EXHIBIT 2
STOCK PURCHASE AND SALE AGREEMENT
FOR THE ACQUISITION OF ALL OF THE CAPITAL STOCK
OF
HCI ACQUISITION CORP.
DATED: JULY 30, 1998
LIST OF SCHEDULES AND EXHIBITS
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Schedule Description
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5.2 Description of Shares and Capitalization of Subsidiary
5.4 1997 Audited Financial Statements; April 30, 1998 Unaudited
Financial Statements
5.6 List of Required Consents
5.8 Litigation and Proceedings
5.9 List of Liens, Security Interests and other Encumbrances;
Exception to Necessary Assets
5.10 List of Intellectual Property
5.11 List of Significant Contracts
5.12 List of Real Estate Leases and Subleases
5.13 Liabilities
5.14 Exception to Taxes
5.15 List of Employee Benefit Plans
5.16 List of Material Permits; List of Violations of Laws
5.17 List of Employment Agreements
5.18 Customers and Suppliers
5.21 Exceptions to Ordinary Course and No Material Events
5.22 Insurance
5.23 Affiliate Transactions
8.9 Employee Severance Schedule
Exhibit Description
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3.2 Wire Transfer Instructions for each Seller
4.2.5.1 Form of Sellers' Counsel Opinion
4.3.5.1 Form of Buyer's Counsel Opinion
9.5 Escrow Agreement
TABLE OF CONTENTS
1. Definitions; Construction..................................................1
1.1. Definitions.........................................................1
1.2. Construction........................................................4
2. Purchase and Sale of Shares................................................4
3. Purchase Price.............................................................4
3.1. Purchase Price......................................................5
3.2. Payment of Purchase Price...........................................5
4. Closing....................................................................5
4.1. Closing Location and Date...........................................5
4.2. Sellers' Conditions.................................................5
4.3. Buyer's Conditions..................................................6
4.4. Additional Payments to be made at Closing by Buyer..................7
5. Representations and Warranties of Sellers (other than the Charities).......7
5.1. Organization........................................................7
5.2. Subsidiaries; Shares................................................8
5.3. Authorization.......................................................8
5.4. Financial Statements................................................8
5.5. Books and Records...................................................9
5.6. No Conflict or Violation............................................9
5.7. No Burdensome Restrictions..........................................9
5.8. Litigation and Proceedings..........................................9
5.9. Assets..............................................................9
5.10. Intellectual Property..............................................10
5.11. Contracts, Leases, and Licenses....................................10
5.12. Real Estate Leases.................................................10
5.13. Liabilities........................................................10
5.14. Taxes..............................................................11
5.15. Employee Benefit Plans.............................................11
5.16. Compliance with Laws; Permits......................................11
5.17. Employment Agreements; Loans From or To Employees..................12
5.18. Customers and Suppliers............................................12
5.19. Labor Matters......................................................12
5.20. Brokers............................................................12
5.21. Ordinary Course; No Material Effect................................12
5.22. Insurance..........................................................13
6. Disclosure Schedule.......................................................13
6.1. General............................................................13
7. Representations and Warranties of Buyer...................................13
7.1. Organization.......................................................13
7.2. Authorization......................................................14
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7.3. No Conflict or Violation...........................................14
7.4. Litigation and Proceedings.........................................14
7.5. Consents and Approvals.............................................14
7.6. Brokers............................................................14
7.7. No Knowledge of Seller's Misrepresentations........................14
7.8. Securities.........................................................14
8. Actions after the Closing.................................................15
8.1. Further Assurances.................................................15
8.2. Sellers' Access to Materials.......................................15
8.3. Buyer's Record Retention...........................................15
8.4. Tax Treatment; Tax Returns.........................................15
8.5. Delivery of Closing Statement of Debt..............................15
8.6. Covenant Not to Compete; Covenant Not to Solicit...................15
8.7. Cooperation on Insurance Matters...................................16
8.8. Omni Payments......................................................17
8.9. Employees..........................................................17
8.10. Seller's Expenses..................................................17
9. Indemnification...........................................................17
9.1. Survival of Representations and Warranties; Survival of Covenants..17
9.2. Indemnification....................................................18
9.3. Procedure for Indemnification......................................18
9.4. Limitations........................................................19
9.5. Escrow.............................................................20
9.6. Taxes..............................................................20
10.General Provisions........................................................20
10.1. Special Provision Regarding Charities..............................20
10.2. Accounting Terms...................................................21
10.3. Amendment and Modification.........................................21
10.4. Assignments........................................................21
10.5. Captions...........................................................21
10.6. Counterpart Facsimile Execution....................................21
10.7. Counterparts.......................................................22
10.8. Entire Agreement...................................................22
10.9. Exhibits; Recitals.................................................22
10.10. Failure or Delay...................................................22
10.11. Governing Law......................................................22
10.12. Legal Fees, Costs..................................................22
10.13. No Joint Venture or Partnership....................................22
10.14. Notices............................................................22
10.15. Publicity..........................................................23
10.16. Severability.......................................................23
10.17. Submission to Jurisdiction.........................................23
10.18. Successors and Assigns.............................................24
10.19. Third-Party Beneficiary............................................24
10.20. Joint Negotiation..................................................24
10.21. Commitments Not Assigned...........................................24
10.22. Legend.............................................................24
10.23. Buyer's Acknowledgement of Access..................................24
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10.24. Specific Performance...............................................25
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STOCK PURCHASE AND SALE AGREEMENT
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This Stock Purchase and Sale Agreement (this "Agreement") is made and
entered into as of July 30, 1998, by and among XXXXXXX X. XXXXXX, XXXX X. XXXXX,
XXXXX X. XXXXX, and THE XXXXXXX XXXXXX FAMILY TRUST, CENTER OF CONTEMPORARY
ARTS, THE JEWISH FEDERATION OF ST. LOUIS (collectively, the "Sellers"), and
UNIVERSAL HOSPITAL SERVICES, INC. (including its respective successors and
assigns, the "Buyer").
RECITALS
A. Sellers are the legal and beneficial owners of all of the issued and
outstanding shares (the "Shares") of common stock of HCI Acquisition Corp.
("HCI").
B. HCI owns all of the issued and outstanding shares of stock of Home
Care Instruments, Inc. ("Subsidiary"; and HCI and Subsidiary, and their
respective successors and assigns, are hereafter referred to collectively as the
"Companies").
. C. Buyer wishes to purchase, and Sellers wish to sell, the Shares
upon the terms set forth herein.
AGREEMENT
In consideration of the foregoing, the mutual covenants contained
herein and other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged by the parties by their execution
hereof, the parties agree as follows:
1. DEFINITIONS; CONSTRUCTION.
1.1. DEFINITIONS. For purposes of this Agreement, the following
capitalized terms have the following meanings.
1.1.1. "ACCOUNT" means any and all rights of either of the
Companies to payment for Inventory sold or leased or for services rendered,
including any such right evidenced by chattel paper, whether due or to become
due. By way of clarification, excluded from the definition of "Account" are the
promissory notes held by the Companies in conjunction with the sale of all of
the issued and outstanding stock of ADM.
1.1.2. "ADM" means Advanced Durable Medical, Inc., its
subsidiaries, and any of their respective successors or assigns.
1.1.3. "AGREEMENT" means this Stock Purchase and Sale Agreement
and all Schedules and Exhibits hereto.
1.1.4. "ASSETS" means all property of any nature owned by either
of the Companies as of the Closing Date.
1.1.5. "BANK DEBT" shall mean all indebtedness and obligations
owing to (i) Magna Bank, National Association under that certain Step-Down
Revolving Loan, Term Loan and Security Agreement dated as of June 14, 1996, as
amended by that certain First Amendment to Step-Down
Revolving Loan, Term Loan and Security Agreement dated January 30, 1998, (ii)
all other notes, guaranties, security agreements, documents, certificates and
agreements executed in connection with any of the documents described in clause
(i) from time to time, and (iii) any amendments, modifications or restatements
to any of the foregoing.
1.1.6. "BUYER" has the meaning set forth in the first paragraph of
this Agreement.
1.1.7. "BUYER BASKET AMOUNT" has the meaning set forth in Section
9.4.2.
1.1.8. "BUYER REPRESENTATION AND WARRANTY LOSSES" has the meaning
set forth in Section 9.4.2.
1.1.9. "BUY/SELL AGREEMENT" means that certain Stock Purchase and
Voting Agreement, dated as of February 14, 1995, as amended, by and among
Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxx, and Xxxxx X. Xxxxx, and pursuant to an
Agreement to be Bound dated as of February 12, 1998, the Xxxxxxx Xxxxxx Family
Trust.
1.1.10. "CHARITIES" means, collectively, Center of Contemporary
Arts, the Jewish Federation of St. Louis, and, for indemnification purposes
hereunder, their respective, directors, officers, employees and agents, and each
of their respective successors and assigns.
1.1.11. "CLOSING" has the meaning set forth in Section 4.1.
1.1.12. "CLOSING DATE" has the meaning set forth in Section 4.1.
1.1.13. "CLOSING STATEMENT OF DEBT" has the meaning set forth in
Section 8.5.
1.1.14. "CODE" means the Internal Revenue Code of 1986 of the
United States of America, as amended, as in effect on the Closing Date.
1.1.15. "COMPANIES" has the meaning set forth in Recital B of this
Agreement.
1.1.16. "CONFIDENTIALITY AGREEMENT" shall mean that certain
Confidentiality Agreement, dated April 17, 1998, between HCI and Buyer.
1.1.17. "DAMAGES" has the meaning set forth in Section 9.2.1.
1.1.18. "DEBT" has the meaning set forth in Section 3.1.
1.1.19. "DOLLARS" OR "$" means the lawful currency of the United
States of America.
1.1.20. "EMPLOYEE BENEFIT PLANS" has the meaning set forth in
Section 5.15.
1.1.21. "GAAP" means United States generally accepted accounting
principles as in effect on the date or for the period with respect to which such
principles are applied.
1.1.22. "HCI" has the meaning set forth in Recital A of this
Agreement.
1.1.23. "XXXX-XXXXX-XXXXXX ACT" means Section 7A of the Xxxxxxx
Act, 15 X.X.X.xx. 18A, and the rules and regulations promulgated thereunder, as
amended from time to time.
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1.1.24. "INDEMNIFIED PARTY" has the meaning set forth in Section
9.2.4.
1.1.25. "INDEMNIFYING PARTY" has the meaning set forth in Section
9.2.4.
1.1.26. "INTELLECTUAL PROPERTY" means all of the following owned
by either of the Companies: (i) trade marks and all applications, registrations
and renewals in connection therewith; (ii) trade name and all applications,
registrations and renewals in connection therewith; (iii) patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions and reexaminations
thereof; (iv) copyrights and all applications, registrations and renewals in
connection therewith; (v) licenses and sublicenses granted or obtained with
respect to any of the foregoing; (vi) all goodwill associated with any of the
foregoing; and (vii) all rights under any of the foregoing.
1.1.27. "INVENTORY" means (i) any and all goods and other personal
property owned, rented, or leased by either of the Companies that at any time is
or may be held for sale, rental, or lease or furnished under any contract of
service in the ordinary course of the Companies' business, together with all
attachments, and accessories to any of the foregoing; and (ii) all bills of
lading, warehouse receipts or documents of title, covering or evidencing any
right, title, interest or claim in or to any of the foregoing.
1.1.28. "KNOWLEDGE" means the actual knowledge of Xxxxxxx X.
Xxxxxx, Xxxx X. Xxxxx or Xxxxx Xxxxxx.
1.1.29. "LATEST BALANCE SHEET" has the meaning set forth in
Section 5.4.
1.1.30. "LEASES" has the meaning set forth in Section 5.12.
1.1.31. "LENDERS" shall mean any Person to whom any of the Bank
Debt is owing.
1.1.32. "LIABILITIES" has the meaning set forth in Section 5.13.
1.1.33. "LIABILITY" has the meaning set forth in Section 5.13.
1.1.34. "MATERIAL ADVERSE EFFECT" means any effect that is (a)
material and adverse to the condition (financial or otherwise), business,
performance, prospects, operations or Assets of the Companies, taken as a whole,
or (b) would materially impair the ability of the Companies or the Sellers to
perform their respective obligations under this Agreement.
1.1.35. "MATERIAL AGREEMENTS" means any contractual obligation of
either of the Companies which, if violated or breached by the Company which is a
party thereto, could reasonably be likely to have a Material Adverse Effect.
1.1.36. "MATERIAL LAW" means any applicable law, rule or
regulation the violation of which by either of the Companies, individually or in
the aggregate with any other applicable law, rule or regulation, could
reasonably be likely to have a Material Adverse Effect.
1.1.37. "MATERIAL PERMITS" means any Permit which, if not
obtained, held or made, or if breached, by either of the Companies, could
reasonably be likely to have a Material Adverse Effect.
1.1.38. "PERMITS" means all approvals, authorizations, consents,
licenses, franchises, orders, registrations, certificates, variances, permits
and similar rights, in each case obtained from or issued by any governmental
authority.
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1.1.39. "PERSON" means any natural person, corporation, limited
partnership, general partnership, joint venture, limited liability company,
limited liability partnership or other organization irrespective of whether it
is a legal entity, and any governmental authority.
1.1.40. "PURCHASE PRICE" has the meaning set forth in Section 3.1.
1.1.41. "REQUIRED CONSENTS" has the meaning set forth in Section
5.6.
1.1.42. "SHARES" means all of the issued and outstanding shares of
stock of HCI currently owned by Sellers.
1.1.43. "SELLERS" has the meaning set forth in the opening
paragraph of this Agreement.
1.1.44. "SELLER BASKET AMOUNT" has the meaning set forth in
Section 9.4.1.
1.1.45. "SELLER REPRESENTATION AND WARRANTY LOSSES" has the
meaning set forth in Section 9.4.1.
1.1.46. "SIGNIFICANT CONTRACTS" has the meaning set forth in
Section 5.11.
1.1.47. "STOCKHOLDERS AGREEMENT" means that Stockholders
Agreement, on even date herewith, among Buyer, Xxxxxxx X. Xxxxxx, and the other
shareholders of Buyer.
1.1.48. "SUBSIDIARY" has the meaning set forth in Recital B of
this Agreement.
1.1.49. "TAX RETURNS" has the meaning set forth in Section 5.14.
1.1.50. "TAXES" has the meaning set forth in Section 5.14.
1.2. CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise: (i) references to the plural include the singular and vice
versa; (ii) references to any Person include such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement; (iii) references to one gender include all genders; (iv)
"including" is not limiting; (v) "or" has the inclusive meaning represented by
the phrase "and/or"; (vi) the words "hereof," "herein," "hereby," "hereunder"
and similar terms in this Agreement refer to this Agreement as a whole and not
to any particular provision of this Agreement; (vii) section, clause, Exhibit
and Schedule references are to this Agreement unless otherwise specified; and
(viii) reference to any agreement (including this Agreement), document or
instrument means such agreement, document or instrument as amended or modified
and in effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof.
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions hereof, on
the Closing Date, Sellers shall sell, assign, transfer, grant, bargain, deliver
and convey to Buyer, and Buyer shall purchase from Sellers, the Shares and all
rights thereto or evidenced thereby, including all rights to receive and share
in dividends and distributions thereon and the right to vote on corporate
matters of HCI, free from any liens or encumbrances whatsoever.
3. PURCHASE PRICE.
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3.1. PURCHASE PRICE. The total purchase price (the "Purchase Price") to
be paid by Buyer to the Sellers for the Shares is Nineteen Million Two Hundred
and Seventy Six Thousand Three Hundred Thirty Two Dollars ($19,276,332) less
Debt (as hereinafter defined). For purposes of this Section 3.1, the term "Debt"
shall include, with respect to the Companies, the sum of, without duplication,
(i) all indebtedness for borrowed money (the Sellers and Buyer agree that the
installment sales contracts disclosed in Item 8 to Schedule 5.9 are not
indebtedness for borrowed money), (ii) capitalized lease obligations (the
Sellers and Buyer agree that the car leases disclosed in Item No. 1 to Schedule
5.11 are not capitalized lease obligations), (iii)capitalized interest expense,
(iv) any prepayment penalty with respect to any of the foregoing, and (v) any
account payable which is outstanding for a period of time in excess of the
greater of (a) 30 days past the due date based on historical trade terms with
respect to such account payable, or (b) 60 days from the Companies' receipt of
an invoice evidencing any such account payable, each as reflected on the Closing
Statement of Debt (as defined in Section 8.5).
3.2. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid by
Buyer to the Sellers on the Closing Date (as defined in Section 4.1) in Dollars
by wire transfer of immediately available funds to the bank accounts specified
by the Sellers in Exhibit 3.2 provided that, One Million Seven Hundred Fifty
Five Thousand Dollars ($1,755,000) of such Purchase Price shall be delivered to
the Escrow Agent (as defined in Section 9.5) in order to fund the
indemnification obligations described in Section 9.2.1. From the proceeds of the
Purchase Price, Exhibit 3.2 shall also set forth directions for the payment of
Sellers' legal fees and expenses, investment banking fees and expenses, and
accounting fees and expenses incurred in connection with the sale by the Sellers
of the Shares
4. CLOSING.
4.1. CLOSING LOCATION AND DATE. The closing of the purchase and sale of
the Shares (the "Closing") is to occur at the offices of Xxxxx, Xxxx & Xxxxxxxx,
X.X., 000 Xxxxx Xxxxxxxx, Xxxxx 0000, Xx. Xxxxx, Xxxxxxxx 00000, at 9:00 a.m.
local time, on the date hereof (the "Closing Date").
4.2. SELLERS' CONDITIONS. All of the obligations of Sellers hereunder
are subject to the satisfaction of every one of the following conditions
precedent unless, and only to the extent, waived in writing by Sellers:
4.2.1. the representations and warranties of Buyer in this
Agreement shall be true and correct in all material respects as of the date
hereof, and the covenants, agreements and undertakings of Buyer herein have been
complied with in all material respects;
4.2.2. all Required Consents have been received by Sellers;
4.2.3. no proceeding is pending or threatened by or before any
arbitrator or governmental authority to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is related to or arises out of, this
Agreement or the consummation of the transactions contemplated hereby; and
4.2.4. the Bank Debt shall have been paid in full to the Lenders,
all original guaranties provided by the Sellers or any other Person shall have
been returned to Sellers and marked "cancelled," and the liens and security
interests granted to the Lenders securing the Bank Debt shall have been released
and terminated, and evidence of such release and termination shall have been
delivered to Sellers; and
4.2.5. at the Closing, Buyer has tendered to Sellers the following
documents, executed in a manner and otherwise in form and substance reasonably
satisfactory to Sellers:
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4.2.5.1. an opinion of counsel for Buyer, dated as of the Closing
Date, substantially in the form of Exhibit 4.2.5.1;
4.2.5.2. a copy of resolutions duly adopted by the board of
directors of Buyer authorizing the execution and delivery of this Agreement and
any other agreement executed and delivered by Buyer in connection herewith and
the consummation of the transactions herein and therein contemplated to be
consummated by Buyer, duly certified, by the secretary of Buyer;
4.2.5.3. a certificate, dated as of the Closing Date, of a
responsible officer of Buyer to the effect that all of the conditions precedent
to Buyer's obligations in Section 4.3 that have not been waived by Buyer have
been satisfied;
4.2.5.4. a certificate of the secretary and another officer of
Buyer that contains their certification of the names and signatures of the
officers of Buyer who have been authorized to execute and deliver this Agreement
and any other instrument and agreement executed and delivered on behalf of Buyer
in connection herewith;
4.2.5.5. a copy of the articles or certificate of incorporation of
Buyer certified as correct and complete as of a recent date by the Secretary of
State or comparable official of the jurisdiction of incorporation of Buyer,
together with a certificate containing the attestation of such official as to
the good standing of Buyer in such jurisdiction, and a copy of the bylaws of
Buyer, as amended, certified as correct and complete as of the Closing Date by
the secretary of Buyer; and
4.2.5.6. such other documents or certificates reasonably requested
by Seller to effectuate the transactions contemplated hereby.
