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EXHIBIT 2.5
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into as of the
1st day of December, 1998 (the "Effective Date"), by and between B and B
Leasing, a general partnership of Xxxxxxx X. Xxxxx and Xxxxxx X. Xxxxx
(collectively, "Seller"), on the one hand, and Children's Comprehensive Services
of California, Inc., a California corporation ("Buyer"), on the other hand; with
Seller and Buyer sometimes referred to herein as "Party" or "Parties" as the
case may be.
RECITALS
A. Seller is engaged in the business of owning or xxxxxxx certain
vehicles (the "Business") used by Somerset, Inc., a California
corporation, all of the issued and outstanding stock of which
Buyer will acquire concurrently herewith.
B. Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, the vehicles on the terms and subject to the
conditions set forth in this Agreement.
C. Concurrently herewith and in connection with its acquisition
of the assets, properties, and rights hereby, Buyer will enter
into: (i) that certain Stock Purchase Agreement with Somerset,
Incorporated, a California corporation, of which the partners
of Seller are shareholders; (ii) that certain Agreement of
Purchase and Sale and Joint Escrow Instructions with BMB
Enterprises, a California general partnership, of which the
partners of Seller are general partners; (iii) that certain
Asset Purchase Agreement with Behavioral Medicine Professional
Services, Inc., a California corporation, of which the
partners of Seller are shareholders.
NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual agreements and covenants contained herein, the Parties hereto agree as
follows:
AGREEMENT
1. Purchase of Assets. Seller agrees to transfer, convey, and deliver
to Buyer all of its right, title, and interest in and to the assets set forth on
the attached Exhibit "A" (the "Assets"). Except as disclosed on Schedule 1
attached hereto, the Assets shall be transferred, conveyed, and delivered to
Buyer free and clear of all Encumbrances.
2. Purchase Price. The purchase price for the Assets shall be Three
Hundred Thousand and NO/100 Dollars ($300,000.00) ("Purchase Price"), payable by
the transfer of said sum to Seller in immediately available funds at the
Closing.
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3. Allocation of Purchase Price. The Parties shall allocate the
Purchase Price among the Assets and agree to use such allocation in reporting
the purchase and sale of the Assets for federal and state income tax purposes.
4. Excluded Liabilities. Except as shown on Schedule 4 attached hereto,
Buyer shall not assume, or otherwise be responsible for, any liabilities or
obligation of Seller, whether actual or contingent, matured or unmatured,
liquidated or unliquidated, known or unknown, with respect to either the
Business or the Assets (collectively, "Excluded Liabilities"), including without
limitation, any claim or liability with respect to any prior creditors or tax
obligations of the Business or the Assets.
5. Seller's Representations and Warranties. Seller, jointly and
severally, represents and warrants to Buyer that the statements contained in
this Paragraph 5 are correct and complete as of the Effective Date and will be
correct and complete as of the Closing Date both generally with respect to the
Business and specifically with respect to the Assets (as though made then and as
though the Closing Date were substituted for the Effective Date throughout this
Paragraph 5):
A. Capacity; Execution; Validity; Binding Effect. Seller has
the full power and capacity necessary to enter into and perform his or its
obligations under this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Seller and
constitutes the legal, valid, and binding obligation of Seller. Seller has read
all provisions of this Agreement in full, has reviewed such provisions with
counsel, and understands each of such provisions and voluntarily agrees to be
bound thereby.
B. Noncontravention. Neither the execution, delivery, or
performance of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which Seller is subject,
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement affecting the Assets. No notice to,
filing with, or any authorization, consent, or approval of any governmental
entity or other person is necessary in connection with the execution, delivery,
and performance by Seller of this Agreement and the consummation of the
transactions contemplated hereby.
C. Brokers' Fees. Seller does not have any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
D. Title to Assets. Seller has good and marketable title to,
or a valid interest in, each item listed on Exhibit "A", in each case free and
clear of all Encumbrances, except as disclosed on Schedule 1 attached hereto. As
of the Closing Date, each listed Asset is in good condition and repair, and none
of such listed Assets require any repair or replacement; it being understood
that the Assets otherwise are being sold "AS-IS".
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E. Legal Compliance. Seller has complied with all Legal
Requirements applicable to him or his, or it or its, conduct, ownership, use,
occupancy, or operation in respect of the Assets; nor, in this regard, has
Seller received notice of any violation of any Legal Requirements.
F. Tax Matters. Seller has filed all Tax Returns that were
required to be filed, and all Taxes due and payable by Seller have been paid in
full.
