ASSET PURCHASE AND SALE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 1st day of June, 2000, by and among ▇▇▇▇ Medical Services, Inc.,
a Connecticut corporation, having its principal place of business at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ #▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Seller") and
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, LLC, a New York limited liability company, having its principal
place of business at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
("Buyer").
WHEREAS, Seller owns and operates a health care supply business that
supplies medical supplies, nutritional supplements, institutional cleaning
products, linens and everyday products to nursing homes, other institutional
facilities, and private persons (the "Business").
WHEREAS, Seller leases office and warehouse space located at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ #▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, in connection with the
Business (the "Facility").
WHEREAS, Seller desires to sell, assign, transfer and convey, and Buyer
desires to purchase, substantially all of the assets of Seller used in
connection with the Business upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements, representations and warranties herein contained, the receipt and
sufficiency which are hereby acknowledged, Buyer and Seller (collectively, the
"Parties") hereby agree as follows.
SECTION 1. SALE AND PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES.
1.1 Assets to be Sold. Subject to the terms and conditions of this
Agreement, and in reliance upon the representations, warranties, covenants and
agreements of the Parties set forth in this Agreement, Seller hereby agrees to
sell, assign, transfer, and convey to Buyer at the Closing (as defined in
Section 2.4), and Buyer agrees to purchase and accept from Seller at the Closing
all of the assets owned and used by Seller in connection with the Business,
other than the Excluded Assets (as defined in Section 1.2), (the "Assets")
including, but not limited to:
(i) all furnishings, furniture, machinery, equipment,
supplies, and other personal property (collectively the
"Tangible Property") including, without limitation, the
Tangible Property identified in Schedule 1.1(i) and
intellectual property rights ("Intellectual Property");
(ii) all licenses, permits, certificates, consents,
approvals, waivers and other authorizations, whether
issued or granted by any governmental authority or by
any other person, if any, set forth in Schedule 1.1(ii),
to the extent transferable (collectively the
"Licenses");
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(iii) all inventory at the Facility (the "Inventory")
determined as set forth in Section 1.3;
(iv) all rights, title and interest of the Seller in and to
all real property leases, including, without limitation,
Seller's right, title and interest in and to all
structures, fixtures and improvement, for the Facility;
(v) all rights of the Seller in, to and under the contracts,
licenses, commitments, purchase orders, sales orders and
other agreements of the Seller;
(vi) all business records, files, invoices, contracts,
supplier lists, consultants' reports, budgets and
projections and other similar data relating to the
Business, all files and records pertaining to employees
employed at the Facility, employee benefit plans, all
labor and employment agreements, and all other records
necessary for the continuing operation of the Facility;
(vii) all stationary, purchase orders, forms, labels, shipping
material, catalogues, sales literature, art work,
photographs and advertising and promotional literature
and other selling materials owned by the Seller;
(viii) all assets of the foregoing nature purchased or acquired
by Seller between the date hereof and the Closing Date
(as defined in Section 2.4);
(ix) all rights in Seller's equipment leases for equipment
located at the Facility or used in connection with the
Business and all service contracts for such equipment
leases; and
(x) all rights to support and maintenance contracts related
to the Facility.
13.1 Excluded Assets. Notwithstanding anything set forth above or in
any other provisions of this Agreement, none of the following assets ("Excluded
Assets") are to be included in the Assets:
(i) Seller's cash, accounts receivable, notes receivable,
and/or any other assets described on Schedule 1.2;
(ii) any minute books or stock records of Seller;
(iii) any rights of Seller under any contract or lease to
which Seller is a party other than the Assumed Contracts
(as defined in Section 3.11);
(iv) any equity interest in Seller;
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(v) Income tax returns, financial and accounting records and
supporting materials for all periods of Seller;
(vi) Claims for income tax refunds and income tax credits and
other refunds and credits due Seller;
(vii) Rights of set-off, counterclaim and/or recoupment
respecting any obligation or liabilities of Seller which
are not assumed by Buyer under the terms of this
Agreement; and
(viii) All other assets not used primarily in connection with
the Facility.
1.3 Physical Inventory Count; Valuation.
(i) Seller will conduct a physical count of inventory at the
Facility as of June 2, 2000 (the "Physical Inventory
Count"). At Buyer's discretion, and upon Buyer's prior
notice to Seller, Buyer may be present during the
Physical Inventory Count to count and verify the Assets.
Buyer agrees to waive any disputes it may have arising
from the Physical Inventory Count if Buyer is not
present, for any reason, during the Physical Inventory
Count.
(ii) Seller will deliver to Buyer on the Closing Date a
statement setting forth the results of the Physical
Inventory Count (the "Inventory Statement").
(iii) Seller will prepare and deliver to Buyer within two (2)
weeks after Closing Date, but not later than one (1)
month after Closing Date, a statement setting forth the
value of the inventory described on the Inventory
Statement (the "Inventory Value"). The Inventory Value
shall be determined for all items on the Inventory
Statement at the invoice price Seller most recently paid
for such type of item.
