Exhibit 10.1a
AMENDMENT TO
STOCK PURCHASE AGREEMENT
This AMENDMENT TO STOCK PURCHASE AGREEMENT (this "Amendment"), dated as of
November 18, 2002, by and among PSS World Medical, Inc., a Florida corporation
(the "Seller"), Diagnostic Imaging, Inc., a Florida corporation (the "Company"),
Imaging Acquisition Corporation, a Delaware corporation (the "Buyer"), and
Platinum Equity, LLC, a Delaware limited liability company (the "Guarantor").
W I T N E S S E T H:
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WHEREAS, the Seller, the Buyer and the Guarantor are parties to that
certain Stock Purchase Agreement dated as of October 28, 2002 (the "Purchase
Agreement") pursuant to which the Buyer has agreed to purchase from the Seller
all of the outstanding shares of capital stock of the Company;
WHEREAS, it is anticipated that certain actions that are required to be
taken on or prior to the Closing Date will not be completed as of the Closing
Date, and the parties desire to amend the Purchase Agreement as provided herein
to make appropriate provision for the completion of such actions following the
Closing Date;
WHEREAS, it is desirable for the Company to be a party to this Amendment so
that it may have certain rights and obligations as provided herein; and
WHEREAS, the parties to the Purchase Agreement desire to make certain
amendments to the Purchase Agreement as provided herein, and the parties hereto
desire to enter into the agreements provided herein in connection with the
consummation of the transactions contemplated by the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective covenants and agreements hereinafter contained, the parties hereby
agree as follows:
A G R E E M E N T:
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1. Capitalized Terms. Capitalized terms used but not defined in this Amendment
shall have the meanings ascribed to them in the Purchase Agreement.
2. Effectiveness of Purchase Agreement. The parties hereby acknowledge and agree
that the Purchase Agreement became effective and binding on the parties upon
receipt by the Seller of a fairness opinion in form and substance acceptable to
the Seller as provided in Section 12.14 (Effectiveness of Agreement) of the
Purchase Agreement.
3. Closing Date; Definition of Net Assets. The parties acknowledge and agree
that, assuming that all of the conditions precedent set forth in Section 9
(Conditions Precedent to Performance by the Seller) and Section 10 (Conditions
Precedent to Performance of the Buyer)
of the Purchase Agreement are either satisfied or waived, the Closing (and
transfer of title to the Shares to the Buyer) will occur in the course of the
day on Monday, November 18, 2002 and that such date shall be the "Closing Date"
under the Purchase Agreement. The foregoing notwithstanding, the Seller and the
Buyer desire to provide that, upon the Closing, the economic benefits and
burdens of owning the Company will be deemed to have been transferred to the
Buyer effective as of 12:01 a.m. on the Closing Date rather than as of the close
of business on the Closing Date. To that end:
(a) the Seller represents and warrants to the Buyer that the Company did
not conduct any business operations after the close of business on Friday,
November 15, 2002 other than to conduct a physical inventory on November 16 and
17, 2002 for the purposes of determining the inventory of the Company;
(b) the Seller represents and warrants to the Buyer that, prior to 11:59
p.m. on November 17, 2002, the Seller took all of the actions required to be
taken by the Seller "on or prior to the Closing Date" pursuant to Section 5.8
(Certain Pre-Closing Transactions) of the Purchase Agreement;
(c) Seller and the Buyer agree that any checks payable to the Company
received after the close of business on Friday, November 15, 2002 will be
delivered to the Company on Monday, November 18, 2002 and will not be recorded
as received prior to such date;
(d) clause (ii) of Section 3.11 (Tax Matters) of the Purchase Agreement
shall be deleted in its entirety and replaced with the following:
(ii) all Taxes relating to periods ending on or before 12:01 a.m. on the
Closing Date owed by the Company or any of its Subsidiaries or to which the
Company or any of its Subsidiaries are liable under Treasury Regulations
ss. 1.1502-6 by virtue of having been a member of any affiliated group of
corporations (within the meaning of Section 1504(a) of the Code) of which
the Seller is the common parent, if required to have been paid, have been
paid;
; and
(e) the definitions of "Net Assets", "Net Cash" and "Pre-Closing Tax
Period" shall be deleted in their entirety and replaced as follows (and with a
corresponding change in the cross references to the term "Net Assets" in Section
5.16 (Covenants to Resolve Certain Disputes) and Section 5.19 (Responsibility
for Certain Insured Claims) of the Purchase Agreement to refer to the term "Net
Assets as of the Closing Date"):
"Net Assets as of the Closing Date" shall mean the amount equal to (i) the
total consolidated assets of the Company other than (a) intercompany
receivables, (b) income tax related assets, (c) deferred compensation
assets and (d) net cash and cash equivalents minus (ii) the total
consolidated liabilities of the Company other than (a) intercompany
payables, (b) income tax related liabilities, (c) deferred compensation and
401(k) plan liabilities of the Company and its Subsidiaries, and
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(d) indebtedness of the Company and its Subsidiaries (excluding any trade
payables but including, without limitation, funded debt, notes payable,
capital lease obligations, payment obligations under the Noncompetition
Agreements and any outstanding checks that were issued by the Company prior
to 11:59 p.m. on November 17, 2002 that have not cleared as of 11:59 p.m.
