provisions and covenants in this Agreement.
SECTION 7.5. Notices. All notices or other communications required
or permitted hereunder shall be in writing and shall be deemed to have been
duly given (i) upon delivery if delivered by hand; (ii) four (4) days
subsequent to mailing if mailed by express, certified or registered
mail, with postage prepaid, in the continental United States; (iii) two
(2) days subsequent to pick up by such courier if sent by a nationally or
internationally recognized overnight courier service that regularly
maintains records of items picked up and delivered; or (iv) when transmitted if
sent by telecopier, as follows:
If to Purchaser:
Life Critical Care Corporation
c/o The Morgenthau Group, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxx X. Xxxxxx
Fax No.: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxx, Esquire
Xxxxxxxxx, Xxxxxx & Xxxxxxx L.L.P.
000 Xxxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
Fax No.: (000) 000-0000
-19-
If to Seller:
Great Lakes Home Medical, Inc.
000 Xxxxx 00xx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxxx Xxxxxxx
with a copy to:
Xxxxxx X. Xxxxx, Esquire
000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
Any party hereto may specify in writing a different address for such purpose
to the other parties at least five (5) days prior to the effective date of such
address change.
SECTION 7.6. Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This
Agreement, and the rights, interests and obligations hereunder, may not be
assigned by either party without the prior written consent of the other party
hereto.
SECTION 7.7. Severability. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to
be prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provision of
this Agreement unless the consummation of the transaction contemplated hereby is
adversely affected thereby.
SECTION 7.8. Complete Agreement. This document and the documents
referred to herein contain the complete agreement between the parties and
supersede any prior understandings, agreements or representations by or
between the parties, written or oral, which may have related to the subject
matter hereof in any way.
SECTION 7.9. No Third-Party Beneficiaries. This Agreement shall
be for the benefit only of the parties hereto, and their respective
successors and assigns.
SECTION 7.10. Waiver of Bulk Sales Act. In consideration
of, and in reliance upon, the representations and warranties made by
Seller in Article 2, Purchaser hereby waives compliance with the
provisions of any applicable bulk transfer laws.
-20-
SECTION 7.11. Singular and Plural; Gender. The singular shall
include the plural and vice-versa, and the use of one gender shall be deemed
to include all other genders whenever appropriate.
SECTION 7.12. Governing Law. All questions concerning the
construction, validity and interpretation of this Agreement and the
performance of the obligations imposed by this Agreement will be governed by
the laws of the State of Maryland without reference to any conflict of laws
rules.
SECTION 7.13. Counterparts. This Agreement may be executed in two
or more counterparts each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
SECTION 7.14. Schedules. The Schedules hereto are an integral
part of this Agreement. Information described in any Schedule of this
Agreement shall be deemed disclosed in all Schedules of this Agreement and the
term "Agreement" shall include all Schedules, exhibits and other deliveries
attached or made pursuant hereto. Except as otherwise specifically provided
for herein, any Schedules which have not been prepared and attached to this
Agreement on the date of execution hereof shall be prepared and delivered by
Seller to Purchaser within ten (10) days from the date of execution of this
Agreement.
SECTION 7.15. Headings. The headings and captions set forth herein
are for convenience of reference only and shall not affect the construction or
interpretation hereof.
SECTION 7.16. Further Documents. Each party shall, whenever and as
often as requested to do so by the other, but without expense to the
non-requesting party, execute, acknowledge, and deliver all such further
conveyances, assignments, confirmations, satisfactions, releases,
instruments of further assurance, approvals, consents and any and all other
further instruments and documents as may be necessary, expedient, or proper in
the reasonable opinion of the requesting party or its counsel in order to
complete the transactions contemplated herein.
SECTION 7.17. Arbitration. Any and all disputes, controversies or
claims that lead up to the execution of this Agreement or that arise out of
or relate to this Agreement or the breach of it, including, without
limitation, any dispute regarding the disposition of any deposit in the
event this Agreement is terminated and including any claims regarding the
validity, scope and enforceability of this arbitration clause, shall, if not
promptly settled by the parties, be solely and finally resolved by
arbitration. The arbitration shall be conducted in accordance with the
commercial arbitration rules of the American Arbitration Association (the
"AAA") in effect at the time and shall be conducted before a single
arbitrator. The parties to the arbitration shall attempt to agree, by mutual
consent,
-21-
to the appointment of the arbitrator. In the absence of agreement among the
parties, any party to the arbitration may apply to AAA for a list of
arbitrators from which list the arbitrator shall be selected in accordance with
the commercial arbitration rules of AAA.
Any such action or proceeding brought by Purchaser arising out of or
relating to this Agreement shall be brought in Escanaba, Michigan, and in no
other location. Any such action or proceeding brought by Seller arising out of
or relating to this Agreement shall be brought in Baltimore City, Maryland,
and no other location. All cross complaints shall be filed with the same
arbitration panel and in the same location in which the original complaint
was filed. The parties hereby waive the right to object to such location
on the basis of venue or forum nonconveniens. Judgment upon any award
rendered by the arbitrator may be entered in any court of competent jurisdiction
in Maryland and/or Michigan and each party hereto consents to the
jurisdiction of such courts and waives all claims of improper venue. The
arbitrator shall determine all claims in accordance with the internal law of
the State of Maryland. The internal procedural and substantive laws of
Maryland and the United States Federal Arbitration Act shall govern all
questions of arbitral procedure, arbitral review, scope of arbitral
authority, and arbitral enforcement. The parties further agree that the
arbitration proceeding shall constitute an absolute bar to the institution of
any court proceeding, and that the decision and award of the arbitrator
shall be final and binding.
The cost of the arbitration proceeding shall be borne by the
prevailing party, except that each party shall be responsible for its own
attorney fees, if any.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, under seal, on the day and year first above written, intending to be
legally bound hereby.
WITNESS: GREAT LAKES HOME MEDICAL, INC.