(iv) If Buyer notifies Seller in writing within two (2) weeks
after its receipt of the Inventory Value that it
disputes any price used in the calculation of the
Inventory Value and describes such dispute in reasonable
detail, Seller will make available to Buyer, within five
(5) business days after Buyer's request, copies of the
invoices used in preparing the Inventory Value. If Buyer
fails to notify Seller of a dispute as to the Inventory
Value as herein described, the Inventory Value shown on
the statement provided by Seller pursuant to Section
1.3(iii) shall be final and be used for the purposes of
Section 2.1 below.
1.4 Liabilities. Except for liabilities and obligations of Seller
pursuant to the Assumed Contracts, and other liabilities and obligations assumed
by Buyer as set forth in this Agreement, which Buyer agrees to assume and
perform (the "Assumed Liabilities"), Buyer shall
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not assume, and Seller shall remain responsible for any and all liabilities and
obligations of Seller. The only obligations set forth on Schedule 3.4 that Buyer
is assuming are the obligations to FMCC, ▇▇▇▇▇▇ Financial and GFI, which
obligations in the aggregate do not exceed one hundred thirty thousand dollars
($130,000).
SECTION 2. PURCHASE PRICE AND CLOSING.
2.1 Purchase Price. In consideration for the sale, transfer, assignment
and conveyance of the Assets, Buyer hereby agrees to pay Seller Three Hundred
Thousand Dollars ($300,000.00), plus the Inventory Value (collectively the
"Purchase Price"). The Purchase Price shall be paid as follows:
(i) Forty Thousand Dollars ($40,000.00) by bank or certified
check payable to the order of Seller and delivered to
Seller at Closing or by wire transfer made during the
Closing, subject to adjustment as provided in Section
2.2 below;
(ii) Buyer's execution and delivery of a note in the amount
of Two Hundred Sixty Thousand Dollars ($260,000.00) (the
"Note"), in the form attached as Exhibit A; and
(iii) Buyer payment of the Inventory Value in full by bank or
certified check payable to the order of Seller and
delivered to Seller within 90 days after the Closing
Date.
2.2 Proration of Expenses. Personal property taxes, equipment lease
payments, security deposits on leased equipment and leased premises and other
payments of like nature shall be adjusted between Seller and Buyer as of the
Closing Date. All revenue generated at the Facility prior to the Closing Date,
including cash received prior to the Closing Date, bills rendered for services
provided prior to the Closing Date, and accounts receivable shall belong to
Seller. All operating expenses of the Business incurred and billed to Seller
prior to the Closing Date, shall be the obligation of Seller. Such operating
expenses shall include, without limitation, rent, equipment leases, employee
salaries and benefits, professional fees, taxes, insurance, supplies, and any
and all ordinary or extraordinary costs incurred in connection with the
operation of the Facility.
2.3 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Assets, in accordance with Schedule 2.3 hereto. Seller and Buyer agree
to prepare and file all federal, state, local and foreign income tax returns and
other filings reflecting the transactions contemplated hereunder on a basis
consistent with such allocation, and to cooperate with each other in good faith
in preparing any and all statements required to be included in the tax returns,
reflecting such allocation. Each party is solely responsible for filing its own
tax returns and paying all taxes in connection therewith.
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2.4 The Closing. The closing of the transactions contemplated hereby
(the "Closing") shall occur at a place to be mutually agreed upon by the
Parties, on or about June 13, 2000 (the "Closing Date").
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SECTION 3. SELLER'S REPRESENTATIONS AND WARRANTIES.
Seller represents and warrants to Buyer as follows:
3.1 Organization and Authority; No Conflict.
3.1.1 Good Standing. Seller is a corporation, duly organized,
validly existing and in legal existence under the laws of the State of
Connecticut.
3.1.2 Power and Authority Relative to the Asset Purchase.
Seller has full corporate power and authority to enter into this
Agreement and perform its obligations hereunder. This Agreement has
been duly authorized and approved by all necessary corporate action of
Seller, has been duly and validly executed and delivered by Seller and
is a valid and legally binding agreement of Seller, enforceable against
Seller in accordance with its terms. The execution, delivery, and
performance of this Agreement by Seller and the consummation of the
transactions contemplated hereby will not violate any provision of the
certificate of incorporation or by-laws of Seller. The execution,
delivery and performance of this Agreement will not conflict with,
violate or constitute a default under or result in any breach of any
agreement, indenture, deed of trust, mortgage, instrument, or lease.
3.2 Certificate of Incorporation and Bylaws. Correct and complete
copies of Seller's certificate of incorporation and bylaws, each as amended to
date, have been furnished to Buyer. Such certificate of incorporation and bylaws
will not be amended prior to the Closing Date.
3.3 Financial Statements. Seller has made available to Buyer financial
statements (including balance sheets and statements of revenue and expense and
tax returns) relating to the operations of the Seller for the fiscal year ended
June 30, 1999. All of the foregoing financial statements (collectively, the
"Financial Statements") fairly present the financial condition and results of
operations of the Seller on the dates and for the financial periods then ended,
in accordance with generally accepted accounting principles which have been and
will be applied on a basis consistent with prior periods.