on November 17, 2002) as of 11:59 p.m. on November 17, 2002 in each case
determined in accordance with GAAP, but without giving effect to purchase
accounting adjustments related to the consummation of the transactions
contemplated hereby; provided, however, that in computing Net Assets as of
the Closing Date (and for such purposes only) (i) any assets transferred to
the Company or any Subsidiary of the Company as required by this Agreement
(other than cash and cash equivalents it being understood that such cash
and cash equivalents shall be excluded in computing Net Assets as of the
Closing Date as provided in Clause (d) above), including without limitation
Section 5.2, shall be deemed to have a book value of zero (0), (ii) if
either or both of the matters listed in Paragraphs 1 or 2 of Schedule 5.1
have been settled prior to the Closing, (A) the accrual for "legal and
professional fees" for the purposes of computing Net Assets as of the
Closing Date shall be reduced only by the lesser of $175,000 or the amount
paid in such settlement(s) and (B) no asset shall be recorded as the result
of any such settlement, (iii) no amount shall be included with respect to
cash held in the escrow account listed in Schedule 3.28. For the purposes
of illustration only, an example of the application of the definition of
Net Assets as of the Closing Date is attached as Schedule I hereto,
calculated as of 11:59 p.m. on September 27, 2002;
"Net Cash as of the Closing Date" shall mean net cash and cash equivalents
(excluding cash held in the escrow account listed in Schedule 3.28) of the
Company as of 11:59 p.m. on November 17, 2002 in accordance with GAAP (with
the understanding that such amount shall be the same as the net cash and
cash equivalents excluding cash held in the escrow account listed in
Schedule 3.28) of the Company as of the close of business on November 15,
2002);
"Pre-Closing Tax Period" shall mean the portion of all taxable periods
ending on or before the Closing Date through 12:01 a.m. on the Closing Date
and the portion of any Straddle Period ending as of 12:01 a.m. on the
Closing Date;
4. Definitions. The definition for the term "Transaction Documents" as defined
in Section 1 (Definitions) of the Purchase Agreement shall be deleted in its
entirety and replaced with the following:
"Transaction Documents" shall mean this Agreement and the Transitional
Services Agreement.
5. Section 2.3 (Purchase Price) of the Purchase Agreement. Section 2.3 (Purchase
Price) of the Purchase Agreement shall be deleted in its entirety and replaced
with the following:
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(a) The purchase price for the Shares being purchased hereunder shall be
Forty-Five Million Dollars ($45,000,000), minus any Net Asset Reduction and
any Net Cash Reduction (such amount, as so adjusted, the "Initial Cash
Payment"), and subject to further adjustment in accordance with Sections
2.4(e) and 2.5(e) below (such amount, as so further adjusted, the "Purchase
Price"), with the Initial Cash Payment, less the Escrow Amount (as defined
below), to be paid by the Buyer to the Seller at the Closing by wire
transfer of immediately available funds to such account as the Seller
shall, not less than two (2) Business Days prior to the Closing Date,
designate in writing to the Buyer.