_____________________________ By:_______________________(SEAL)
- Seller -
WITNESS: LIFE CRITICAL CARE CORPORATION
______________________________ By:_______________________(SEAL)
- Purchaser -
-22-
WITNESS:
______________________________ ________________________________(SEAL)
XXXXXXX XXXXXXX, Individually
WITNESS:
______________________________ ________________________________(SEAL)
XXXXX XXXXXX, Individually
WITNESS:
_______________________________ ________________________________(SEAL)
XXXXXX XXXXXXXXX, Individually
-23-
EXHIBIT 1.2
XXXX OF SALE AND ASSIGNMENT OF ASSETS
THIS XXXX OF SALE AND ASSIGNMENT OF ASSETS is executed and
delivered effective this ____ day of ______________, 1996 by GREAT LAKES
HOME MEDICAL, INC., a Michigan corporation ("Seller"), to LIFE CRITICAL
CARE CORPORATION, a Delaware corporation ("Purchaser").
WHEREAS, Purchaser and Seller have entered into an Asset Purchase
Agreement, dated as of March 1, 1996 (the "Agreement"), providing for the
purchase by Purchaser of substantially all of the assets of Seller,
excluding the assets of Seller used in the "Medwest" business controlled by
stockholders of Seller;
NOW, THEREFORE, pursuant to the Agreement, and for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Seller hereby grants, bargains, sells, delivers, transfers,
sets over, assigns and conveys to Purchaser and its successors and
assigns, free and clear of any and all liens, claims or encumbrances of any
kind, all of the Purchased Assets (as defined in the Agreement) including,
without limitation, those assets and properties listed or described on Schedule
A attached hereto and made a part hereof.
TO HAVE AND TO HOLD the Purchased Assets unto Purchaser and its
successors and assigns, to its and their own use and benefit forever, and
Seller, for itself and its successors and assigns, covenants to and agrees
with Purchaser to warrant and defend the sale, transfer, assignment,
conveyance and delivery of the Purchased Assets unto Purchaser and its
successors and assigns, against all lawful claims and demands.
Seller hereby covenants and agrees with Purchaser that it will duly
execute and deliver all such deeds, bills of sale, endorsements, assignments,
drafts, checks, and other instruments of transfer as may be necessary or
helpful more fully to sell, transfer, assign and convey to and to invest in
Purchaser, all and singular, the Purchased Assets hereby sold, transferred,
assigned and conveyed by this Xxxx of Sale and Assignment of Assets.
The transfer evidenced by this Xxxx of Sale and Assignment of Assets
is made subject to and upon all of the terms, covenants, conditions,
representations and warranties set forth in the Agreement, and all of which
terms, covenants, conditions, representations and warranties are
incorporated herein by reference, and shall survive the delivery of this Xxxx
of Sale and Assignment of Assets.
All of the terms and provisions of this Xxxx of Sale and Assignment
of Assets shall be binding upon Seller and its respective successors and
assigns, and shall inure to the benefit of the Purchaser and its successors
and assigns.
IN WITNESS WHEREOF, Seller and Purchaser have caused the due
execution of this Xxxx of Sale and Assignment of Assets, under seal, as of the
day and year first above written.
GREAT LAKES HOME MEDICAL, INC.
By:______________________(SEAL)
- Seller -
LIFE CRITICAL CARE CORPORATION
By:______________________(SEAL)
- Purchaser -
-2-
SCHEDULE A
TO
XXXX OF SALE AND ASSIGNMENT OF ASSETS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
SCHEDULE 1.3
EXCLUDED ASSETS
1. Life Insurance Policy(ies) of Seller
2. Cash values of any Life Insurance Policy(ies) of Seller
3. Federal and Michigan corporate income tax deposits of Seller
4. Cash of Seller
5. Marketable Securities of Seller
6. Certificates of Deposit of Seller and other Cash Equivalents
7. Those assets owned by Seller which are used in the business operated
in Wisconsin and known as "Medwest" which is controlled by the
stockholders of Seller.
SCHEDULE 1.6
LIABILITIES ASSUMED
1. Ordinary and customary accounts payable incurred in the ordinary
course of business and miscellaneous other expenses which are not
material to the financial condition of Seller. The nature and
amount of such liabilities will be mutually agreed to by Seller and
Purchaser in good faith at Closing.
SCHEDULE 1.7
ALLOCATION OF PURCHASE PRICE
_______________________ $__________
_______________________ $__________
_______________________ $__________
Furniture, Fixtures, and
Equipment $__________
_______________________ $__________
Goodwill $__________
TOTAL: $__________
[to be completed by Purchaser and Seller prior to Closing]
SCHEDULE 2.7
CONTRACTS AND COMMITMENTS
[to be provided by Seller to Purchaser within thirty (30) days
following the execution of the Asset Purchase Agreement]
SCHEDULE 2.8
LITIGATION
1. Litigation pending in the Circuit Court of Marquette County, Michigan
and now in the Michigan Court of Appeals. Part of the relief requested
is injunctive relief in regards to an employee performing duties for
Seller. Seller is to provide further information regarding this case to
Purchaser.
SCHEDULE 2.10
INSURANCE
[to be provided by Seller to Purchaser within thirty (30) days
following the execution of the Asset Purchase Agreement]
SCHEDULE 2.13
LICENSES AND PERMITS
[to be provided by Seller to Purchaser within thirty (30) days
following the execution of the Asset Purchase Agreement]
EXHIBIT 4.1.1.2
ASSIGNMENTS OF LEASES
[TO BE SUPPLIED BY SELLER]
EXHIBIT 4.1.1.3
COVENANT NOT TO COMPETE
COVENANT NOT TO COMPETE made and entered into this ____ day
of __________, 1996, by and between _____________________________________
("Covenantor") and LIFE CRITICAL CARE CORPORATION, a Delaware corporation,
and its successors and assigns ("Purchaser").
WITNESSETH:
WHEREAS, Great Lakes Home Medical, Inc. (hereafter called "Seller")
is selling certain operating assets related to its home medical equipment
business (the "Business") to Purchaser in a transaction contemplated in an
Asset Purchase Agreement dated March 1, 1996 (hereafter called the
"Agreement") entered into by Seller and Purchaser; and
WHEREAS, the Covenantor has been a stockholder of Seller involved
in the operation of the Business and is familiar with the operation of the
Business generally; and
WHEREAS, the Covenantor agreed to enter into this Covenant Not to
Compete as an inducement to Purchaser to enter into the Agreement as a result of
which Agreement the Covenantor will materially benefit.