G. Litigation. There is no action, suit, proceeding,
investigation, claim, or order pending or threatened against Seller with respect
to the Business or proposed business of Seller, or to which Seller otherwise is
a party, which if adversely determined would have Adverse Consequences on
Seller, his or its assets, including the Assets, or the Business, before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction; nor is there any reasonable basis for any such action,
suit, proceeding, investigation, claim, or order. Seller is not subject to any
injunction, judgment, order, decree, or ruling of any court or governmental
entity. Seller has not received any opinion or memorandum of legal advice from
legal counsel retained by Seller or any Seller to the effect that any is
exposed, from a legal standpoint, to any liability which may have Adverse
Consequences on the Business or proposed business of Seller or the Assets.
Seller is not engaged in any action to recover monies due him or it or for
damages sustained by him or it.
H. Environmental, Health, and Safety Matters. Seller is in
strict compliance with all Environmental, Health, and Safety Requirements, and
Seller possesses all required permits, licenses, and certificates, and has filed
all notices or applications, required thereby. Seller has not received any
written notice, report or other information (and there is no reasonable basis
for any such notice, report, or information) regarding any actual or alleged
violation of Environmental, Health, and Safety Requirements, or any liabilities
or potential liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise), including any investigatory, remedial or corrective obligations,
relating to Seller or its facilities arising under Environmental, Health, and
Safety Requirements. No facts, events, or circumstance with respect to the past
or present operations, business, or facilities of Seller exist which reasonably
could be expected to interfere with or prevent continued compliance with, or
could give rise to any common law or statutory liability or otherwise form the
basis of any claim, action, suit, proceeding, hearing, or investigation against
or involving Seller or its business under any Environment Health, and Safety
Requirement based upon any such fact, event, or circumstances, including,
without limitation, liability for cleanup costs, personal injury, or property
damage.
I. No Undisclosed Liabilities. Seller does not have any debt,
liability, or obligation of any nature (whether accrued, absolute, contingent,
direct, indirect, perfected, inchoate, unliquidated, or otherwise and whether
due or to become due) arising out of any transaction entered into at or prior to
the Effective Date, or any transaction, series of transactions, action or
inaction at or prior to the Effective Date, or any state of facts or condition
existing at or prior to the Effective Date (regardless of when such debt,
liability, or obligation is asserted), including, but not limited to, debts,
liabilities, and obligations on account of Taxes or governmental charges or
penalties, interest or fines thereon or in respect thereof, except to the extent
specifically reflected and accrued for or reserved against in the financial
statements.
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J. Licenses and Permits. Seller holds all permits, licenses,
franchises, and approvals of governmental authorities necessary or required for
its current conduct, ownership, use, occupancy, or operation in respect of its
business and properties, real and personal, all of which are listed on Schedule
5.J attached hereto ("Permits"). Seller is in compliance with such Permits, all
of which are in full force and effect, and neither Seller nor any Seller has
received any notice thereof to the contrary.
K. No Omissions and No Misrepresentations. Neither the
representations and warranties of Seller nor any other document or written
information provided to Buyer by or on behalf of Seller in connection with the
transactions contemplated hereby contain any untrue statement of any material
fact or omit to state any material fact necessary to make any such statement,
warranty, or representation not misleading. There is no material fact which has
not been disclosed to Buyer which would have Adverse Consequences or could
reasonably be anticipated to have Adverse Consequences on the Assets or the
business conducted by Seller or Seller's ability to consummate the transactions
contemplated hereby.
6. Buyer Representations. Buyer hereby represents and warrants to
Seller as follows:
A. Organization and Authority. Buyer is a corporation validly
existing under the laws of the State of California. Buyer has all requisite
power and authority to enter into this Agreement and to perform the transactions
contemplated hereby.
B. Authorization and Enforceability. Prior to the Closing, all
internal action on the part of Buyer necessary for the authorization, execution,
delivery and performance by Buyer of this Agreement and the consummation of the
transactions contemplated hereby will have been taken. This Agreement is a
legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, except as limited by bankruptcy, insolvency or other
laws affecting creditors' rights generally or by the availability of equitable
remedies.
7. Taxes and Prorations. Seller shall pay any or all Transfer Taxes
arising out of the transfer of the Assets hereunder.
8. Closing. This Agreement shall close concurrently with the closing of
the Stock Purchase Agreement (the "Closing"). Buyer and Seller shall make the
following deliveries on the date of Closing:
A. Buyer's Closing Conditions. Buyer's obligation to purchase
the Assets is subject to the fulfillment on or before the Closing of the
following conditions and contingencies:
(1) The representations and warranties herein made by
Seller shall be true and correct when made and as of the Closing and Seller
shall have delivered to Buyer a Certificate of Seller dated as of the Closing to
all such effects;
(2) Seller shall deliver a Xxxx of Sale in the form
attached hereto at Exhibit "B" transferring title to the Assets to Buyer; and
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(3) All conditions to the obligations of the parties
to the Stock Purchase Agreement shall have been satisfied or waived.