3.4 No Undisclosed Liabilities. Except as set forth in Schedule 3.4,
and to the best of Seller's knowledge, the Business is not subject to any
liability, whether absolute, contingent, accrued or otherwise (including but not
limited to any pension and any other fringe benefit liabilities of any nature),
which is not shown or which is in excess of amounts shown or reserved for in the
Financial Statements or incurred or accrued since the date of the Financial
Statements in the ordinary course of business, or which is not disclosed in this
Agreement or in the Schedules attached hereto. The obligations being assumed by
Buyer under Schedule 3.4 do not exceed one hundred thirty thousand dollars
($130,000).
3.5 Litigation. Except as set forth in Schedule 3.5, and to the best of
Seller's knowledge, there are no actions, suits or legal, administrative,
arbitration or other proceedings
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pending against Seller or the Facility before or by any governmental department,
commission, board or entity which could have a material adverse impact upon the
operation of the Business.
3.6 Compliance with Law and Licensure. Except as set forth on Schedule
3.5, the Facility, to the best of Seller's knowledge, is operating in accordance
with applicable state and federal laws and regulations.
3.7 Title. Seller has good and marketable title to the Assets, free and
clear of all liens other than inventory liens that will be discharged with the
proceeds of the transaction contemplated hereby and liens relating to
obligations being assumed by Buyer. No person has any option or any right
capable of becoming an option for the purchase of the Business or any Assets.
3.8 Tangible Property. To the best of Seller's knowledge, each material
piece of Tangible Property used in the Facility is in good and usable working
condition, and is suitable for the purposes for which it is used. To the best of
Seller's knowledge, no material piece of Tangible Property has been removed from
the Facility, except for Tangible Property which has worn out and is being
scrapped or abandoned and except for inventory and supplies consumed in the
ordinary course of business. All Tangible Property is being transferred to Buyer
"as is."
3.9 Leases. Seller has delivered or shall deliver to Buyer a true,
complete and accurate list of all material leases, subleases, conditional sales
agreements or other title retention agreements (collectively the "Leases") to
which Seller is a party or by which the Seller or the Assets are bound. There is
no existing default or event of default or event which with notice or lapse of
time or both would constitute a default under the Lease. Seller enjoys peaceful
and undisturbed possession under the Lease.
3.10 Licenses. To the best of Seller's knowledge, there is no License
required to be maintained by Seller according to any federal, state or local
law, regulation or ordinance for the conduct of Facility which has not already
been duly obtained. To the best of the Seller's knowledge, the consummation of
this Agreement will not result in any such revocation, cancellation, suspension
or modification thereof.
3.11 Assumed Contracts. Schedule 3.11 lists all material contracts,
agreements and instruments, including all modifications amendments and waivers
thereto, to which Seller is a party or by which the Facility or any of the
Assets are bound (collectively, the "Assumed Contracts"), complete copies of
which have been made available to Buyer. Except as set forth in Schedule 3.11,
(a) all Assumed Contracts are in full force and effect and valid and enforceable
in accordance with their respective terms except as such may be subject to
bankruptcy and other creditors' rights laws and laws limiting injunctive and
other equitable relief; (b) Seller is not in default under any such Assumed
Contract and no event, occurrence, condition or act now exists or, upon the
consummation of the transactions contemplated by this Agreement will exist
which, with the giving of notice or the lapse of time or both, would give rise
to a default thereunder on the part of Seller or, to the best of Seller's
knowledge, any other party thereto or would give rise
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to the right of any party or parties thereto to cancel or terminate thereunder;
and (c) there are no anticipated cancellations or terminations of any such
Assumed Contracts.
3.12 Books and Records. The books and records of the Facility made
available to Buyer set forth in all material respects all material transactions
affecting the Facility, and such books and records, to the best of Seller's
knowledge, are complete and correct in all material respects.
3.13 Taxes. To the best of Seller's knowledge, no state of facts exists
or has existed which would constitute grounds for the assessment against Buyer,
whether by reason of transferee liability or otherwise, of any liability for any
taxes attributable to periods prior to the Closing Date by any taxing authority
with regard to Seller's income or operations, Assets or any of the transactions
contemplated by this Agreement. Seller will have paid, on or before the Closing
Date, or made adequate provision for payment of all taxes attributable to the
ownership or operation of the Facility for periods prior to the Closing Date.
3.14 Absence of Certain Changes or Events. Since June 30, 1999, Seller
has not, other than in the ordinary course of business consistent with past
practice: (i) sold or committed to sell or assigned, transferred or leased any
of the Assets; (ii) subject to Section 11, suffered any damage, destruction or
loss, not fully covered by insurance, which materially and adversely affects the
business, operations, assets or properties of the Facility; or (iii) entered
into any material transaction with respect to the Assets.
