EXHIBIT 10(a)
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this 19th day of July, 1996, by
and between Xxxxx Xxxxx, dba Edina Pharmacy, (the "Seller") and Health Outcomes
Management, Inc., a Minnesota corporation, (the "Purchaser").
RECITALS:
A. The Seller is engaged in the business of operating a pharmacy
through an unincorporated business doing business as Edina
Pharmacy, with its operations at 0000 Xxxx 00xx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000 (the "Business").
B. Seller desires to sell and Purchaser desires to purchase
selected assets used by Seller in the operations of the
Business.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
PURCHASE OF ASSETS
1.1 Purchase and Sale of the Assets. Purchaser hereby purchases from
Seller and Seller hereby sells to Purchaser, on the terms and subject to the
conditions set forth in this Agreement, of the assets and properties of Seller
which are related to or used in the operation of the Business. The assets and
properties to be purchased and sold pursuant to this Agreement (collectively the
"Assets") are as follows:
a. The equipment, machinery, furnishings, inventory and other
assets owned by Seller and used in the operation of the Business, as
set forth in Schedule 1.1(a);
b. All of the customer lists, lists of suppliers, telephone
numbers, and other information reasonably necessary for Purchaser to
carry on the Business in the ordinary course on and after the date of
closing; and
c. General intangible assets of the Business which include
goodwill and the Business name "Edina Pharmacy".
1.2 Lease Agreement. Seller shall assign all of his rights and interest
in the building lease pursuant to a Lease Agreement with Xxxxxx X. Xxxxxx
("Xxxxxx") dated September 19, 1993 ("Lease Agreement"). Seller shall use his
best efforts to obtain consent from Xxxxxx for assigning his rights under the
Lease Agreement to Purchaser.
ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price and Allocation. The purchase price for the Assets
(the "Purchase Price") shall be as follows:
a. The Purchase Price for the inventory shall be the value for
agreed-upon salable inventory as of July 19, 1996. The salable
inventory subject to this Agreement shall be determined upon a physical
inventory conducted by the parties on the morning of July 19, 1996
adjusted for the cost basis of inventory sold during the course of
business on July 19, 1996. The agreed-upon value paid by Purchaser for
the inventory shall be reduced by Purchaser's assumption of Seller's
remaining obligation pursuant to paragraph 2.1(c);
b. The Purchase Price of Thirteen Thousand and no/100 Dollars
($13,000.00) shall be paid for all of the equipment and furnishings of
the Business; and
c. Purchaser hereby agrees to assume Seller's remaining
obligation under a Promissory Note dated September 19, 1993 payable to
Xxxxxx ("Promissory Note").
The Purchase Price shall be allocated among the Assets in a manner to
be mutually agreed upon by the Seller and Purchaser. Each party agrees not to
assert, in connection with any tax return, audit or other similar proceeding,
any allocation of the Purchase Price which differs from the allocation to which
the parties shall have agreed.
2.2 Payment of Purchase Price. The Purchase Price, with the exception
of the Promissory Note, shall be paid by cash payments delivered to Seller in
the following amounts:
a. $12,000 at Closing; and
b. The balance in twelve (12) equal monthly installments. Each
subsequent payment shall be due on or before the fifteenth day of each
of the twelve succeeding months, beginning with the first month
following the date of closing.
These payments will be made promptly by Health Outcomes Management,
Inc. and collection of the same are guaranteed personally by W. A. Xxxxx, Jr. W.
A. Xxxxx, Jr. shall be entitled to assert against Seller any and all defenses
available to the Purchaser pursuant to the terms of this Agreement.
ARTICLE 3
ASSUMPTION OF LIABILITIES AND ACCOUNTS RECEIVABLE
3.1 Limitation on Assumption of Liabilities. Seller will transfer the
Assets to Purchaser at the Closing free and clear of all liens and encumbrances,
except the equipment leases listed in attached Schedule 3.1, which Purchaser
shall assume by virtue of its purchase of the Assets. Purchaser also agrees to
assume Seller's obligation pursuant to the Promissory Note. Purchaser shall not
assume responsibility for any other debts, liabilities or obligations of Seller
of any kind or nature whatsoever other than those specifically pursuant to this
paragraph.