(b) After the Closing, the Buyer shall transfer, on behalf of the Company,
a portion of the Initial Cash Payment equal to Five Hundred Twenty-Five
Thousand Dollars ($525,000) (the "Escrow Amount") to the Fleet Lessor, to
be held by the Fleet Lessor pursuant to the terms and conditions of a Cash
Collateral Deposit Agreement to be entered into by the Company and the
Fleet Lessor as of the date hereof (the "Cash Collateral Deposit
Agreement"). If any amount of cash collateral held pursuant to the terms of
the Cash Collateral Deposit Agreement is either (i) released to the Company
(a "Released Amount") or (ii) applied by the Fleet Lessor to any future
indebtedness, liability or obligation of the Company (an "Applied Amount"),
the Buyer shall, or shall cause the Company to, pay to the Seller an amount
(a "Returned Amount") equal to one-half of such Released Amount or such
Applied Amount within five (5) Business Days of its release. Within five
(5) Business Days of the termination of the Cash Collateral Deposit
Agreement, the Buyer shall, or shall cause the Company to, pay to the
Seller an amount equal to the Escrow Amount, plus any interest accrued on
the Escrow Amount under the terms of the Cash Collateral Deposit Agreement,
less any Returned Amounts previously paid to the Seller.
6. Estimated Net Assets as of the Closing Date. The statement of the Estimated
Net Assets as of the Closing Date referenced in part (a) of Section 2.4
(Purchase Price Adjustment) is attached hereto as Exhibit A. The parties hereby
acknowledge and agree that the Net Asset Reduction is an amount equal to
$420,000, the Net Cash Reduction is an amount equal to $8,000,000 and the
Initial Cash Payment is an amount equal to $36,580,000 (with the understanding
that the actual cash payment to be made at Closing shall be an amount equal to
$36,055,000, which amount takes into account the Escrow Amount described in
Section 5 of this Amendment).
7. Schedules. The Disclosure Schedules to the Purchase Agreement, as updated
pursuant to part (f) of Section 3.12 (Real Property), Section 3.16 (Licenses and
Permits) and Section 5.7 (Notice of Breach; Updating Schedules) of the Purchase
Agreement, are attached hereto as Exhibit B.
8. Assignments of Real Property Leases.
(a) The parties acknowledge that the leases for real property held by the
Seller and used primarily by the Company (each an "Assigned Property") that are
required to be assigned by the
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Seller to the Company prior to the Closing Date, as required by part (b) of
Section 5.3 (Consents and Approvals) of the Purchase Agreement, will not be so
assigned at or prior to the Closing Date. In order to permit the Closing to
occur without delay, the Buyer and the Guarantor are willing to proceed with the
Closing prior to the assignment of all such Assigned Properties only on the
conditions set forth in this Section 7. The Seller shall use commercially
reasonable efforts to work with the Buyer to assign such Assigned Property to
the Company and obtain a release from the landlord of the Seller regarding such
Assigned Property as promptly as practicable after the Closing Date. The Seller
shall bear all costs related to making such assignments and obtaining such
releases, subject to the limitation on such costs provided for under part (a) of
Section 5.3 (Consents and Approvals) of the Purchase Agreement. Until such time
as the assignment to the Company and release of the Seller regarding any
Assigned Property, the provisions of part (b) of Section 5.3 (Consents and
Approvals) to the Purchase Agreement shall apply, and the Buyer and the Company
shall, jointly and severally, indemnify, protect, defend and hold the Seller
harmless from any and all liabilities and obligations, including without
limitation liability for any lease payments, arising after the Closing Date,
related to or otherwise arising in connection with such Assigned Property;
provided, however, that the foregoing shall not affect or limit the Seller's
liability or obligation pursuant to Section 8 (Indemnification) of the Purchase
Agreement.
(b) To the extent that the Seller is named as a guarantor under any Lease
(a "Guaranteed Lease"), the Buyer and the Company shall use commercially
reasonable efforts to work with the Seller to obtain a release from the landlord
of the Seller regarding such Guaranteed Lease as promptly as practicable after
the Closing Date. The Seller shall bear all costs related to obtaining such
releases, subject to the limitation on such costs provided for under part (a) of
Section 5.3 (Consents and Approvals) of the Purchase Agreement. Until such time
as the Seller is released as a guarantor under any Guaranteed Lease, the Buyer
and the Company shall, jointly and severally, indemnify, protect, defend and
hold the Seller harmless from any and all liabilities and obligations, including
without limitation liability for any lease payments, arising after the Closing
Date, related to or otherwise arising in connection with such Guaranteed Lease;
provided, however, that the foregoing shall not affect or limit the Seller's
liability or obligation pursuant to Section 8 (Indemnification) of the Purchase
Agreement.