4.3. BUYER'S CONDITIONS. All of the obligations of Buyer hereunder are
subject to the satisfaction of every one of the following conditions precedent
unless, and only to the extent, waived in writing by Buyer:
4.3.1. the representations and warranties of the Sellers in this
Agreement shall be true and correct in all material respects as of the date
hereof, and the covenants, agreements and undertakings of Sellers herein have
been complied with in all material respects;
4.3.2. all Required Consents have been received by Buyer;
4.3.3. no proceeding is pending or threatened by or before any
arbitrator or governmental authority to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is related to or arises out of, this
Agreement or the consummation of the transactions contemplated hereby;
4.3.4. evidence that the Buy/Sell Agreement is terminated
simultaneously with the Closing;
4.3.5. at the Closing, Sellers have tendered to Buyer the
following documents, executed in a manner and otherwise in form and substance
reasonably satisfactory to Buyer:
4.3.5.1. an opinion of counsel for Sellers (other than the
Charities) dated as of the Closing Date, substantially in the form of Exhibit
4.3.5.1;
4.3.5.2. copies of the articles of incorporation of HCI and
Subsidiary certified as correct and complete as of a recent date by the
Secretary of State of Missouri and copies of the bylaws of
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HCI and Subsidiary certified as correct and complete as of the Closing Date by
the secretary of HCI and Subsidiary, as appropriate;
4.3.5.3. certificates of the Secretary of State of Missouri
that contain the attestation of such official to the good standing of HCI and
Subsidiary in such jurisdiction;
4.3.5.4. certificates for the Shares duly endorsed in blank
by the Sellers or accompanied by stock powers duly exercised by Sellers;
4.3.5.5. certificates, dated as of the Closing Date, from
each Seller attesting to the fact that all of the conditions precedent to
Sellers' obligations in Section 4.2 that have not been waived by Sellers have
been satisfied;
4.3.5.6. resignations of the each of the directors of HCI;
4.3.5.7. the stock ledgers, minute books, and corporate seals
of each of the Companies, provided, that any of the foregoing items shall be
deemed to have been delivered if such item is actually delivered, or is
otherwise located at the main office of the Companies in St. Louis, Missouri;
and
4.3.5.8. such other documents or certificates reasonably
requested by Buyer to effectuate the transactions contemplated hereby;
4.3.6. The Sellers shall have repaid in full each of the
promissory notes dated March 1, 1998, issued by such Sellers to HCI;
4.3.7. Xxxx Xxxxxx shall have executed the Stockholders'
Agreement;
4.3.8. Xxxxxxx X. Xxxxxx shall have executed a noncompetition
agreement containing substantially the provisions set forth in Section 8.6;
4.3.9. No arrangements shall exist between the Companies and ADM
and no employee of either Company shall perform services for ADM, except
arrangements on an arms'-length basis, which shall be evidenced by a written
agreement reasonably acceptable to Buyer to be executed on or prior to Closing
between ADM and Subsidiary; and
4.3.10. the Shares are free and clear of any lien, pledge,
security interest or other encumbrance.
4.4. ADDITIONAL PAYMENTS TO BE MADE AT CLOSING BY BUYER. Simultaneously
with the Closing, Buyer shall pay by wire transfer in same day funds, in
addition to the Purchase Price, the amount necessary to pay the Lenders in full
for all outstanding Bank Debt.
5. REPRESENTATIONS AND WARRANTIES OF SELLERS (OTHER THAN THE CHARITIES). Except
as set forth on the Disclosure Schedule, Sellers (other than the Charities)
represent and warrant to Buyer that the statements contained in this Section 5
are correct and complete as of the date of this Agreement, and for purposes of
this Section 5, the term "Sellers" shall not include the Charities.
5.1. ORGANIZATION. HCI is a corporation duly organized and a validly
existing corporation in good standing under the laws of the State of Missouri
and has the corporate power and authority to own, lease and operate its assets
and properties and to conduct its businesses as now being conducted.
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Subsidiary is a corporation duly organized and a validly existing corporation in
good standing under the laws of the State of Delaware and has the corporate
power and authority to own, lease and operate its assets and properties and to
conduct its businesses as now being conducted. Subsidiary is qualified to do
business and is in good standing in every state where the nature or extent of
its business or properties require it to be qualified to do business, except
where the failure to so qualify individually or in the aggregate will not have a
Material Adverse Effect. The copies of the certificate of incorporation, by-laws
or similar organizational documents of each of HCI and the Subsidiary which have
been provided to Buyer prior to the date of this Agreement are correct and
complete and reflect all amendments made thereto through the date hereof. The
minute books of HCI and the Subsidiary (or copies thereof) made available to
Buyer prior to the date of this Agreement fairly and accurately reflect all
material corporate action taken by the Board of Directors or stockholders of
each of HCI and the Subsidiary, respectively, since February 15, 1995.
5.2. SUBSIDIARIES; SHARES. Neither of the Companies has an ownership
interest or other equity interest in any other business or enterprise, except
for HCI's ownership of the Subsidiary. The Shares have been duly authorized and
validly issued, are fully paid and non-assessable and have not been issued in
violation of any preemptive rights. Except for the Buy/Sell Agreement, there are
no (i) existing voting trusts, liens, security interests, encumbrances or
options relating to any of the Shares; (ii) outstanding securities of either of
the Companies convertible into or evidencing the right to purchase or subscribe
for any share of stock in either of the Companies; (iii) existing subscriptions,
rights, or commitments obligating either of the Companies to issue any shares of
their stock or any securities convertible into or evidencing the right to
purchase or subscribe for any shares of such stock; or (iv) existing any stock
appreciation, phantom or similar rights outstanding based upon the book value or
any other attribute of any of the capital stock of either of the Companies, or
the earnings or other attributes of either of the Companies. The Shares
constitute 100% of the issued and outstanding shares of stock in HCI. A
description of the Shares, and the legal and beneficial owners of each of the
Shares, is set forth on Schedule 5.2. On the Closing Date, the delivery by a
Seller of stock certificates representing the Shares owned by such Seller in a
manner set forth in Section 4.3.5.4 will transfer good and valid title to such
Shares to Buyer, free and clear of any lien, pledge, security interest,
encumbrance or charge of any kind. All of the issued and outstanding shares of
stock of Subsidiary are owned by HCI, and have been duly authorized and are
validly issued, fully paid and nonassessable and were not issued in violation of
any preemptive rights. The issued and outstanding shares of stock of the
Subsidiary, a description thereof and ownership thereof is described on Schedule
5.2. Schedule 5.2 is true and correct in all material respects.
5.3. AUTHORIZATION. There is no provision in either of the Companies'
articles of incorporation or bylaws which prohibit or limit Sellers' ability to
consummate the transactions contemplated to be consummated by Sellers hereunder.
Sellers have the full right, power and authority to enter into this Agreement
and to consummate all of the transactions and to fulfill all of the obligations
contemplated to be consummated or fulfilled by Sellers hereunder. This Agreement
constitutes the legal, valid and binding agreement of Sellers enforceable
against Sellers in accordance with its terms.
5.4. FINANCIAL STATEMENTS. The audited consolidated balance sheet of
HCI, the Subsidiary and ADM as of December 31, 1997, and related audited income
statement for the year ended December 31, 1997, as well as the consolidating
balance sheet and consolidating income statement for the year ended December 31,
1997, copies of which have been previously delivered to Buyer, and which are
attached hereto as Schedule 5.4, have been prepared in accordance with GAAP, and
fairly present in all material respects the financial position and the results
of operations of HCI, the Subsidiary, and ADM as of the dates and for the
periods indicated. Except for (i) normal year-end adjustments, and (ii)
disclosures customarily made in the notes to audited financial statements, the
unaudited consolidated balance sheet of the Companies (excluding ADM) as of
April 30, 1998 (the "Latest Balance Sheet"), and related unaudited income
statement and cash flow statement for the year-to-date as of April 30, 1998,
copies of which have
8
been previously delivered to Buyer, and which are attached hereto as Schedule
5.4, fairly present in all material respects the financial position and the
results of operations of the Companies (excluding ADM) as of the dates and for
the periods indicated. The Accounts reflected on the Latest Balance Sheet (i)
represent bona fide accounts incurred in the ordinary course of business, and
represent obligation of third parties to pay for services actually rendered or
goods actually provided, leased or rented, in each case, by either of the
Companies, and (ii) except as noted in the Schedules hereto, based on historical
practice, the Accounts reflected on the Latest Balance Sheet represent
collectible obligations owing to the Companies, except for the non-collection of
those Accounts which, individually or in the aggregate, would not reasonably be
likely to have a Material Adverse Effect.
5.5. BOOKS AND RECORDS. The books and records of the Companies are true
and correct in all material respects. Except as required by GAAP, since December
31, 1996, there has not been a significant change in the accounting methods or
practices of the Companies.
5.6. NO CONFLICT OR VIOLATION. Except for obtaining the consents listed
on Schedule 5.6 (the "Required Consents"), and neither the execution and
delivery of this Agreement by Sellers, nor the performance by Sellers of the
transactions contemplated to be consummated by Sellers hereby, will result in:
(i) a breach of, or right of termination, forfeiture or default under any term,
condition or provision of any Material Agreement or Material Permit to which
either of the Companies is a party; or (ii) a violation of any Material Law, or
order, judgment, writ, injunction, decree or award applicable to either of the
Companies. No authorization, consent or approval of, or filing with, any public
body, court or authority is necessary on the part of either of the Companies or
any of the Sellers for the consummation by the Sellers of the transactions
contemplated by this Agreement, including, without limitation, under the
Xxxx-Xxxxx-Xxxxxx Act.
5.7. NO BURDENSOME RESTRICTIONS. Neither of the Companies is a party to
any Material Agreement, the performance of which could reasonably be likely to
have a Material Adverse Effect.
5.8. LITIGATION AND PROCEEDINGS. Except as set forth on Schedule 5.8,
there are no proceedings currently pending or, to Sellers' Knowledge, currently
threatened against or directly affecting either of the Companies or any of their
Assets or their directors, officers or employees (in their capacities as such).
Since December 31, 1996, neither of the Companies have been charged with, nor to
Sellers' Knowledge is under investigation with respect to any charge, which has
not been resolved concerning any violation of any Material Law or Material
Permit. Except as set forth on Schedule 5.8, neither the Companies nor their
Assets are subject to any judgment, order, writ, injunction, or decree of any
governmental authority which is presently in effect. There is no proceeding
currently pending or, to Sellers' Knowledge, currently threatened against,
either of the Companies which challenges the validity of this Agreement or the
transactions contemplated hereunder, or otherwise seeks to prevent the
consummation of such transactions.
5.9. ASSETS. Except as set forth on Schedule 5.9, since December 31,
1997, there has not been any acquisitions or dispositions of assets owned or
leased by either Company, except in the ordinary course of business of such
Company. Except as set forth on Schedule 5.9, none of the assets owned by the
either of the Companies is subject to a lien, security interest or encumbrance.
Except as set forth on Schedule 5.9, the Companies own or lease all buildings,
machinery, equipment and other tangible assets reasonably necessary for the
conduct of its business as currently being conducted. All Inventory reflected on
the Latest Balance Sheet is in the possession or under the control of the
Companies, except for Inventory which is (i) currently being rented or leased
to, or held by, a customer of either of the Companies, or (ii) in transit with a
common carrier for delivery to or from a customer of either of the Companies or
to or from either of the Companies. Each item of Inventory is in good working
order and operating condition, except for ordinary repairs, customary wear and
tear, or where the failure to be in such condition would
9
not reasonably be likely to have a Material Adverse Effect. The Accounts that
are owned by the Companies have been created in the ordinary course of business,
and represent bona fide transactions. HCI owns no assets other than the stock of
Subsidiary.
5.10. INTELLECTUAL PROPERTY. Schedule 5.10 lists or identifies all of
the Intellectual Property owned by the Companies. Since December 31, 1996, none
of the Intellectual Property has given rise to any written claim by any third
party that either of the Companies has infringed upon the rights of any other
Person. Since February 15, 1995 (i) neither the Companies nor the Sellers have
received any written notice of any infringement, misappropriation or violation
by either Company of any intellectual property (of the type described in clauses
(i) through (v) of the definition of Intellectual Property contained herein) of
any third parties, and (ii) the Companies have not infringed, misappropriated or
violated any such intellectual property (of the type described in clauses (i)
through (v) of the definition of Intellectual Property. The Companies' own or
license all of the Intellectual Property reasonably necessary for the operation
of their business as currently conducted.
5.11. CONTRACTS, LEASES, AND LICENSES. Except for leases and subleases
of real estate, set forth on Schedule 5.12, set forth on Schedule 5.11, is a
complete and correct list of (a) all written contracts, leases, licenses and
other agreements to which a Company is a party that are currently in effect with
annual payments by either of the Companies or the other parties thereto in
excess of $10,000.00; (b) all commitments for capital expenditures in excess of
$10,000; (c) all agreements which prohibit either of the Companies from freely
engaging in business anywhere in the world; (d) all agreements or indentures
evidencing, the borrowing of money by, or the mortgaging, pledging or otherwise
placing a lien on any of the assets of, the Companies; (e) all guarantees of
either of the Companies of any obligation for borrowed money or other obligation
of any third party; or (f) all license agreements or other agreements providing
for the payment or receipt of royalties in excess of $10,000 per year by either
of the Companies in connection with the Intellectual Property rights listed on
Schedule 5.10 (the "Significant Contracts"). The Significant Contracts have not
been modified or amended except as disclosed on Schedule 5.11. Except as
disclosed on Schedule 5.11, neither of the Companies is in breach of any such
Significant Contracts, and, except as set forth on Schedule 5.11, to Seller's
Knowledge, none of the other parties to such Significant Contracts are in breach
thereof.
5.12. REAL ESTATE LEASES. Neither of the Companies owns any real
property. Set forth on Schedule 5.12 is a complete and correct description of
all leases and subleases with respect to real property that are currently in
effect to which either of the Companies is a party, whether as a lessor, lessee,
sublessor, sublessee (collectively, the "Leases"). The Leases are, with respect
to the Companies, in full force and effect and have not been modified or amended
except as disclosed on Schedule 5.12. Except as disclosed on Schedule 5.12,
neither of the Companies is in breach of any such Leases (and to Seller's
Knowledge no circumstances exist which, if unremedied, would, either with or
without notice or the passage of time or both, result in such a breach by either
of the Companies), except for breaches that could not reasonably be likely to
have a Material Adverse Effect and, except as set forth on Schedule 5.12, to
Seller's Knowledge, none of the other parties to such Leases are in breach
thereof.
5.13. LIABILITIES. Neither of the Companies has any liability or
obligation, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, and whether liquidated or unliquidated
(individually, a "Liability," collectively, the "Liabilities"), except: (i)
Liabilities which are set forth in the Companies' December 31, 1997, balance
sheets; (ii) Liabilities which have arisen after the date of the Companies'
December 31, 1997, balance sheets and have been incurred in the ordinary course
of business none of which is a material uninsured Liability or which could have
a Material Adverse Effect; (iii) as otherwise specifically set forth in any
Schedule to this Agreement; and (iv) Liabilities which are accounts payable
incurred in the ordinary course of business.
10
5.14. TAXES. Except as set forth on Schedule 5.14, since February 15,
1995, each of the Companies has duly and timely filed, all tax returns required
to be filed by it (the "Tax Returns"), there are currently no pending extensions
to file any Tax Returns, and all such Tax Returns were, at the time of filing,
correct and complete. Except as set forth on Schedule 5.14, since February 15,
1995, no governmental authority has conducted, nor is any governmental authority
currently conducting, an audit of either of the Companies, nor since February
15, 1995, has any governmental authority asserted any claim for the assessment
of any additional tax liability or initiated any action or proceeding which
could result in such an assertion (other than those which have already been
paid). Except as set forth on Schedule 5.14, since February 15, 1995, each of
the Companies has paid all taxes required to be paid by it on or prior to the
date any such payments would be due without incurring any penalties. The
Companies have reserved on the Latest Balance Sheet, in accordance with GAAP,
reserves that are reasonably adequate for the payment of any taxes not yet due
and payable. For periods after February 15, 1995, (i) there is no assessment of
any additional taxes of either Company, and (ii) to Seller's Knowledge there are
no unresolved claims or disputes concerning the liability for taxes owing by
either Company. Neither Company is a party to any tax sharing agreement,
contract or arrangement that would cause such Company to be obligated to pay any
tax obligation of any other person. Neither Company is a party to any agreement,
contract or arrangement that would result, separately or in the aggregate, in
the payment of any "excess parachute payments" within the meaning of Section
280G of the Code and the consummation of the transactions contemplated by this
Agreement will not be a factor causing payments to be made by either Company
that are not deductible (in whole or in part) under Section 280G of the Code.
For purposes of this Agreement, the term "taxes" means all taxes, charges, fees,
levies, or other assessments.
5.15. EMPLOYEE BENEFIT PLANS. Set forth on Schedule 5.15 is a complete
and correct list of all written employee benefit plans of either of the
Companies currently in effect applicable to any of the employees or former
employees of either of the Companies or to their respective dependents or
beneficiaries (the "Employee Benefit Plans"), copies of which have been provided
to Buyer. There are neither presently pending nor, to Sellers' Knowledge,
threatened against either of the Companies, any (i) claims or charges or (ii) to
Seller's Knowledge, audits or investigations, by any governmental authority,
labor organization, employee or former employee of either of the Companies or
participant or beneficiary of any Employee Benefit Plan alleging that either of
the Companies or such Employee Benefit Plan (or any fiduciary) has violated any
law respecting employee benefits or employment claims or charges. Except for the
Employee Benefit Plans set forth on Schedule 5.15 or such Employee Benefit Plans
predecessors, since February 15, 1995, the Companies have not had any other
benefit plans or benefit arrangements for the benefit of its employees. With
respect to each Employee Benefit Plan set forth on Schedule 5.15, since February
15, 1995: (i) each such Employee Benefit Plan has been in compliance in form and
operation with all applicable laws, regulations and rules, including, without
limitation, the filing of all necessary reports with respect to each such
Employee Benefit Plan, and to the extent applicable, the requirements of the
Code, and the Employee Benefit Plans have not been operated in any manner that
would result in the imposition of any fine, penalty, or disallowance of a tax
deduction, except to the extent any such noncompliances or impositions would
result in a liability to the Companies of $5,000 or less in the aggregate; and
(ii) each such Employee Benefit Plan has been administered in compliance with
its respective plan documents.