3.15 Employee Benefits. Seller has made available to Buyer a list of
all benefit plans of Seller within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended to date, ("Benefit Plans") of
which Seller has actual knowledge. Seller does not have a direct or indirect,
actual or contingent, liability with respect to any Benefit Plan. Neither the
Facility or the Assets are subject to any lien under ERISA or the Internal
Revenue Code (the "Code"). Each Benefit Plan is in material compliance with its
terms and the requirements of applicable law.
3.16 Employees. Schedule 3.16 attached hereto contains a true, correct
and complete list of all employees of Seller and a summary of all benefits
provided to such employees as of the date hereof. To the best of Seller's
knowledge, there is no litigation or administrative proceeding pending or
threatened with regard to any current or former employee, nor has Seller any
reason to know of circumstances that might lead to such a dispute. To the best
of its knowledge, Seller is in material compliance with all federal, state or
other applicable law, respecting employment and employment practices, terms and
conditions of employment and wages and hours, and has not and is not engaged in
any unfair labor practice.
3.17 Brokers and Finders. Seller has not dealt with any broker, finder
or similar agent with respect to transaction contemplated by this Agreement.
3.18 Disclosure. To the best of Seller's knowledge, no representation,
warranty, covenant or agreement by Seller in this Agreement and no statement
contained in any document,
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including without limitation, financial statements, certificates, or other
writing furnished or to be furnished to Buyer or any of its representatives
pursuant to the provisions hereof contains or will contain any untrue statement
of material fact or omits or will omit to state any material fact necessary in
order to make the statements made herein or therein not misleading. To the best
of Seller's knowledge, all copies of contracts, agreements and other documents
delivered to Buyer or any of its representatives pursuant hereto are true,
complete and accurate and reflect the complete understanding among the parties
thereto.
SECTION 4. BUYER'S REPRESENTATIONS AND WARRANTIES.
Buyer represents and warrants to Seller as follows:
4.1 Organization and Authority; No Conflict.
4.1.1 Good Standing. Buyer is a corporation, duly organized,
validly existing and in good standing under the laws of the State of
New York. Buyer has all requisite corporate power and corporate
authority to own its properties and carry on its business as now
conducted. Buyer has filed, or will promptly file, with the Secretary
of the State of the State of Connecticut a fully-completed application
for authority to do business as a foreign corporation in the State of
Connecticut.
4.1.2 Power and Authority Relative to the Asset Purchase.
Buyer has full corporate power and authority to enter into this
Agreement and perform its obligations hereunder. This Agreement has
been duly authorized and approved by all necessary corporate action of
Buyer, has been duly and validly executed and delivered by Buyer and is
a valid and legally binding agreement of Buyer, enforceable against
Buyer in accordance with its terms. The execution, delivery, and
performance of this Agreement by Buyer and the consummation of the
transactions contemplated hereby will not violate any provision of the
certificate of incorporation or by-laws of Buyer. Nor will execution,
delivery and performance of this Agreement conflict with or violate any
provision of law, or violate or constitute a default under or result in
any breach of any agreement, indenture, deed of trust, mortgage,
instrument, lease, order, judgment, writ, injunction, decree, license,
permit, or rule or regulation of any court or governmental authority
applicable to Buyer.
4.2 Brokers and Finders. Buyer has not dealt with any broker, finder or
similar agent with respect to transaction contemplated by this Agreement.
4.3 Compliance with Law. Buyer has not received any notice from any
governmental authority that it is in violation of any material federal, state or
local statute, ordinance, judgment, decree, order or governmental rule,
regulation, policy or guideline applicable to Buyer, including without
limitation laws concerning claims for payment for health care goods or services,
in a manner which is likely to materially adversely affect its condition
(financial or otherwise) or the transactions contemplated by this Agreement.
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4.4 Litigation. There is no litigation, proceeding or investigation
pending or threatened against Buyer or affecting any of their properties, rights
or assets in any court or before any governmental department, commission, board
or entity which is likely to materially and adversely affect its condition
(financial or otherwise) or its assets, its business or the transaction
contemplated by this Agreement.
SECTION 5. SURVIVAL.
The representations and warranties contained in this Agreement, shall,
except as otherwise provided herein, survive the Closing for a period of twelve
(12) months after the Closing Date.
SECTION 6. CONDITIONS TO BUYER'S OBLIGATIONS.
The obligation of Buyer to enter into and complete the Closing is
conditioned upon the satisfaction, or waiver by Buyer, on or before the Closing
Date, of the following conditions:
6.1 Due Diligence. Buyer shall have completed at its sole cost and
expense its due diligence review of the Assets, including without limitation the
Facility and its operations, and shall be satisfied with the results thereof. If
Buyer is not satisfied with the results of such examinations for any reason
whatsoever, Buyer must so notify Seller in writing at least two (2) business
days prior to the Closing, whereupon this Agreement, and the rights and
obligations of the parties hereunder, shall immediately terminate and be of no
further force and effect.
6.2 Representations and Warranties. The representations and warranties
made by Seller contained in this Agreement, the Schedules hereto or in any
certificate or document delivered to Buyer by Seller in connection with the
transactions contemplated by this Agreement shall be true in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties were made on such date.
