BUSINESS PURCHASE AGREEMENT EX-10.30
This BUSINESS PURCHASE AGREEMENT ("Agreement") is made and entered into as
of September 9, 1996 (the Effective Date ) by and between WORK RECOVERY, INC.,
a Colorado corporation ("WRI" or Seller ) and ▇.▇. ENTERPRISES, an Arizona
Company whose sole shareholder (owner) is ▇▇▇ ▇▇▇▇▇▇▇▇ (the Purchaser ).
RECITALS
A. WRI presently owns One Hundred Percent (100%) of the stock (the
Stock ) of New Concepts Corporation, an Illinois Corporation (the
"Corporation"), and the Corporation operates a business located at 2301 South
▇▇▇▇▇▇▇, Tucson, Arizona (the "Premises ), at which it manufactures vocational
aptitude assessment and vocational training equipment and associated software.
B. WRI desires to sell to the Purchaser, and Purchaser desires to
purchase from WRI, all assets and liabilities of the Corporation, both known and
unknown and expressly including trade payables and commissions payables, as of
the Effective Date, including the following: physical inventory including parts,
supplies, completed units and partially completed units; manufacturing materials
and supplies; manufacturing/assembly tools and equipment; research and
development materials including partially completed projects/products; marketing
materials and supplies including one commercial table top display unit; office
furniture, equipment and supplies; current accounts payable liability; current
accounts receivable; the goodwill associated with the Business (including such
items as existing advertisements,telephone numbers, customer lists, trade
secrets, and, if applicable, any trademarks and copyrightsassociated with the
product); any existing contract rights; and the name New Concepts Corporation
(all items set forth in this Recital being collectively referred to as the
"Business"). Purchaser acknowledgesthat Seller has attempted to locate the
Corporation s corporate documents, but has been unable to do so. The Business
expressly excludes video tape duplicating equipment. In the event Purchaser
desires to purchase such video tape duplicating equipment, the price and payment
for same shall be described in a separate letter agreement to be negotiated and,
if terms agreed to, formally documented subsequent to the Effective Date.
C. As of the Effective Date, Purchaser will expressly assume all assets
and liabilities of the Corporation and the Business, including, but not limited
to, complete responsibility for any and all obligations of every nature and kind
in connection with future employees (as there are no current employees of the
Corporation), such as payroll, payroll deductions, accrued vacation and sick
leave, and the like. Notwithstanding the foregoing, Purchaser agrees that it
will pay to Seller, on a monthly basis for a six month period commencing upon
the Closing Date (as hereinafter defined), an amount equal to one-half (1/2) of
the gross monthly salary and benefits currently payable to ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
whom Seller agrees to permit to continue to perform those functions she is
currently performing on behalf of the Corporation for this six-month period; and
D. The Purchaser has personally managed and operated the Business, and
has personally performed such due diligence with respect to the purchase of the
Business, is familiar with the assets, liabilities and the specialized nature of
the Business and has been represented by counsel in connection herewith or has
consciously elected not to seek such counsel.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:
1. Recitals
The foregoing recitals are hereby incorporated herein by this
reference and made a part hereof as though set forth in full at this
point.
2. Bankruptcy Court Approval
THE PARTIES HERETO EXPRESSLY ACKNOWLEDGE AND AGREE THAT THE
FINAL CONSUMMATION OF THE TRANSACTION CONTEMPLATED HEREBY IS SUBJECT TO
THE APPROVAL OF THE BANKRUPTCY COURT IN CASE NO. B-96-01640 TUC-JMM IN THE
UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF ARIZONA. THIS AGREE-
MENT SHALL BE OF NO FORCE OR EFFECT UNLESS AND UNTIL SUCH APPROVAL IS
GRANTED BY ORDER OF SAID COURT. The parties hereto agree to execute this
Agreement, and Purchaser will pay the Purchase Price to WRI on or before the
Closing Date, subject only to the Court s approval hereof.
3. Purchase and Sale of Business; Surrender of Seller s Stock
3.1 Purchase and Sale; Payment. Subject to the terms, conditions and
covenants set forth herein, within five (5) business days of the Closing (as
defined below) WRI shall sell, assign, transfer and convey to Purchaser and
Purchaser shall purchase and accept from WRI all of WRI's right, title and
interest to the Business for a price of Fifty Thousand Dollars ($50,000) (the
"Purchase Price"). The Purchase Price shall be paid to WRI in full, in cash,
at Closing, by wire transfer, into WRI s bankruptcy counsel s trust account, to
be held therein pending approval of the Bankruptcy Court, directed as follows:
-Norwest Bank Minnesota, N.A., ABA# ▇▇▇▇▇▇▇▇▇
-For credit to Beneficial Bank: Norwest Bank Phoenix, Arizona
-Further credit to FBO Work Recovery, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PA
#XXXXXXXXXX
-Please note on wiring instructions: Upon receipt notify ▇▇▇▇
▇▇▇▇▇▇ at ▇▇▇-▇▇▇-▇▇▇▇
The Parties acknowledge and agree that, unless otherwise stated herein, the
Business, and every item of the Business, is sold AS IS, WHERE IS.