(c) To the extent that the Seller is named as a co-tenant under any Lease
(a "Joint Lease"), the Buyer and the Company shall use commercially reasonable
efforts to work with the Seller to obtain a release from the landlord of the
Seller regarding such Joint Lease as promptly as practicable after the Closing
Date. The Seller shall bear all costs related to obtaining such releases,
subject to the limitation on such costs provided for under part (a) of Section
5.3 (Consents and Approvals) of the Purchase Agreement. Until such time as the
Seller is released as a co-tenant under any Joint Lease, the Buyer and the
Company shall, jointly and severally, indemnify, protect, defend and hold the
Seller harmless from any and all liabilities and obligations, including without
limitation liability for any lease payments, related to or otherwise arising in
connection with such Joint Lease; provided, however, that the foregoing shall
not affect or limit the Seller's liability or obligation pursuant to Section 8
(Indemnification) of the Purchase Agreement.
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9. Use of Commercially Reasonable Efforts.
(a) The Buyer hereby waives the requirement that the Seller use
commercially reasonable efforts prior to the Closing to perform and/or obtain
the following: (i) the assignment of the assets, as required under part (a) of
Section 5.2 (Company Intellectual Property and Other Assets Necessary to the
Business of the Company or a Subsidiary but Owned, Licensed or Leased by the
Seller) of the Purchase Agreement; (ii) the Consents required to be obtained by
the Seller pursuant to part (a) of Section 5.3 (Consents and Approvals) of the
Purchase Agreement; and (iii) the assignment of the Seller's rights under
certain agreements, as required by part (b) of Section 5.3 (Consents and
Approvals) of the Purchase Agreement.
(b) Notwithstanding the foregoing, (i) the Seller hereby assigns, transfers
and delivers to the Company, all of its right title and interest in and to the
assets set forth on Schedule 5.2(a) to the Purchase Agreement, free and clear of
all Liens, with specific identification of such assets to be provided by the
Seller to the Buyer, and agreed to by the Buyer, within 60 days following the
Closing Date, (ii) following the Closing, the Seller shall (A) use commercially
reasonable efforts to assist the Buyer and the Company in obtaining all
necessary Consents pursuant to part (a) of Section 5.3 (Consents and Approvals)
of the Purchase Agreement (subject to the limitation on costs related to
obtaining such Consents provided for under part (a) of Section 5.3 (Consents and
Approvals) of the Purchase Agreement), and (B) within 60 days, assign to the
Company all of the Seller's rights under those Assigned Contracts that relate to
leases of personal property; provided that, to the extent the Seller is unable
to assign such Assigned Contracts within such time period, the provisions of
part (b) of Section 5.3 (Consents and Approvals) to the Purchase Agreement shall
still apply.
10. Section 5.2 (Company Intellectual Property and Other Assets Necessary to the
Business of the Company or a Subsidiary but Owned, Licensed or Leased by the
Seller) of the Purchase Agreement. The last sentence in part (b) of Section 5.2
(Company Intellectual Property and Other Assets Necessary to the Business of the
Company or a Subsidiary but Owned, Licensed or Leased by the Seller) of the
Purchase Agreement shall be deleted in its entirety and replaced with the
following:
To the extent such assignment or such equivalent rights have not been
obtained prior to the 75th day following the Closing Date, the Seller shall
pay to the Company the amount set forth opposite such lease or license on
Schedule 5.2(b) and the Seller's obligation to make the benefits thereof
available to the Company shall terminate.
11. Section 5.13 (Noncompetition and Employment Agreements) of the Purchase
Agreement. The last sentence of Section 5.13 (Noncompetition and Employment
Agreements) of the Purchase Agreement shall be deleted in its entirety and
replaced with the following:
At or prior to the Closing and effective as of the Closing Date, the Seller
shall assign its rights under the employment agreements listed on Schedule
5.13(a) (the "Employment Agreements") to the Buyer; provided that,
notwithstanding the foregoing, the Seller shall be responsible for, and
indemnify and hold the Buyer
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harmless from, any and all obligations pursuant to the employment
agreements listed on Schedule 5.13(b) other than the obligation to pay
compensation and benefits provided pursuant to paragraph 5 of each such
agreement.
