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EXHIBIT 10.32
PURCHASE AGREEMENT
1. PARTIES: XXx Xxxxx Corporation, an Illinois corporation ("Seller")
agrees to sell and convey to Sharps Compliance, Inc., a Texas
corporation ("Buyer") and Buyer agrees to buy from Seller the Assets
only of the business operations of Pitch It, Pitch It, Jr. and other
disposable IV poles (collectively, the "Business") located at 00
Xxxxxxxx, Xxxxx X, Xxxxxx, Xxxxxxxx 00000.
2. PRICE AND TERMS: Seller shall convey the Assets (as described below) to
Buyer on the Closing Date, and shall execute a Xxxx of Sale, in form
attached hereto as Exhibit "A", and those other documents described in
Section 12, below. The total purchase price for the Assets shall be
$100,000, payable and due at Closing. In accordance with paragraph 2 of
that certain Letter of Intent previously entered into between Buyer and
Seller, Buyer has previously tendered $12,500 to Seller as xxxxxxx
money, which xxxxxxx money shall be applied to the Purchase Price or in
the absence of a Closing, as provided in the Letter of Intent.
Simultaneously herewith, Buyer has tendered $87,500 in readily
available funds.
3. ASSETS INCLUDED: Seller agrees to sell, transfer, convey and assign to
Buyer at Closing the following:
(a) all personal property, leases, contracts, rights under or
pursuant to all warranties, representations and guaranties
made by suppliers in connection with products, materials or
services, permits, plans, licenses and licensing agreements
and any other agreements or undertakings of any kind of Seller
relating exclusively to the Business;
(b) all trade secrets, know-how, patents, applications for
patents, trademarks, inventions, engineering drawings,
licenses and other intellectual property and intangible assets
in, developed for exclusive use in, or under development for
exclusive use in the Business as set forth on Exhibit "B";
(c) all customer lists, and vender and supplier information as set
forth on Exhibit "C";
(d) all prototypes, plans, designs and test results of any and all
disposable IV poles manufactured or designed by Seller
including the Pitch It and Pitch It, Jr., and all other
disposable IV poles under development ("Disposable IV Poles");
and
(e) all files, records, information and data directly relating to
any of the Assets.
Items (a) through (e) are hereafter collectively referred to as
"Assets". Assets shall not include accounts receivable of Seller.
4. NO ASSUMPTION OF LIABILITIES: Buyer is not assuming and does not agree
to pay any liabilities incurred by Seller or incurred by the Business
or the Assets prior to Closing. Seller indemnifies Buyer and agrees to
defend and hold Buyer harmless from and against any
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and all claims, causes of action, debts, obligations and liabilities
incurred or arising prior to Closing for two (2) years from the date
hereof.
5. WARRANTIES AND COVENANTS OF SELLER:
a. Authority. The execution and delivery of this Agreement and
the consummation by Seller of the transactions contemplated
herein and therein (i) have been duly authorized by the Board
of Directors of Seller; (ii) are not prohibited by, and do not
violate any provisions or result in the breach of, or
accelerate or permit the acceleration of the performance
required by the terms of (a) the Articles of Incorporation or
Bylaws, or other governing documents of Seller; (b) any
applicable law, rule, regulation or other requirement of the
United States, any state, municipality or subdivision therein,
or of any authority, department, commission, board, bureau,
agency or instrumentality thereof; or (c) any contract,
indenture, agreement or commitment to which Seller is a party
or is bound or by which any of the Assets are bound, and (iii)
have not resulted and will not result in the creation or
imposition of any lien, encroachment, easement, encumbrances,
mortgage, hypothecation, equity, charge, restriction,
possibility of reversion or other similar conflicting
ownership or security interest in favor of any third party on
any of the Assets.
b. Title. Seller has and will have at Closing and will transfer,
convey and deliver to Buyer at Closing good and marketable
title to the Assets, free and clear of all liens and
encumbrances and claims of any third persons.
c. Compliance with Law. To the best of Seller's knowledge, Seller
has conducted and is now conducting Seller's business in
compliance with all applicable regulatory, federal, state or
local laws, statutes and regulations the violation of which
would have a material and adverse effect upon Seller's
business or the Assets.
d. Litigation. No litigation, including any arbitration,
investigation or other proceeding of or before any court,
arbitrator or governmental or regulatory official body or
authority is pending or, to the best knowledge of Seller,
threatened against Seller or which relates to the Assets of
Seller or the transactions contemplated by this Agreement.