5.16. COMPLIANCE WITH LAWS; PERMITS. Except as set forth on Schedule
5.16, since December 31, 1996, neither of the Companies or the Sellers have
received any written notice alleging (or any notice of any investigation related
to) any violation by either of the Companies of any Material Law. Except as set
forth on Schedule 5.16, neither of the Companies' businesses nor the conduct or
operation thereof, nor the ownership or use of the Assets, violates any Material
Law. Set forth on Schedule 5.16 is a complete and correct list of all Material
Permits used in the operation of each of the Companies' businesses. Each of the
Companies is in possession of all Permits required for the operation of its
11
business (and any part thereof), and is in compliance with all of the
requirements and limitations included in such Permits, except where the failure
to be in possession of any such Permits or in compliance with any such Permits
could not reasonably be likely to have a Material Adverse Effect.
5.17. EMPLOYMENT AGREEMENTS; LOANS FROM OR TO EMPLOYEES. Set forth on
Schedule 5.17 is a list of all written or oral employment agreements or
contracts currently in effect with any employees or former employees of the
Companies or relating to severance pay for any such person. There are no amounts
in excess of normal withholdings and wages or customary reimbursements owed by
either of the Companies to any of their respective employees, and there are no
amounts owed by any of the Companies' employees to the Companies, except for
ordinary advances for travel and similar items.
5.18. CUSTOMERS AND SUPPLIERS. Schedule 5.18 lists the ten largest
customers (by gross revenue) and ten largest suppliers (by Dollar purchase
amount) of the Company for the year ended December 31, 1997. Since December 31,
1997, there has not been any change in the Companies' business relationships or
any material decrease in the rate of business with any customer or supplier
which as of December 31, 1997 was one of the Companies' ten largest customers or
ten largest suppliers, other than in the ordinary course of business.
5.19. LABOR MATTERS. Neither of the Companies have been a party to any
labor union contract or collective bargaining agreement, nor, since December 31,
1996, to Sellers' Knowledge, has there been any union organizing activity
conducted by either of the Companies' employees with respect to its operations.
5.20. BROKERS. Except for X. X. Xxxxxxx & Sons, Inc., no agent, broker
or other Person acting on behalf of Sellers is entitled to a commission or
finder's fee in connection with the transaction contemplated by this Agreement.
5.21. ORDINARY COURSE; NO MATERIAL EFFECT. Since December 31, 1997,
except as set forth on Schedule 5.21 (i) the Companies have been operated in the
ordinary course of business, (ii) except with regards to any change in the
industry in which the Companies operate generally, no event, occurrence or
development has occurred which, individually or taken together with all other
events, occurrences or developments, could reasonably be likely to give rise to
a Material Adverse Effect, and (iii) neither of the Companies has:
(A) disclosed, to any person other than Buyer and its
representatives and other third parties and their representatives who have
expressed interest in purchasing the Companies (and/or their assets) from time
to time, any proprietary confidential information, in each case other than
pursuant to a confidentiality agreement substantially in the form executed by
Buyer in connection with the transactions contemplated hereby;
(B) declared or paid any dividends or other distributions with
respect to any shares of capital stock of either of the Companies or redeemed or
purchased, directly or indirectly, any shares of such capital stock or any
options therefor;
(C) issued, sold or transferred any of its equity securities,
securities convertible into or exchangeable for its equity securities or
warrants, options or other rights to acquire its equity securities, or any bonds
or debt securities;
(D) entered into any transaction with any employee, officer,
director, or shareholder, other than employment arrangements otherwise disclosed
in this Agreement and the Schedules hereto, the
12
agreement between the Subsidiary and ADM executed on or about the Closing Date,
or the transactions contemplated by this Agreement;
(E) suffered any theft, damage, destruction or loss of, or to, any
property owned or regularly used by it, whether or not covered by insurance in
excess of $25,000 in the aggregate;
(F) made any capital expenditure not in the ordinary course or
inconsistent with the Companies' customary capital expenditure levels;
(G) made charitable contributions or pledges which in the
aggregate exceed $10,000; or
(H) made or granted any bonus, wage, salary or compensation
increase to any director, officer or employee, or made or granted any increase
in any benefits provided under any employee benefit plan or arrangement, or
amended or terminated any existing employee benefit plan or arrangement, or
adopted any new employee benefit plan or arrangement, or made any commitment or
incurred any liability to any organized labor organization.
5.22. INSURANCE. Schedule 5.22 lists each insurance policy maintained
by either of the Companies with respect to its respective properties and assets.
Prior to the date hereof, the Sellers have delivered to Buyer complete and
accurate copies of each of the insurance policies described on Schedule 5.22.
All such insurance policies are in full force and effect, and to Seller's
Knowledge neither of the Companies is in default with respect to its obligations
under any of such insurance policies.
5.23. AFFILIATE TRANSACTIONS. Except as set for the on Schedule 5.23
and other than as described in or contemplated by this Agreement and the
Schedules hereto, none of the Sellers or any member of the immediate family of
any such Seller or any entity in which any of the Sellers or members of such
Seller's immediate family owns any beneficial interest greater than one percent
(1%), has any agreement with either of the Companies (other than employment
arrangements) or any interest in any property necessary for the conduct of the
business of either of the Companies (other than ownership of capital stock of
either of the Companies). For purposes of this Section 5.23, the members of the
immediate family of a Seller shall consist of the spouse and minor children of
such Seller, or in the case of a Seller which is a trust, the beneficiaries of
such trust.
6. DISCLOSURE SCHEDULE.
6.1. GENERAL. All capitalized terms used in the Disclosure Schedule,
unless otherwise defined therein, have the meaning set forth in this Agreement.
The section references referred to in the Disclosure Schedule are to Sections of
this Agreement. For convenience, some disclosures are cross-referenced to other
Sections. For purposes of the Disclosure Schedule, any information which is
disclosed on the Disclosure Schedule will, to the extent reasonably apparent, be
deemed disclosed for all Sections of Section 5 of the Agreement to which such
disclosure is relevant. The items listed in the Disclosure Schedule may not in
many cases meet the "materiality" standard, if any, set forth in the
corresponding Section of the Agreement, but are being disclosed to assist Buyer
after the Closing Date.
7. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
Sellers that the statements contained in this Section 7 are correct and complete
as of the date of this Agreement.
7.1. ORGANIZATION. Buyer is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
incorporation, and has the corporate power and authority to own, lease and
operate its assets and properties and to conduct its business as now being
conducted.
13
7.2. AUTHORIZATION. There is no provision in Buyer's articles or
certificate of incorporation or comparable organizational documents or in its
bylaws which prohibits or limits Buyer's ability to consummate the transactions
contemplated to be consummated by Buyer hereunder. Buyer has the full right,
power and authority to enter into this Agreement and to consummate or cause to
be consummated all of the transactions and to fulfill all of the obligations
contemplated to be consummated or fulfilled by Buyer hereunder. The execution
and delivery of this Agreement by Buyer and the due consummation by Buyer of the
transactions contemplated to be consummated by Buyer hereby have been duly
authorized by all necessary action of the board of directors and shareholders of
Buyer. This Agreement constitutes the legal, valid and binding agreement of
Buyer enforceable against Buyer in accordance with its terms.
7.3. NO CONFLICT OR VIOLATION. Neither the execution and delivery of
this Agreement by Buyer, nor the consummation by Buyer of the transactions
contemplated to be consummated by Buyer hereby nor compliance by Buyer with any
of the provisions hereof will result in: (i) a violation of or a conflict with
any provision of the articles or certificate of incorporation or comparable
organizational documents or bylaws of Buyer; (ii) a breach of, or right of
termination, forfeiture or default under any term, condition or provision of any
material contractual obligation or material permit to which Buyer is a party or
by which any of its assets is bound or affected, or an event which, with the
giving of notice, lapse of time or both, would result in any such breach, right
of termination, forfeiture or default; (iii) a violation of any applicable law,
or order, judgment, writ, injunction, decree or award applicable to and material
to Buyer; or (iv) any Person having the right to enjoin, rescind or otherwise
prevent or impede the transactions contemplated hereby or to obtain damages from
Sellers or to obtain any other judicial or administrative relief as a result of
any transaction carried out in accordance with the provisions of this Agreement.
7.4. LITIGATION AND PROCEEDINGS. There is no controversy pending or, to
the knowledge of Buyer, threatened against Buyer which challenges the validity
of this Agreement or the transactions contemplated hereunder, or otherwise seeks
to prevent the consummation of such transactions.
7.5. CONSENTS AND APPROVALS. No consent, approval or authorization of
any Person, nor any declaration, filing or registration with any governmental
authority or other Person, is required to be made or obtained by Buyer in
connection with the execution, delivery and performance by Buyer of the
transactions contemplated to be consummated by Buyer hereunder. No
authorization, consent or approval of, or filing with, any public body, court or
authority is necessary on the part of Buyer for the consummation by the Buyer of
the transactions contemplated by this Agreement, including, without limitation,
under the Xxxx-Xxxxx-Xxxxxx Act.
7.6. BROKERS. No agent, broker or other Person acting on behalf of
Buyer is entitled to a commission or finder's fee in connection with the
transactions contemplated by this Agreement.
7.7. NO KNOWLEDGE OF SELLER'S MISREPRESENTATIONS. Except as
specifically disclosed by Messrs. Xxxxxxxxx and Yun at the July 21, 1998 meeting
between them and Xxxxxxx Xxxxxx, neither Xxxxx X. Xxxxxxxxx nor Xxx X. Xxx has
any actual knowledge of any misrepresentation by Sellers in this Agreement or of
any breach by Sellers of any of Sellers' representations and warranties
contained herein or in any other agreement or certificate executed in connection
herewith, which could give rise to a claim for indemnification under Section
9.2.1.
7.8. SECURITIES. Buyer qualifies and as "accredited investor," or is an
entity in which all of its equity owners fall within the definition of
"accredited investor" as defined in Regulation D of the Securities and Exchange
Commission, promulgated under the Securities Act of 1933, as amended. Buyer has
extensive experience in reviewing and assessing the merits and risks and other
considerations relating to the desirability of making investments of the kind
contemplated hereby. Buyer understands that the
14
Shares have not been registered with any governmental authority. Buyer is
purchasing the Shares for investment for its own account and not with a view to
distribution or resale thereof.
8. ACTIONS AFTER THE CLOSING. The parties respectively covenant as follows for
the period after the Closing:
8.1. FURTHER ASSURANCES. From and after the Closing, upon reasonable
request of Seller or Buyer, the other party shall, at its own expense, do such
further acts as may be reasonably necessary or appropriate to carry out the
transactions contemplated by this Agreement, including, without limitation,
obtaining consents from any third party. Without limiting the foregoing, from
and after the Closing, upon reasonable request of Buyer and at Buyer's expense,
Sellers shall do, execute, acknowledge and deliver, all such further acts,
assurances, deeds, assignments, transfers, conveyances, powers of attorney and
other instruments and papers as may be reasonably required to sell, assign,
transfer, convey and deliver to and vest in Buyer ownership of all the Shares
consistent with the terms of, this Agreement, and as may be reasonably
appropriate otherwise to carry out the transactions contemplated by this
Agreement. After the Closing Date, Buyer shall cause the Companies to continue
to provide to Xxxxx Xxxxx the leased car currently provided to such employee on
the Closing Date under the lease in effect on the Closing Date until the
expiration of such lease, and Buyer shall cause the Companies to comply with all
terms and conditions of the leases of the cars leased by the Companies on the
Closing Date.
8.2. SELLERS' ACCESS TO MATERIALS. It is recognized that Sellers may
need financial or other data with respect to the Companies, the Shares and the
Assets covering several fiscal periods prior to the Closing Date. Buyer shall
render reasonable cooperation to Sellers and their auditors, attorneys and other
representatives for such purpose, including without limitation, access to the
books and records (for periods prior to the Closing) of the Companies and the
employees of the Companies.
8.3. BUYER'S RECORD RETENTION. Buyer agrees to preserve and keep all
financial and tax business records for a period of six years from the Closing
Date or if longer, the period of completion and closure of all United States,
state and local tax audits of returns. Other business records including, but not
limited to such business records as pertain to environmental and health and
safety matters shall be kept as long as required by applicable law or
regulations.
8.4. TAX TREATMENT; TAX RETURNS. Buyer shall not take any action
inconsistent with the parties intent to treat the Purchase Price solely as
consideration for the Shares. Buyer shall timely file, and cause the Companies
to timely file, all tax returns and statements (including, without limitation
income tax returns) for the 1998 calendar year and any other assessment or
taxing period relating to assessment or taxing periods which encompass both
pre-Closing and post-Closing periods.
8.5. DELIVERY OF CLOSING STATEMENT OF DEBT. On the Closing Date, the
Sellers shall deliver a statement of all existing Debt as of the Business Day
immediately preceding the Closing Date (the "Closing Statement of Debt"), which
shall fairly represent the amount of Debt of the Companies as of such date.
8.6. COVENANT NOT TO COMPETE; COVENANT NOT TO SOLICIT.
8.6.1. Each Seller hereby agrees that, for a period of three years
following the Closing Date, such Seller will not, directly or indirectly,
without the prior written consent of the Buyer, engage in activities in North
America which are competitive with the business actually conducted by the
Companies or Buyer on the Closing Date. The covenant set forth herein shall be
conditioned on Buyer fully performing all its obligations under this Agreement.
15
8.6.2. Notwithstanding subsection 8.6.1, any Seller may, directly
or indirectly, (i) acquire (by merger or otherwise) any business (an "Acquired
Business") that includes a business which is then engaged in a business
competitive with the activities of the business actually conducted by the Buyer
or the Companies on the Closing Date (such portion of the Acquired Business,
being a "Competitive Business") if the acquisition of the Competitive Business
is incidental to the merger or acquisition of the Acquired Business, provided,
however, if the Competitive Business represents more than five percent (5%) of
the aggregate sales revenues of the entire Acquired Business for the twelve (12)
calendar months immediately preceding the closing of the acquisition of the
Acquired Business, then Seller, as applicable, shall within twenty four months
(24) from the date of the closing of the Acquired Business, sell, exchange or
transfer such portion of the Competitive Business so that the portion, if any,
of the Competitive Business that remains with Seller and its Subsidiaries is not
more than five percent (5%) of the aggregate sales revenues of the Acquired
Business for the twelve (12) calendar months immediately preceding the closing
of the disposition of such portion of the Competitive Business, or (ii) acquire
for investment purposes an equity position of less than five percent (5%) of the
voting interest of a third party who is engaged in a Competitive Business.
8.6.3. Notwithstanding subsection 8.6.1, nothing contained herein
shall prohibit ADM or Sellers, through their ownership interest in ADM, from
conducting the business of ADM substantially as conducted on the Closing Date.
The parties hereto agree that ADM's business as conducted on the Closing Date is
the renting or leasing of equipment which is paid for by third party payors (as
opposed to the lessee) or provided to certain users on a subcontracting basis
(e.g. the arrangement between ADM and Unity Health Services, pursuant to which
ADM provides the equipment and set up).
8.6.4. Each Seller agrees that for a period of three years after
the Closing Date, such Seller shall not, directly or indirectly, (i) offer to
provide to any third party who is a customer of the Companies or the Buyer on
the Closing Date, the type of services any such customer receives from either of
the Companies or Buyer on the Closing Date, without the prior written consent of
Buyer, or (ii) encourage any such customer to terminate or alter such customer's
relationship with either of the Companies (or its successor by merger).
8.6.5. Each Seller hereby agrees that, for a period of three years
after the Closing Date, it shall not, directly or indirectly, solicit for
employment, offer to hire, or hire, without the prior written consent of Buyer,
any individual who, as of the Closing Date, was a full time, active employee of
either of the Companies or Buyer or who subsequent to the date of this Agreement
becomes a full time, active employee of either of the Companies or Buyer (an
"Employee"), provided that this provision shall not apply to (i) any such
Employee whose employment relationship with either of the Companies or Buyer has
been terminated for at least three months prior to the date of such hiring, or
(ii) any such Employee whose employment is terminated, for any reason, by the
Companies or Buyer. Notwithstanding the foregoing, nothing contained in this
Subsection 8.6.5 shall prohibit any Seller from directly or indirectly hiring
any Employee who responds to an advertisement or solicitation made to the
general public, except for management Employees and sales Employees (who may
otherwise be so employed, directly or indirectly, by a Seller, pursuant to the
preceding sentence).
8.6.6. This Section 8.6 shall not apply in any respect to the
Charities or the Trust, and the term "Sellers" as used in this Section 8.6 shall
not include the Charities or the Trust. This Section 8.6 shall not apply in any
respect to Xxxxxxx X. Xxxxxx, and the term "Sellers" as used in this Section 8.6
shall not include Xxxxxxx X. Xxxxxx, and the restrictions of the type described
in this Section 8.6 are set forth in the employment agreement by and between
Xxxxxxx X. Xxxxxx and Buyer, of even date herewith.
8.7. COOPERATION ON INSURANCE MATTERS. The Sellers agree reasonably to
cooperate in any effort by Buyer or either of the Companies following the
Closing Date to recover under the insurance
16
policies referred to in Section 5.22 for losses relating to occurrences prior to
the Closing Date or under the indemnification provisions contained in the Asset
Purchase Agreement dated as of January 31, 1997 by and between Omni Medical
Supply, Inc. and the Company.
8.8. OMNI PAYMENTS. Buyer shall, within sixty (60) days following the
Closing Date, pay the full amount required to terminate the Subsidiary's
obligations to pay commissions pursuant to Section 9(d) of that certain Asset
Purchase Agreement dated as of January 31, 1997 by and between Omni Medical
Supply ("Omni") and Home Care Instruments, Inc. (the "Commission Termination
Payment") (unless Buyer has terminated such obligations, but is withholding
payment of the Commission Termination Payment as a result of a good faith
dispute with Omni). In the event that Buyer shall not make the Commission
Termination Payment in accordance with the foregoing sentence, then Buyer shall
(subject to the proviso to this sentence), within sixty-five (65) days following
the Closing Date, pay to the Sellers an additional amount of Ninety Five
Thousand Dollars ($95,000), and the failure of Buyer to make such payment shall
not be subject to the limitations contained in Section 9.4.2; provided, however,
if Buyer resolves any such good faith dispute with Omni, and the result of such
resolution is that no Commission Termination Payment is to be made or the
Commission Termination Payment is to be reduced, then, within ten (10) days of
such resolution (i) if no Commission Termination Payment is to be made to Omni,
then the Additional Amount shall be paid to Sellers in accordance with this
Section, and (ii) if the Commission Termination Payment is reduced, one half of
the Dollar amount of such reduction shall be paid to Sellers in accordance with
this Section.
8.9. EMPLOYEES. Each employee's time of employment with either of the
Companies will be recognized by the Buyer, and credited for the benefit of each
employee, for computing severance payments under Buyer's standard severance
policies (unless an employee has a written employment agreement with Buyer
providing for greater severance, in which case such written employment agreement
will govern). In the event that Buyer shall, within one year from the Closing
Date, terminate any of the employees of the Companies listed on Schedule 8.9
hereto, then Seller shall, in connection with such termination, have the sole
discretion to require Buyer to pay up to Seventy Five Thousand Dollars ($75,000)
in the aggregate to such employees as additional severance (e.g. in addition to
Buyer's standard severance payments). The failure of Buyer to make such payments
shall not be subject to the limitations contained in Section 9.4.2. Buyer will
use reasonable efforts to provide prior notice to Seller in the event of any
such termination to enable Seller to promptly determine the amount of severance
(but Buyer shall have no liability for failure to provide any such notice).