NOW, THEREFORE, the parties hereto do covenant and agree as follows:
1. COVENANT NOT TO COMPETE PAYMENT. Simultaneously with the
delivery of this Covenant Not to Compete, Purchaser has paid to Seller the
sum of One Dollar ($1.00) in cash, or certified check.
2. RESTRICTIVE COVENANT. In consideration for the entry into
the Agreement by the Purchaser, the Covenantor covenants that he will not,
directly or indirectly for a period of five (5) years from and after the date
hereof, own in whole or in part, manage, operate, control, or perform services
for any home health equipment business located within seventy-five (75) miles of
Escanaba, Michigan; provided, however, that Medwest shall be entitled to
continue to conduct business in Marshfield, Wisconsin and Wisconsin Rapids,
Wisconsin.
3. CONFIDENTIAL INFORMATION. For a period of ten (10) years
from and after the date hereof, the Covenantor shall hold all Confidential
Information (i.e., all trade secrets and proprietary and confidential
information regarding the Business of whatever nature, in whatever medium,
developed, owned or acquired by the Seller or the Covenantor, including
customers and prospective customers and suppliers but excluding information
which at the time of disclosure is in the public domain through no fault of,
or violation of law or breach of agreement by the Covenantor or which the
Covenantor can demonstrate he has lawfully obtained from a third party under
circumstances permitting its lawful disclosure and use which the Covenantor
reasonably believes has no obligation of confidentiality with respect
thereto) in confidence and not disclose, duplicate, communicate or transmit
the Confidential Information to any person or use or exploit any
Confidential Information for any purpose.
4. REASONABLENESS. The Covenantor hereby expressly agrees
that any competition by him with the Business in violation of the terms of this
Covenant Not to Compete would, among other things, materially impair the
Purchaser's future prospects and that the limitations set forth in Paragraph 2
above are reasonable, both as to time and geographic area. If,
notwithstanding the foregoing, the scope of any restriction contained in
Paragraph 2 is too broad to permit enforcement thereof to its full extent,
such restriction shall be enforced to the maximum extent permitted by law, and
Covenantor hereby agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.
5. INJUNCTIVE RELIEF. The Covenantor hereby recognizes that
in the event of his breach of any of the covenants hereunder Purchaser's
remedies at law for money damages would be inadequate, and, therefore, the
Covenantor hereby stipulates that Purchaser shall be entitled to injunctive
relief in the event of any breach of the Covenantor's covenants hereunder.
6. INTERPRETATION. This Covenant Not to Compete and the
provisions hereof shall in all respects be interpreted under and regulated
by the laws of the State of Michigan except for the choice of law rules
utilized in that jurisdiction.
7. AMENDMENT. This Covenant Not to Compete contains all the
understandings of the parties and shall not be altered or amended, except in a
writing signed by each of the parties hereto.
8. ATTORNEYS' FEES. The Covenantor hereby agrees that, in
the event of a breach of the Covenantor's covenants hereunder,
Purchaser shall be entitled to recover such costs, damages and reasonable
attorneys' fees as may be incurred on account of such breach from the
Covenantor.
-2-
9. BINDING EFFECT. This Covenant Not to Compete shall be
binding upon the parties and their respective successors and assigns.
10. COUNTERPARTS. This Covenant Not to Compete may be executed
in two or more counterparts, each of which, when taken together, shall
constitute one and the same original.
IN WITNESS WHEREOF, the parties have caused this Covenant Not to
Compete to be executed under seal on the day and year first above written.
COVENANTOR:
(SEAL)
[ONE SET TO BE EXECUTED BY EACH
STOCKHOLDER OF GREAT LAKES
HOME MEDICAL, INC.]
PURCHASER:
LIFE CRITICAL CARE CORPORATION
By: (SEAL)
-3-
EXHIBIT 4.1.1.6
OPINION OF COUNSEL FOR SELLER
[Letterhead of Vader & Vader]
______________, 1996
Life Critical Care Corporation
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxx X. Xxxxxx
Ladies and Gentlemen:
This opinion is delivered pursuant to Section 4.1.1.6 of the Asset
Purchase Agreement, dated March 1, 1996 (the "Agreement"), between Great
Lakes Home Medical, Inc. (the "Company"), Xxxxxxx Xxxxxxx, Xxxxx Xxxxxx and
Xxxxxx Xxxxxxxxx and Life Critical Care Corporation (the "Purchaser"). I have
acted as counsel to the Seller in connection with the Agreement and the
transactions contemplated thereby. Where a term that is defined in the
Agreement is used in this Opinion, the term has the same meaning set forth in
the Agreement, unless differently defined herein.
(1) In rendering the opinions set forth below, I have examined:
(A) The fully executed Agreement; and
(B) The Articles of Incorporation, By-Laws and minutes of
the corporate proceedings of the Company.
(2) In rendering the opinions set forth below, I have assumed:
(A) Each of the parties to the Agreement other than my
clients have the power and authority to: (i) enter into the Agreement and all
other agreements or documents required to be executed by it pursuant to the
Agreement; and (ii) perform all of its obligations under the Agreement and all
other agreements or documents required to be executed by it pursuant to the
Agreement;
(B) All required corporate actions and authorizations
other than on behalf of my clients have been completed; and
(C) The authenticity of all documents submitted as
originals, the genuineness of all signatures other than signatures on behalf
of my clients and the conformity to the originally executed documents of all
documents submitted to us as drafts or photocopies.