Seller does not know of any reasonable likelihood for the
basis of any such litigation, arbitration, investigation or
proceeding, the result of which could adversely affect Seller,
the Assets or the transactions contemplated hereby.
e. Consents. No consent, approval, authorization or order of any
governmental agency or body or other persons are required for
the consummation of the transactions contemplated by this
Agreement.
f. Referrals. Seller hereby covenants and agrees that it shall
immediately forward to Buyer any and all indications of
interest to acquire any of the products subject to the
Business.
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6. FURTHER ASSURANCES: At the Closing, and at all times thereafter as it
may be necessary, Seller shall execute and deliver to Buyer such other
instruments of transfer as shall be reasonably necessary or appropriate
to vest in Buyer good and indefeasible title to all of the Assets
individually and/or in the aggregate including execution of all
documents necessary to assign all rights in and to United States
Letters Patent No(s). DES 390,952 and DES 390,953.
7. SPECIAL CONDITIONS: In addition to the agreements described herein,
Buyer agrees to grant to Xxxx Medical Systems the right to (a) acquire
Pitch It and Pitch It, Jr. from Buyer at a price equal to five percent
(5%) below the amount paid by other distributors, and (b) acquire the
Pump Pole from Buyer at a price, equal to the lesser of (i) five
percent (5%) less than other distributors, or (ii) a twenty-five (25)
point xxxx-up over cost. Seller agrees that all calls relating to the
sale and distribution of Disposable IV Poles shall be referred to Buyer
at 1-800-772-5657, except for sales to regional companies whose base of
operation are in the states of Illinois, Indiana, Wisconsin, Minnesota
and Michigan, which shall be referred to Xxxx Medical Systems. Seller
and Xxxx Medical Systems shall grant Buyer the right to audit Seller's
and Xxxx Medical Systems' sales of all Disposable IV Poles.
Distribution rights granted to Xxxx Medical Systems herein shall only
be applicable (i) for so long as Xxxx Medical Systems actively markets
and sells Disposable IV Poles, and (ii) for sales originated by Xxxx
Medical Systems to new customers in the States of Illinois, Indiana,
Wisconsin, Minnesota and Michigan. Xxxx Medical Systems hereby
acknowledges that Buyer shall be its exclusive manufacturer of
Disposable IV poles. Furthermore, in consideration of the pricing
schedule above, Xxxx Medical Systems hereby agrees that it shall not
manufacture, for itself or on behalf of others, any Disposable IV
Poles. Buyer acknowledges that Seller shall not be liable for a breach
by Xxxx Medical Systems of this Section 7, unless Seller shall have
directly contributed to such breach by Xxxx Medical Systems.
8. CONTINGENCIES: This contract and Buyer's obligations hereunder shall be
contingent upon satisfaction of the following:
a. all covenants, warranties, representations and agreements of
Seller hereunder shall be true and correct at the time of
execution of this contract and at closing of the transaction
described herein;
b. Seller shall have performed all of Seller's obligations
hereunder;
9. CLOSING DATE: The closing of the sale shall be on or before June 19,
1998 in the offices of XxXxxxx, Xxxx & Xxxxxx, L.L.P. or any other
place or by any other means as may be agreed upon by the parties.
10. POSSESSION: The possession of the Assets shall be delivered to Buyer,
in its present condition, ordinary wear and tear excepted, at Closing.
11. EFFECTIVE DATE: The effective date of sale shall be at closing. The
effective date of this Contract shall be the date of execution by all
parties hereto.
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12. CLOSING DOCUMENTS: Closing documents to be executed and delivered at
Closing shall consist of the following:
a. Xxxx of Sale;
b. Assignment of Patents in the form attached hereto as Exhibit
"D";
c. Assignment of Contracts in the form attached hereto as Exhibit
"E";
d. Assignment of Tradename in the form attached hereto as Exhibit
"F";
e. Any other documents deemed reasonably necessary or appropriate
to close this transaction.
13. SALES, TRANSFER AND DOCUMENTARY TAXES: Seller shall pay all federal,
state and local sales, documentary and other transfer taxes, if any,
due as a result of the purchase, sale or transfer of the Assets in
accordance herewith whether imposed by law on Seller or Buyer and
Seller shall indemnify, reimburse and hold harmless Buyer in respect of
the liability for payment of or failure to pay any such taxes or the
filing of or failure to file any reports required in connection
therewith.