8.10. SELLER'S EXPENSES. Sellers shall pay, at Closing, all liabilities
incurred by them either in respect of legal fees and expenses, investment
banking fees and expenses, and accounting fees and expenses incurred in
connection with the sale by the Sellers of the Shares, and Seller's shall
indemnify and hold harmless Buyer and the Companies with respect to the
foregoing fees, costs and expenses. The failure of Sellers to make such payments
shall not be subject to the limitations contained in Section 9.4.1.
9. INDEMNIFICATION.
9.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; SURVIVAL OF COVENANTS.
9.1.1. The representations and warranties contained in this
Agreement shall survive the Closing and shall remain in full force and effect
for 365 days following the Closing Date, but subject to all express limitations
and other provisions contained in this Agreement; provided, however, the
representations and warranties of Seller as contained in Sections 5.1, 5.2, 5.3,
and 5.14, and the representations and warranties of Buyer contained in Sections
7.1 and 7.2 in each case shall survive to the later of 365 days following the
Closing Date or the termination of the applicable statute of limitations.
17
Failure of a party to give notice of a claim based on an inaccuracy or breach of
a representation or warranty in this Agreement within the applicable survival
periods shall constitute a waiver of such claim.
9.1.2. The covenants contained herein shall survive the Closing in
accordance with their respective terms.
9.2. INDEMNIFICATION.
9.2.1. Subject to Section 9.4 and except as expressly provided to
the contrary in this Agreement, Sellers (other than the Charities) agree to
indemnify and hold the Buyer harmless from and against all demands, actions or
causes of action, assessments, losses, costs, expenses, debts, claims,
liabilities and obligations (including, without limitation, interest, penalties,
and reasonable attorneys' fees and expenses), but in no event including special.
exemplary, or punitive damages (collectively, "Damages") to the extent arising
out of or resulting from Sellers' (other than the Charities) breach of
representation or warranty, covenant or agreement contained herein. The
foregoing indemnification obligation of the Sellers (other than the Charities)
shall be joint and several.
9.2.2. Subject to Section 9.4 and except as expressly provided to
the contrary in this Agreement, Buyer agrees to indemnify and hold the Sellers
(including, without limitation, the Charities and all beneficiaries of any trust
which is a Seller), harmless from and against all Damages to the extent arising
out of or resulting from (i) Buyer's breach of representation or warranty,
covenant or agreement contained herein, (ii) any liability arising from and
after the Closing Date for violation or breach of any laws arising due to
Buyer's or the Companies' actions or omissions relating to the hiring,
termination, or retention of any of the Companies' employees, and the employment
or termination of employment of any such individuals by Buyer or any of the
Companies, and (iii) the car leases listed in Schedule 5.11.
9.2.3. The above indemnification obligations expressly apply
whether or not liability is based on negligence, in whole or in part, of the
indemnified party and irrespective of the legal theory or cause of action and
whether for injury or death to the indemnified party's own employees.
9.2.4. As used in this Agreement, (i) "Indemnifying Party" shall
mean any party which is required to indemnify any other party pursuant to the
terms hereof, and (ii) "Indemnified Party" shall mean any party which is
entitled to be indemnified by any other party pursuant to the terms hereof.
9.3. PROCEDURE FOR INDEMNIFICATION.
9.3.1. In the event that, from and after the Closing Date, a claim
is asserted by a third party against any Indemnified Party, with respect to any
matter to which the indemnities contained in this Section 9 relate, the
Indemnified Party shall give prompt written notice to the Indemnifying Party,
and the Indemnifying Party shall have the right, at its election, to take over
the defense or settlement (such settlement to be made only with the prior
written consent of the other party which shall not be unreasonably withheld) of
such claim at its own expense by giving prompt notice to the Indemnified Party;
provided, however, that (a) the Indemnified Party shall at all times have the
right, at its option and expense, to participate fully therein, and (b) if the
Indemnifying Party does not give such notice and does not proceed diligently to
defend the claim within thirty (30) days after receipt of such notice of the
claim, the Indemnified Party shall have the right, but not the obligation, to
undertake the defense of such claim for the account of and at the risk of the
Indemnifying Party and the Indemnifying Party shall be bound by any defense or
settlement that the Indemnified Party may make as to such claim. The parties
shall cooperate in defending any such third party's claim, and the defending
party shall have reasonable access to the books and records, and personnel in
the possession or control of the other party which are pertinent to the defense.
The parties agree that any Indemnified Party may join an Indemnifying Party in
any action,
18
claim or proceeding brought by a third party, as to which any right of indemnity
created by this Agreement would or might apply, for the purpose of enforcing any
right of indemnity granted to such Indemnified Party pursuant to this Agreement.
Any failure by an Indemnified Party to provide the notice required by the first
sentence of this Section shall relieve the Indemnifying Party to whom such
notice was not provided of liabilities and indemnification under this Section 9
with respect to such matter to the extent, but only to the extent, that such
non-notified Indemnifying Party is prejudiced by the lack of such timely and
adequate notice.
9.3.2. Subject to Section 9.4, the costs and expenses, including
reasonable fees and disbursements of counsel as permitted under Section 9.3.1,
incurred by any Indemnified Party in connection with any claim shall be
reimbursed on a quarterly basis by the Indemnifying Party, without prejudice to
the Indemnifying Party's right to contest the Indemnified Party's right to
indemnification and subject to refund in the event the Indemnifying Party is
ultimately held not to be obligated to indemnify the Indemnified Party.
9.4. LIMITATIONS.
Except as otherwise expressly provided in this Agreement, after the Closing,
each party's respective obligations for a breach of a representation or warranty
are subject to the following:
9.4.1. As used in this Section 9.4.1, the term "Sellers" shall not
include the Charities. Sellers will not have any liability or obligations
(including, without limitation, for Damages), under Section 9.2 or otherwise,
arising out of or resulting from the breach of Sellers' representations and
warranties, contained in Section 5 of this Agreement, the Schedules hereto, or
any in any other document, certificate or agreement executed or delivered in
connection with this Agreement ("Seller Representation and Warranty Losses")
until the aggregate amount of the Seller Representation and Warranty Losses
incurred or suffered by Buyer exceed a total of One Hundred Ninety Five Thousand
Dollars ($195,000) (the "Seller Basket Amount"); and if the cumulative aggregate
amount of such Seller Representation and Warranty Losses exceeds the Seller
Basket Amount, then Sellers shall be obligated with respect to such Seller
Representation and Warranty Losses, only for or with respect to the amount by
which the cumulative aggregate Seller Representation and Warranty Losses under
this Agreement exceed the Seller Basket Amount; provided that in no event shall
Sellers be obligated with respect to aggregate Seller Representation and
Warranty Losses under this Agreement which exceed a cumulative aggregate total
of One Million Seven Hundred Fifty Five Thousand Dollars ($1,755,000).
9.4.2. Buyer will not have any liability or obligations
(including, without limitation, for Damages), under Section 9.2 or otherwise,
arising out of or resulting from the breach of Buyer's representations and
warranties contained in Section 7 of this Agreement, the Schedules hereto, or
any in any other document, certificate or agreement executed or delivered in
connection with this Agreement ("Buyer Representation and Warranty Losses")
until the aggregate amount of the Buyer Representation and Warranty Losses
incurred or suffered by Seller exceed a total of One Hundred Ninety Five
Thousand Dollars ($195,000) (the "Buyer Basket Amount"); and if the cumulative
aggregate amount of such Buyer Representation and Warranty Losses exceeds the
Buyer Basket Amount, then Buyer shall be obligated with respect to such Buyer
Representation and Warranty Losses, only for or with respect to the amount by
which the cumulative aggregate Buyer Representation and Warranty Losses under
this Agreement exceed the Buyer Basket Amount; provided that in no event shall
Buyer be obligated with respect to aggregate Buyer Representation and Warranty
Losses under this Agreement which exceed a cumulative aggregate total of One
Million Seven Hundred Fifty Five Thousand Dollars ($1,755,000).
9.4.3. Each of the parties covenants and agrees that it will use
its reasonable efforts to mitigate any Damages with respect to which such party
is or may become entitled to be indemnified by the other party pursuant to this
Agreement.
19
9.4.4. In determining the amount of Damages for which an
Indemnified Party is entitled to seek indemnity hereunder, net amounts paid or
recovered (and the Indemnified Party shall use reasonable efforts to file and
support claims therefor short of litigation) under third party insurance
policies (excluding self-insurance), contractual or other rights of recovery,
indemnification or contribution shall reduce the amount for which
indemnification may be sought as shall the actual net tax effect of Damages on
the tax liability of the Indemnified Party.
9.4.5. Except, in each case, as expressly set forth in this
Agreement, the Schedules hereto or any document or certificate delivered by
Sellers to Buyer under this Agreement, (i) SELLERS MAKES NO REPRESENTATIONS OR
WARRANTIES (WHETHER EXPRESS OR IMPLIED) OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR USE OR OTHERWISE IN REGARD TO THE SHARES OR THE ASSETS;
(ii) except as expressly provided in this Agreement, the Schedules hereto or any
document or certificates delivered by Sellers to Buyer under this Agreement,
Sellers undertake no liability for any damage, loss, expense or claim or any
other matter relating to any cause whatsoever arising under or pursuant to this
Agreement, (whether such cause be based in contract, negligence, strict
liability, other tort or otherwise), and in no event shall Sellers be liable for
special, exemplary, or punitive damages to Buyer, and (iii) Sellers shall not be
liable for, and Buyer assumes liability for, all personal injury and property
damage connected with the handling, transportation, possession, or other use or
resale of any of the Assets from and after the Closing Date whether such Assets
are used or resold alone or in combination with any other material.
9.4.6. Subject to the limitations on indemnity obligations as set
forth in this Section 9, the representations, warranties and covenants of the
parties set forth herein shall survive the Closing, regardless of any
investigation made by or on behalf of the parties hereto or the results of any
such investigation, and the participation of the parties in the consummation of
the transactions contemplated herein will not constitute a waiver of any
representation, warranty or covenant of any other party hereto.
9.5. ESCROW. On the Closing Date, Buyer shall deliver $1,755,000 of the
Purchase Price to an escrow agent (the "Escrow Agent") selected by the Sellers
with the consent of Buyer, to fund the indemnification obligations described in
this Section 9.2.1. Such funds shall be held in an account by the Escrow Agent
pursuant to an escrow agreement substantially in the form attached as Exhibit
9.5 to this Agreement, among Buyer, the Sellers and the Escrow Agent, to be
executed on and dated as of the Closing Date.
9.6. TAXES. Sellers make no representation as to the tax liability, if
any, of Buyer or the Companies as a result of the consummation of the
transactions contemplated hereby (including, without limitation, if the
Companies are merged or liquidated), and Seller's shall have no liability or
obligation to indemnify Buyer for any such tax liability.
10. GENERAL PROVISIONS.
10.1. SPECIAL PROVISION REGARDING CHARITIES. Notwithstanding anything
contained herein or in any other agreement, document or certificate executed in
connection herewith:
(i) Each Charity makes only the following representations and
warranties and only with respect to itself, and makes no other
representations or warranties of any kind or nature (A) the Shares
owned by such Charity are not subject to any lien or security interest,
(B) such Charity has the full right, power and authority to enter into
this Agreement and to consummate all of the transactions and to fulfill
all of the obligations contemplated to be consummated or fulfilled by
such Charity hereunder, (C) there is no provision in such Charity's
organizational documents that
20
prohibits or limits its ability to consummate the transactions
contemplated to be consummated by such Charity hereunder, and (D) this
Agreement constitutes the legal, valid and binding agreement of such
Charity enforceable against such Charity in accordance with its terms.
The representations and warranties in this Section shall survive for
365 days following the Closing Date, and in the event of a breach
thereof, such Charity shall have liability for Damages to Buyer only up
to the amount of the Purchase Price actually received by such Charity.
(ii) The only covenant or other agreement of the Charities owing to
Buyer under or with respect to this Agreement and the transactions
contemplated hereby shall be each Charity's agreement to sell its
Shares.
(iii) Except as specifically set forth in clause (i) above, the
Charities shall have no obligation to indemnify the Buyer hereunder,
and shall have no liability to Buyer of any kind or nature, including,
without limitation for Damages, whether hereunder, or under any law,
rule or regulation, or at equity.
(iv) Buyer hereby irrevocably releases and discharges forever, the
Charities from any Damages of any kind or nature, except for a breach
of the representations and warranties of the Charities set forth in
clause (i) of this Section 10.1, and subject to the limitations and
qualifications contained in this Section 10.1.
10.2. ACCOUNTING TERMS. All accounting terms not specifically defined
herein are to be construed in accordance with GAAP.
10.3. AMENDMENT AND MODIFICATION. No amendment, modification,
supplement, consent or waiver of any provision of this Agreement, nor consent to
any departure therefrom, will in any event be effective unless the same is in
writing and is signed by the party against whom enforcement of the same is
sought. Any waiver of any provision of this Agreement and any consent to any
departure from the terms of any provision of this Agreement is to be effective
only in the specific instance and for the specific purpose for which given.
10.4. ASSIGNMENTS. No party may assign or transfer any of its rights or
obligations under this Agreement to any other Person without the prior written
consent of the other party; provided, however, Buyer may collaterally assign its
rights hereunder, but not its obligations hereunder, to any lender(s) providing
financing to Buyer secured by substantially all of Buyer's assets; provided
further, however, any such collateral assignment shall not amend, expand or
alter the terms of this Agreement.
10.5. CAPTIONS. Captions contained in this Agreement have been inserted
herein only as a matter of convenience and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provision hereof.
10.6. COUNTERPART FACSIMILE EXECUTION. For purposes of this Agreement,
a document (or signature page thereto) signed and transmitted by facsimile
machine or telecopier is to be treated as an original document. The signature of
any party thereon, for purposes hereof, is to be considered as an original
signature, and the document transmitted is to be considered to have the same
binding effect as an original signature on an original document. At the request
of any party, any facsimile document is to be re-executed in original form by
the parties who executed the facsimile document. No party may raise the use of a
facsimile machine or telecopier or the fact that any signature was transmitted
through the use of a facsimile or telecopier machine as a defense to the
enforcement of this Agreement or any amendment or other document executed in
compliance with this Section.
21
10.7. COUNTERPARTS. This Agreement may be executed by the parties on
any number of separate counterparts, and all such counterparts so executed
constitute one agreement binding on all the parties notwithstanding that all the
parties are not signatories to the same counterpart.
10.8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior agreements, letters of intent, understandings, negotiations and
discussions of the parties, whether oral or written except that the
Confidentiality Agreement remains in full force and effect and is in no way or
manner amended or terminated or otherwise affected by the execution of this
Agreement, and the Confidentiality Agreement shall remain in full force and
effect.
10.9. EXHIBITS; RECITALS. All of the Exhibits and Schedules attached to
this Agreement are deemed incorporated herein by reference. The Recitals to this
Agreement are substantive in nature and a part of this Agreement.
10.10. FAILURE OR DELAY. No failure on the part of any party to
exercise, and no delay in exercising, any right, power or privilege hereunder
operates as a waiver thereof; nor does any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof, or the exercise of any other right, power or privilege. No notice to or
demand on any party in any case entitles such party to any other or further
notice or demand in similar or other circumstances.
10.11. GOVERNING LAW. This Agreement and the rights and obligations of
the parties hereunder are to be governed by and construed and interpreted in
accordance with the laws of the State of Missouri applicable to contracts made
and to be performed wholly within Missouri, without regard to choice or conflict
of laws rules.
10.12. LEGAL FEES, COSTS. Unless specifically stated otherwise herein,
all legal and other costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby are to be paid by the party
incurring such costs and expenses. Buyer agrees to pay directly all taxes,
recording fees, and other charges incurred as a result of the consummation of
the Transactions contemplated by this Agreement.
10.13. NO JOINT VENTURE OR PARTNERSHIP. The parties agree that nothing
contained herein is to be construed as making the parties joint venturers or
partners.
10.14. NOTICES. All notices, consents, requests, demands and other
communications hereunder are to be in writing, and are deemed to have been duly
given or made: (i) when delivered in person; (ii) three days after deposited in
the United States mail, first class postage prepaid; (iii) in the case of
overnight courier services, one business day after delivery to the overnight
courier service with payment provided; or (iv) in the case of fax, when sent,
verification received; in each case addressed as follows:
IF TO SELLERS:
00000 Xxxxx Xxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Confirming No.: (000) 000-0000
WITH A COPY TO:
Xxxxx, Xxxx & Xxxxxxxx, X.X.
000 Xxxxx Xxxxxxxx, Xxxxx 0000
00
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Fax #: (000) 000-0000
Confirming No.: (000) 000-0000
AND WITH AN ADDITIONAL COPY TO:
The Handshake Group
00000 Xxxxxxxx Xxxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxx
Fax #: (000) 000-0000
Confirming No.: (000) 000-0000
IF TO BUYER:
Universal Hospital Services, Inc.
0000 Xxxxxxxxx Xxxxx
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xx. Xxxxx X. Xxxxxxxxx, President
Fax #: (000) 000-0000
Confirming No.: (000) 000-0000
WITH A COPY TO:
Xxxxxx & Xxxxxxx LLP
Pillsbury Center South
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Fax #: (000) 000-0000
Confirming No.: (000) 000-0000
or to such other address as any party may designate by notice to the other party
in accordance with the terms of this Section.
10.15. PUBLICITY. Any publicity release, advertisement, filing, public
statement or announcement made by or at the request of any party regarding this
Agreement or any of the transactions contemplated hereby is to be first reviewed
by and must be reasonably satisfactory to the other party, except as required by
law.
10.16. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction is, as to such
jurisdiction, ineffective to the extent of any such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof, or affecting the validity, enforceability or legality of such
provision in any other jurisdiction, unless the ineffectiveness of such
provision would result in such a material change as to cause completion of the
transactions contemplated hereby to be unreasonable.
10.17. SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO SHALL BE
23
BROUGHT IN THE COURTS OF THE STATE OF MISSOURI LOCATED IN ST. LOUIS COUNTY,
MISSOURI OR ANY COURT OF THE UNITED STATES OF AMERICA FOR THE EASTERN DISTRICT
OF MISSOURI AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF SUCH COURTS. THE PARTIES IRREVOCABLY WAIVE
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF SUCH COURTS
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID, TO EACH OF THE OTHER PARTIES AT ITS ADDRESS
PROVIDED HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
10.18. SUCCESSORS AND ASSIGNS. All provisions of this Agreement are
binding upon, inure to the benefit of and are enforceable by or against the
parties and their respective heirs, executors, administrators or other legal
representatives and permitted successors and assigns.
10.19. THIRD-PARTY BENEFICIARY. This Agreement is solely for the
benefit of the parties and their respective successors and permitted assigns,
and no other Person has any right, benefit, priority or interest under or
because of the existence of this Agreement.