6.3 Litigation. No action, proceeding or investigation before any
court, arbitration or similar panel or government body or regulatory authority
shall be pending or threatened wherein an unfavorable judgment, decree or order
would prevent or materially and adversely affect the carrying out of this
Agreement or any of the transactions contemplated hereby, declare unlawful the
transactions contemplated by this Agreement or cause such transaction to be
rescinded.
6.4 Material Changes. Subject to the provisions of Section 11, there
shall not have been any material adverse change in the Assets from the date
hereof to the Closing Date, nor shall there exist any condition which could
reasonably be expected to result in such a material adverse change.
6.5 Compliance Evidence. All proceedings to be taken by Seller in
connection with the consummation of the Closing on the Closing Date and the
other transactions contemplated hereby and all certificates, instruments and
other documents reasonably required by Buyer to
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effect the transactions contemplated hereby will be reasonably satisfactory in
form and substance to Buyer.
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SECTION 7. CONDITIONS TO SELLER'S OBLIGATIONS.
Seller's obligation to enter into and complete the Closing is
conditioned upon the satisfaction, or waiver, on or before the Closing Date, on
all of the following conditions:
7.1 Purchase Price. Seller shall have received the Purchase Price as
provided in Section 2.1.
7.2 Representations and Warranties. The representations and warranties
made by Buyer contained in this Agreement or in any certificate or document
delivered to Seller by Buyer in connection with the transactions contemplated by
this Agreement shall be true in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties were
made on such date.
7.3 Litigation. No action, proceeding or investigation before any
court, arbitration or similar panel or government body or regulatory authority
shall be pending or threatened wherein an unfavorable judgment, decree or order
would prevent or materially and adversely affect the carrying out of this
Agreement or any of the transactions contemplated hereby, declare unlawful the
transactions contemplated by this Agreement, or cause such transaction to be
rescinded.
7.4 Performance of Covenants. Buyer shall have performed and complied
with all of the agreements, covenants and conditions required by this Agreement
to be performed and complied with by them prior to or on the Closing Date.
7.5 Compliance Evidence. All proceedings to be taken by Buyer in
connection with the consummation of the Closing on the Closing Date and the
other transactions contemplated hereby and all certificates, opinions,
instruments and other documents reasonably required by Seller to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to Seller.
SECTION 8. CONDUCT OF BUSINESS.
Through the Closing Date, Seller shall continue to (i) conduct the
business of the Facility in the ordinary course of business in a manner
consistent with past practice, including retention of adequate staff, and
purchase of all necessary supplies, (ii) preserve intact the condition of the
Facility, (iii) keep available the services of its present employees and
reasonably preserve the good will of its suppliers, (iv) maintain or cause to be
maintained all Licenses presently in existence, (v) perform all maintenance and
repairs reasonably necessary to maintain the Facility and Assets, (vi) maintain
or cause to be maintained all insurances upon the Assets and the Facility,
including appropriate fire, liability and extended risk, and (vii) take no
action which shall cause any of the representations or warranties set forth in
this Agreement to be untrue.
SECTION 9. MUTUAL COVENANTS.
9.1 Access. From the date hereof through the Closing Date, Seller shall
provide
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Buyer and its authorized employees, agents, officers and representatives with
reasonable access to Seller's properties, books, records, contracts,
information, and documents as they relate to the Facility and to the Assets, at
all convenient times, during regular business hours, for the purpose of making
such investigation of the Assets and the business, properties, financial
condition and results of operations of the Facility as Buyer may reasonably
desire.
9.2 Licensing and Consents. Prior to Closing, the Parties will
cooperate in submitting all applications and other notices to Medicare,
Medicaid, HMO's, etc. and all applicable local, state and federal licensing
agencies, boards and other bodies which must be submitted in order to obtain all
necessary consents, registrations, licensure and other approvals, and shall
provide all information and take actions necessary for the obtaining of any
required consents or approvals in connection with the transfer of the Assets
and/or assumptions of the Assumed Contracts.
9.3 Post Closing Collection of Receivables.
(i) Seller appoints Buyer as its agent and
attorney-in-fact for purposes of collecting the
accounts receivable listed on Schedule 1.2, in
Seller's name and on its behalf, for all services
rendered by Seller ("Collection Services").
(ii) Seller shall provide Buyer with all information
requested by Buyer to permit Buyer to act as Seller's
agent for such purposes.
(iii) Buyer shall remit to Seller all amounts collected on
account of such accounts receivable on a weekly basis
and provide Seller a statement summarizing Buyer's
performance of Collection Services with each such
payment.
(iv) Buyer agrees that it shall use good faith and
diligent efforts in providing Collection Services.
Buyer also agrees to deliver to Seller within five
(5) days after the end each month a status report
with respect to the remaining accounts receivable.
(v) Seller shall compensate Buyer such Collection
Services at the rate of One Thousand Dollars
($1,000.00) per month for twelve (12) months after
the Closing Date, or such shorter period as requested
by Seller.