In rendering my opinions, whenever my opinion herein regarding
the existence or absence of facts is indicated to be based on my knowledge or
awareness, my opinion is intended to signify that during the course of my
representation of the Company no information has come to my attention which
would give me actual knowledge of the existence or absence of such facts. I
have not undertaken any independent investigation to determine the
existence or absence of such facts and no inference of further knowledge
should be drawn from my representation of the Company. As to various
questions of fact material to this Opinion, I have relied upon the truth
and completeness of the representations and warranties made by the Company as
the "Seller" in the Agreement and upon certifications executed by the Officers
and Directors of the Company. In addition, I have obtained from public
officials and from officers of the Company such other certificates and
assurances, and I have examined such corporate records, other documents
and questions of law, as I have considered necessary or appropriate for
purposes of this Opinion.
Based upon the foregoing, and subject to the limitations and
qualifications set forth herein, it is my opinion that, as of the date of this
letter:
(A) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the state of Michigan, and has
the corporate power to own all of its properties and assets and to carry on
its business as it is now being conducted.
(B) The Company has validly taken all necessary corporate
action to authorize it to execute and deliver the Agreement and to consummate
the transactions contemplated thereby; and the Agreement has been duly
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms.
(C) The execution and delivery of the Agreement by the
Company and the consummation by the Company of the transactions contemplated
on its part thereby do not and will not violate any provision of the Articles
of Incorporation or By-Laws of the Company.
-2-
(D) To my knowledge, all consents, authorizations,
orders or approvals of, and filings and registrations with, any governmental
commission, board or other regulatory body required for or in connection with
the execution and delivery of the Agreement by the Company and the
consummation by it of the transactions contemplated on its part thereby have
been obtained or made.
(E) To my knowledge, except as disclosed on any
Schedule to the Agreement, there is no claim, action, suit or legal,
administrative or other proceeding or governmental investigation, pending
or threatened against the Company or any of its properties which might result
in any material adverse change in the business or financial condition of the
Company.
(F) To the best of my knowledge, neither the execution
and delivery of the Agreement, nor the consummation of the transactions
contemplated thereby, conflicts with or does or will violate or result (with
the giving of notice and/or the passage of time) in a breach of any of the
terms, conditions or provisions of or constitute a default under, any lease,
mortgage, contract or other agreement binding on the Company or affecting its
properties. To the best of my knowledge, no consent or approval of any
public authority is required as a condition to the validity or enforceability
of the Agreement or any transaction contemplated thereby.
The foregoing Opinion is subject to the following
qualifications:
(A) The Opinion is subject to the operation and effect of
applicable bankruptcy, insolvency, moratorium, reorganization, receivership
or other similar laws, statutes or rules now or hereafter in effect
affecting the rights of creditors generally and the rights of taxing
authorities.
(B) The enforceability of the Agreement may require
enforcement by a court of equity, and such enforcement is subject to such
principles of equity as courts having jurisdiction may impose.
(C) In rendering my opinion regarding the good
standing of the Company, I have relied exclusively upon a Certificate
of Good Standing, dated __________ , 1996, issued by the Michigan Corporation
and Securities Bureau.
(D) My Opinion is based solely upon the laws of the
State of Michigan, and I am opining herein as to the subject transaction as
though the laws of the United States of America and the State of Michigan were
the only applicable laws. I assume no responsibility as to the applicability
thereto or affect thereon of the laws of any other state or jurisdiction. As
to matters governed or affected by laws of states other than the State of
Michigan, I have assumed that insofar as the substantive laws of any other
state may be
-3-
applicable to any opinions herein, such laws are identical to the
substance of laws of the State of Michigan applied by me herein.
This opinion is being furnished to you solely for your benefit and the
benefit of your counsel and may not be relied upon by, nor copies of it
delivered to, any other person or parties without my prior written consent.
Very truly yours,
VADER & VADER
By: _________________________
Xxxxxx X. Xxxxx, Partner
-4-
EXHIBIT 4.1.1.7
ARTICLES OF TRANSFER
BETWEEN
GREAT LAKES HOME MEDICAL, INC.
AND
LIFE CRITICAL CARE CORPORATION
THIS IS TO CERTIFY THAT:
FIRST: Great Lakes Home Medical, Inc., a Michigan
corporation (the "Transferor"), agrees to transfer all or substantially
all of its property and assets to Life Critical Care Corporation, a
Delaware corporation (the "Transferee") pursuant to the terms of an Asset
Purchase Agreement between the Transferor and the Transferee of even date
herewith.
SECOND: The Transferor is incorporated under the laws of the
State of Michigan, with a principal office located at
________________________________________.
THIRD: The Transferee is incorporated under the general
laws of the State of Delaware. The Transferee's address and principal place of
business is 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
FOURTH: The Transferor owns no interest in land, the title
to which could be affected by the recording of an instrument among the land
records.
FIFTH: The terms and conditions of the transaction set forth
in these Articles of Transfer were advised, authorized and approved by the
Transferor in the manner and by the vote required by its Articles of
Incorporation and Michigan law, in the following manner: The Board of
Directors of the Transferor by unanimous written consent adopted a resolution
declaring that the proposed transaction described herein was advisable, and
directed that the proposed transaction be submitted to the stockholders of the
Transferor for consideration and approval. The Shareholders of the
Transferor by unanimous written consent adopted a resolution declaring that
the proposed transaction described herein was approved.
SIXTH: The terms and conditions of the transaction set forth
in these Articles of Transfer were advised, authorized and approved by the
Transferee in the manner and by the vote required by its Charter and the laws of
the place of its incorporation, in the following manner: The Board of
Directors of the Transferee by unanimous written consent adopted a resolution
declaring that the proposed transaction was approved.
SEVENTH: The nature and amount of the consideration to
be paid by the Transferee to the Transferor for the assets to be
transferred by the Transferor pursuant to the Asset Purchase Agreement is
____________ Thousand Dollars ($___________).
IN WITNESS WHEREOF, on this day of __________________, 199__,
Transferor has caused these Articles of Transfer to be executed on its
behalf by its President and attested by its Secretary, and Transferee has
caused these Articles of Transfer to be executed on its behalf by its President
and attested by its Secretary, and each individual signing hereby
acknowledges, under penalties for perjury, that these Articles of Transfer are
the act of the party on whose behalf such individual is executing the
Articles of Transfer and that, to the best of his or her knowledge,
information and belief, the facts and matters set forth herein are true
in all material respects.