10.20. JOINT NEGOTIATION. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises regarding this Agreement, this
Agreement will be construed as if drafted jointly by the parties and no
presumption or burden of proof will arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
10.21. COMMITMENTS NOT ASSIGNED. Notwithstanding anything contained
herein to the contrary, to the extent that any contract or agreement which by
its terms prohibits the transactions contemplated hereby without the consent of
a third party who is a party thereto, or without novation of the same, and such
consent is not obtained or novation effected, as the case may be, this Agreement
shall not constitute an assignment or an attempted assignment thereof. With
respect to any such contract or agreement for which consents are not obtained as
of Closing Date, Seller and Buyer shall use their respective reasonable efforts
to effectuate such assignment, but the failure to obtain such assignment shall
not be a breach of any representation or warranty of Sellers herein.
10.22. LEGEND. Buyer acknowledges and understands that the following
restrictive legend, or an appropriate equivalent, will be sent forth on the
certificates representing the Shares and the stock of the Subsidiary:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF EXEMPTION THEREFROM
UNDER SAID ACT OR THE RULES AND REGULATIONS PROMULGATED
THEREUNDER."
10.23. BUYER'S ACKNOWLEDGEMENT OF ACCESS. Buyer acknowledges that (i)
the tangible personal property included in the Assets constitutes used property;
(ii) Sellers are selling the Shares to
24
Buyer, and Buyer is purchasing and accepting such Shares pursuant to Buyer's
independent investigation and examination and on the basis described in this
Section and the representations and warranties of Sellers in this Agreement and
the Schedules hereto or in the documents or certificates delivered by Sellers
hereunder at Closing; and (iii) except as expressly set forth in this Agreement
and the Schedules hereto or in documents or certificates delivered hereunder by
Sellers at Closing, Sellers are not making any representation, warranty or
statement, oral or written, of Sellers or any representative thereof, relative
to the condition of the Shares, the Assets, or the condition, financial or
otherwise, of the Companies.
10.24. SPECIFIC PERFORMANCE. The parties hereto agree that if for any
reason any party hereto shall have failed to perform such party's obligations
under this Agreement, then any other party hereto seeking to enforce this
Agreement against such nonperforming party, in addition to all other remedies
available to it, shall be entitled to specific performance and injunctive and
other equitable relief, and the parties hereto further agree to waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief.
{remainder of page intentionally left blank; signature page follows}
25
In witness hereof, the parties hereto have duly executed and delivered
this Stock Purchase and Sale Agreement as of the date first written above.
----------------------------------
Xxxxxxx X. Xxxxxx
----------------------------------
Xxxx X. Xxxxx,
----------------------------------
Xxxxx X. Xxxxx
----------------------------------
The Xxxxxxx Xxxxxx Family Trust,
Xxxxxxx X. Xxxxxx, Trustee
CENTER OF CONTEMPORARY ARTS
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
THE JEWISH FEDERATION OF ST. LOUIS
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
UNIVERSAL HOSPITAL SERVICES, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
26
ACKNOWLEDGEMENT
Each of the undersigned acknowledges and agrees to each of the terms
and conditions contained in the foregoing Stock Purchase and Sale Agreement as
amended from time to time (as amended from time to time, the "Agreement"), and
agrees to be bound thereby. Upon completion of the transactions described in the
Agreement, HCI Acquisition Corp. will change its stock record books to reflect
such transaction.
Dated as of July 30, 1998
HCI ACQUISITION CORP.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
HOME CARE INSTRUMENTS, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
27
JULY 27, 1998
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.2
DESCRIPTION OF SHARES; LEGAL AND BENEFICIAL OWNERS OF SHARES;
OWNERSHIP OF ISSUED AND OUTSTANDING STOCK OF SUBSIDIARY
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.2
1. Description of Shares of HCI
HCI is a Missouri corporation.
The Shares represent all of the issued and outstanding common stock of
HCI. Each share has a par value of $1.00 per share and is fully paid and
non-assessable. HCI has authorized the issuance of 30,000 shares of its common
stock and has outstanding 1,000 shares of its common stock, all of which is
owned by the Sellers.
2. Legal and Beneficial Owners of Shares
Legal and Beneficial Owner # of Shares Class Par Value
-------------------------- ----------- ----- ---------
Xxxxxxx X. Xxxxxx 650 common $1.00
Xxxx X. Xxxxx 196 common $1.00
Xxxxx X. Xxxxx 100 common $1.00
The Xxxxxxx Xxxxxx Family Trust 50 common $1.00
Center of Contemporary Arts .67 common $1.00
The Jewish Federation of St. Louis 3.33 common $1.00
3. Description of Stock of Subsidiary
Subsidiary is a Delaware corporation.
The Subsidiary has authorized 10,000 shares of common stock, par value
$1.00 per share. The Subsidiary has issued 389 shares of its common stock, all
of which is owned by HCI.
4. Ownership of Issued and Outstanding Stock of Subsidiary
Legal and Beneficial Owner # of Shares Class Par Value
-------------------------- ----------- ----- ---------
HCI Acquisition Corp. 389 common $1.00
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.4
FINANCIAL STATEMENTS
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.6
REQUIRED CONSENTS
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.6
1. Step-Down Revolving Loan, Term Loan and Security Agreement, dated June
14, 1996, by and between Home Care Instruments, Inc., a Delaware
corporation, and Magna Bank, N.A., as amended by First Amendment to
Step-Down Revolving Loan, Term Loan and Security Agreement. NOTE: THIS
DOCUMENT AND RELATED AGREEMENTS WILL BE TERMINATED AT CLOSING.
2. An application will need to be filed on or before the Closing Date in
order to continue in effect the License from the Missouri Board of
Pharmacy, which would otherwise expire on June 30, 1999.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.8
LITIGATION AND PROCEEDINGS
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.8
1. The Companies have received warranty claims for routine repair or
replacement of equipment from customers in the ordinary course of
business; provided that no such claims involve a claim for monetary
damages.
2. Xxxxx Xxxxxxx has filed a workers' comp. claim alleging a sprained back
as a result of lifting a piece of medical equipment, which claim is
fully insured.
3. By letter dated March 18, 1998, HCI has informed Omni Medical Supply,
Inc. that Omni has breached the Asset Purchase Agreement, dated as of
January 31, 1997, by and between Omni Medical Supply, Inc. and Home
Care Instruments, Inc. by failing to disclose therein that Omni was a
party to a rent to own contract with Home Infusion Services and thereby
owes HCI $22,633.55.
4. The Companies have had a judgment entered by a Missouri state court
against Homecare of Michigan f/k/a Homecare of Dearborn, Inc. in the
amount of $110,000 for an amount past due. The Companies have
registered the judgment in Michigan. Homecare of Michigan has moved to
set aside the registration of the foreign judgment as well as the
judgment itself. HCI still has approximately an $135,000 receivable on
its books from Homecare of Michigan related to this judgment. The
collectability of this receivable is questionable.
5. The Companies have received a letter, dated June 23, 1997, from I-Flow
Corporation alleging that the Companies were out of compliance with a
contract for the Eclipse Homepump quota for two consecutive quarters
and notifying the Companies of cancellation of such contract. The
Companies have asserted that they previously terminated the contract.
The Subsidiary has a past due payable to I-Flow Corporation in the
amount of approximately $80,000. The Subsidiary has not paid such
amount in light of this dispute. The liability of the Companies related
to such matter does not exceed $90,000.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.9
ACQUISITIONS OR DISPOSITIONS OF ASSETS NOT IN THE ORDINARY COURSE
OF BUSINESS; LIENS, SECURITY INTEREST AND OTHER ENCUMBRANCES
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.9
Acquisitions or dispositions of assets not in the ordinary course of business:
------------------------------------------------------------------------------
1. On February 28, 1998, HCI sold all of the issued and outstanding shares
of stock of Advanced Durable Medical, Inc. to the Sellers.
2. HCI received promissory notes in the aggregate principal amount of
$200,000 from Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxx, Xxxxx X. Xxxxx and The
Xxxxxxx Xxxxxx Family Trust in connection with the sale of all of the
issued and outstanding stock of Advanced Durable Medical, Inc. These
notes have been paid in full, with the proceeds thereof reducing the
Bank Debt of the Companies.
3. The Companies had accrued a management fee in the amount of
approximately $158,000 from Advanced Durable Medical, Inc. in exchange
for Advanced Durable Medical, Inc.'s use of certain rental equipment,
space and ancillary services. The Advanced Durable Medical receivable
has been paid in full, with the proceeds thereof reducing the Bank Debt
of the Companies.
Liens, security interests and other encumbrances:
-------------------------------------------------
1. Asset: 1996 Chrysler, Xxxxxxxx, Xxxxxx #0X0XX0X0XX000000
Security interest: Commercial Security Agreement, dated July 17,
1996, entered into between Home Care Instruments,
Inc. and Magna Bank, N.A.
This security interest will be released at or prior to Closing.
2. Asset: 1996 Ford, Windstar, VIN #0XXXX00000XX00000
Security interest: Commercial Security Agreement, dated August 30,
1996, entered into between Home Care Instruments,
Inc. and Magna Bank, N.A.
This security interest will be released at or prior to Closing.
3. Asset: 1996 Honda, Accord, Serial #1HGCD5632TA2514N
Security interest: Commercial Security Agreement, dated August 30,
1996, entered into between Home Care Instruments,
Inc. and Magna Bank, N.A.
This security interest will be released at or prior to Closing.
4. Asset: 1997 Ford, Windstar, Serial #0XXXX00X0XXX00000
Security interest: Commercial Security Agreement, dated April 4,
1997, entered into between Home Care Instruments,
Inc. and Magna Bank, N.A.
This security interest will be released at or prior to Closing.
5. Asset: 1997 Ford, Aerostar, VIN #0XXXX00X0XXX00000
Security interest: Commercial Security Agreement, dated September 18,
1996, entered into between Home Care Instruments,
Inc. and Magna Bank, N.A.
This security interest will be released at or prior to Closing.
6. Asset: 1997 Ford, Aerostar, Serial #0XXXX00X0XXX00000
Security interest: Commercial Security Agreement, dated April 4,
1997, entered into between Home Care Instruments,
Inc. and Magna Bank, N.A.
This security interest will be released at or prior to Closing.
7. All of the assets of the Companies are subject to a blanket lien in
favor of Magna Bank. This lien will be released at or prior to
Closing.
8. Various automobile purchase agreements:
(a) Texas Simple Interest Vehicle Retail Installment Contract,
dated October 23, 1997, evidencing purchase of a 1997 Ford
Aerostar Truck.
(b) Missouri Simple Interest Retail Installment Contract, dated
June 30, 1997, evidencing purchase of a 1997 Infiniti G20.
9. The following UCC financing statements appear of record, all of which
shall be released at or prior to Closing except for those marked with
a "**":
Secured Party State
------------- -----
(a) Xxxxxx X. Xxxxxxxxx et al. Illinois
(b) Magna Bank Illinois
(c) Xxxxxx X. Xxxxxxxxx et al. Indiana
(d) Magna Bank Indiana
(e) Xxxxxx X. Xxxxxxxxx et al. Iowa
(f) Magna Bank Iowa
(g) PN Leasing Kansas
(h) Xxxxxx X. Xxxxxxxxx et al. Kansas
(i) Magna Bank Kansas
(j) Magna Bank Kentucky
(k) Magna Bank Michigan
(l) Magna Bank Oakland County, Michigan
(m) PN Leasing Minnesota
(n) Xxxxxx X. Xxxxxxxxx et al. Minnesota
(o) Magna Bank Minnesota
(p) PN Leasing Missouri
(q) Copelco Leasing Corporation (multiple) Missouri
(r) Sterling Bank & Trust Missouri
(s) Advanta Leasing Corp. Missouri
(t) Bank One, Utah Missouri
(u) Northwest Financial Leasing, Inc. Missouri
(v) Xxxxxx X. Xxxxxxxxx et al. Missouri
(w) Magna Bank Missouri
(x) Inter-Tel Leasing, Inc. ** Missouri
(y) Sterling Bank & Trust St. Louis County, Missouri
(z) Norwest Financial Leasing, Inc. St. Louis County, Missouri
(aa) Xxxxxx X. Xxxxxxxxx et al. St. Louis County, Missouri
(bb) Magna Bank St. Louis County, Missouri
(cc) Inter-Tel Leasing, Inc.** St. Louis County, Missouri
(dd) Xxxxxx X. Xxxxxxxxx et al. Nebraska
(ee) Magna Bank Nebraska
(ff) Magna Bank Texas
(gg) Magna Bank Tarrant County, Texas
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.10
INTELLECTUAL PROPERTY
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.10
1. NONE.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.11
SIGNIFICANT CONTRACTS; BREACHES
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.11
Significant Contracts
1. Various automobile leases:
(b) Lessor: Plaza Motor Co.
Lessee: Home Care Instruments
Auto: 97 Mercedes-Benz E32OW
Date: September 13, 1996
(c) Lessor: Plaza Motor Co.
Lessee: Home Care Instruments
Auto: 97 Infiniti I-30 (Beige)
Date: November 11, 1996
(c) Lessor: Plaza Motor Co.
Lessee: Home Care Instruments
Auto: 97 Infiniti I-30 (Silver)
Date: November 9, 1996
2. Promissory Note, dated July 17, 1996, in the original principal amount
of $17,500.00 given by Home Care Instruments, Inc. to Magna Bank, N.A.
This Note will be paid at or prior to Closing.
3. Promissory Note, dated August 30, 1996, in the original principal
amount of $16,940.00, given by Home Care Instruments, Inc. to Magna
Bank, N.A. This Note will be at or prior to Closing.
4. Promissory Note, dated August 30, 1996, in the original principal
amount of $19,300.00, given by Home Care Instruments, Inc. to Magna
Bank, N.A. This Note will be paid at or prior to Closing.
5. Promissory Note, dated September 18, 1996, in the original principal
amount of $14,300.00, given by Home Care Instruments, Inc. to Magna
Bank, N.A. This Note will be paid at or prior to Closing.
6. Promissory Note, dated April 4, 1997, in the original principal amount
of $17,923.30, given by Home Care Instruments, Inc. to Magna Bank,
N.A. This Note will be paid at or prior to Closing.
7. Promissory Note, dated April 4, 1997, in the original principal amount
of $17,640.00, given by Home Care Instruments, Inc. to Magna Bank,
N.A. This Note will be paid at or prior to Closing.
8. Promissory Note, dated December 30, 1997, in the original principal
amount of $17,897.49, given by Home Care Instruments, Inc. to Magna
Bank, N.A. This Note will be paid at or prior to Closing.
9. Management agreement, dated March 1, 1998, between HCI Acquisition
Corp. and Omni Medical Supply, Inc. Pursuant to the management
agreement, Omni Medical Supply, Inc. will assume all management
responsibilities for "HCI, Michigan," including filling all HCI,
Michigan orders/deliveries within the service area in a timely manner,
in exchange for a $4,000 per month management fee, which is also
payment for several additional items. Reference is made to the
management agreement for the specific contractual obligations of "HCI,
Michigan" and Omni Medical Supply, Inc. under such agreement, and
reference is made to the related Asset Purchase Agreement, dated as of
January 31, 1997, by and between Omni Medical Supply, Inc. and Home
Care Instruments, Inc.
10. Asset Purchase Agreement, dated as of January 31, 1997, by and between
Omni Medical Supply, Inc. and Home Care Instruments, Inc. This Asset
Purchase Agreement contains the following terms, among others:
(a) Subsidiary will not compete with Omni Medical Supply, Inc.,
for four years following the closing date of the
transactions contemplated by the Asset Purchase Agreement,
in the sale of Disposable Medical Supplies (as defined in
the Asset Purchase Agreement) in the State of Michigan or to
certain existing Omni customers or in the sale and/or rental
of EKG Equipment (as defined in the Asset Purchase
Agreement) throughout the United States. Reference is made
to the Asset Purchase Agreement for the specific contractual
obligation.
(b) Subsidiary will pay certain commissions to Seller on all
Rental Sales (as defined in the Asset Purchase Agreement),
sales by Subsidiary of Disposable Medical Supplies (as
defined in the Asset Purchase Agreement), Repair and
Recertification Sales (as defined in the Asset Purchase
Agreement) and Equipment Sales (as defined in the Asset
Purchase Agreement) in accordance with the Asset Purchase
Agreement. Reference is made to the Asset Purchase Agreement
for the specific contractual obligation.
(c) Subsidiary may, at any time after the end of the first
Commission Year (as defined in the Asset Purchase
Agreement), terminate the payment of commissions to Omni
upon making a certain lump sum payment to Omni. Reference is
made to the Asset Purchase Agreement for the specific
contractual obligation.
(d) Subsidiary may have Omni act as a sales representative and
supply Subsidiary with one half- to one full-time employee
for Subsidiary to use in the State of Michigan. Reference is
made to the Asset Purchase Agreement for the specific
contractual obligation.
(e) Omni will accept for Subsidiary orders for Rental Sales (as
defined in the Asset Purchase Agreement), Repair and
Recertification Sales (as defined in the Asset
Purchase Agreement) and Equipment Sales (as defined in the
Asset Purchase Agreement). Reference is made to the Asset
Purchase Agreement for the specific contractual obligation.
(f) Subsidiary has agreed to indemnify Omni under certain
circumstances. Reference is made to the Asset Purchase
Agreement for the specific contractual obligation.
(g) Subsidiary may occupy a certain portion of Omni's facility
located in Michigan. Reference is made to the Asset Purchase
Agreement for the specific contractual obligation.
11. Step-Down Revolving Loan, Term Loan and Security Agreement, dated June
14, 1996, by and between Home Care Instruments, Inc., a Delaware
corporation, and Magna Bank, N.A., as amended by First Amendment to
Step-Down Revolving Loan, Term Loan and Security Agreement. NOTE: THIS
DOCUMENT AND RELATED AGREEMENTS WILL BE TERMINATED AT CLOSING.
12. Lease/purchase agreement, dated February 27, 1998, between Callaway
Community Hospital and Home Care Instruments, Inc.
13. Agreement for bio-medical services, dated January 1, 1998, between
Marquette General Hospital and Home Care Instruments, Inc.
14. Letter agreement, dated April 28, 1998, between Option Care of the
Quad Cities and "HCI" concerning certain rental rates involving Iowa
Public Aid and Illinois Public Aid patients.
15. Agreement, dated August 18, 1993, between Express Scripts, Inc. and
Home Care Instruments, Inc. (equipment lease).
16. Extension Agreement between Nebraska Methodist Hospital and HCI, Inc.
(relates to the furnishing of infusion pumps and maintenance to
patients of Nebraska Methodist Home Services).
17. Letter agreement with Signature Home Care (rental of CADD infusion
pumps).
18. Price Protection Rental Agreement, dated November 15, 1994, between
Home Care Instruments, Inc. and Deaconess Health System.
19. Agreement for bio-medical services, dated January 1, 1995, between
National Medical Care and Home Care Instruments, Inc.
20. Equipment Purchase and Lease Agreement between Lincoln Land Home
Infusion and "HCI."
21. The Companies have standing purchase orders for the sale of Inventory
to the following:
(a) Deaconess Hospital
(b) Deaconess Hospital Physical Medicine
(c) Deaconess Hospital Home Care
(d) Americare
(e) Iowa Methodist
(f) St. Luke's
(g) University of Iowa
(h) University of Nebraska
(i) Beaumont
(j) Marquette General
(k) Washington University
(l) St. Xxxxxxx
None of these purchase orders are open purchase orders.
22. The Companies have a standing purchase order for the purchase of
Inventory with Parenteral Providers, Inc.