B. Seller's Closing Conditions. The obligations of Seller to
sell the Assets at the Closing is subject to the fulfillment on or before the
Closing of the following conditions:
(1) Buyer's representations and warranties set forth
herein shall be true and correct when made and as of the Closing and Buyer shall
have delivered a Certificate of Buyer dated as of the Closing to all such
effects; and
(2) All conditions to the obligations of the parties
to the Stock Purchase Agreement shall have been satisfied or waived.
9. Indemnification; Right of Set-Off.
9.1 Indemnification by Seller. From and after the Closing,
Seller shall indemnify, defend and hold harmless Buyer and its successors and
assigns against and from all Damages (as defined below) sustained or incurred by
any of them resulting from or arising out of or by virtue of; (i) any inaccuracy
in or breach of any representation or warranty made by Seller in this Agreement;
(ii) any breach by Seller of, or failure to comply with, any of its covenants or
obligations under this Agreement (including, without limitation, the obligations
under this Section 9); (iii) any federal, state, or local tax liability of
Seller arising out of any period prior to the Closing, or (iv) any Damages
arising from any claims against the Business or the Assets, to the extent the
same arose, accrued or were otherwise incurred prior to the Closing.
9.2 Indemnification by Buyer. From and after the Closing,
Buyer shall indemnify, defend and hold harmless Seller and his successors and
permitted assigns against and from all Damages sustained or incurred by Seller
resulting from or arising out of or by virtue of; (i) any inaccuracy in or
breach of any representation or warranty made by Buyer in this Agreement; (ii)
any breach by Buyer of, or failure by Buyer to comply with, any of its covenants
or obligations under this Agreement (including, without limitation, Buyer's
obligations under this Section 9); or (iii) any Damages arising from Buyer's use
of the Assets following the Closing.
9.3 Right of Set-off. If, with respect to any matter arising
under this Agreement, in Buyer's good faith belief Buyer is entitled to
indemnification, reimbursement or payment from Seller hereunder, then, in
addition to any other remedies which Buyer may have available to it, Buyer shall
have the right to set-off the entire amount thereof against the amounts, if any,
then due under the Real Estate Note.
10. Survival. The covenants, representations, warranties, and
indemnities contained herein shall survive the Closing.
11. Assignment. Neither party shall have the right to assign this
Agreement without the written consent of the other party, which consent shall
not be unreasonably withheld.
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12. Incorporation of Exhibits. All Exhibits and Schedules referenced in
this Agreement shall be incorporated fully herein and shall be given legal
effect as if included within the text of this Agreement.
13. Final Agreement. This Agreement together with any documents
expressly referred to herein, constitutes the final agreement of the parties
concerning the matters referred to herein, and supersedes all prior agreements
and understandings among the Parties. The caption headings of the sections of
this Agreement are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
14. Applicable Law. This Agreement and all documents executed and
delivered in connection herewith and the rights and obligations of the parties
hereto and thereto shall be governed by and construed in accordance with the
laws of the State of California.
15. Inurement. This Agreement and the other documents executed and
delivered in connection herewith shall be binding upon and inure to the benefit
of the parties hereto and their respective personal and legal representatives,
heirs, successors, and permitted assigns.
16. Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same
agreement.
17. Severability. It is intended that each paragraph of this Agreement
shall be treated as separate and divisible, and in the event that any paragraphs
are deemed unenforceable, the remainder shall continue to be in full force and
effect so long as the primary purpose of this Agreement is unaffected.
18. Legal Fees. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, default, misrepresentation, or breach in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees, expenses, and other
costs incurred in that action or proceeding in addition to any other relief to
which such party may be entitled. The right to such attorneys' fees, expenses,
and costs shall be deemed to have accrued upon the commencement of such action
and shall be enforceable whether or not such action is prosecuted to judgment.
19. Further Cooperation. Each party hereto covenants and agrees to
prepare, execute, acknowledge, file, record, publish, and deliver to the other
parties hereto such other instruments, documents, and statements, including
without limitation instruments and documents of assignment, transfer, and
conveyance, and take such other action as may be reasonably necessary or
convenient in the discretion of the requesting party to carry out more
effectively the purposes of this Agreement.
20. Modifications. This Agreement may not be altered, amended, changed,
waived, terminated, or modified in any manner unless the same shall be in
writing and signed by or on behalf of the party to be bound.
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21. Definitions. Each undefined capitalized term herein shall have the
meaning ascribed thereto in the Stock Purchase Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
BUYER:
CHILDREN'S COMPREHENSIVE SERVICES OF
CALIFORNIA, INC., a California corporation
By:
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Name:
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Title:
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SELLER:
B AND B LEASING, a general partnership of
Xxxxxxx X. Xxxxx and Xxxxxx X. Xxxxx
By:
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Xxxxxxx X. Xxxxx, individually and as a
general partner of B and B Leasing
By:
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Xxxxxx X. Xxxxx, individually and as a
general partner of B and B Leasing
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