<PAGE> 1
Exhibit 2.1
ASSET PURCHASE AGREEMENT
AGREEMENT, made as of this 28th day of June, 2000, by and among LINCARE
INC., a corporation duly organized and existing under the laws of the State of
Delaware, having its principal place of business at 19337 U.S. 19 North, Suite
500, Clearwater, Florida 33764 (hereinafter referred to as "Lincare"); UNITED
MEDICAL, INC., a corporation duly organized and existing under the laws of the
State of Arkansas, having its principal place of business at 999 South Falls
Boulevard, Wynne, Arkansas 72396 (hereinafter referred to as the "Company"); and
the shareholders of Company: J.T. STEPHENS TRUST ONE, UID 9/7/94, JACKSON T.
STEPHENS AND WARREN A. STEPHENS, CO-TRUSTEES, having an address at 111 Center
Street, Suite 2400, Little Rock, Arkansas 72201 (hereinafter sometimes referred
to as "JTS Trust One"); WARREN A. STEPHENS TRUST, UID 9/30/87, WARREN A.
STEPHENS, TRUSTEE, having an address at 111 Center Street, Suite 2400, Little
Rock, Arkansas 72201 (hereinafter sometimes referred to as "WAS Trust"); HARRIET
CALHOUN STEPHENS TRUST, UID 3/22/84, HARRIET C. STEPHENS, TRUSTEE, having an
address at 111 Center Street, Suite 2400, Little Rock, Arkansas 72201
(hereinafter sometimes referred to as "HST Trust"); JOHN CALHOUN STEPHENS 1995
TRUST, UID 12/4/95, JON E.M. JACOBY, TRUSTEE, having an address at 111 Center
Street, Suite 2400, Little Rock, Arkansas 72201 (hereinafter sometimes referred
to as "JCS 1995 Trust"); WARREN MILES AMERINE STEPHENS 1995 TRUST, UID 12/4/95,
JON E.M. JACOBY, TRUSTEE, having an address at 111 Center Street, Suite 2400,
Little Rock, Arkansas 72201 (hereinafter sometimes referred to as "WMAS 1995
Trust"); LAURA WHITAKER STEPHENS 1995 TRUST, UID 12/4/95, JON E.M. JACOBY,
TRUSTEE, having an address at 111 Center Street, Suite 2400, Little Rock,
Arkansas 72201 (hereinafter sometimes referred to as "LWS 1995 Trust"); CAROLINE
STEPHENS, an individual having an address at 111 Center Street, Suite 2400,
Little Rock, Arkansas 72201 (hereinafter sometimes referred to as "C.
Stephens"); BESS C. STEPHENS TRUST, UID 1/4/85, BESS C. STEPHENS, TRUSTEE,
having an address at 111 Center Street, Suite 2400, Little Rock, Arkansas 72201
(hereinafter sometimes referred to as "BCS Trust"); ELIZABETH ANN STEPHENS
CAMPBELL REVOCABLE TRUST, U/I/D 8/25/92, ELIZABETH ANN STEPHENS CAMPBELL,
TRUSTEE, having an address 111 Center Street, Suite 2400, Little Rock, Arkansas
72201 (hereinafter sometimes referred to as "EASC Trust"); PAMELA DIANE STEPHENS
TRUST, UID 4/10/92, PAMELA DIANE STEPHENS, TRUSTEE, having an address at 111
Center Street, Suite 2400, Little Rock, Arkansas 72201 (hereinafter sometimes
referred to as "PDS Trust"); W.R. STEPHENS, JR. REVOCABLE TRUST, UID 2/19/93,
W.R. STEPHENS, JR., TRUSTEE, having an address at 111 Center Street,
-1-
<PAGE> 2
Suite 2400, Little Rock, Arkansas 72201 (hereinafter sometimes referred to as
"WRS Trust"); RISA J. LAVIZZO-MOUREY, an individual having an address at 111
Center Street, Suite 2400, Little Rock, Arkansas 72201 (hereinafter sometimes
referred to as "Lavizzo-Mourey"); EARL CLEMMONS, an individual having an address
at 111 Center Street, Suite 2400, Little Rock, Arkansas 72201 (hereinafter
sometimes referred to as "Clemmons"); CURTIS F. BRADBURY, an individual having
an address at 111 Center Street, Suite 2400, Little Rock, Arkansas 72201
(hereinafter sometimes referred to as "Bradbury"); JACKSON FARROW, JR., an
individual having an address at 111 Center Street, Suite 2400, Little Rock,
Arkansas 72201 (hereinafter sometimes referred to as "Farrow"); C. RAY GASH, an
individual having an address at 111 Center Street, Suite 2400, Little Rock,
Arkansas 72201 (hereinafter sometimes referred to as "Gash"); JAMES O. JACOBY,
JR., an individual having an address at 111 Center Street, Suite 2400, Little
Rock, Arkansas 72201 (hereinafter sometimes referred to as "J. Jacoby"); JON
E.M. JACOBY, an individual having an address at 111 Center Street, Suite 2400,
Little Rock, Arkansas 72201 (hereinafter sometimes referred to as "J.E.M.