ATTEST: GREAT LAKES HOME MEDICAL, INC.
_______________________________ By:____________________________(SEAL)
, Secretary , President
ATTEST: LIFE CRITICAL CARE CORPORATION
_______________________________ By:____________________________(SEAL)
, Secretary , President
-2-
EXHIBIT 4.2.1.3
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made this _____ day
of _______________, 1996, by and between LIFE CRITICAL CARE CORPORATION, a
Delaware corporation ("Purchaser"), and GREAT LAKES HOME MEDICAL, INC., a
Michigan corporation ("Seller").
WHEREAS, pursuant to that certain Asset Purchase Agreement,
dated March 1, 1996, between the parties hereto (the "Purchase Agreement"),
Seller has agreed to assign and transfer to Purchaser certain assets,
properties and business of Seller;
NOW, THEREFORE, in consideration of the transfer to Purchaser
of the aforesaid assets, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Assignment. Seller hereby assigns and transfers to
Purchaser the following: All right, title and interest of Seller in, to and
under all contracts, leases, indentures, agreements, commitments and all
other legally binding arrangements, whether oral or written, to which
Seller is a party or by which Seller is bound ("Contracts") that are listed on
Schedule A hereto.
2. Assumption. Subject to the further terms of this
Agreement, effective on the date hereof, Purchaser, for itself and its
successors and assigns, hereby covenants and agrees to assume, and hereby does
assume, and agrees to discharge, perform, and observe, and to indemnify,
defend, and hold Seller harmless from and against the obligations of Seller,
as and to the extent arising from and after the date hereof, or pertaining
to any period subsequent to the date hereof, as are listed or described on
Schedule B, attached hereto and made a part hereof (the "Assumed Liabilities").
3. Indemnification. Seller shall defend, indemnify, and
hold Purchaser harmless against and from (a) all liability to any person,
firm, corporation, political subdivision, or other entity for any default
by Seller in connection with the Assumed Liabilities to the extent such
default occurs prior to the date hereof, and (b) any debt, liability,
obligation or contract not expressly assumed by Purchaser hereunder.
Purchaser shall defend, indemnify and hold Seller harmless against and from
any and all liability to any person, firm, corporation, political
subdivision, or other entity for any default by Purchaser in connection with
the Assumed Liabilities, to the extent such default occurs on or after the
date hereof. The indemnifications set forth herein are in addition to any
indemnifications set forth in the Purchase Agreement.
4. Representations of Seller. All representations and
warranties of Seller relating to the Assumed Liabilities contained in the
Purchase Agreement are hereby incorporated by reference herein. Seller
hereby further represents and warrants to
Purchaser that, as of the effective date of this Agreement, Seller has not
received notice of any default by Seller in connection with the Assumed
Liabilities, and to the best of Seller's knowledge, information and belief,
Seller is not in default in connection with the Assumed Liabilities.
5. Further Assurances. The parties agree that they
will take whatever action or actions are found to be reasonably necessary
from time to time to effectuate the provisions and intent of this Agreement,
and, to that end, the parties agree that they will execute any further
documents or instruments which may be necessary to give full force and effect
to this Agreement or to any of its provisions.
6. Binding Effect. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns.
7. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Michigan.
8. Miscellaneous. This Agreement is made and
entered into pursuant to the terms, conditions, and provisions of the
Purchase Agreement. Except as otherwise provided herein or except as otherwise
required by the context herein, all capitalized terms defined in the Purchase
Agreement shall have such defined meanings when used herein.
IN WITNESS WHEREOF, the parties hereto have caused the due
execution of this Assignment and Assumption Agreement, under seal, as of the
day and year first above written.
WITNESS: GREAT LAKES HOME MEDICAL, INC.
______________________________ By: ___________________________(SEAL)
- SELLER-
WITNESS: LIFE CRITICAL CARE CORPORATION
______________________________ By: ___________________________(SEAL)
- PURCHASER-
-2-
SCHEDULE A
TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
-3-
SCHEDULE B
TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
-4-
FIRST AMENDMENT
TO
ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment") is
executed this _____ day of June, 1996 to be made effective as of the 30th day of
May, 1996, by and among ABC Medical Supply, Inc., Xxxxxxx Xxxxxx, Xxxxxx
Xxxxxxxx and Life Critical Care Corporation.
RECITALS
The parties are parties to an Asset Purchase Agreement among them dated
March 1, 1996 (the "Agreement") and desire to amend the Agreement as set forth
herein.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF the mutual entry into this
Amendment by the parties hereto, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged by each party hereto,
the parties hereto hereby agree as follows:
Section 1. Amendment of Agreement. The provisions of the Agreement
are hereby amended as follows:
(a) Section 1.1 of the Agreement is hereby amended by deleting the date
"May 30, 1996" as it appears in the third line thereof and by inserting in lieu
thereof the date "November 1, 1996."
(b) Section 1.4 of the Agreement is hereby amended by
deleting the phrase "Four Million Five Hundred Thousand Dollars
($4,500,000)" as it appears in the fourth line thereof and by inserting in lieu
thereof the following: "Five Million Five Hundred Thousand Dollars
($5,500,000)."
(c) Section 1.5 of the Agreement is hereby amended by deleting clauses
(ii) and (iii) and by inserting the following in lieu thereof:
"(ii) the balance of the Purchase Price shall be paid as
follows:
(a) Three Million Seven Hundred Thousand Dollars
($3,700,000) of the Purchase Price, after being reduced by the
Deposit, shall be paid by wire transfer of immediately
available funds to such bank account as shall be designated by
the Seller or by delivery of a cashier's check to the Seller
at Closing; and
(b) One Million Eight Hundred Thousand ($1,800,000)
of the Purchase Price (the "Purchase Price Balance") shall be
paid by the issuance by Purchaser to Seller of that number of
shares of the common stock of Purchaser determined by dividing
the amount of the offering price per share of the Common Stock
into the Purchase Price Balance (the "Common Stock"), or, if
the IPO (as defined in Section 4.1.0 hereof) shall not have
been completed at Closing, in cash in lieu of the Common
Stock, at the sole discretion of Purchaser and subject to the
provisions of Section 4.1.0 hereof.