9.4 Confidentiality. Except as contemplated by this Agreement or as
necessary to carry out the transactions herein set forth, each of the parties
hereto shall not disclose the fact of this Agreement or any information or data
concerning this Agreement except with the approval of Seller and Buyer. Upon
termination of this Agreement for any reason, Buyer shall promptly return to
Seller any and all information or documentation provided by Seller to Buyer and
all copies thereof in the possession of Buyer or Buyer's representatives.
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9.5 Public Announcements. Any public announcement or similar publicity
with respect to this Agreement or the transactions contemplated hereby shall be
issued, if at all, at such time and in such manner as Buyer and Seller shall
jointly determine, in writing subject to applicable law. Unless consented to by
each party hereto in advance in writing prior to the Closing, all parties hereto
shall keep the provisions of this Agreement strictly confidential and make no
disclosure thereof to any person, other than such party's respective legal and
financial advisors.
SECTION 10. NO REQUIREMENT TO REFER.
No remuneration payable or paid pursuant to this Agreement or any
instruments or documents to be made or delivered in connection herewith, whether
direct or indirect, tangible or intangible, and nothing else is intended to,
shall have the effect of, or shall be construed to encourage, require or
otherwise solicit Seller, or any employee or affiliate of Seller, to refer
business of any kind whatsoever to Buyer.
SECTION 11. RISK OF LOSS.
The risk of loss or damage to the Facility, by fire or otherwise, or
by condemnation or any governmental taking, is upon Seller until the Closing of
the transactions contemplated hereby, unless such loss is caused by the
negligence or willful misconduct of Buyer or Buyer's agents, in which case the
loss shall be upon Buyer.
SECTION 12. INDEMNIFICATION; REMEDIES.
12.1 Indemnification of Buyer. Except as otherwise provided herein,
Seller agrees that it will, after the consummation of Closing hereunder,
indemnify Buyer and hold it harmless against and in respect of any and all
damages, claims, losses, expenses and liabilities, including without limitation
reasonable attorneys' fees, which arise or result from (a) the inaccuracy of any
representation or warranty made by Seller under this Agreement, (b) any breach
or failure of Seller to perform any of its commitments, obligations, covenants
or conditions hereunder, (c) the failure of Seller to discharge any of its
liabilities, or (d) the operations of the Facility, or the ownership of the
Assets prior to the Closing Date.
12.2 Indemnification of Seller. Except as otherwise provided herein,
Buyer agrees that it will, after the consummation of Closing hereunder,
indemnify Seller and hold it harmless against and in respect of any and all
losses which arise or result from (a) the inaccuracy of any representation or
warranty made by Buyer under this Agreement, (b) any breach or failure of Buyer
to perform any of its commitments, obligations, covenants or conditions
hereunder, including, without limitation, the Assumed Liabilities, (c) the
operations of the Business or the Facility or the ownership of the Assets on or
after the Closing Date, or (d) any actions of Buyer, its employees or agents,
taken before or after the Closing Date.
12.3 Claims. Notwithstanding anything contained in this Section 12 to
the contrary, Buyer and Seller shall have no right to take any action with
respect to the other's indemnification
Page 14 of 23
obligations under this Section 12, unless and until: (i) the party claiming
indemnification (the "indemnified party") shall have given notice to the party
against which indemnification is sought (the "indemnifying party") specifying in
reasonable detail the matter for which the indemnified party claims
indemnification hereunder, and (ii) the indemnifying party shall not have cured
at its own expense those matters giving rise to the indemnified party's claim
for indemnification within thirty (30) days after such notice (except in
connection with any matter which can not be completely cured within said thirty
(30) day period, in which case, if the indemnifying party shall not have
commenced to cure such matter within said thirty (30) day period and thereafter
diligently pursued said cure to completion). Should a claim be made by a person
that is not a party to this Agreement with respect to any matter to which the
foregoing indemnity by Seller relates, Buyer shall, at Seller's election, defend
such claim and take all reasonable action, as determined by Buyer, to pursue
such rights, defenses, claims, counterclaims, set-offs and rights of
indemnification which may exist against third parties (including insurers) with
respect to such claim as Buyer may deem appropriate. Buyer and their successors
and assigns shall assign to Seller any such rights, defenses, claims,
counterclaims and set-offs with respect to such claims which Seller may request.
In addition, Seller shall be subrogated to all rights of Buyer and their
successors and assigns for reimbursement or indemnification with respect to a
liability or claim paid by Seller.
12.4 Third Parties. It is the intent of the Parties that their
obligations to each other under this Section 12 do not and will not create any
rights whatsoever in any third parties.
12.5 Limitations. No party shall be liable to the other party under
this Section 12 until all claims and demands asserted by such other party exceed
an aggregate amount of Ten Thousand Dollars ($10,000), and then such party shall
be liable for the full amount (including said $10,000) of such claims and
demands.