3.2 Accounts Receivable. It is understood and agreed between the
parties that the Seller shall be entitled to the receipt of all accounts
receivable existing as of the Closing, including: all unremitted credit card
receipts of Seller which may be on hand as of the Closing and related to the
operation of the Business prior to the date of Closing, all payments due on
account as of the Closing and all payments due from insurance, Medicare or other
providers. Purchaser agrees to remit to Seller at the place specified in this
Agreement any payments received from outstanding accounts as of the close of
business on July 19, 1996.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 Clear Title and Conditions. Seller warrants and represents to
Purchaser that he has good and marketable title to the Assets subject to this
Agreement free and clear of any and all liens, encumbrances, security devices,
security interests, financing statements, mortgages, pledges, conditional sales
agreements, or claims of any kind, nature or description whatsoever, other than
those listed in Schedule 3.1. All of the Assets to be purchased and sold
hereunder have been maintained in good operating condition. However, it is
specifically agreed between the parties that the Purchaser has been given the
opportunity to inspect the Assets fully, and it purchases said Assets in "as is"
condition and without any representations or warranties by the Seller.
4.2 Litigation. Seller has no knowledge of any claim, suit, proceeding
or investigation at law or equity which is pending or threatened against or
affecting the Seller, the Assets or the Business.
4.3 Taxes. All federal, state, county, local sales and use, income, and
employment taxes and assessments attributable to the Assets and/or the Business
which are due and payable by Seller have been duly reported and are fully paid.
4.4 Books and Records. It is further agreed and understood between the
parties that the Seller has provided the Purchaser access to the Seller's
financial records, patient medical records and tax returns relating to the
Business. Purchaser has independently ascertained the value and expected
profitability of the Business and Purchaser does not rely upon any
representations or warranties by the Seller as to the future profitability of
the Business.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER
5.1 Due Incorporation. The Purchaser is duly organized, validly
existing and in good standing under the laws of Minnesota and has all power and
authority to carry on its business and to own, lease, use and operate its
properties. Purchaser is not subject to any agreement, commitment or
understanding which restricts or may restrict Purchaser's performance of its
obligations under this Agreement.
5.2 Due Authorization. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part of
Purchaser. This Agreement and any documents and agreements referred to have been
or will be duly and validly authorized, executed and delivered by Purchaser and
the obligations of the Purchaser hereunder and thereunder are or will be valid
and legally binding, and this Agreement and the documents and agreements
referred to are or will be enforceable in accordance with its/their terms.
5.3 No Breach. Purchaser has full corporate power and authority to
purchase, assume and accept the Assets from the Seller, and the execution and
delivery of this Agreement and consummation of the transactions contemplated
hereby will not conflict with, violate or result in any breach or default of any
term or provisions of the Articles of Incorporation, By-Laws or other governing
instruments of Purchaser and will not violate any other restriction of any kind
or character to which Purchaser is subject.
ARTICLE 6
CONDITIONS PRECEDENT TO PURCHASER' OBLIGATIONS
6.1 Necessary Licensing. The Purchaser's obligations pursuant to this
Agreement shall be conditioned upon the following:
a. Obtaining the appropriate pharmacy licenses necessary to
operate the Business. Purchaser shall undertake all efforts reasonably
necessary to obtain the required licenses.
b. Obtaining Xxxxxx'x consent to Seller's assignment of the
Lease Agreement.
c. Obtaining Xxxxxx'x consent to an extension agreement of the
Lease Agreement. Said extension to be on terms which are suitable to
the Purchaser.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by Purchaser. Purchaser agrees to indemnify Seller
and hold Seller harmless from and against any loss, cost, expense, liability, or
other damage resulting from any matter relating to or arising out of the
Business from occurrences subsequent to the date of Closing.
7.2 Indemnification by Seller. Seller agrees to indemnify Purchaser and
hold Purchaser harmless from and against any loss, cost, expense, liability or
other damage resulting from any matters relating to or arising out of the
Business from occurrences prior to the date of Closing.
7.3 Right of Offset. Seller agrees that Purchaser shall have the right
to offset any unpaid liabilities as of July 19, 1996, which are not expressly
assumed by Purchaser, against all payments of the Purchase Price due to Seller,
in any order determined by the Purchaser. This right to offset shall be in
addition to all other remedies available to Purchaser pursuant to this Agreement
or under applicable law.