(iii) The Closing shall have been completed on or before
November 1, 1996. In addition, Purchaser hereby agrees that
if, for any reason other than a material misrepresentation by
Seller or a material change in the business of Seller, it does
not file with the Securities and Exchange Commission its
registration statement for an initial public offering on or
before August 15, 1996, then Seller shall be entitled to
terminate this Agreement and retain the Deposit. Conforming
changes are hereby made to any other affected Section of this
Agreement, including without limitation Sections 5.3, 7.2.2
and 7.2.3."
(d) Section 1.5(v) of the Agreement is hereby amended by adding the
following to the end of existing Section 1.5(v): "Any adjustments resulting from
this Section 1.5(v) shall be applied to increase or decrease, as applicable, the
Common Stock to be delivered pursuant to Section 1.5(ii)((b) hereof, and only if
a negative adjustment exceeds $1.8 million will such excess be applied to
reductions in the cash portion of the Purchase Price provided for in Section
1.5(ii)(a) hereof."
(e) Section 4.2.1.1 of the Agreement is hereby amended by deleting
existing Section 4.2.1.1 and by inserting in lieu thereof the following:
"4.2.1.1. The wire transfer or delivery of a cashier's
check in the amount of the cash portion of the Purchase
Price, less the amount of the Deposit, and the delivery of
the Common Stock."
(f) New Section 6.5 is hereby added as follows:
"SECTION 6.5. Lock-Up Agreements. Seller warrants that, if
required by the underwriter(s) for the IPO, it will enter into
any required "lock-up" agreement; provided, however, that
Seller will not be required to a lock-up of the Common Stock
for a period of time in excess of the shortest period of time
agreed to by any other principal stockholder of Purchaser."
-2-
(g) New Section 3.6 is hereby added as follows:
"SECTION 3.6 Material Misstatements or Omissions. Purchaser
(for purposes of this Section 3.6, the knowledge of Purchaser
shall mean the actual knowledge after reasonable diligence of
Xxx X. Xxxxxx, Vice President of Purchaser) has not knowingly
made any material misstatements of fact or omitted to state
any material fact necessary or desirable to make complete,
accurate , and not misleading every representation, warranty,
schedule, and agreement of Purchaser set forth, described or
referred to herein."
Section 2. Effect of this Amendment. Except as is hereinabove set
forth, the provisions of the Agreement shall hereafter remain in full force and
effect.
Section 3. This Amendment may be executed in two or more counterparts,
all of which when taken together shall constitute one and the same original.
Section 4. By their execution hereof, the parties hereto hereby agree
that this Amendment is voluntarily accepted for the purpose of making a full and
final compromise adjustment, settlement and waiver of any and all prior defaults
of the Agreement that either has alleged has occurred prior to the execution
hereof.
IN WITNESS WHEREOF, the parties have executed this Amendment the day
and year first above written.
ABC MEDICAL SUPPLY, INC.
By: _______________________________
Xxxxxx Xxxxxxxx, President
-3-
LIFE CRITICAL CARE CORPORATION
By: _______________________________
Xxx X. Xxxxxx, Vice President
____________________________________
Xxxxxxx Xxxxxx, Individually
____________________________________
Xxxxxx Xxxxxxxx, Individually
-4-
SECOND AMENDMENT
TO
ASSET PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment") is
executed this 5th day of September, 1996 to be made effective as of the 15th day
of August, 1996, by and among ABC Medical Supply, Inc., Xxxxxxx Xxxxxx, Xxxxxx
Xxxxxxxx and Life Critical Care Corporation.
RECITALS
The parties are parties to an Asset Purchase Agreement among them dated
March 1, 1996, as amended by a First Amendment to Asset Purchase Agreement dated
June 29, 1996 (as amended, the "Agreement") and desire to amend the Agreement as
set forth herein.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF the mutual entry into this
Amendment by the parties hereto, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged by each party hereto,
the parties hereto hereby agree as follows:
Section 1. Amendment of Agreement. The provisions of the Agreement
are hereby amended as follows:
(a) Section 1.1 of the Agreement is hereby amended by deleting the date
"November 1, 1996" as it appears in the third line thereof and by inserting in
lieu thereof the date "December 31, 1996."
(b) Section 1.1 of the Agreement is hereby further amended by
adding the following at the end of existing Section 1.1:
"Closing will take place simultaneously with the closing
of the IPO (as defined in Section 4.1.0 hereof)."
(c) Section 1.5 of the Agreement is hereby amended by deleting clauses
(ii) and (iii) and by inserting the following in lieu thereof:
"(ii) the balance of the Purchase Price shall be paid as
follows:
(a) Subject to the provisions of Section 1.5(ii)(b)
hereof, a portion of the Purchase Price shall be paid by the
issuance by Purchaser to Seller of 180,000 shares of the
common stock of Purchaser (the "Common Stock") which shall be
valued at the offering price per share in Purchaser's IPO (as
defined in Section 4.1.0 hereof) (e.g., if the offering price
per share in the IPO is $10.00, then the amount applied
against the Purchase Price shall be $1,800,000); and
(b) The balance of the Purchase Price, after being
reduced by the Deposit, shall be paid by wire transfer of
immediately available funds to such bank account as shall be
designated by the Seller or by delivery of a cashier's check
to the Seller at Closing; provided, however, that in no event
shall the cash portion of the Purchase Price (prior to being
reduced by the Deposit) be less than $3,700,000 and, if the
offering price per share in the IPO is greater than $10.00,
the number of shares to be issued to Seller pursuant to
Section 1.5(ii)(a) hereof shall be reduced to that number of
shares equal to $1,800,000 divided by the IPO price per share
(i.e., if the IPO price per share equals $11.00, the cash
portion of the Purchase Price would be $3,700,000, reduced by
the Deposit, and the number of shares issued pursuant to
Section 1.5(ii)(a) hereof would be 163,636 shares).