12.6 General. Notwithstanding anything to the contrary contained in
this Agreement each party's remedies under or in connection with this Agreement
shall (i) be limited as set forth in Section 5, (ii) be limited to
indemnification under this Section 12, and (iii) with respect to
indemnification, where applicable, be subject to the limitations and procedures
contained in this Section 12.
SECTION 13. OBLIGATIONS AT THE CLOSING.
13.1 Seller. At the Closing, Seller shall deliver or cause to be
delivered to Buyer the following:
(i) a ▇▇▇▇ of sale, free and clear of all liens, for the Assets
being conveyed hereunder;
(ii) an assignment and assumption agreement conveying the
interest of Seller in and to the Intellectual Property, the
Assumed Contracts, all warranties, guarantees and assurances
(if any) given by third parties with respect to any of the
Assets and all Licenses if any relating to the Business and
the
Page 15 of 23
use and operation of the Assets (to the extent such Licenses
exist and are transferable);
(iii) the Inventory Statement; and
(iv) any other books, records, documents, and instruments
necessary to effect the transfer of Assets by Seller to
Buyer in accordance with the provisions of this Agreement.
13.2 Buyer. At the Closing, Buyer shall deliver or cause to be
delivered the following:
(i) bank or certified check payable to Seller for that portion
of the Purchase Price described in Section 2.1(i);
(ii) the Note and the Security Agreement;
(iii) an assumption agreement pursuant to which Buyer assumes and
agrees to discharge the Assumed Liabilities; and
(iv) any documents required to be delivered by Buyer to Seller
under the provisions of this Agreement or otherwise
necessary to effectuate all other transactions under this
Agreement.
SECTION 14. MISCELLANEOUS.
14.1 Successors. This Agreement shall be binding upon and shall inure
to the benefit of the Parties hereto and their respective successors and
permitted assigns.
14.2 Further Assurances. Each of the Parties hereto agrees that it
will, from time to time after the date of this Agreement, execute and deliver
such other certificates, documents and instruments and take such other action as
may be reasonably requested by the other party to carry out the actions and
transactions contemplated by this Agreement.
14.3 No Waiver. The failure of any party at any time to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. No waiver (by conduct or otherwise) of any
condition or the breach of any term, covenant, representation or warranty
contained in this Agreement, whether such occurs on one or more instances, shall
be deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver or any other term, covenant, representation, or
warranty of this Agreement.
14.4 Entire Agreement. This Agreement (together with the certificates,
agreements, Schedules, instruments and other documents referred to herein)
constitutes the entire agreement between the Parties with respect to the subject
matter hereof and thereof and supersedes all prior agreements, both written and
oral, with respect to such subject matter.
Page 16 of 23
14.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CONNECTICUT APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
14.6 Assignment. Seller shall not assign this Agreement to any other
person without the prior notice to Buyer. Buyer in its sole discretion may
assign its rights hereunder to one or more affiliates of Buyer or to an entity
to be formed by Buyer. No such assignment shall relieve Buyer of it duties
obligation under this Agreement.
14.7 Notices. Any notice, request, instruction or other communications
to be given hereunder by any party hereto to another shall be in writing and
shall be delivered personally or sent registered or certified mail, postage
prepaid:
If to Seller: ▇▇▇▇ Medical Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ #▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
If to Buyer: ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chairman
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
14.8 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.9 Counterparts. This Agreement may be executed in multiple
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the Parties and delivered to the other party, it being understood that both
parties need no sign the same counterpart.
Page 17 of 23
14.10 Schedules. The Schedules to this Agreement are incorporated by
reference herein and are made a part hereof as if they were fully set forth
herein.
14.11 Severability. The invalidity of any term or terms of this
Agreement shall not affect any other term of this Agreement, which shall remain
in full force and effect.
Page 18 of 23
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
▇▇▇▇ MEDICAL SERVICES, INC.
BY:___________________________________
Name:
Title:
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, LLC
BY:___________________________________
Name:
Title:
Page 19 of 23
EXHIBIT A
PROMISSORY NOTE
$260,000.00 June ___, 2000
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, LLC, a New York
limited liability company ("Maker"), promises to pay to the order of ▇▇▇▇
Medical Services, Inc., a Connecticut corporation (the "Holder"), c/o Lexington
Healthcare Group, Inc. at its principal office at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other place as the Holder may designate in
writing, without notice or offset, the principal sum of TWO HUNDRED SIXTY
THOUSAND DOLLARS ($260,000.00), together with interest from the date hereof at
the Interest Rate (as hereinafter defined). This Note is delivered pursuant to
an Asset Purchase and Sale Agreement dated as of June 1, 2000, between Maker and
Holder (the "Purchase Agreement"), and is secured by certain assets as set forth
in a Security Agreement of even date herewith between Maker and Holder (the
"Security Agreement" and together with the Purchase Agreement, the
"Agreements"). Terms not otherwise defined herein shall have their meanings as
set forth in the Agreements.
Maker agrees to pay all taxes or duties, levied or assessed on this
Note against Holder, together with all costs of collection (including attorney
fees) incurred in any action to collect this Note.