14. WARRANTY: Seller warrants that the Business and assets being sold and
conveyed to Buyer will be sold, assigned, conveyed and transferred free
and clear of all debts, liens, taxes (including payroll, sales and
excise taxes) and/or any other encumbrances, except those specifically
disclosed herein/agreed to by Buyer, as of the Closing Date.
15. GENERAL INDEMNIFICATION OF SELLER: From the Closing Date, and for two
(2) years thereafter, Seller will (i) reimburse, indemnify and hold
harmless Buyer and its successors and assigns against and in respect of
any and all damages, losses, deficiencies, liabilities, costs and
expenses incurred or suffered by Buyer as a result of Seller's
operations or ownership of the Assets prior to Closing; (ii) any
misrepresentation, breach of warranty or nonfulfillment of any
agreement or covenant on the part of Seller under this Agreement, or
from any misrepresentation in or omission from any certificate,
schedule, exhibit, statement, document or instrument furnished to Buyer
pursuant hereto or in connection with the negotiation, execution or
performance of this Agreement and the attached Exhibits; and (iii) any
and all actions, suits, claims, proceedings, investigations, demands,
assessments, audits, filings, judgments, costs and other expenses
(including without limitation, reasonable legal fees, costs and
expenses) incident to Seller's operations or ownership of the Assets
prior to Closing or to the enforcement of this Section 15. From the
Closing Date, and for two (2) years thereafter, Buyer will reimburse,
indemnify and hold harmless Seller and its successors and assigns
against and in respect of any and all damages, losses, deficiencies,
liabilities, costs and expenses incurred or suffered by Seller as a
result of Buyer's operations or ownership of the Assets after the
Closing.
16. COVENANT NOT TO COMPETE: For three (3) years from execution of this
Agreement, Seller, its officers, directors, stockholders and
affiliates, (collectively "Seller Parties" agree that it shall not,
directly or indirectly, engage in the business operations of Pitch It,
Pitch It, Jr. and other Disposable IV Poles. Furthermore, Seller
Parties shall not contact any customers of the Buyer for the same time
period specified above in connection with the sale of Disposable Poles,
except as required in Section 7 above. Seller Parties shall be deemed
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to be in competition with Buyer and in violation of this Agreement if
payments for activities prohibited under this Agreement are received by
(a) Seller Parties, (b) any partnerships, corporations, affiliates or
other entities in which Seller Parties owns ten percent (10%) or
greater interest therein, or (c) any family members of Seller Parties,
with respect to competitive activities of such corporation as
authorized herein. Notwithstanding anything to the contrary herein,
this Agreement shall not (i) restrict Seller Parties from participating
or engaging in the business of manufacturing and selling non-disposable
IV poles, so long as said corporation confines its business to same and
in no way engages in the same or similar business as Buyer, or (ii)
restrict Xxxx Medical Systems from its distribution rights set forth in
Section 7.
17. ATTORNEY'S FEES: Any signatory to this contract who is the prevailing
party in any legal proceeding against any other signatory brought under
or with relation to this contract or transaction shall be additionally
entitled to recover court costs and reasonable attorney's fees from the
non-prevailing party.
18. BENEFIT: This contract shall inure to the benefit of and be binding on
the parties hereto, their heirs, executors, legal representatives,
successors and assigns.
19. SURVIVAL: All the terms, conditions, provisions, and obligations under
this contract, and all instruments related to this transaction, shall
survive the Closing for one (1) year.
20. GOVERNING LAW: This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of Texas, and the
venue for all proceedings shall be Xxxxxx County, Texas.
21. EXPENSES: Except as otherwise provided in this Agreement, each party
hereto shall pay its own expenses incidental to the preparation of this
Agreement, the carrying out of the provisions of this Agreement and the
consummation of the transactions contemplated hereby.
22. BROKER FEES: There are no broker fees to be paid in connection with the
consummation of this transaction. Each party shall indemnify the other
party from and against any claims by any brokers in connection with
this transaction.
23. NOTICES: Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be
in writing and shall be deemed given if personally delivered or sent by
registered or certified mail to the party at the address set forth
below.
24. SEVERABILITY: Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be unaffected to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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25. COUNTERPARTS: This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart,
each of which when executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall constitute
one in the same instrument.