Jacoby"); DOUGLAS H. MARTIN, an individual having an address at 111 Center
Street, Suite 2400, Little Rock, Arkansas 72201 (hereinafter sometimes referred
to as "Martin"); ROBERT L. SCHULTE, an individual having an address at 111
Center Street, Suite 2400, Little Rock, Arkansas 72201 (hereinafter sometimes
referred to as "Schulte"); K. RICK TURNER, an individual having an address at
111 Center Street, Suite 2400, Little Rock, Arkansas 72201 (hereinafter
sometimes referred to as "Turner"); NANCY WEAVER, an individual having an
address at 111 Center Street, Suite 2400, Little Rock, Arkansas 72201
(hereinafter sometimes referred to as "Weaver"); RONNIE CORBIN, an individual
having an address at 8605 Rosewood Drive, Fort Smith, Arkansas 72903(hereinafter
sometimes referred to as "Corbin"); STACY LYNN PATTERSON TRUST, STACY LYNN
PATTERSON, TRUSTEE, having an address at 4 Galway Drive, Wynne,
-2-
<PAGE> 3
Arkansas 72396 (hereinafter sometimes referred to as "Patterson Trust"); JAMES
H. CALDWELL TRUST, JAMES H. CALDWELL, TRUSTEE; having an address at 4 Galway
Drive, Wynne, Arkansas 72396 (hereinafter sometimes referred to as "J.H.
Caldwell Trust"); JODY LEA CALDWELL TRUST, JODY LEA CALDWELL, TRUSTEE, having an
address at 4 Galway Drive, Wynne, Arkansas 72396 (hereinafter sometimes referred
to as "J.L. Caldwell Trust"); AARON GLEN POOL TRUST, JAMES H. CALDWELL, TRUSTEE;
having an address at 4 Galway Drive, Wynne, Arkansas 72396 (hereinafter
sometimes referred to as "Pool Trust"); CARLY CALDWELL TRUST, JAMES H. CALDWELL,
TRUSTEE, having an address at 4 Galway Drive, Wynne, Arkansas 72396 (hereinafter
sometimes referred to as "C. Caldwell Trust"); KATIE CALDWELL TRUST, JAMES H.
CALDWELL, TRUSTEE, having an address at 4 Galway Drive, Wynne, Arkansas 72396
(hereinafter sometimes referred to as "K. Caldwell Trust"); JOHN SCOFIELD, an
individual having an address at 1161 Oyster Catcher Court, Johns Island, South
Carolina 29455, (hereinafter sometimes referred to as "Scofield"); TIMOTHY E.
MCNATT, an individual having an address at 3073 Highway 64, Wynne, Arkansas
72396 (hereinafter sometimes referred to as "McNatt"); and RANDAL E. CALDWELL,
an individual having an address at 4 Galway Drive, Wynne, Arkansas 72396 (Each
of the shareholders of Company listed above are hereinafter sometimes referred
to individually as a "Shareholder" and collectively as the "Shareholders").