23. All documents and agreements evidencing indebtedness secured by
vehicles owned by the Companies.
24. Equipment Rental Agreement, made effective December 10, 1996, by and
between Home Care Instruments, Inc. and Amicare Home Healthcare, Inc.
25. Rental Agreement, dated February 26, 1997, between HCI and Northwood
Group Buyers' Program.
26. Rental Contract, dated April 17, 1997, between HCI and Aeromed, A
Medserv Corporation.
27. Home Medical Equipment Service Agreement, dated July 20, 1997, by and
between "HCI" and Xxxxx Xxxx Lincoln Home Health Services.
28. Cadd Ambulatory Infusion Pump Systems DME Special Service Agreement,
dated December 1, 1997, by and between Xxxx Deltec Inc. and Home Care
Instruments, Inc.
29. Various automobile purchase agreements:
(a) Texas Simple Interest Vehicle Retail Installment Contract,
dated October 23, 1997, evidencing purchase of a 1997 Ford
Aerostar Truck.
(b) Missouri Simple Interest Retail Installment Contract, dated
June 30, 1997, evidencing purchase of a 1997 Infiniti G20.
30. Lease Agreement, between Home Care Instruments, Inc. and Inter-Tel.
31. Confidentiality Agreement, dated January 12, 1998, with Geneva
Corporate Finance, concerning Medic Quip Locators.
32. HCI has received the following promissory notes in conjunction with
the sale of all of the issued and outstanding stock of Advanced
Durable Medical, Inc. These notes have been paid in full, with the
proceeds thereof reducing the Bank Debt of the Companies.
(a) Promissory Note, dated March 1, 1998, in the original
principal amount of $130,000, given by Xxxxxxx X. Xxxxxx to
HCI.
(b) Promissory Note, dated March 1, 1998, in the original
principal amount of $40,000, given by Xxxx X. Xxxxx to HCI.
(c) Promissory Note, dated March 1, 1998, in the original
principal amount of $20,000, given by Xxxxx X. Xxxxx to HCI.
(d) Promissory Note, dated March 1, 1998, in the original
principal amount of $10,000, given by The Xxxxxxx Xxxxxx
Family Trust to HCI.
33. Stock Purchase and Sale Agreement (stock of Advanced Durable Medical,
Inc.), dated as of February 28, 1998, among Xxxx X. Xxxxx, Xxxxx X.
Xxxxx, Xxxxxxx X. Xxxxxx and The Xxxxxxx Xxxxxx Family Trust, and HCI
Acquisition Corp. pursuant to which HCI has agreed to indemnify
Sellers under certain circumstances. Reference is made to the Stock
Purchase and Sale Agreement for the specific contractual obligation.
34. Medicare Participating Physician or Supplier Agreement.
35. HCI has rent-to-own programs for equipment with the following entities
(i) Indiana Prescription Labs, (ii) Respiratory Care Professionals,
(iii) Home Infusion Services, (iv) Xxxxx Medical, and (v)
Pharmaceutical Health Care.
36. Agreement, dated July 30, 1998, by and between Home Care Instruments,
Inc. and Advanced Durable Medical, Inc.
Breaches
--------
1. By letter dated March 18, 1998, HCI has informed Omni Medical Supply,
Inc. that Omni has breached the Asset Purchase Agreement, dated as of
January 31, 1997, by and between Omni Medical Supply, Inc. and Home
Care Instruments, Inc. by failing to disclose therein that Omni was a
party to a rent to own contract with Home Infusion Services and thereby
owes HCI $22,633.55.
2. The Companies have received a letter, dated June 23, 1997, from I-Flow
Corporation alleging that the Companies were out of compliance with a
contract for the Eclipse
Homepump quota for two consecutive quarters. The Companies have
asserted that they previously terminated the contract. The Subsidiary
has a past due payable to I-Flow Corporation in the amount of
approximately $80,000. The Subsidiary has not paid such amount in
light of this dispute. The liability of the Companies related to such
matter does not exceed $90,000.
3. The Sellers did not timely make the first payment due under the
Promissory Notes dated March 1, 1998, arising from the sale of all of
the issued and outstanding stock of Advanced Durable Medical, Inc.
These notes have been paid in full with the proceeds thereof reducing
the Bank Debt of the Companies.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.12
REAL ESTATE LEASES
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.12
1. Landlord: Xxxxxxxx Brookhollow, Inc., a Kansas corporation
Tenant: HCI, Inc., a Delaware corporation
Date: December 10, 1997
Leased Premises: Within building located at
0000 Xxxxxx Xxxx, Xxxxxx, Xxxxxx 00000
Term: January 5, 1998 - December 31, 2000
Base Rent: $756 per month
2. Landlord: Xxxx & Xxxxxxxx Xxxxxxxx
Tenant: Home Care Instruments, Inc., a Delaware corporation
Date: February 28, 1997
Leased Premises: Located on the property at
00000 Xxxxxxx Xxxxx Xxxxx, Xxxxx, Xxxxxxxx 00000
Term: May 1, 1997 - April 30, 2000
Base Rent: $700 per month
3. Landlord: Xxxxx X. Xxxxxxx
Tenant: Home Care Instruments, Inc.
Date: August 14, 1997
Leased Premises: 0000 Xxxxx Xxxxx Xxxxx XX, Xxxxx Xxxxxx, Xxxx 00000
Term: September 1, 1997 - August 30, 2000
Base Rent: $922.58 per month
4. Landlord: Xxxxxxx Xxxxxxxx
Tenant: Home Care Instruments, Inc.
Date: August 28, 1997
Leased Premises: 0000 X. X.X. 00, Xxxxxxxxxxxx, Xxxxxxx
Term: September 1, 1997 - August 31, 2000
Base Rent: $931 per month
5. Landlord: Modern Business Systems, a division of Ikon Office
Solutions, Inc.
Tenant: Home Care Instruments, Inc.
Date: February 14, 1997
Leased Premises: 00000 Xxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxx
Term: February 14, 1997 - April 30, 2000
Base Rent: $5,350 per month
6. Landlord: Bedford 209 L.P.
Tenant: Home Care Instruments, Inc.
Date: October 2, 1997
Leased Premises: 000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
Term: October 15, 1997 - October 31, 2000
Base Rent: $858 per month
7. Landlord: Xxxxxx/Xxxxxxx Management Co.
Tenant: Home Care Instruments, Inc.
Date: August 20, 1997
Leased Premises: 000 Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxxx 00000
Term: August 25, 1997 - August 31, 1999
Base Rent: $871.97 per month
On July 21, 1998, the Companies were informed that the above
referenced property was sold and the Lease assigned to Apple Partners
L.L.C.
8. The Companies rent from Omni Medical Supply, Inc. certain space in
Omni's facility located in Michigan pursuant to the management
agreement, dated March 1, 1998, between HCI Acquisition Corp. and Omni
Medical Supply, Inc. and pursuant to the Asset Purchase Agreement,
dated as of January 31, 1997, by and between Omni Medical Supply, Inc.
and Home Care Instruments, Inc.
9. Subsidiary leases to Advanced Durable Medical, Inc. approximately 400
square feet of office space located at 00000 Xxxxxxxxx Xxxxx, Xxxxx
Xxxx, Xxxxxxxx, pursuant to the Agreement, dated July 30, 1998, by and
between Home Care Instruments, Inc. and Advanced Durable Medical, Inc.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.13
LIABILITIES
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.13
1. The Companies have received a letter, dated June 23, 1997, from I-Flow
Corporation alleging that the Companies were out of compliance with a
contract for the Eclipse Homepump quota for two consecutive quarters.
The Companies have asserted that they previously terminated the
contract. The Subsidiary has a past due payable to I-Flow Corporation
in the amount of approximately $80,000. The Subsidiary has not paid
such amount in light of this dispute. The liability of the Companies
related to such matter does not exceed $90,000.
2. The Companies provide warranties to certain customers in the ordinary
course of business.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.14
EXCEPTION TO TAXES
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.14
1. Subsidiary has been paying franchise taxes in various states as if it
had 1000 shares of common stock outstanding. Subsidiary has 389 shares
of common stock outstanding, all of which is owned by HCI.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.15
EMPLOYEE BENEFIT PLANS
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.15
1. Benefit Plan: Group Long-Term Disability Plan #01095219
Note: Insurer is UNUM Life Insurance Company (description
attached)
2. Benefit Plan: Medical insurance
Note: Insurer is Prudential, policy #0100495 (description
attached)
3. Benefit Plan: 401(k) Plan
Note: 401(k) Plan is with General American Life Insurance
(description attached)
4. Benefit Plan: Paid holidays, vacation days, sick days, jury duty,
funeral leave, maternity leave (description attached)
5. Benefit Plan: Term Life Insurance Policy for Xxxxxxx X. Xxxxxx
Note: Insurer is Northwestern Mutual Life, policy #14449 863,
owner is Subsidiary or its successor
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.16
MATERIAL PERMITS; VIOLATION OF LAWS
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.16
Material Permits
----------------
1. License from Missouri Board of Pharmacy, expires June 30, 1999.
2. Medicare Participating Physician or Supplier Agreement.
Violation of Material Laws
--------------------------
1. NONE.
2. Subsidiary has been paying franchise taxes in various states as if it
had 1,000 shares of common stock outstanding. Subsidiary has 389
shares of common stock outstanding, all of which is owned by HCI.
3. An application will need to be filed on or before the Closing Date in
order to continue in effect the License from the Missouri Board of
Pharmacy, which would otherwise expire on June 30, 1999.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.17
EMPLOYMENT AGREEMENTS
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.17
1. The sales force and bio-medical technicians are entitled to
commissions in accordance with the Companies' policies.
2. Xxxx Xxxxxx owes the Subsidiary $7,000 in the form of a non-interest
bearing loan repayable at $1,000 per month.
3. Subsidiary has executed a Covenant Not to Compete with Xxxxxxx Xxxxx
which prohibits Xxxxxxx Xxxxx from competing with Subsidiary under
certain circumstances in the event that Xxxxxxx Xxxxx resigns from the
Subsidiary or is terminated for reasons other than "justifiable
cause."
4. HCI received a promissory note from Xxxxxxx X. Xxxxxx as consideration
for certain shares of Advanced Durable Medical, Inc. This note has
been paid in full with the proceeds thereof reducing the Bank Debt of
the Companies.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.18
CUSTOMERS AND SUPPLIERS
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.18
The following is a list of HCI's top 10 Customers (based on gross revenues)
1. Amicare (all branches)
4. Apria, located in Elmhurst, Illinois
5. Infusytems
6. Apria, located in Lenexa, Kansas
7. Dependicare
8. Apria, located in Irving, Texas
9. St. Lukes West
10. Apria, located in Indianapolis, Indiana
11. Apria, located in Joliet, Illinois
12. PRN, located in Indianapolis, Indiana
The following is a list of HCI's top 10 Suppliers (based on dollar amounts
purchased)
1. Xxxxxx/Allegiance
2. Beirsdorf Jobst
3. Breg
4. Duracell
5. Gaymar
6. Xxxxxx Field
7. Med-E-Quip Locaters
8. Medical Solution
9. Nellcor Puritan Xxxxxxx
10. Ohmeda
Change in Business Relationships
--------------------------------
Amicare has indicated to the Companies that it may no longer rent equipment from
the Companies and instead will purchase its own equipment.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.21
EXCEPTIONS TO ORDINARY COURSE; NO MATERIAL EVENTS
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.21
Exceptions to Ordinary Course
-----------------------------
1. On February 28, 1998, HCI sold all of the issued and outstanding
shares of Advanced Durable Medical Inc. to Sellers and received
promissory notes as consideration thereof (these notes will be paid in
full in conjunction with or prior to the Closing).
2. Sellers did not timely make payment under the Promissory Notes, dated
March 1, 1998, given by Sellers to HCI in conjunction with their
purchase of all of the issued and outstanding shares of Advanced
Durable Medical, Inc. (initial payment was due June 1, 1998). These
notes have been paid in full with the proceeds thereof reducing the
Bank Debt of the Companies.
3. Sellers have disclosed, in soliciting bids for the purchase of the
Companies, certain information relating to the Companies, pursuant to
confidentiality agreements substantially in the form executed by Buyer
in connection with the transactions contemplated hereby.
4. The Companies have received a letter, dated June 23, 1997, from I-Flow
Corporation alleging that the Companies were out of compliance with a
contract for the Eclipse Homepump quota for two consecutive quarters.
The Companies have asserted that they previously terminated the
contract. The Subsidiary has a past due payable to I-Flow Corporation
in the amount of approximately $80,000. The Subsidiary has not paid
such amount in light of this dispute. The liability of the Companies
related to such matter does not exceed $90,000.
5. Various officers and employees of the Companies have received pay
increases in the ordinary course of business.
6. Xxxxx Xxxxxx will receive a bonus in the amount of $9,000 in June or
July 1998.
7. The Companies entered into a Confidentiality Agreement, dated January
12, 1998, with Geneva Corporate Finance concerning Medic Quip
Locators.
8. HCI paid in full three promissory notes, each in the amount of
$50,000, given by HCI to Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxx and Xxxxx X.
Xxxxx, respectively.
9. The Companies have accrued a management fee in the amount of
approximately $158,000 from Advanced Durable Medical, Inc. in exchange
for Advanced Durable Medical, Inc.'s use of certain rental equipment,
space and ancillary services. The Advanced Durable Medical receivable
has been paid with the proceeds thereof reducing the Bank Debt of the
Companies. Such management fee relationship has terminated, and prior
to the Closing, ADM and the Subsidiary will execute an Agreement which
will evidence the relationship among the Subsidiary, HCI and ADM from
and after the Closing Date.
Material Events
---------------
1. Neither HCI nor Subsidiary nor the assets owned by HCI or Subsidiary
are "Year 2000" compliant but the Companies have began discussions
with consultants to become "Year 2000" compliant. The Companies'
suppliers or customers may not be "Year 2000" compliant.
2. A list of the unused vacation time of various employees is attached
which is not accrued on the books of the Companies, nor reflected on
the Latest Balance Sheet.
3. Amicare has indicated to the Companies that it may no longer rent
equipment from the Companies and instead will purchase it own
equipment.
4. Subsidiary has been paying franchise taxes in various states as if it
had 1000 shares of common stock outstanding. Subsidiary has 389 shares
of common stock outstanding, all of which is owned by HCI.
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.22
INSURANCE
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.22
1. Policy #: 84 UEN PJ4928
Insurer: The Hartford
Type: Commercial Auto
2. Policy #: 00 XXX XX 3905
Insurer: The Hartford
Type: Commercial Auto
3. Policy #: CK08501909
Insurer: St. Xxxx
Type: Package
4. Policy #: WVA 8500454
Insurer: St. Xxxx
Type: Workers' Compensation
5. Policy #: 01095219
Insurer: UNUM Life Insurance Company
Type: Group Long-Term Disability
6. Policy #: 0100495
Insurer: Prudential
Type: Medical
7. Policy #: 14449863
Insurer: Northwestern Mutual Life
Type: Term Life Insurance Policy for Xxxxxx X. Xxxxxx
DISCLOSURE SCHEDULE
TO
STOCK PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXXX
XXXX X. XXXXX
XXXXX X. XXXXX
THE XXXXXXX XXXXXX FAMILY TRUST
CENTER OF CONTEMPORARY ARTS
THE JEWISH FEDERATION OF ST. LOUIS
AND
UNIVERSAL HOSPITAL SERVICES, INC.
DATED JULY 30TH, 1998
SCHEDULE 5.23
AFFLIATE TRANSACTIONS
THE ITEMS LISTED IN THE SCHEDULE MAY NOT IN MANY CASES MEET THE
"MATERIALITY" STANDARD, IF ANY, SET FORTH IN THE CORRESPONDING SECTION
OF THE AGREEMENT BUT ARE BEING DISCLOSED TO ASSIST BUYER AFTER THE
CLOSING DATE.
FOR PURPOSES OF THE DISCLOSURE SCHEDULE, ANY INFORMATION WHICH IS
DISCLOSED ON THE DISCLOSURE SCHEDULE WILL, TO THE EXTENT REASONABLY
APPARENT, BE DEEMED DISCLOSED FOR ALL SECTIONS OF SECTION 5 OF THE
AGREEMENT TO WHICH SUCH DISCLOSURE IS RELEVANT.
SCHEDULE 5.23
1. Xxxx X. Xxxxx, Xxxxx X. Xxxxx, Xxxxxxx X. Xxxxxx, and The Xxxxxxx
Xxxxxx Family Trust own 100% of the outstanding shares of ADM. ADM has
received certain services, rented certain office and warehouse space,
and rented to third parties certain equipment owned by HCI or the
Subsidiary. ADM has also paid a management fee to HCI for these
services and other arrangements. These arrangements may or may not have
been on an arm's-length basis, and the management fee may or may not
have fairly compensated HCI and the Subsidiary for these services and
other arrangements. At Closing, ADM and HCI will execute an agreement
(a copy of which has been provided to Buyer) which will evidence the
relationship among the Subsidiary, HCI and ADM from and after the
Closing Date.
SCHEDULE 8.9
------------
Xxxx Xxxxxxxx 25,000.00
Xxxx Xxxxxx 25,000.00
Xxxxx Xxxxx 15,000.00
Xxxxxx Xxxxx 10,000.00
---------
75,000.00
EXHIBIT 3.2
-----------
WIRE TRANSFER INSTRUCTIONS
--------------------------
Xxxxxxx X. Xxxxxx*
------------------
Mercantile Bank
ABA Routing No.: 000000000
Reference: FBO Xxxxxxx X. Xxxxxx 030 866207-001
Account No.: 030 866207-001
Amount in Dollars: 8,703,507.12
(714,999.00) less investment in UHS*
-------------
7,988,508.12
*Xxxxxxx X. Xxxxxx'x investment in UHS in the amount of $714,999 which evidences
256,272 shares in Buyer shall be deemed made, as such amount has been deducted
from Xxxxxxx X. Xxxxxx'x share of the Purchase Price.
Xxxx X. Xxxxx
-------------
Mercantile Bank
ABA Routing No.: 000000000
Account No.: 1006400160
Amount in Dollars: 2,631,397.13
Xxxxx X. Xxxxx
--------------
Chase N.Y. City
ABA Routing No.: 000000000
Credit U.S. Trust Co. of N.Y.
Account No.: 000-0-000000
FAO 1st Manhattan Co.
Account No.: 0000000
FAO Xxxxx Xxxxx
Account No.: 00000000
Amount in Dollars: 1,342,549.56
The Xxxxxxx Xxxxxx Family Trust
-------------------------------
Mercantile Bank
ABA Routing No.: 000000000
Reference: FBO Xxxxxxx X. Xxxxxx 030 866339-001
Account No.: 030 866339-001
Amount in Dollars: 694,339.76
Center of Contemporary Arts
---------------------------
Mercantile Bank
ABA Routing No.: 000000000
Reference: Center of Contemporary Arts
Account No.: 1999120005
Amount in Dollars: 8,995.08
The Jewish Federation of St. Louis
----------------------------------
Mercantile Bank
ABA Routing No.: 000000000
Reference: The Jewish Federation of St. Louis
Account No.: 0000-00-0000
Amount in Dollars: 44,706.90
X.X. Xxxxxxx & Sons, Inc.**
---------------------------
Mercantile Bank, St. Louis, MO
ABA Routing No.: 081-000210
Reference: FBO HCI Acquisition Corp. Attn: Xxxxxxx Xxxxxx
Account No.: 1001435187
Amount in Dollars: 361,299.63
Xxxxx, Rice & Xxxxxxxx, X.X.**
------------------------------
NationsBank
ABA Routing No.: 000000000
Reference: Xxxxx, Rice & Fingersh Special Account
Account No.: 101601082255
Please notify Xxxxxxx Xxxxxxxx (314-444-7600) when wire transfer is
received.