12. Access to Books and Records of the Company. The following shall be added to
the Purchase Agreement as a new Section 6.9, entitled "Access to Company Books
and Records":
In connection with the action entitled In Re PSS World Medical, Inc.
Securities Litigation, Case No. 3:01-CV-795-J-16-TEM, currently pending in
the United States District Court for the Middle District of Florida,
Jacksonville Division (the "Litigation"), Seller has received Plaintiffs'
First Request for Production of Documents Addressed to All Defendants,
dated August 14, 2002 (the "Document Request"), a copy of which has been
provided to the Buyer, which calls for the production of a broad range of
documents maintained by the Seller and the Company at any of their
headquarters, branches or other locations, including storage facilities and
including, but not limited to, all documents (whether maintained in paper
form or electronically, including all back-up tapes) referring or relating
to the period July 1, 1999 through March 31, 2001 (the "Inquiry Period"),
concerning the proposed merger between the Seller and Xxxxxx Scientific
International, Inc., all financial statements prepared by the Seller
(including work papers), financial projections and business plans, all
accounting journals and registers (including the general ledger), all
customer records, all accounting controls and policies, sales and revenue
goals, discounts, rebates and refunds, purchase orders, invoices, bills of
lading and payment records, product installations, inventory, returns
(including credit memoranda), revenue recognition, any actual or potential
restatement, corporate policy manuals, communications with auditors, the
Seller's bonus program and emails. From and after the Closing Date and
until the Litigation is finally concluded, except as provided in the final
sentence of this Section 6.9, the Company shall maintain its books and
records relevant to the Inquiry Period in the ordinary course of business
and shall provide the Seller with reasonable access, upon prior written
notice, during normal business hours, to such books and records and permit
the Seller to make copies of such books and records, at the Seller's cost
and expense; provided that the Seller shall take such action as is deemed
necessary in the reasonable judgment of the Buyer to schedule such access
in a manner as to avoid disrupting the normal business of the Company. The
Seller shall use its best efforts to obtain copies of all books and records
of the Company necessary to respond to the Document Request or that may be
necessary or useful in connection with the Litigation so as to limit the
impact on the Company of assisting in the Seller's compliance with the
Document Request. In the event that the Buyer determines prior to the final
conclusion of the Litigation that it will not maintain any of the books and
records of the Company that may relate to the Litigation, the Buyer shall
return all such books and records to the custody of the Seller and the
Seller shall maintain such books and records until the Litigation is
finally concluded and shall use them purely for the purposes of the
Litigation.
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13. American Express Cards. The parties acknowledge that the American Express
purchasing and corporate cards that are used by the employees of the Company and
its Subsidiaries (the "AMEX Cards") will not be replaced by new purchasing
and/or corporate cards as of the Closing Date. In order to permit the Closing to
occur without delay, the parties are willing to proceed with the Closing prior
to the termination and replacement of the AMEX Cards. For a period of not longer
than 60 days following the Closing Date, the employees of the Company and its
Subsidiaries shall have the right to continue to use (and the Seller will take
no action inconsistent with such right) the AMEX Cards. The Buyer, the Company
and the Guarantor shall indemnify, protect, defend and hold the Seller harmless
from any and all liabilities and obligations related to or otherwise arising in
connection with any charges made on the AMEX Cards following the Closing Date.
The Buyer, the Company and/or the Guarantor shall reimburse the Seller within 5
Business Days after receipt of an invoice from the Seller setting forth amounts
due to the Seller pursuant to this Section 11.
14. Transitional Services Agreement. Exhibit A (Transitional Services Agreement)
to the Purchase Agreement shall be deleted in its entirety and replaced with
Exhibit C to this Amendment.
15. Miscellaneous.
(a) Internal References. All references in the Purchase Agreement to "this
Agreement," "herein" and "hereunder" and all similar references shall be deemed
to refer to the Purchase Agreement as amended by this Amendment.
(b) No Other Effect. This Amendment is entered into as permitted by Section
12.6 (Amendments; Waivers) of the Purchase Agreement. Except as expressly
amended hereby, the Purchase Agreement shall remain in full force and effect.
[The remainder of this page has been intentionally left blank.]
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[Signature page to Amendment to Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.
PSS WORLD MEDICAL, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
DIAGNOSTIC IMAGING, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
IMAGING ACQUISITION CORPORATION
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: Vice President
PLATINUM EQUITY, LLC
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