W I T N E S S E T H:
WHEREAS, the Company (as such term is defined in Section 1.1(g) hereof)
is engaged in the business of marketing, advertising, selling, leasing, renting,
distributing or otherwise providing oxygen, oxygen equipment, aerosol inhalation
therapy equipment and respiratory medications, nasal continuous positive airway
pressure devices, infant monitoring equipment and services, home sleep studies
and related therapy equipment, infusion therapy equipment, drugs, products,
supplies and services, and other respiratory therapy, durable medical and
infusion therapy equipment, products, supplies and services to customers in
their homes or other alternative site care facilities in the Territory (as such
term is defined in Section 1.1(f) hereof); and
WHEREAS, Lincare desires to acquire, and Company desires to sell to
Lincare, substantially all of the business and assets of Company;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties hereto agree and contract
as follows:
Article 1 - DEFINITIONS
1.1 In this Agreement, the following terms shall mean the
following:
(a) "Assets" shall mean and include all assets and
properties owned, leased, rented, used or otherwise possessed by Company, of
every kind, character and description, whether tangible or intangible, and
wherever located, except for the Excluded Assets (as defined in Section 1.1(c)
hereof). The Assets shall include, but shall not be limited to, the following:
(i) all of Company's rights with respect to the
real property leased, rented, used or otherwise possessed by the
-3-
<PAGE> 4
Company at those locations listed on Schedule 1 hereto which are not identified
as Excluded Assets;
(ii) all of the oxygen equipment, aerosol
inhalation therapy equipment, nasal continuous positive airway pressure devices,
infant monitoring equipment, home sleep study and related therapy equipment,
infusion therapy equipment, drugs, products and supplies, and all other
respiratory therapy, durable medical, and infusion therapy equipment, products
and supplies owned, leased, rented, used or otherwise possessed by the Company
(including, but not limited to, all of such items provided to customers in their
homes or alternative site care facilities);
(iii) all of the inventory, disposables, spare
parts, materials, work-in-process and supply items owned, leased, rented, used
or otherwise possessed by Company;
(iv) all other equipment, products, machines,
furniture, fixtures, furnishings, parts, supplies and vehicles owned, leased,
rented, used or otherwise possessed by Company;
(v) all accounts receivable, refunds,
receivables, notes, evidences of indebtedness, credits, claims, debts and
obligations of any kind due and owing to the Company as of the Closing Date (as
defined in Section 6.1 hereof) or which become due and owing to the Company on
or after the Closing Date or which accrue to the Company on or after the Closing
Date;
(vi) all corporate names, patents, trademarks,
trade names, service marks, copyrights and applications therefor owned or
licensed by Company in respect to the Business, including, but not limited to,
the names "United Medical, Inc.", "Tennessee Welding Supply, Inc., d/b/a Argo
Medical Services, Inc.", "Home Oxygen Medical Equipment, Inc.", "Transitional
Respiratory Care" and "T.R.C.";
(vii) the originals and all copies of the customer
list of the Business, all customer files of the Business, the current and
historical referral list of the Business, and all other documents, files and
records of, or relating to, any of the Assets or the Business;
(viii) all of the rights and interests in and to
the specific contracts, agreements and leases set forth on Schedules 1, 2 and 3
attached hereto, but specifically excluding as Excluded Assets, subject to the
provisions of Sections 3.4 and 4.6(b)(ii) and (iii) hereof, those contracts,
agreements and leases listed on Schedules 1, 2 and 3 hereof and designated as
Excluded
-4-
<PAGE> 5
Assets. Schedules 1, 2, and 3 contain each and every "material" contract,
agreement and lease of, or relating to, the Company, the Business or any of the
Assets; provided, however, if at any time it is determined that any contract,
agreement or lease was omitted from such schedules, Lincare shall have the
option, in its sole discretion, to determine whether such contract, agreement or
lease shall be an Asset or Excluded Asset under this Agreement, whether to
accept or reject assignment of each such contract, agreement or lease, and
whether the Contract Asset Purchase Requirements (as defined in Section 3.4
hereof) of Sections 3.4 and 4.6(b)(iii) shall apply to any such additional
contract, agreement or lease. For purposes of this Agreement, any contract,
agreement or lease shall be considered "material" if the aggregate annual
payments to be made by or to Company under each such contract, agreement or
lease exceeds $20,000. If Lincare does not expressly accept responsibility in
writing for the contract, agreement or lease which is not included on Schedules
1, 2 or 3, the obligations of that contract, agreement or lease remain the
responsibility of Company and the Shareholders. Company and Shareholders agree
to amend promptly Schedule 1, 2, or 3 hereof, as the case may be, after the
Closing Date, to include all such additional contracts, agreements, and leases
in accordance with Lincare's determinations;
(ix) the sole and exclusive use of all Medicare,
Medicaid and other public or private insurance carrier provider numbers and all
regulatory licenses and permits owned, held, used, or otherwise possessed by the
Company, to the extent the same are assignable to Lincare under applicable law;
(x) all of the Business of Company;
(xi) the exclusive use of the telephone numbers
of Company and all intangible personal property rights and goodwill of Company;
and
(xii) all billings for any equipment, products,
supplies or services provided to any customers of Company after May 25, 2000, it
being agreed that the right to all such billings after May 25, 2000 shall be
included in the Assets purchased by Lincare and shall be for the sole benefit of
Lincare.