Amount in Dollars: 100,000
Escrow Agent
------------
Enterprise Bank
ABA Routing No.: 000000000
Reference: Enterprise Bank as escrow agent for Xxxx Xxxxx -
HCI Common Stock Escrow
Account No.: 0000000
Amount in Dollars: 1,755,000
** These fees are expenses of the Sellers and are being paid by the Sellers in
connection with the payment of the Purchase Price only as a matter of
convenience to the Sellers so that Sellers can make these payments on the
Closing Date.
EXHIBIT 4.2.5.1
FORM OF SELLERS' COUNSEL OPINION
July 30, 1998
Universal Hospital Services, Inc.
0000 Xxxxxxxxx Xxxxx
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
Attn. Xxxxx Xxxxxxxxx
RE: Stock Purchase and Sale Agreement
Ladies & Gentlemen:
We have acted as special counsel to Sellers (as such term is defined
below), HCI Acquisition Corp. ("HCI"), and Home Care Instruments, Inc.
("Subsidiary"; HCI and Subsidiary are collectively referred to herein as the
"Companies") in connection with the execution and delivery by the Companies of
the following documents, each dated as of the date hereof:
Stock Purchase and Sale Agreement
Escrow Agreement
The foregoing agreements and documents are sometimes referred to herein
collectively as the "Purchase Documents."
This opinion is delivered to you pursuant to your request as set forth
in Section 4.3.5.1 of the Stock Purchase and Sale Agreement, of even date
herewith, by and among Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxx, Xxxxx X. Xxxxx, and the
Xxxxxxx Xxxxxx Family Trust, Center of Contemporary Arts, the Jewish Federation
of St. Louis, and Universal Hospital Services, Inc. ("Buyer") (the "Purchase
Agreement"). For purposes of this Opinion, (i) Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxx,
Xxxxx X. Xxxxx, and the Xxxxxxx Xxxxxx Family Trust are collectively referred to
herein as the "Sellers"; and (ii) the Xxxxxxx Xxxxxx Family Trust is referred to
herein as the Trust. Capitalized terms used herein, but not defined herein, have
the meanings set forth in the Purchase Agreement.
In connection with this opinion as it relates to HCI, in addition to
the Purchase Documents to which HCI is a party, we have also examined and relied
upon the following (the following documents being, collectively the "HCI
Documents"):
B-1 The articles of incorporation of HCI, as certified as of July 14,
1998, by the Secretary of State of Missouri as being true and
correct;
B-2 The by-laws of HCI, as certified as of July 30, 1998, by an
officer of HCI as being true and correct;
B-3 Good Standing Certificate with respect to HCI issued by the
Secretary of State of Missouri dated July 14, 1998; and
B-4 Unanimous written consent of the shareholders of HCI and the Board
of Directors of HCI authorizing and approving the transactions
contemplated by the Purchase Documents.
In connection with this opinion as it relates to the Subsidiary, in
addition to the Purchase Documents to which the Subsidiary is a party, we have
also examined and relied upon the following (the following documents being,
collectively the "Subsidiary Documents"):
B-5 The articles of incorporation of Subsidiary, as certified as of
July 14, 1998, by the Secretary of State of Delaware as being true
and correct;
B-6 The by-laws of Subsidiary, as certified as of July 30, 1998, by an
officer of the Subsidiary as being true and correct; and
B-7 Good Standing Certificate with respect to the Subsidiary issued by
the Secretary of State of Delaware dated July 14, 1998, and Good
Standing Certificate issued by the Secretary of State of Missouri
dated July 14, 1998.
In connection with this opinion as it relates to the Trust, in addition
to the Purchase Documents to which the Trust is a party, we have also examined
and relied upon the following (the following documents being, collectively the
"Trust Documents"):
B-8 The Trust Indenture of the Trust, as certified as of July 30,
1998, by the Trustee of the Trust as being true and correct; and
B-9 Certificate of the Trustee of the Trust, certifying his status as
the duly appointed, sole trustee of the Trust.
The opinions hereafter expressed are based upon our review of the HCI
Documents, the Subsidiary Documents, the Trust Documents, the Purchase
Documents. As to questions of fact material to our opinion which have not been
independently established, we have relied upon, without independent
verification, the accuracy of the relevant facts stated in the HCI Documents,
the Subsidiary Documents, the Trust Documents and the Purchase Documents.
Use of the term "to our knowledge" and words of similar import means
that, during the course of our representation as described herein, no
information has come to the attention of our attorneys actually involved in the
transactions described herein which gave such attorneys actual knowledge of the
existence of the matter as so qualified. We have not undertaken any
investigation to determine the existence or status of such matters nor have we
made any independent investigations as to the accuracy or completeness of any
representation, warranty, data or other information, written or oral, made or
furnished by the Sellers (or their agents), HCI or the Subsidiary to us or to
Buyer, or its representatives.
Based solely upon our review of the HCI Documents, the Subsidiary
Documents, the Trust Documents and the Purchase Documents, the assumptions
stated herein, and subject to the qualifications and limitations stated herein,
we are of the opinion that:
1. HCI is a Missouri corporation, validly existing and in good standing under
the laws of the State of Missouri. Subsidiary is a Delaware corporation, validly
existing and in good standing under the laws of the State of Delaware and
Missouri.
2. Each of the Purchase Documents to which the Trust is a party has been duly
authorized, executed and delivered by the Trust, and constitutes the legal,
valid and binding obligation of the Trust, enforceable against the Trust in
accordance with its terms. Each of the Purchase Documents to which the Sellers
(other than the Trust) are a party, as the case may be, have been executed and
delivered by such Sellers and constitute the legal, valid and binding obligation
of such Sellers (other than the Trust), as the case may be, enforceable against
such Sellers (other than the Trust), as the case may be, in accordance with its
terms.
3. HCI and the Subsidiary, as the case may be, have all requisite corporate
power, authority and legal capacity and legal rights to own, lease and operate
their respective properties and assets.
4. The execution, delivery and performance of the Purchase Documents by Seller,
to which each is a party, will not (a) violate HCI or the Subsidiary's
respective articles of incorporation or any provision of the bylaws of HCI or
the Subsidiary, as the case may be, or (b) to our knowledge, violate any law of
the United States, the State of Missouri or the Delaware General Corporation Law
affecting HCI or Subsidiary which could reasonably be likely to have a Material
Adverse Effect. The execution, delivery and performance of the Purchase
Documents by the each of the Sellers to which it is a party, will not, to our
knowledge, violate any law of the State of Missouri affecting Sellers which such
violation could reasonably be likely to have a Material Adverse Effect. The
execution, delivery and performance of the Purchase Documents by the Trust, to
which it is a party, will not violate the Trust's trust indenture.
5. To our knowledge, (i) all of the shares of capital stock of each of the
Companies are duly authorized, validly issued, fully paid and non-assessable,
and (ii) none of such shares of either Company have been issued in violation of
any preemptive rights. To our knowledge, all of the issued and outstanding
shares of HCI are owned of record by the individuals or trust listed on ANNEX I
attached hereto and incorporated herein, and such ANNEX I is correct. To our
knowledge, HCI owns all of the issued and outstanding shares of Subsidiary. To
our knowledge, (i) there are no outstanding securities of either Company
convertible into or evidencing the right to purchase or subscribe for any voting
or equity interests in either Company, (ii) there are no outstanding or
authorized options, warrants, calls, subscriptions, rights, commitments or any
other agreements of any character obligating either Company to issue any voting
or equity interests or any securities convertible into or evidencing the right
to purchase or subscribe for any such voting or equity interests, other than as
set forth in the articles of incorporation and by-laws of such Company, and
(iii) there are no agreements or understandings with respect to the voting, sale
or transfer of any equity or voting interests in either Company other than as
set forth in the articles of incorporation and by-laws of such Company.
For purposes of the opinions expressed herein, we have assumed, without
investigation, the following:
C-1 the legal capacity of each natural person including, without
limitation, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxx, and Xxxxx X. Xxxxx;
C-2 the full power and authority of each person, other than the Trust,
HCI, Subsidiary, and their respective trustees and officers, to
execute, deliver and perform each document and each of the
Purchase Documents heretofore or hereafter executed and delivered
in each case to which it is a party, and to do each other act
heretofore or hereafter done by such person;
C-3 the due authorization, execution and delivery by each person,
other than the Sellers, HCI and the Subsidiary, and their
respective trustees and officers, of each document and each of the
Purchase Documents heretofore executed and delivered or hereafter
to be executed and delivered by such person in each case to which
it is a party;
C-4 the legality, validity, binding effect and enforceability as to
each person, other than Sellers, HCI and the Subsidiary, and, for
the entities, their respective trustees and officers, of each
document and each of the Purchase Documents heretofore executed
and delivered or hereafter to be executed and delivered in each
case to which it is a party, and of each other act heretofore done
or hereafter to be done by such person;
C-5 the genuineness of each signature on and the completeness of each
document and each of the Purchase Documents submitted to us as an
original;
C-6 the conformity to the original of each document and each of the
Purchase
Documents submitted to us as a copy;
C-7 the authenticity of each original of each document and each of the
Purchase Documents submitted to us as a copy;
C-8 no modification of any provision of any document or any of the
Purchase Documents from that provided to us, nor waiver of any
right or remedy thereunder not disclosed to us in writing;
C-9 the accuracy of the information contained in all certificates
delivered by Sellers, HCI or the Subsidiary to us on or prior to
the date hereof in connection with the transactions described in
the Purchase Documents; and
C-10 the termination prior to the giving of this Opinion of the
Buy/Sell Agreement, and our opinions in Paragraph 6 above are
expressly conditioned upon and subject to the prior termination of
the Buy/Sell Agreement.
The opinions expressed herein are limited solely to the matters stated
herein, and no opinion is to be inferred or may be implied beyond the matters
expressly stated herein. In addition, each of the opinions expressed herein is
subject to each of the following qualifications and limitations:
D-1 the opinions expressed by us herein are expressly limited to the
laws of the State of Missouri, the General Corporation Law of the
State of Delaware of the Delaware Code (statutory) and, where
applicable, the laws of the United States of America. We express
no opinion concerning the applicability to the Sellers, HCI or
Subsidiary, or the Purchase Documents of state and local laws,
rules, regulations, ordinances or restrictive covenants of any
other state or jurisdiction;
D-2 we express no opinion concerning the applicability to the Sellers,
HCI or Subsidiary, or the Purchase Documents of any federal, state
(including, without limitation, those of the State of Missouri)
and local laws, rules, regulations, ordinances or restrictive
covenants relating to: (i) the issuance, purchase or sale of
securities or with respect to securities generally; (ii) the
environment or toxic or hazardous substances; (iii) occupational
safety or health; (iv) any federal or state tax consequences
arising in connection with any of the transactions contemplated by
the Purchase Documents; (v) antitrust matters; (vi) unfair
competition matters; (vii) employment relations matters; (viii)
intellectual property matters (including, without limitation,
matters pertaining to patent, copyright, servicemark, trade name
or trademark rights); or (ix) employee benefit matters;
D-3 our opinions are subject to the effect of bankruptcy, insolvency,
reorganization, fraudulent conveyance, arrangement, moratorium,
and other laws relating to or affecting the rights of creditors
generally;
D-4 our opinions are subject to limitations imposed by general
principles of equity, and any fraudulent conveyance, preferential
transfer, equitable subordination or similar law;
D-5 we express no opinion as to any provision of the Purchase
Documents that purports: (i) to specify that provisions of the
Purchase Documents may be waived or amended
only in writing; (ii) to waive any right to trial by jury; (iii)
to require arbitration; or (iv) to have the effect of agreeing to
the jurisdiction of a court (or waiving objections to
jurisdiction) or agreeing to venue (or waiving objections to
venue);
D-6 we express no opinion as to the legality or enforceability of (i)
exculpation clauses; or (ii) any choice-of-law clause or provision
requiring the application of the laws of a particular
jurisdiction;
D-7 we express no opinion as to the specific remedy that any court or
other authority or body might grant in connection with the
enforcement of rights under any of the Purchase Documents;
D-8 enforcement of the Purchase Documents may be conditioned upon the
conduct of the parties thereto, conforming with applicable implied
covenants of good faith, fair dealing and/or commercial
reasonableness, notwithstanding any language therein;
D-9 in delivering this opinion letter, we express no opinion as to the
status of title as to any property, real, personal, tangible or
intangible, of HCI or Subsidiary other than the shares of
Subsidiary owned by HCI;
D-10 we express no opinion as to the effect on our opinions or the
Purchase Documents of the failure of Buyer to comply with any of
the transactions contemplated by, or the terms or provisions of,
the Purchase Documents, or with any laws or regulations applicable
to Buyer; and
D-11 we express no opinion with respect to the Charities.
Our opinion is rendered solely for Buyer's benefit and may not be
delivered to, or relied upon by, any other person for any purpose. Our opinion
is based upon a state of facts and the law existing and in effect on the date
hereof, and we assume no obligation to Buyer or any other person to, and we will
not, revise, supplement or update this opinion in any respect at any time
subsequent to the date hereof.
Sincerely,
XXXXX, XXXX & XXXXXXXX, X.X.
ANNEX I IS ATTACHED HERETO
ANNEX I
Legal and Beneficial Owner # of Shares Class Par Value
-------------------------- ----------- ----- ---------
Xxxxxxx X. Xxxxxx 650.00 common $1.00
Xxxx X. Xxxxx 196.00 common $1.00
Xxxxx X. Xxxxx 100.00 common $1.00
The Xxxxxxx Xxxxxx Family Trust 50.00 common $1.00
Center of Contemporary Arts .67
common $1.00
The Jewish Federation of St. Louis 3.33
common $1.00
TOTAL: 1,000
EXHIBIT 4.3.5.1
July 30, 1998
Xxxxxxx X. Xxxxxx,
Xxxx X. Xxxxx,
Xxxxx X. Xxxxx,
Xxxxxxx Xxxxxx Family Trust,
Center of Contemporary Arts, and
Jewish Federation of St. Louis
(collectively, the "Sellers")
c/o Xxxxxxx X. Xxxxxx
00000 Xxxxx Xxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Re: Universal Hospital Services, Inc.
Ladies and Gentlemen:
We have acted as counsel to Universal Hospital Services, Inc., a
Minnesota corporation (the "Company"), in connection with (a) the Company's
acquisition of all of the issued and outstanding capital stock of HCI
Acquisition Corp., a Delaware corporation ("HCI"), pursuant to the Stock
Purchase and Sale Agreement (the "Agreement") dated as of July 30, 1998 between
the Company and the Sellers and (b) the investment by Xxxxxxx X. Xxxxxx ("Xx.
Xxxxxx") in 256,272 shares (the "Shares") of Common Stock, $.01 par value (the
"Common Stock"), of the Company pursuant to the Stock Purchase Agreement (the
"Investment Agreement") between Xx. Xxxxxx and the Company. This opinion is
being delivered to you pursuant to Section 4.2.6.1 of the Agreement. Our
opinions set forth below with respect to the Investment Agreement and the Shares
are being provided solely to Xx. Xxxxxx in connection with the Investment
Agreement. Capitalized terms used herein, except as otherwise specifically
defined herein, are used with the same meaning as defined in the Agreement.
In connection with this opinion, we have examined the following
documents:
The Sellers named herein
July 30, 1998
Page 2
(i) the Agreement, the Investment Agreement and the
Escrow Agreement (the "Escrow Agreement") dated July
30, 1998 among the Company, the Sellers and
Enterprise Bank;
(ii) a copy of the Restated Articles of Incorporation of
the Company (the "Restated Articles"), certified as
of July 21, 1998 by the Secretary of State of
Minnesota;
(iii) a certificate of good standing concerning the Company
from the Minnesota Secretary of State issued July 21,
1998;
(iv) a copy of the Bylaws of the Company, certified by an
officer of the Company;
(v) a copy of resolutions of the Board of Directors of
the Company adopted June 29, 1998 and July 27, 1998,
certified by an officer of the Company; and
(vi) a certificate of an officer of the Company dated July
30, 1998.
We have also reviewed such questions of law as we have considered necessary and
appropriate for the purposes of this opinion.
In addition, as to questions of fact material to the opinions
hereinafter expressed, we have, when relevant facts were not independently
established by us, relied upon certificates and opinions of the Company, and its
officers, and of public officials. We have not independently examined the
records of any court or public office in any jurisdiction, and our opinion is
subject to matters which examination of such records would reveal. Without
limiting the generality of the foregoing, we have relied upon (A) certificates
of officers of the Company referenced in items (iv), (v) and (vi) above, and the
representations contained therein, and we have assumed that all such
representations are true and correct as of the date of this opinion and (B) the
accuracy of all certificates of public officials described above.
In rendering the opinions expressed below, we have assumed,
with your permission and without verification: (a) the authenticity of all
documents submitted to us as originals, (b) that all signatures are in fact the
signatures of the natural persons which they purport to be, (c) the legal
capacity of natural persons, (d) with respect to all
The Sellers named herein
July 30, 1998
Page 3
parties to agreements or instruments relevant hereto other than the Company,
that such parties had the requisite power and authority (corporate or otherwise)
to execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties, and (e) the conformity to originals of all documents submitted to
us as copies and the authenticity of the originals of such copies.
Our opinions expressed below as to certain factual matters are
qualified as being limited "to our knowledge" or "known to us" or by other words
to the same or similar effect. Such words, as used herein, mean the information
known to Xxxxxxxxx X. Xxxxx or Xxxx X. Xxxxxxxxxxx, the attorneys who have
represented the Company in connection with the transactions contemplated by the
Agreement and the Investment Agreement in connection with their representation
of the Company. In rendering such opinions, we have not conducted any
independent investigation or consulted with other attorneys in our firm with
respect to the matters covered thereby. No inference as to our knowledge with
respect to such matters should be drawn from the fact of our representation of
the Company.
Based on the foregoing, and subject to the qualifications set forth
below, we are of the opinion that:
1. The Company is duly incorporated, validly existing and in good
standing under the laws of the State of Minnesota with corporate power and
authority to conduct any lawful business activity.
2. The Company has an authorized capital stock consisting of 25,000,000
shares of common stock, $.01 par value; to our knowledge, all of the outstanding
shares of capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and were not issued in violation of any
preemptive or similar rights pursuant to the Company's Restated Articles or
bylaws or pursuant to the Minnesota Business Corporation Act (the "MBCA"); the
Shares, when issued, delivered and paid for in accordance with the terms of the
Investment Agreement will be duly authorized, validly issued, fully paid and
nonassessable and not issued in violation of any preemptive or similar rights
pursuant to the Company's Restated Articles or bylaws or pursuant to the MBCA.