Notwithstanding that the parties hereto acknowledge and agree that the sale
contemplated hereby is a sale of assets, at Closing, as defined at Section 3.5
hereinbelow, Seller shall transfer, surrender and deliver either (i) its stock
certificate(s) evidencing its 100% ownership of the Corporation to Purchaser.
(The Seller has been able to confirm the Illinois identification numberfor
the corporation (D53978196), that it was incorporated on September 17, 1985, and
that the corporation was involuntarily dissolved on February 1, 1994.); or,
alternatively, (ii) in lieu of (i), a certificate signed by the Acting President
of Seller, confirming that the corporate records for the Corporation have not
been located, but that the Seller certifies that it has conducted such search,
has been unable to locate such documents, but is nevertheless transferring all
of its right, title and interest in and to the Corporation s stock in accordance
with the terms of this Agreement. One of the above-referenced documents will be
delivered via overnight courier to ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PA,
The Phoenix Plaza, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, with
directions to hold it pending (i) the receipt of the Purchase Price; and (ii)
the approval of the Bankruptcy Court, whereupon it shall be delivered to Seller.
3.2 Taxes. The Purchaser agrees to pay any Federal, state or local
sale or transfer taxes, or the like, arising from the sale of the Business to
the Purchaser.
3.3 Bulk Sale Compliance. If applicable, the Purchaser agrees to be
responsible and liable for compliance with any applicable bulk sales
requirements in connection with the purchase of the Business.
3.4 Office Space for the Business. The Corporation currently rents
space from the Seller and operates the Business at the Premises. Upon the
Closing (as defined in section 3.5 hereinbelow), Seller agrees to rent to
Purchaser the office space at 2341 South ▇▇▇▇▇▇▇, Suites 18 and 19, in
accordance with the following schedule, for a term of six (6) months (the
Term ): for the first three (3) months of the Term, Purchaser, as tenant, shall
pay the amount of One Hundred Dollars ($100.00) per month, payable $50.00 on the
1st and 15th of each month to Seller, as Landlord; for the second three
(3) months of the Term, Purchaser shall pay to Seller the amount of $450.00 per
month, payable in full onthe 1st of each month. Any extension of the Term must
be agreed to in writing and signed by the Seller (as Landlord) and the Purchaser
(as Tenant).
3.5 Closing Date. The closing of the transactions contemplated
hereby (the "Closing") shall be held at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ at 10:00 a.m. on September _____, 1996, or at such other time and place
as Seller and Purchaser may agree in writing (the "Closing or the Closing
Date").
4. Disclaimer.
SELLER IS SELLING THE BUSINESS, AND EACH AND EVERY COMPONENT THEREOF, AS IS
AND WHERE IS, AND MAKES NO WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING
BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. IN NO EVENT SHALL SELLER BE LIABLE FOR LOSS OF PROFITS,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE BREACH OR
ALLEGED BREACH OF ANY PROVISION OF THIS AGREEMENT.
5. Transfer and Assumption at Closing
The Purchaser shall assume responsibility and liability for, among other
things, all trade payables, lease payments and all other liabilities and
obligations of the business, whether arising before or after the Effective Date
and shall be entitled to all trade receivables arising from Purchaser's
operation of the Business, whether arising before or after the Effective Date.
Except as provided in Recital C hereinabove with respect to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
(which obligation of Seller shall automatically cease and terminate following
Seller's final (6th) payment as described therein), Purchaser s assumptions
described herein expressly include any and all of the Business's employee
payroll costs and expenses and overhead associated therewith. Notwithstanding
the foregoing, in the event that the Bankruptcy Court declines to approve the
transaction contemplated hereby, the parties agree to do an accounting of the
Business s operations fromthe Effective Date to the date that the parties
receive notice that the Court has declined to approve this transaction, and
payables and receivables will be apportioned, and the parties will reconcile,
accordingly.
6. Payments to Seller in Addition to Purchase Price
In addition to the Purchase Price, and as further consideration to Seller
for the sale of the Business as described in this Agreement, Purchaser will pay
to Seller the following:
6.1 an amount equal to ten percent (10%) of the gross sales amount
generated from the following three (3) current sales projects to the extent that
any or all of them are actually received, or should actually be received, within
eighteen (18) months following the Closing Date: (i) the sale of software,
equipment and materials to the Chicago, Illinois Career One Stop directors for
use in middle schools and high schools in the metropolitan Chicago area; (ii)
the sale of software, equipment and materials for a pilot program sponsored by
the San Diego Job Corp.; and (iii) the sale of software, equipment and materials
for a Career One Stop program in West Virginia. Payments due to Seller
pursuant to this Section 6.1 shall be due and payable to Seller no later than
ten (10) days following receiptof any proceeds described in this Section 6.2,
whether received in one lump sum or in payments over time.