(b) "Business" shall mean the entire business of Company
and each of its subsidiaries, including, but not limited to, the business of
marketing, advertising, selling, leasing, renting, distributing or otherwise
providing oxygen, oxygen equipment, aerosol inhalation therapy equipment and
respiratory medications, nasal continuous positive airway pressure devices,
infant monitoring equipment and services, home sleep studies and related
-5-
<PAGE> 6
therapy equipment, infusion therapy equipment, drugs, products, supplies and
services (including, but not limited to, those related to antibiotic,
parenteral, enteral, hydration, chemotherapy, chelation, terabutaline, pain
management, diabetic or renal therapies, drugs for congestive heart failure,
anti-infectives and narcotic analgesics), and other respiratory therapy, durable
medical and infusion therapy equipment, products, supplies and services to
customers in their homes or other alternative site care facilities.
(c) "Excluded Assets" shall mean exclusively the
following:
(i) the cash and cash equivalents owned by
Company and on hand on the day immediately preceding the Closing Date;
(ii) all of the real property owned by Company,
and all liabilities and obligation related thereto;
(iii) subject to the provisions of Sections 3.4
and 4.6(b)(ii) and (iii) hereof, the contracts, agreements and leases listed on
Schedules 1, 2 and 3 hereof which are designated as Excluded Assets on such
schedules;
(iv) all books, records and documents which
relate to the Excluded Liabilities, together with all of Company's financial
books, records and documents reasonably necessary to prepare tax returns and all
of Company's minute books and shareholder records;
(v) those items of enteral product inventory and
enteral pumps held by Company on consignment which are listed on Schedule
1.1(c)(v) hereof;
(vi) those certain vehicles listed on Schedule
1.1(c)(vi), and all liabilities and obligations related thereto;
(vii) that certain office furniture of Company
used exclusively by Randal Caldwell and Timothy McNatt in their offices located
in Company's Wynne, Arkansas headquarters facilities, and all liabilities and
obligations related thereto;
(viii) Company's life insurance policy covering
Randal Caldwell, and all liabilities and obligations related thereto;
-6-
<PAGE> 7
(ix) any and all rebates, refunds or other
credits received by Lincare or Company from Invacare or Sunrise relating to all
periods prior to the Closing Date;
(x) any funds of Company received by Lincare or
Company from Automotive Rentals, Inc. as a result of Company's purchase from
Automotive Rentals, Inc. of those certain leased motor vehicles for Lincare
which are included among the Assets acquired by Lincare under this Agreement;
(xi) the following items used exclusively by
Company to process its payroll: personal computer, Abra software desk, chair and
filing cabinet, each of which are located in the Company's separate payroll
office located in its Wynne, Arkansas headquarters facilities; provided,
however, Lincare shall have the right to non-exclusively use such excluded
payroll department equipment for a period of ninety (90) days after the Closing
to ensure a smooth transition of the Business to Lincare; and
(xii) all of Company's deferred tax asset accounts
and prepaid income tax assets.