BUYER: SELLER:
SHARPS COMPLIANCE, INC. XXX XXXXX CORPORATION
By: /s/ XXXX XXXXX By:
-------------------------- --------------------------
Name: XXXX XXXXX Name:
Title: President -------------------------
Title:
------------------------
ADDRESS: ADDRESS:
0000 Xxxxx Xxxxx 00 Xxxxxxxx, Xxxxx X
Xxxxxxx, Xxxxx 00000 Xxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxx Xxxxx Attn:
-------------------------
Xxxx Medical Systems hereby executes this Agreement solely for
acknowledging its agreement to the terms and conditions described in Section 7
above.
XXXX MEDICAL SYSTEMS
By:
--------------------------
Name:
------------------------
Title:
-----------------------
ADDRESS:
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EXHIBIT A
XXXX OF SALE
THE STATE OF ILLINOIS )
) KNOW ALL MEN BY THESE PRESENTS
COUNTY OF LAKE )
THAT XXX XXXXX CORPORATION, an Illinois corporation ("Seller"), for and
in consideration of the purchase price provided for in, and the other terms and
conditions of, that certain Purchase Agreement, dated June ___, 1998, by and
among SHARPS COMPLIANCE, INC., a Texas corporation ("Buyer"), and Seller (the
"Agreement") (capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Agreement) has bargained and sold, and by
these presents Seller does sell, assign, transfer and convey unto Buyer all of
Seller's right, title and interest in the Assets. Seller hereby acknowledges and
agrees that this Xxxx of Sale is made pursuant to and subject to all the terms
and conditions of the Agreement, including without limitation, Buyer's rights of
indemnification under the Agreement.
Seller hereby represents and warrants to Buyer that Seller is the
absolute owner of the Assets, that the Assets are free and clear of any and all
liens, charges and encumbrances of any kind whatsoever, and that Seller has full
right, power and authority to sell the Assets to Buyer and to make this Xxxx of
Sale.
Seller hereby binds itself, its successors and assigns to WARRANT AND
FOREVER DEFEND the title to the Assets to Buyer, and Buyer's successors and
assigns, against the lawful claim or claims of any and all persons.
The parties hereto agree that this Xxxx of Sale shall be governed by
and construed in accordance with the laws of the State of Texas, without resort
to the conflict of law principles thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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EXECUTED effective the ____day of June, 1998.
BUYER: SELLER:
SHARPS COMPLIANCE, INC. XXX XXXXX CORPORATION
a Texas corporation an Illinois corporation
By: /s/ XX. XXXX XXXXX By:
--------------------------- -------------------------
Xx. Xxxx Xxxxx, Name: ,
President -----------------------
Title:
----------------------
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EXHIBIT B
LIST OF PATENTS, TRADEMARKS, ETC.
PATENTS:
U.S. Design Patent No. Des. 390,952
U.S. Design Patent No. Des. 390,953
TRADEMARKS:
Pitch It
Pitch It, Jr.
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EXHIBIT C
LIST OF CUSTOMERS, VENDORS AND SUPPLIERS
CUSTOMERS:
List attached
VENDORS/SUPPLIERS:
Sierra Pacific Co., Ltd.
Address: 3F-4, Xx. 00, Xx Xxx Xx.
Xxx Xxxx Xxxxxxxx, Xxxxxxxx
Taiwan, R. O. C.
Phone: 000-000-0-000-0000
Fax: 000-000-0-000-0000
Email: xxxx0000@xx0.xxxxx.xxx
Contact: Xxxx Xxx
Xxxxxx
Bank Information: Bank of Taiwan
Xxxxxx Xxxxxx
6-1 Xx. 00, 00 Xxxxxx Xxxx
Xxxxxxxx
Xxxxxx ROC
Circle International (Freight forwarder)
Address: Bensenville, IL
Phone: 000-000-0000
Contact: Xxx Xxxx
Note: Will need to establish account with
Houston office. Xxx will provide
referral information.
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EXHIBIT D
ASSIGNMENT OF PATENTS
STATE OF ILLINOIS )
)
COUNTY OF LAKE )
WHEREAS XXX XXXXX CORPORATION ("Assignor"), an Illinois corporation
with offices at 00 Xxxxxxxx, Xxxxx X, Xxxxxx, Xxxxxxxx 00000 is the owner of the
entire right, title, and interest to the United States Letters Patent No(s).