(iii) The Closing shall have been completed on or before
December 31, 1996. In addition, Purchaser hereby agrees that
if, for any reason other than a material misrepresentation by
Seller or a material change in the business of Seller, it does
not file with the Securities and Exchange Commission its
registration statement for an initial public offering on or
before November 1, 1996, then Seller shall be entitled to
terminate this Agreement and retain the Deposit. Any
adjustments to the Purchase Price shall be post-Closing
adjustments. Conforming changes are hereby made to any other
affected Section of this Agreement, including without
limitation Sections 5.3, 7.2.2 and 7.2.3."
(d) Section 1.5(v) of the Agreement is hereby amended by deleting the
following from the end of existing Section 1.5(v): "Any adjustments resulting
from this Section 1.5(v) shall be applied to increase or decrease, as
applicable, the Common Stock to be delivered pursuant to Section 1.5(ii)((b)
hereof, and only if a negative adjustment exceeds $1.8 million will such excess
be applied to reductions in the cash portion of the Purchase Price provided for
in Section 1.5(ii)(a) hereof."
(e) Section 2.4 of the Agreement is hereby amended by deleting the date
"September 30, 1995" from the first line thereof and inserting in lieu thereof
the date "June 30, 1996" and by deleting the following phrase from the existing
Section 2.4: ", except as may have been disclosed by Seller to Purchaser in
writing prior to Closing."
(f) Section 2.16 of the Agreement is hereby amended by adding
the following at the end of existing Section 2.16:
"Seller has no liabilities or obligations (whether absolute,
accrued, contingent or otherwise), except liabilities,
obligations or contingencies that are accrued or reserved
against in the June 30, 1996 audited financial statements of
Seller or that were incurred since the date of such statements
in the ordinary course of business and would not reasonably
likely have a material adverse effect on the business,
operations, properties, assets, condition (financial or
otherwise), prospects or results of operations of Seller."
-2-
(g) New Section 6.6 is hereby added as follows:
"SECTION 6.6. Registration Rights. Purchaser shall, at
closing, enter into a Registration Rights Agreement
pursuant to which Seller shall be granted certain
piggyback registration rights with respect to the Common
Stock."
Section 2. Effect of this Amendment. Except as is hereinabove set
forth, the provisions of the Agreement shall hereafter remain in full force and
effect.
Section 3. This Amendment may be executed in two or more counterparts,
all of which when taken together shall constitute one and the same original.
Section 4. By their execution hereof, the parties hereto hereby agree
that this Amendment is voluntarily accepted for the purpose of making a full and
final compromise adjustment, settlement and waiver of any and all prior defaults
of the Agreement that either has alleged has occurred prior to the execution
hereof.
IN WITNESS WHEREOF, the parties have executed this Amendment the day
and year first above written.
ABC MEDICAL SUPPLY, INC.
By: ________________________________
Xxxxxx Xxxxxxxx, President
LIFE CRITICAL CARE CORPORATION
By: ________________________________
Xxx X. Xxxxxx, Vice President
____________________________________
Xxxxxxx Xxxxxx, Individually
____________________________________
Xxxxxx Xxxxxxxx, Individually
-3-
FIRST AMENDMENT
TO
ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment") is
executed this _____ day of June, 1996 to be made effective as of the 30th day of
May, 1996, by and among Great Lakes Home Medical, Inc., Xxxxxxx X. Xxxxxxx,
Xxxxx Xxxxxx, Xxxxxx Xxxxxxxxx and Life Critical Care Corporation.
RECITALS
The parties are parties to an Asset Purchase Agreement among them dated
March 1, 1996 (the "Agreement") and desire to amend the Agreement as set forth
herein.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF the mutual entry into this
Amendment by the parties hereto, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged by each party hereto,
the parties hereto hereby agree as follows:
Section 1. Amendment of Agreement. The provisions of the Agreement
are hereby amended as follows:
(a) Section 1.1 of the Agreement is hereby amended by deleting the date
"May 30, 1996" as it appears in the third line thereof and by inserting in lieu
thereof the date "November 1, 1996."
(b) Section 1.4 of the Agreement is hereby amended by deleting
the phrase "Eight Million Seven Hundred Ninety Thousand Dollars
($8,790,000)" as it appears in the fourth line thereof and by inserting in lieu
thereof the following: "Six Million Four Hundred Fifty-One Thousand Two
Hundred and Fifty-Four Dollars ($6,451,254)."
(c) Section 1.5 of the Agreement is hereby amended by deleting
clause (i) and by inserting the following in lieu thereof:
"(i) The Purchase Price shall be paid as follows:
(a) Seventy-Five Percent (75%) of the Purchase Price,
after being reduced by the Deposit, shall be paid by wire
transfer of immediately available funds to such bank account
as shall be designated by the Seller or by delivery of a
cashier's check to the Seller at Closing; and
(b) Twenty-Five Percent (25%) of the Purchase Price
(the "Purchase Price Balance") shall be paid by the issuance
by Purchaser to Seller of that number of shares of the common
stock of Purchaser determined by dividing the amount of the
offering price per share of the Common Stock less the
underwriters' discount into the Purchase Price Balance (the
"Common Stock"), or, if the IPO (as defined in Section 4.1.0
hereof) shall not have been completed at Closing, in cash in
lieu of the Common Stock, at the sole discretion of Purchaser
and subject to the provisions of Section 4.1.0 hereof."
(d) Section 1.5(iv) of the Agreement is hereby deleted.
(e) Section 1.5(v) is hereby deleted and the following inserted in
lieu thereof:
"(v) As a result of an extension to this Agreement, Purchaser
has paid to Seller a deposit of $50,000 (the "Deposit") which
shall be applied to the cash portion of the Purchase Price at
Closing."
(f) New Section 1.5(vi) is hereby added to the Agreement as
follows:
"(iii) The Closing shall have been completed on or before
November 1, 1996, subject to any extension(s) thereto solely
as a result of market conditions for an initial public
offering by Purchaser. In addition, Purchaser hereby agrees
that if, for any reason other than a material
misrepresentation by Seller or a material change in the
business of Seller, it does not file with the Securities and
Exchange Commission its registration statement for an initial
public offering on or before August 15, 1996, then Seller
shall be entitled to terminate this Agreement and retain the
Deposit. Conforming changes are hereby made to any other
affected Section of this Agreement, including without
limitation Sections 7.2.2 and 7.2.3."