(d) "Accepted Liabilities" shall mean exclusively the
following:
(i) all debts, liabilities and obligations of
every kind whatsoever incurred in connection with or arising out of Lincare's
conduct of the Business or ownership of the Assets from and after the Closing
Date;
(ii) pursuant to the provisions of Section 4.6(b)
(ii) hereof, Lincare shall only be responsible for the liabilities, duties and
obligations arising out of the contracts, agreements and leases listed on
Schedules 1, 2 and 3 hereof which are not designated as Excluded Assets or which
are not expressly accepted by Lincare pursuant to Section 1.1(a)(viii) and which
liabilities, duties and obligations arise and pertain to periods commencing on
or after the Closing Date;
(iii) the obligation of Lincare at the Closing to
reimburse Company for Three Hundred Ninety Thousand Six Hundred Dollars
($390,600) of Company's purchases of certain rehabilitation equipment and
respiratory therapy and durable medical equipment and supplies listed on
Schedule 1.1(d)(iii) hereto, which equipment and supplies were received in the
normal course of business after May 25, 2000, and for which Company has not
billed or received any payments;
-7-
<PAGE> 8
(iv) the obligation of Lincare at Closing to
assume Company's obligations to lease from Automotive Rentals, Inc. twenty (20)
2000 Dodge B1500 Vans as listed on Schedule 2 hereto;
(v) Company's remaining payment obligations
under that certain Consulting and Non-Competition Agreement among Company, ARC
Investments, L.L.C. and A.L. Corbin, Jr., dated July 31, 1997, which
obligations, in the aggregate, do not exceed Two Hundred Sixty Seven Thousand
Dollars ($267,000); and
(vi) certain discretionary payments of Company to
those employees of Company holding non-vested stock options listed on Schedule
1.1(vi) hereto, which payments, in the aggregate, do not exceed One Million Two
Hundred Eighty Two Thousand Three Hundred Nine Dollars ($1,282,309).
(e) "Excluded Liabilities" shall mean and include all
debts, liabilities and obligations of Company and Shareholders of every kind,
character and description whatsoever, except for the Accepted Liabilities.
(f) "Territory" shall mean the States of Arkansas,
Mississippi and Tennessee and a radius of one hundred fifty (150) miles from
each of Company's current operating locations, regardless of which states such
territory may include.
(g) "Company" shall mean United Medical, Inc., a
corporation duly organized and existing under the laws of the State of Arkansas,
having its principal place of business at 999 South Falls Boulevard, Wynne,
Arkansas 72396, and each of its wholly-owned subsidiaries: (i) Tennessee Welding
Supply, Inc., d/b/a Argo Medical Services, Inc.; and (ii) Home Oxygen Medical
Equipment, Inc.
(h) "Stephens Shareholders" shall mean and include each
of the following Shareholders of Company: "JTS Trust One", "WAS Trust", "HST
Trust", "JCS 1995 Trust", "WMAS 1995 Trust", "LWS 1995 Trust", "C. Stephens",
"BCS Trust", "EASC Trust", "PDS Trust", "WRS Trust", "Lavizzo-Mourey",
"Clemmons", "Bradbury", "Farrow", "Gash", "J. Jacoby", "J.E.M. Jacoby",
"Martin", "Schulte", "Turner", and "Weaver".
(i) "UMI Shareholders" shall mean and include each of the
following Shareholders of Company: "Corbin", "Patterson Trust", "J.H. Caldwell
Trust", "J.L. Caldwell Trust", "Pool Trust", "C. Caldwell Trust", "K. Caldwell
Trust", "Scofield", "McNatt" and "Caldwell".
-8-
<PAGE> 9
1.2 In addition to the terms defined in Section 1.1 hereof, other
terms defined elsewhere in this Agreement shall have the meanings set forth
therein.
Article 2 - PURCHASE AND SALE OF ASSETS
Subject to the terms and conditions set forth in this Agreement,
Company hereby sells, conveys, transfers, assigns, and delivers to Lincare, and
Lincare hereby purchases and accepts from Company, good and marketable title to
the Assets, free and clear of any restrictions or conditions to transfer or
assignment and free and clear of all liens, mortgages, pledges, encumbrances,
agreements, leases, contracts, claims, security interests, taxes, conditions
enforceable by any third party, covenants, conditions or restrictions of any
kind or description (hereinafter referred to collectively as "Encumbrances"). It
is understood and agreed by the parties that the term "Encumbrances" as used in
this Agreement shall not include the Accepted Liabilities described in Section
1.1(d) hereof.