ARTICLE 8
CLOSING
8.1 Date of Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall be held on July 19, 1996 at the offices of
Xxxx & Xxxxxxx, A Professional Association, 00 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000 or at such place as may be mutually agreed upon by
the parties and shall be as of the close of business on such day.
8.2 Documents Delivered by Seller. At the Closing, Seller will deliver
to Purchaser the following:
a. Xxxx of Sale to all of the Assets, duly executed by Seller;
b. Releases or terminations of any financing statements or
security agreements, if any, there be;
c. Consent from Xx. Xxxxxx X. Xxxxxx regarding substitution of
Purchaser as obligor on Promissory Note;
d. Consent from Xxxxxx regarding assignment of the Lease
Agreement;
e. Inventory evaluation and tabulation as of July 19, 1996;
and
f. Clearance letter from Xxxxxx indicating that Seller is
current with respect to any and all obligations owed to Xxxxxx.
8.3 Documents Delivered by Purchaser. At the Closing, Purchaser will
deliver to Seller the following:
a. The initial cash payment portion of the Purchase Price; and
b. The assignment and assumption agreement related to
Purchaser's assumption of Seller's liabilities and obligations set
forth in Schedule 3.1.
ARTICLE 9
PERFORMANCE FOLLOWING THE CLOSING
9.1 Further Acts and Assurances. The parties will undertake the
following acts subsequent to closing:
a. Seller agrees that after the date of Closing he will do all
such further acts and things and execute, acknowledge and deliver to
Purchaser any and all documents, as may be necessary or desirable to
vest title to the Assets in Purchaser.
b. Purchaser agrees to remit to Seller at the place specified
in this Agreement any payments received from outstanding accounts as of
the close of business on July 19, 1996.
9.2 Covenant Not to Compete. During the period of three (3) years from
and after the date hereof, Seller covenants and agrees that he will not, without
the Purchaser's prior consent, directly or indirectly, within a three (3) mile
radius of the Business, engage in the operation or ownership of a pharmacy,
become employed by a pharmacy or perform services as a pharmacist.
9.3. Non-Solicitation. During the period of three (3) years from and
after the date hereof, Seller covenants and agrees that he will not, whether for
his own account or for the account of any other person, directly or indirectly
interfere with the Purchaser's relationship with or endeavor to divert or entice
away from the Purchaser any person who or which at any time during the two years
preceding the date hereof obtained Seller's services or the services of the
Business.
9.4 Consulting Agreement. Seller agrees to perform consulting services
for Purchaser for a period of up to four (4) weeks following the date of
Closing. Purchaser shall pay One Thousand and no/100 Dollars ($1,000.00) for
each week Seller performs such consulting services.
ARTICLE 10
MISCELLANEOUS
10.1 Survival of Representations, Warranties and Covenants. Each of the
representations, warranties, covenants, agreements and indemnities of the
parties contained in this Agreement and in any Exhibit, Schedule, or document
delivered by or on behalf of the parties shall survive the closing.
10.2 Employees. Nothing contained in this Agreement shall constitute or
be construed as a contract of employment between Purchaser and any employees of
Seller. Seller shall pay to the current employees all accrued wages up to the
date of this Agreement.
10.3 Sales and Use Taxes. Seller agrees to pay in full any and all
sales and use taxes, as and when the same may be due, which may be imposed upon
or arise out of the transfer of the Assets to the Purchaser and the consummation
of the transactions contemplated hereby.
10.4 Notices. All notices and other communications provided for
hereunder shall be in writing and shall be personally delivered, telecopied or
mailed or sent to each party, at their address as set forth below or at such
other address or in such other manner as may be designated by such party in
written notice to each of the other parties.
If to Seller: Xxxxx Xxxxx
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
If to Purchaser: Xxxxxxx X. Xxxxx, Jr.
Health Outcomes Management, Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
10.5 Entire Agreement. This Agreement, together with the Exhibits and
Schedules attached hereto, contains the entire agreement of the parties hereto
and supersedes all prior or contemporaneous agreements and understandings, oral
or written, between the parties hereto with respect to the subject matter
hereof.
10.6 No Waiver; Remedies Cumulative. No failure on the part of a party
hereto to exercise and no delay in exercising any right hereunder shall operate
as a waiver thereof nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. Remedies herein provided are cumulative and not exclusive of any
other remedies provided by law.