The Sellers named herein
July 30, 1998
Page 4
3. The Company has the corporate power and authority to execute,
deliver and perform its obligations under the Agreement, the Investment
Agreement and the Escrow Agreement; the Agreement, the Investment Agreement and
the Escrow Agreement have been duly authorized by all requisite corporate
action, executed and delivered by the Company; each of the Agreement, the
Investment Agreement and the Escrow Agreement constitutes the binding obligation
of the Company, enforceable in accordance with its terms.
4. The execution and delivery of the Agreement, the Investment
Agreement and the Escrow Agreement by the Company and the performance by the
Company of its obligations thereunder do not violate or cause a breach of the
Restated Articles or bylaws of the Company.
5. To our knowledge, the execution and delivery of the Agreement, the
Investment Agreement and the Escrow Agreement by the Company and the issue and
sale of the Shares by the Company will not violate any federal law of the United
States of America or law of the State of Minnesota affecting the Company which
could reasonably be likely to have a material adverse effect on the financial
condition of the Company.
The opinions set forth above are subject to the following
qualifications and exceptions:
(a) Our opinions in paragraph 3 above are subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar law of general application affecting creditors' rights, including
(without limitation) applicable fraudulent transfer laws.
(b) Our opinions in paragraph 3 above are subject to the effect of
general principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing, and other similar
doctrines affecting the enforceability of agreements generally (regardless
of whether considered in a proceeding in equity or at law).
(c) Our opinions in paragraph 3 above are subject to possible judicial
action giving effect to governmental actions or foreign laws affecting
creditors' rights.
The Sellers named herein
July 30, 1998
Page 5
(d) Our opinions in paragraph 3 above, insofar as it relates to
indemnification provisions, are subject to the effect of federal and state
securities laws and public policy relating thereto.
(e) Minnesota Statutes section. 290.371, Subd. 4, provides that any
corporation required to file a Notice of Business Activities Report does not
have a cause of action upon which it may bring suit under Minnesota law
unless the corporation has filed a Notice of Business Activities Report and
provides that the use of the courts of the State of Minnesota for all
contracts executed and all causes of action that arose before the end of any
period for which a corporation failed to file a required report is
precluded. Insofar as our opinion may relate to the valid, binding and
enforceable character of any agreement under Minnesota law or in a Minnesota
court, we have assumed that any party seeking to enforce such agreement has
at all times been, and will continue at all times to be, exempt from the
requirement of filing a Notice of Business Activities Report or, if not
exempt, has duly filed, and will continue to duly file, all Notice of
Business Activities Reports.
The opinions expressed above are limited to the laws of the State of
Minnesota and the federal laws of the United States of America, and we express
no opinion as to the laws of any other jurisdiction. We call your attention to
the fact that the Agreement states that it is governed by Missouri law. We have
not examined the question of what law would govern the interpretation or
enforcement of such Agreement and our opinions in paragraph 3 above are based on
the assumption, solely for purposes of our opinion in paragraph 3 above (and
without opining as to such governing law provisions), that the internal laws of
the State of Minnesota and the federal laws of the United States of America
would govern the provisions of such Agreement and the transactions contemplated
thereby.
The foregoing opinions are being furnished to you to the extend
provided herein, solely for your benefit and may not be relied upon by, nor may
copies be delivered to, any other person without our prior written consent.
Very truly yours,
ECH
JBA
EXHIBIT 9.5
ESCROW AGREEMENT
This Agreement, dated July30, 1998, is made by and among Universal
Hospital Services, Inc., a Minnesota corporation ("UHS"), Xxxxxxx X. Xxxxxx,
Xxxx X. Xxxxx, Xxxxx X. Xxxxx and the Xxxxxxx Xxxxxx Family Trust, Center of
Contemporary Arts, the Jewish Federation of St. Louis (the "Shareholders"), and
Xxxx X. Xxxxx (acting in his capacity as representative of the Shareholders (the
"Shareholders' Representative")) and Enterprise Bank, as escrow agent (the
"Escrow Agent").
Reference is made to that certain Stock Purchase and Sale Agreement
dated July 30, 1998 (as amended from time to time, the "Stock Purchase and Sale
Agreement"), by and among UHS, the Shareholders and certain charities named
therein. The Stock Purchase and Sale Agreement provides that on the Closing Date
(as defined therein) UHS shall deliver $1,755,000 (the "Escrow Funds") to the
Escrow Agent, to be held in an escrow account in accordance with the terms of
this Escrow Agreement, to fund liquidated indemnification obligations of the
Shareholders under the Stock Purchase and Sale Agreement. The parties hereto
desire that the Escrow Agent hold, invest and distribute the Escrow Funds,
together with accrued interest thereon, all in the manner set forth in this
Escrow Agreement. Accordingly, in consideration of consummating the transactions
contemplated by the Stock Purchase and Sale Agreement, the covenants and
agreements herein set forth and for other valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:
1. Appointment and Agreement of Escrow Agent. UHS and the Shareholders
hereby appoint and designate the Escrow Agent as the escrow agent for the
purposes set forth herein, and the Escrow Agent hereby accepts such appointment
under the terms and conditions set forth herein.
2. The Shareholders' Representative.
2.1. Appointment. The Shareholders hereby appoint the Shareholders'
Representative, and the Shareholders' Representative hereby agrees to act, as
the Shareholders' Representative, until a successor Shareholder's Representative
has been appointed as herein provided.
2.2. Election and Replacement. During the period ending upon the date
when all obligations under this Agreement have been discharged (including all
indemnification obligations pursuant to Section 9.2.1 of the Stock Purchase and
Sale Agreement), the Shareholders who immediately prior to the date hereof held
HCI Common Stock representing an aggregate number of shares of HCI Common Stock
which exceeded 80% of the amount of such HCI Common Stock outstanding
immediately prior to the date hereof (a " Majority") may from time to time upon
written notice to the Shareholders' Representative, the Escrow Agent and UHS
remove the Shareholders' Representative, and if the Shareholders' Representative
dies, becomes incapacitated, resigns or is removed by a Majority, the Majority
shall appoint a successor Shareholders' Representative to fill the vacancy so
created. If the Majority is required to but has not appointed a successor
Shareholders' Representative within 15 business days from a request by UHS to
appoint a successor Shareholders' Representative, UHS shall have the right to
appoint a Shareholders' Representative to fill the vacancy so created, and shall
advise all those who were holders of HCI Common Stock immediately prior to the
date hereof of such appointment by written notice. A copy of any appointment by
the Majority of any successor Shareholders' Representative shall be provided to
UHS promptly after it shall have been effected.
2.3. Authority. The Shareholders' Representative has been duly
authorized by the Shareholders to act on their behalf as specified in this
Agreement, and this Agreement has been duly authorized, executed and delivered
by the Shareholders' Representative. The Shareholders' Representative shall be
authorized to make and deliver any certificate, notice, consent or instrument
required or permitted to be made or delivered under this Agreement or under the
documents referred to in this Agreement (an " Instrument") which the
Shareholders' Representative determines in its sole and absolute discretion to
be necessary, appropriate or desirable, and, in connection therewith, to hire or
retain, at the sole expense of the Shareholders, such counsel, investment
bankers, accountants, representatives and other professional advisors as it
determines in its sole and absolute discretion to be necessary, advisable or
appropriate in order to carry out and perform its rights and obligations
hereunder. Any party receiving an Instrument from the Shareholders'
Representative shall have the right to rely in good faith upon such
certification, and to act in accordance with the Instrument without independent
investigation.
2.4. No Liability of UHS or the Escrow Agent. Neither UHS nor the
Escrow Agent nor any officer, employee, director or affiliate of UHS or the
Escrow Agent shall have any liability whatsoever to any Shareholder or otherwise
arising out of the acts or omissions of the Shareholders' Representative or any
disputes among the Shareholders or among them and the Shareholders'
Representative. Neither UHS nor the Escrow Agent shall have any direct liability
to the Shareholders under this Agreement or the other agreements referred to
herein and may rely entirely on its dealings with, and notices to and from, the
Shareholders' Representative to satisfy any obligations it might have under this
Agreement, any agreement referred to herein or otherwise to the Shareholders.
3. Indemnity Obligations Satisfied Solely from Escrow Funds. The
indemnity obligations of Section 9.2.1 of the Stock Purchase and Sale Agreement
shall be satisfied solely from the Escrow Funds.
2
4. Establishment of Escrow.
4.1. Escrow Deposit. On the Closing Date, UHS shall cause the Escrow
Funds to be delivered to the Escrow Agent. The Escrow Funds shall be held and
used only for the purposes of funding the indemnity obligations of the
Shareholders set forth in Section 9.2.1 of the Stock Purchase and Sale Agreement
("the Escrow Fund Indemnities").
4.2. Receipt. The Escrow Agent hereby acknowledges receipt of the
Escrow Funds and agrees to hold and disburse the Escrow Funds in accordance with
the terms and conditions of this Escrow Agreement for the uses and purposes
stated herein.
4.3. Investment of Escrow Funds. The Escrow Agent agrees to hold and
invest such Escrow Funds, together with interest accrued thereon, in
FDIC-insured or privately insured bank deposits. The Escrow Agent shall have the
right to liquidate any investments held in order to provide funds necessary to
make required payments under this Escrow Agreement. The Escrow Agent shall not
be liable for any loss incurred at such liquidation which is due to fluctuations
in market rates or penalties incurred because of early redemption. All interest
or earnings with respect to the Escrow Funds and/or the Escrow Funds Reserved
Amount shall belong solely to the Shareholders, and shall not be paid to or
claimed by UHS. All interest reported as income to the Shareholders shall be
distributed to the Shareholders prior to or concurrently with the delivery of
any 1099 or similar statements. No consent of UHS is required to distribute any
such interest or earnings to the Shareholders.
5. Purpose; Term. This Escrow Agreement has been executed and the
deposit of the Escrow Funds hereunder has been made pursuant to Section 9.5 of
the Stock Purchase and Sale Agreement. The deposit of the Escrow Funds has been
made for the purpose of funding and securing the Escrow Fund Indemnities until
the close of business on the 365th day following the date hereof (the
"Termination Date").
6. Procedures for Disbursement of the Escrow Funds to UHS. At any time
prior to the Termination Date, whenever there shall be delivered to the Escrow
Agent (a) a certificate signed by UHS and the Shareholders' Representative
certifying or (b) a certified copy of a final, non-appealable judgment of a
court of competent jurisdiction determining, that an amount is due to UHS
pursuant to Section 9.2.1 of the Stock Purchase and Sale Agreement, the Escrow
Agent shall, solely to the extent of the Escrow Funds, promptly (and in no event
later than five business days following receipt of either document referred to
in clauses (a) and (b) of this Section 6) cause Escrow Funds equal to such
amount (but in no event greater than $1,755,000, less the sum of all amounts
previously distributed to UHS under this Agreement) to be delivered to UHS.
3
7. Termination of Escrow. At the close of business on the Termination
Date, the Escrow Agent shall deliver the balance of any Escrow Funds, together
with interest accrued thereon, to the Shareholders as directed by the
Shareholders' Representative; provided, however, that there shall be deducted
from the amount to be delivered to the Shareholders pursuant to this Section 7
an amount equal to the Escrowed Funds Reserved Amount (as defined in Section 8
hereof) if and only if the notification relating to such Escrowed Funds Reserved
Amount required by Section 8 has been delivered to the Escrow Agent and the
Shareholders' Representative prior to the Termination Date. This Escrow
Agreement shall automatically terminate if and when all the Escrowed Funds shall
have been distributed by the Escrow Agent in accordance with the terms of this
Escrow Agreement.
8. Retention and Disbursement of Escrow Funds Following the Termination
Date.
(a) In the event that UHS shall have determined in good faith that it
intends to pursue bona fide indemnification claims pursuant to Section 9.2.1 of
the Stock Purchase and Sale Agreement and in accordance with the other terms and
provisions of the Stock Purchase and Sale Agreement, then UHS shall, at any time
prior to the Termination Date, notify concurrently the Escrow Agent and the
Shareholders' Representative to such effect in writing, which written notice
shall describe briefly the nature of each such claim, the facts and
circumstances which give rise to each such claim and the estimated amount,
determined solely by UHS in its good faith judgment, of the potential liability
with respect to each such claim, and the provisions of the Stock Purchase and
Sale Agreement on which each such claim is based. The Escrow Agent shall have no
obligation to verify that delivery of such notice has been made by UHS to the
Shareholders' Representative, but agrees to forward to the Shareholders'
Representative, promptly, by telecopier and overnight mail, a copy of the notice
received by it. If such notice is delivered to the Escrow Agent on or prior to
the Termination Date, an amount of the Escrow Funds equal to one hundred percent
(100%) of the total of the amounts claimed (but in no event greater than
$1,755,000, less the sum of all amounts other than interest previously
distributed to UHS under this Agreement) shall be set aside and retained (to the
extent available in the then remaining Escrow Funds) by the Escrow Agent as a
reserve to cover such claim or claims (such amounts so set aside and reserved,
as reduced from time to time pursuant to the provisions of this Section 8(a) or
of Section 6 hereof, being herein called the "Escrow Funds Reserved Amount").
(b) Following the Termination Date, the Escrow Agent agrees to hold and
invest such Escrow Funds Reserved Amount, together with accrued interest
thereon, in the same manner as the Escrow Funds hereunder. The Escrow Funds
Reserved Amount shall be disbursed by the Escrow Agent in the same manner as the
Escrow Funds are to be disbursed pursuant to Section 6, but only to cover the
4
claims identified in the notice sent pursuant to Section 8(a) that led to the
establishment of such Escrow Funds Reserved Amount. In addition, if at any time
UHS determines in good faith that it will not pursue or, under the terms of the
Stock Purchase and Sale Agreement, cannot pursue any claim for indemnification
to which all or any portion of the Escrow Funds Reserved Amount relates, or a
court of competent jurisdiction by final, non-appealable judgment so finds, UHS
shall direct the Escrow Agent to disburse all or such portion of the Escrow
Funds Reserved Amount, together with accrued interest thereon, to the
Shareholders.
9. The Escrow Agent.
9.1. Indemnification of the Escrow Agent. UHS and the Shareholders,
jointly and severally agree to indemnify and hold the Escrow Agent and its
directors, officers and employees harmless from and against any and all costs,
charges, damages, and attorneys' fees which the Escrow Agent in good faith may
incur or suffer in connection with or arising out of this Escrow Agreement.
9.2. Duties of the Escrow Agent. The Escrow Agent shall have no duties
other than those expressly imposed on it herein and shall not be liable for any
act or omission except for its own gross negligence or willful misconduct.
9.3. Fees of the Escrow Agent. The fees and charges of the Escrow Agent
(including its attorneys fees and expenses) related to this Agreement shall be
paid 50% by the Shareholders and 50% by UHS.
9.4. Escrow Agent to Follow Instructions of UHS and the Shareholders'
Representative. Any provision herein contained to the contrary notwithstanding,
the Escrow Agent shall at any time and from time to time take such action
hereunder with respect to the Escrow Funds as shall be agreed to in writing by
UHS and the Shareholders' Representative, provided that the Escrow Agent shall
first be indemnified to its satisfaction, jointly and severally, by UHS and the
Shareholders with respect to any of its costs or expenses which might be
involved.
9.5. Delivery of Statements of Account. The Escrow Agent shall provide
monthly statements of account to each of the Shareholders' Representative and
UHS.
9.6. Appointment of Successor Escrow Agent. The Escrow Agent may resign
at any time upon forty-five (45) days' written notice to UHS and the
Shareholders' Representative. UHS and the Shareholders' Representative may by
mutual agreement remove the Escrow Agent by giving thirty (30) days' written
notice of such removal. In the event of the resignation or removal of the Escrow
Agent, UHS and the Shareholders' Representative shall appoint a successor Escrow
Agent. The successor Escrow Agent shall have the same powers and duties as those
conferred
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upon the Escrow Agent named in this Agreement, and shall agree to be bound by
the terms of this Agreement as though named as the Escrow Agent herein. Upon the
resignation or removal of the Escrow Agent, the Escrow Funds shall be delivered
to the successor escrow agent, with delivery to be made as of the effective date
of the Escrow Agent's resignation or removal. If for any reason delivery to a
successor escrow agent is not possible, the Escrow Agent shall deliver the
Escrow Funds to a party mutually agreed upon by UHS and the Shareholders'
Representative.
10. Other Provisions.
10.1. Notices. All notices and other communications hereunder shall be
in writing and shall be sufficiently given if made by hand delivery, by telex,
by telecopier, or by registered or certified mail (postage prepaid and return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by it by like notice) provided that
communications given to the Escrow Agent shall be considered given when received
by the Escrow Agent and, provided further, that any communications to the Escrow
Agent directing it to make a disbursement from the Escrow Funds will be made by
the Escrow Agent only upon receipt of originally executed copies of such
communication:
(a) if to UHS:
Universal Hospital Services, Inc.
0000 Xxxxxxxxx Xxxxx
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xx. Xxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxx & Whitney LLP
Pillsbury Center South
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
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(b) if to the Shareholders or the Shareholders' Representative:
Xxxx X. Xxxxx
The Handshake Group
00000 Xxxxxxxx Xxxxxxxxxx Xxxx.
Xx. Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Confirmation No.: (000) 000-0000
with a copy to:
Xxxx Xxxxxx
Xxxxx, Xxxx & Xxxxxxxx, X.X.
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Phone: (000) 000-0000
(c) if to the Escrow Agent:
Enterprise Bank
0000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
10.2. Benefit and Assignment. The rights and obligations of each party
under this Escrow Agreement may not be assigned without the prior written
consent of all other parties. This Escrow Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Nothing in this Escrow Agreement, expressed or implied, is intended to
or shall (i) confer on any person other than the parties hereto, or their
respective successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Escrow Agreement, or (ii) constitute the
parties hereto as partners or participants in a joint venture. The Escrow Agent
shall not be obligated to recognize any such succession or assignment, until
satisfactory written evidence thereof shall have been received by it.
10.3. Entire Agreement; Amendment. This Escrow Agreement and the Stock
Purchase and Sale Agreement contain all the terms agreed upon by the parties
with respect to the subject matter hereof. This Escrow Agreement may be amended
only by a written instrument signed by the party against which enforcement of
any waiver, change, modification, extension or discharge is sought.
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10.4. Headings. The headings of the sections and subsections of this
Escrow Agreement are for ease of reference only and shall not be deemed to
evidence or affect the meaning or construction of any of the provisions hereof.
10.5. Governing Law. This Escrow Agreement shall be construed, as to
both validity and performance, enforced in accordance with and interpreted and
governed by the laws of the State of Missouri.
10.6. Counterparts. This Escrow Agreement may be executed in multiple
counterparts, all of which taken together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
executed on the date first written above by their respective officers on the
date first written above.
UNIVERSAL HOSPITAL SERVICES, INC.
By:
--------------------------------
Xxxxx X. Xxxxxxxxx
Chief Executive Officer
SHAREHOLDERS:
-----------------------------------
Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx
-----------------------------------
The Xxxxxxx Xxxxxx Family Trust,
By: Xxxxxxx X. Xxxxxx, sole trustee
-----------------------------------
Xxxxxxx X. Xxxxxx
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CENTER OF CONTEMPORARY ARTS
By:
--------------------------------
Its:
---------------------------
THE JEWISH FEDERATION OF ST. LOUIS
By:
--------------------------------
Its:
---------------------------
ENTERPRISE BANK
By:
--------------------------------
Its:
---------------------------
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