(g) Section 4.2.1.1 of the Agreement is hereby amended by deleting
existing Section 4.2.1.1 and by inserting in lieu thereof the following:
"4.2.1.1. The wire transfer or delivery of a cashier's
check in the amount of 75% of the Purchase Price, less the
amount of the Deposit, and the delivery of the Common
Stock."
-2-
(h) New Section 6.5 is hereby added as follows:
"SECTION 6.5. Lock-Up Agreements. Seller warrants that, if
required by the underwriter(s) for the IPO, it will enter into
any required "lock-up" agreement; provided, however, that
Seller will not be required to a lock-up of the Common Stock
for a period of time in excess of the shortest period of time
agreed to by any other principal stockholder of Purchaser and
further provided, however, that the period of any such lock-up
will not exceed the periods provided under Rule 144 and Rule
145 allowing for the resale of restricted stock."
Section 2. Effect of this Amendment. Except as is hereinabove set
forth, the provisions of the Agreement shall hereafter remain in full force and
effect.
Section 3. This Amendment may be executed in two or more counterparts,
all of which when taken together shall constitute one and the same original.
Section 4. By their execution hereof, the parties hereto hereby agree
that this Amendment is voluntarily accepted for the purpose of making a full and
final compromise adjustment, settlement and waiver of any and all prior defaults
of the Agreement that either has alleged has occurred prior to the execution
hereof.
IN WITNESS WHEREOF, the parties have executed this Amendment the day
and year first above written.
GREAT LAKES HOME MEDICAL, INC.
By: _________________________________
Xxxxxxx X. Xxxxxxx, President
-3-
LIFE CRITICAL CARE CORPORATION
By: _______________________________
Xxx X. Xxxxxx, Vice President
____________________________________
Xxxxxxx X. Xxxxxxx, Individually
____________________________________
Xxxxx Xxxxxx, Individually
____________________________________
Xxxxxx Xxxxxxxxx, Individually
-4-
SECOND AMENDMENT
TO
ASSET PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment") is
executed this 20th day of September, 1996 to be made effective as of the 15th
day of August, 1996, by and among Great Lakes Home Medical, Inc., Xxxxxxx X.
Xxxxxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxxxxxx and Life Critical Care Corporation.
RECITALS
The parties are parties to an Asset Purchase Agreement among them dated
March 1, 1996, as amended by a First Amendment to Asset Purchase Agreement dated
June 24, 1996 (as amended, the "Agreement") and desire to amend the Agreement as
set forth herein.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF the mutual entry into this
Amendment by the parties hereto, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged by each party hereto,
the parties hereto hereby agree as follows:
Section 1. Amendment of Agreement. The provisions of the Agreement
are hereby amended as follows:
(a) Section 1.1 of the Agreement is hereby amended by deleting the date
"November 1, 1996" as it appears in the third line thereof and by inserting in
lieu thereof the date "December 31, 1996."
(b) Section 1.1 of the Agreement is hereby further amended by
adding the following at the end of existing Section 1.1:
"Closing will take place simultaneously with the closing
of the IPO (as defined in Section 4.1.0 hereof)."
(c) Section 1.5(vi) is hereby amended by deleting existing
Section 1.5(vi) and by inserting the following in lieu thereof:
"(vi) The Closing shall have been completed on or before
December 31, 1996. Purchaser shall file its initial
registration statement to be used in connection with the IPO
no later than November 1, 1996. Conforming changes are hereby
made to any other affected Sections of this Agreement,
including without limitation Sections 7.2.2 and 7.2.3."
(d) Section 2.16 of the Agreement is hereby amended by adding
the following at the end of existing Section 2.16:
"Seller has no liabilities or obligations (whether absolute,
accrued, contingent or otherwise), except liabilities,
obligations or contingencies that are accrued or reserved
against in the Statements or that were incurred since the date
of the Statements in the ordinary course of business and would
not reasonably likely have a material adverse effect on the
business, operations, properties, assets, condition (financial
or otherwise), prospects or results of operations of Seller."
(e) Section 4.2.1.1 of the Agreement is hereby amended by deleting
existing Section 4.2.1.1 and by inserting in lieu thereof the following:
"4.2.1.1. The wire transfer or delivery of a cashier's
check in the amount of the cash portion of the Purchase
Price, less the amount of the Deposit, and the delivery of
the Common Stock."
(f) New Section 5.6 is hereby added as follows:
"SECTION 5.6 Cooperation. Seller agrees reasonably to
cooperate with Purchaser in its IPO (as defined in Section
4.1.0 hereof)."
(g) New Section 6.6 is hereby added as follows:
"SECTION 6.6. Registration Rights. Purchaser shall, at
closing, enter into a Registration Rights Agreement
pursuant to which Seller shall be granted certain
piggyback registration rights with respect to the Common
Stock."
Section 2. Effect of this Amendment. Except as is hereinabove set
forth, the provisions of the Agreement shall hereafter remain in full force and
effect.
Section 3. This Amendment may be executed in two or more counterparts,
all of which when taken together shall constitute one and the same original.
Section 4. By their execution hereof, the parties hereto hereby agree
that this Amendment is voluntarily accepted for the purpose of making a full and
final compromise adjustment, settlement and waiver of any and all prior defaults
of the Agreement that either has alleged has occurred prior to the execution
hereof.
-2-
IN WITNESS WHEREOF, the parties have executed this Amendment the day
and year first above written.
GREAT LAKES HOME MEDICAL, INC.
By: _______________________________
Xxxxxxx X. Xxxxxxx, President
LIFE CRITICAL CARE CORPORATION
By: ______________________________
Xxx X. Xxxxxx, Vice President
____________________________________
Xxxxxxx X. Xxxxxxx, Individually
____________________________________
Xxxxx Xxxxxx, Individually
____________________________________
Xxxxxx Xxxxxxxxx, Individually