10.7 Specific Performance. Seller acknowledges and agrees that the
Assets are unique and that Purchaser will have no adequate remedy at law if
Seller shall fail to perform any of his obligations hereunder. In such event,
Purchaser shall have the right, in addition to any other rights he may have, to
specific performance of this Agreement.
10.8 Amendments. No purported amendment, modification or waiver of any
provision of this Agreement or any Schedule or Exhibit hereto or document
referred to herein or contemplated hereby shall be binding or effective unless
the same shall be in writing and signed by all the parties.
10.9 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns. Nothing in this Agreement is
to be construed as an authorization or right of any party to assign their rights
or delegate their duties under this Agreement without the prior written consent
of the other parties hereto.
10.10 Costs. Each party hereto shall pay their own costs and expenses
incurred in connection with negotiating, preparing and consummating the
transactions contemplated by this Agreement, including but not limited to
attorneys and accountants fees. Notwithstanding the foregoing, the inventory
evaluation cost will be split equally by the parties (estimated cost $150 each).
10.11 Headings. The headings of the articles, sections and subsections
of this Agreement are intended for the convenience of the parties only and shall
in no way be held to explain, modify, construe, limit, amplify or aid in the
interpretation of the provisions hereof.
10.12 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day, month and year first above written.
PURCHASER: SELLER:
HEALTH OUTCOMES MANAGEMENT, INC. ------------------------------------
Xxxxx Xxxxx
By
----------------------------------
Xxxxxxx X. Xxxxx, Jr.
Its President
GUARANTY
I, Xxxxxxx X. Xxxxx, Jr., hereby personally guarantee Seller's
collection of the installment payments to be made by Purchaser pursuant to
paragraph 2.2(b) of this Agreement. This guaranty of collection shall extend
only to those payments listed in Paragraph 2.2(b). No other guarantees, whether
express or implied, oral or written, are being made.
IN WITNESS WHEREOF, this guaranty has been duly exercised by the
undersigned as of the day, month and year first above written.
------------------------------------
Xxxxxxx X. Xxxxx, Jr.
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1(a) - List of Fixed Assets
Schedule 3.1 - Liabilities and Obligations Assumed
SCHEDULE 1.1(a)
Edina Pharmacy
0000 X. 00xx Xx.
Xxxxxxxxxxx, XX 00000
FIXTURES AND EQUIPMENT
Outside
"Edina Pharmacy" sign (4 feet x 20 feet approx.) - lighted
East Side
27 feet wall shelving unit with lighted valance
West Side
12 feet wall shelving
6 feet wall shelving unit with lighted valance
8 feet wall pegboard
1 chair
Middle Section
8 feet metal gondola section
1 display unit
9 feet drug counter unit with formica top - metal shelving on both sides
1 Sharp cash register
1 Rolodex file
1 Unitrex electronic adding machine
1 tape dispenser
Prescription Section - South Side
18 feet "Prescription" sign overhead
15 feet Prescription counter formica top
12 feet prescription door shelving (Xxxxxxxx type)
3 feet metal wall shelving
4 feet wood wall shelving
1 Kenmore refrigerator
1 metal prescription file unit
1 Xxxxxx safe
Infonet computer system (owner F Xxxxxx Co. - month-by-month charge)
IBM electric typewriter
1 calculator
Phone system - 4 in pharmacy; 1 in office
Assorted pharmacy books and manuals
Tape dispensers
Radio
Assorted pharmacy implements
Assorted tools
Metro alarm burglar system
Pharmacy Storeroom
1 Norand computer system (older model)
3 feet wood shelving
Pharmacy sink
1 torsion balance
Miscellaneous pharmacy implements
1 microwave oven
15 feet wall shelving, wood and metal
1 step ladder
Label dispensers
Waste container
1 Panasonic commercial vacuum cleaner
Rolodex files
Bulk scale
Office Upstairs
3 chairs
1 wood desk
2 drawer metal file
1 adding machine
1 sharp TV security unit
Storeroom Basement
1 metal prescription file unit
Assorted shelving and metal pegs
SCHEDULE 3.1
LIABILITIES AND OBLIGATIONS ASSUMED
1. Promissory Note dated September 19, 1993 to Xxxxxx X. Xxxxxx