As used herein, the term "Interest Rate" means the lowest rate required
as of the date hereof under Section 1274 of the Internal Revenue Code of 1986,
or any provision succeeding thereto (6.53%), which shall accrue, compounded
annually upon the whole of said principal and interest sum remaining from time
to time unpaid.
Maker shall pay principal plus interest in twelve (12) monthly
installments, the first of which shall be due on July 1, 2000. If not sooner
paid, all outstanding principal plus all accrued interest shall be due and
payable on June 1, 2001 (the "Maturity Date").
Maker may prepay this Note in whole or in part at any time without the
necessity of any payment of any fee or penalty for the privilege of making such
prepayment. All accrued and unpaid interest and any other costs, charges and
sums due under this Note shall be due on the date of any prepayment.
Maker agrees that if any of the following shall occur (each an "Event
of Default"): (i) the Maker shall fail to pay, within five (5) days of the due
date hereof, any amount of principal or interest due under this Note; or (ii)
upon any default in the performance, or breach, of any other covenant,
agreement, or provision contained in this Note or the Agreements, then the
entire indebtedness evidenced by this Note, including all accrued and unpaid
interest due under this Note, shall accelerate and become immediately due and
payable at the option of the Holder.
Page 20 of 23
Maker agrees that after maturity or upon the occurrence of any Event of
Default, the interest rate shall increase by five percent (5%) per annum above
the Interest Rate.
Nothing contained in this Note shall be deemed to establish or require
the payment of a rate of interest in excess of the maximum rate of interest
permitted by any applicable law. In the event that any rate of interest required
to be paid under this Note exceeds the maximum rate permitted by any such law,
such rate shall automatically be reduced to the maximum rate permitted by such
law and any amount paid in excess of such rate shall be considered to have been
payment(s) in reduction of principal.
Failure by the Holder to insist upon the strict performance by Maker of
any terms and provisions herein shall not be deemed to be a waiver of any terms
and provisions herein, and the Holder shall retain the right thereafter to
insist upon strict performance by the Maker of any and all terms and provisions
of this Note or any document securing the repayment of this Note. No
modification or waiver of any provision of this Note and no consent to any
departure by Maker therefrom shall in any event be effective unless the same
shall be in writing and signed by Maker and Holder.
MAKER ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS NOTE IS A COMMERCIAL
TRANSACTION AND WAIVES ITS RIGHT TO NOTICE AND HEARING AS ALLOWED BY ANY STATE
OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER MAY
DESIRE TO USE, AND FURTHER, WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST, NOTICE OF PROTEST AND ANY OTHER FORMALITIES WHICH
MAY AFFECT OR IMPEDE THE RIGHT OF THE HOLDER TO EXERCISE ITS RIGHTS TO COLLECT
THE SUMS DUE HEREUNDER.
MAKER HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY SUIT, ACTION
OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO
THE TRANSACTIONS OF WHICH THIS NOTE IS A PART. MAKER ACKNOWLEDGES THAT IT MAKES
THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE
RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
Any provision of this Note which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
This Note shall be governed by and construed in accordance with the
laws of the State of Connecticut.
Maker hereby submits to personal jurisdiction in the State of
Connecticut for the enforcement of its obligations hereunder and under any
mortgage and/or security agreement
Page 21 of 23
securing this Note, and Maker waives any and all rights under the law of any
other state to object to jurisdiction within the State of Connecticut for the
purposes of litigation to enforce such obligations.
This Note and the provisions hereof shall inure to the benefit of the
Holder, its successors and assigns and shall be binding upon Maker and its
successors and assigns.
IN WITNESS WHEREOF, Maker has executed this instrument as of the date
first above written.
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, LLC
BY: ____________________________
Name:
Title:
GUARANTY
By signing below, eHealthCare Ventures, Inc. ("Guarantor") hereby absolutely and
unconditionally guarantees to the Holder the timely payment and performance by
Maker of all its obligations under the foregoing Note and/or under any
instrument or document made or delivered by Maker pursuant to the Agreements.
Guarantor and Maker acknowledge and agree that this guaranty by Guarantor was a
material inducement to the Holder entering into the foregoing Note and the
Agreements.
eHEALTH CARE VENTURES, INC.
BY:________________________________
Name:
Title:
Page 22 of 23
SCHEDULES
Schedule 1.1(i) Tangible Property
Schedule 1.1(ii) Licenses
Schedule 1.2 Excluded Assets
Schedule 2.3 Allocation of Purchase Price
Schedule 3.4 Liabilities
Schedule 3.5 Litigation
Schedule 3.11 Assumed Contracts
Schedule 3.16 List of Employees and their Benefits
These Schedules are furnished by Seller to Buyer in connection with the
sale of assets described in this Agreement. The section numbers of the Schedules
correspond to the section numbers of the Agreement; however, any information
disclosed in any schedule shall be deemed disclosed and incorporated into all
schedules where appropriate. Certain of the schedules reflect information as of
April 30th, which information shall be updated and incorporated herein when such
information is available as of the Closing Date.
Page 23 of 23