DES. 390,952 and DES. 390,953 (the "Patents") and the inventions covered by the
Patents (the "Inventions");
AND WHEREAS SHARPS COMPLIANCE, INC., ("Assignee"), a Texas corporation
with offices at 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, is desirous of acquiring
the entire right, title, and interest in and to the Inventions in the United
States and foreign countries and the Patents;
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and intending to be legally bound hereby, Assignor
hereby assigns and transfers to Assignee the entire right, title, and interest
in and to the Inventions in the United States and foreign countries and the
Patents, including but not limited to all reissues, divisions, continuations and
extensions of the Patents, all rights of action arising from the Patents, all
claims for damages by reason of past infringement of the Patents and the right
to xxx and collect damages for such infringement, to be held and enjoyed by the
Assignee for its own use and benefit and for its successors and assigns as the
same would have been held by Assignor had this assignment not been made.
Dated: June ___, 1998.
ASSIGNOR:
By:
-------------------------
Title:
----------------------
Subscribed and sworn to before me on June ___, 1998.
Notary Public:
------------------------------
Printed Name:
-------------------------------
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EXHIBIT E
ASSIGNMENT OF CONTRACTS
AND WARRANTIES
THE STATE OF ILLINOIS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF LAKE )
That XXX XXXXX CORPORATION, (hereinafter called the "Assignor" whether
one or more), for and in consideration of the sum of Ten and No/100 Dollars
($10.00) and other good and valuable consideration paid to the Assignor by
SHARPS COMPLIANCE, INC. (hereinafter called the "Assignee" whether one or more),
the receipt and sufficiency of which consideration are hereby confessed and
acknowledged by the undersigned, has SOLD, ASSIGNED, TRANSFERRED and CONVEYED
and by these presents does hereby SELL, ASSIGN, TRANSFER and CONVEY unto
Assignee, and Assignee's heirs, legal representatives, successors and assigns,
all of Assignor's right, title and interest in and to all contracts, agreements,
and to the extent assignable, all guaranties, warranties and service contracts
with respect to all or any portion of the products known as Pitch It and Pitch
It, Jr.
TO HAVE and TO HOLD all of Assignor's right, title and interest in and
to said contracts and agreements unto the Assignee and Assignee's heirs, legal
representatives, successors and assigns forever.
EXECUTED effective the ___ day of June, 1998.
------------------------------
Name:
-------------------------
------------------------------
Name:
-------------------------
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THE STATE OF ILLINOIS )
)
COUNTY OF LAKE )
BEFORE ME, the undersigned authority, on this date personally appeared
________________________, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he/she executed the
same for the purposes and consideration therein expressed.
SWORN TO AND SUBSCRIBED BEFORE ME on this ___ day of June, 1998.
-----------------------------
Notary Public
My Commission Expires:
----------------------------- -----------------------------
(Print Name)
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EXHIBIT F
ASSIGNMENT OF TRADENAME
THE STATE OF ILLINOIS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF LAKE )
That XXX XXXXX CORPORATION, (hereinafter called the "Assignor" whether
one or more), for and in consideration of the sum of Ten and No/100 Dollars
($10.00) and other good and valuable consideration paid to the Assignor by
SHARPS COMPLIANCE, INC., (hereinafter called the "Assignee" whether one or
more), the receipt and sufficiency of which consideration are hereby confessed
and acknowledged by the undersigned, has SOLD, ASSIGNED, TRANSFERRED, and
CONVEYED and by these presents does hereby SELL, ASSIGN, TRANSFER, and CONVEY
unto the Assignee, and Assignee's heirs, legal representatives, successors and
assigns, all of Assignor's right, title and interest in and to the tradename
Pitch It and Pitch It, Jr. including, without limitation, the exclusive right to
use and enjoy such tradename to the fullest extent that the Assignor may
lawfully grant such exclusive right.
TO HAVE and TO HOLD all of Assignor's right, title and interest in and
to said tradename unto the Assignee and Assignee's heirs, legal representatives,
successors and assigns forever.
Executed effective the ___ day of June, 1998.
------------------------------
Name:
-------------------------
------------------------------
Name:
-------------------------
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THE STATE OF ILLINOIS )
)
COUNTY OF LAKE )
BEFORE ME, the undersigned authority, on this date personally appeared
________________________, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he/she executed the
same for the purposes and consideration therein expressed.
SWORN TO AND SUBSCRIBED BEFORE ME on this ___ day of June, 1998.
-----------------------------
Notary Public
My Commission Expires:
----------------------------- -----------------------------
(Print Name)
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