6.2 an amount equal to fifty percent (50%) of the gross amount of
collections on trade receivables which exceeds the total amount of trade
payables and commissions payables at the Effective Date of this Agreement. When
collections have exceeded this amount, these payments will be due and payable to
Seller no later than ten (10) days following receipt of and proceeds described
in this Section 6.2, whether received in one lump sum or in payments over time.
7. Purchaser s Indemnification
The Purchaser unconditionally agrees to indemnify, defend and hold
harmless Seller and Seller s officers, directors, employees, agents, successors
and assigns from and against any and all losses, liabilities, damages and
claims, and all related costs and expenses including reasonable attorneys' fees
and any and all costs of investigation, litigation, settlement, judgment,
appeal, interest and penalties (collectively, "Losses") arising from or in
connection with: (i) the death or bodily injury of any agent, employee,
customer, business invitee or business visitor of the Purchaser, (ii) the
Purchaser s operation of the Corporation, or (iii) the breach by the Purchaser
of any of its obligations arising hereunder. The employees or agents and
representatives of Seller shall, when at the Corporation, be deemed the
Purchaser s business invitee or business visitor.
8. Release by Purchaser
Purchaser and its sole owner, ▇▇▇ ▇▇▇▇▇▇▇▇, hereby agree to
unconditionally waive, release and forever discharge Seller and Seller s
officers, directors, shareholders, affiliates, subsidiaries, representatives,
agents and attorneys, and each of their respective heirs, successors and assigns
(the Released Parties ) from and against any and all claims, disputes, demands,
liabilities, controversies, actions, obligations, debts, losses, rights,
promises, liens, causes of action, damages, costs, expenses and attorneys fees
of any kind or nature, whether legal or equitable, in tort or in contract,
actual or contingent, latent or patent, known or unknown, that Purchaser and ▇▇▇
▇▇▇▇▇▇▇▇, or either of them, ever had, now have or may have in the future
(collectively, the Claims ) which, in any way, arise out of or relate, directly
or indirectly, in any manner, to any of the Released Parties and Purchaser or
Mr. ▇▇▇ ▇▇▇▇▇▇▇▇,or either of their, past, present or future relationships with
any of the Released Parties. Purchaser and ▇▇▇ ▇▇▇▇▇▇▇▇ expressly agree that
the Release provisions set forth in this Section 8 are intended to, andwill,
fully, finally and forever discharge all Claims, whether now asserted or
unasserted, known or unknown, and shall remain in effect as a full and complete
release, notwithstanding the discovery or existence of additional claims or
facts related thereto which may not be known as of the Effective Date of this
Agreement.
9. Miscellaneous Provisions
9.1 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Arizona as applicable to
contracts executed and performed entirely within and by residents of such state.
Each party hereto hereby submits to the exclusive jurisdiction and venue of the
Superior court of the State of Arizona for the County of Pima or the Federal
District Court for the District of Arizona for purposes of any legal or
equitable action or proceeding arising out of this Agreement. Each party agrees
that service upon such party in any such action or proceeding may be made by
first class mail, certified or registered, return receipt requested, as provided
by the giving of notices in Section 9.4 below.
9.2 No Other Agreements. This Agreement embodies all agreements
between the parties hereto with respect to the subject matter hereof and
supersedes any and all prior or contemporaneous agreements or representations of
any kind, written or oral, between the parties.
9.3 Disputes and Attorneys' Fees. In the event any action or
proceeding is filed to enforce or interpret this Agreement, the prevailing party
in such action or proceeding will be entitled to recover its reasonable
attorneys' fees in addition to any other award of the court or tribunal, as the
case may be.
9.4 Notice. Any communication among the parties hereto, and any
notices or communications herein provided to be made, shall be given or made by
personal delivery, telecopy, facsimile or overnight courier, or by mailing the
same by first class mail, postage prepaid, to the parties at the address
indicated below, or to such other address(es) as either party may in writing
hereafter provide in accordance with this section 9.4. Notices will be deemed
to be received when personally delivered or transmitted by telecopy or
facsimile, one (1) day after the date of forwarding by overnight courier, or
three (3) business days after posting in the U.S. Mails, as the case may be.
9.5 Savings Clause. In the event that any provision, or provisions,
of this Agreement should be declared invalid or unenforceable by any court of
law, the remaining terms and conditions set forth herein shall remain in full
force and effect.
(INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
SELLER: PURCHASER:
WORK RECOVERY, INC RJ ENTERPRISES
By____________________________ By ____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, sole owner
Its Acting Chief Financial Officer
Address: Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
October 9, 1996