Article 3 - PURCHASE PRICE AND METHOD OF PAYMENT
3.1 Purchase Price and Method of Payment.
The aggregate purchase price (hereinafter referred to as the
"Purchase Price") for the Assets and the Business shall be ONE HUNDRED TWENTY
MILLION NINE HUNDRED FIFTY THOUSAND SIX HUNDRED NINETY ONE DOLLARS
($120,950,691), which shall be payable to Company, and/or its designees, as
follows:
(a) ONE HUNDRED FIFTEEN MILLION NINE HUNDRED FIFTY
THOUSAND SIX HUNDRED NINETY ONE DOLLARS ($115,950,691) shall be payable by wire
transfer of immediately available funds at the Closing (as such term is defined
in Section 6.1 hereof); and
(b) FIVE MILLION DOLLARS ($5,000,000) shall be payable,
without interest, six (6) months after the Closing Date.
3.2 Excluded Assets.
Notwithstanding anything to the contrary contained in this
Agreement, Lincare shall not acquire or receive hereunder any title to or
interest in any of the Excluded Assets, which Excluded Assets shall remain the
property of the Company and Shareholders, or one or more entities designated by
the Company and the Shareholders.
-9-
<PAGE> 10
3.3 Accepted Liabilities.
In connection with its purchase of the Assets hereunder,
Lincare shall assume and be responsible for the payment and/or satisfaction of
the Accepted Liabilities in accordance with their terms.
3.4 Excluded Liabilities.
Lincare shall not assume, nor be responsible for, any Excluded
Liabilities. All Excluded Liabilities shall be retained by, and shall be the
sole responsibility of, Company and Shareholders. Without limiting the
generality of the foregoing or the definition of Excluded Liabilities contained
in Section 1.1(e) hereof, the Excluded Liabilities shall include, but shall not
be limited to, the following: (a) the obligation to pay all invoices which are
dated on or before the Closing Date or which relate to goods or services
ordered, consumed or used on or before the Closing Date, except as provided for
in Section 1.1(d)(iii) hereof and for goods ordered by Company in the ordinary
course of business prior to the Closing which will not be received until after
the Closing and for which Company has not billed or received any payments; (b)
the liabilities and obligations under all contracts, agreements and leases
designated as Excluded Assets on Schedules 1, 2 or 3 hereof; (c) the obligation
to satisfy any claims and litigation against the Company which are included in
the Excluded Liabilities, including, but not limited to, those claims and
litigation listed on any Schedule hereto, and any claim or litigation, whether
or not listed on a Schedule hereto, that arose prior to the Closing Date; and
(d) the obligation, in accordance with the provisions of Section 4.6(b)(iii)
hereof, to pay-off in full those certain leases and rental agreements expressly
designated on Schedules 1, 2 and 3 hereof as subject to this Section 3.4(d), as
well as any obligations pertaining to any lease or rental agreement which the
Company or the Shareholders failed to disclose but existed prior to the Closing
Date unless expressly accepted by Lincare as provided in Section 1.1(a)(viii),
and to deliver to Lincare title to all such leased or rented Assets free and
clear of any Encumbrances. (Company's obligations under this Section 3.4(d) are
referred to herein as the "Contract Asset Purchase Requirements".) The Contract
Asset Purchase Requirements shall include, but shall not be limited to, the
payment of any purchase options or other similar payments relating to any of
such Assets. If Lincare deems it necessary or appropriate to make payment of any
Excluded Liability for which Company and/or Shareholders do not assume
responsibility pursuant to the terms of this Agreement, Lincare shall have the
right to deduct such amounts from its payment obligations under this Agreement.
-10-
<PAGE> 11
3.5 Allocation of Purchase Price.
The parties agree to allocate the Purchase Price among the
Assets as set forth in Addendum 3.5. The values assigned to the Assets as set
forth Addendum 3.5 were separately established by the parties in good faith and
each party agrees to report the transaction contemplated by this Agreement to
the Internal Revenue Service as required by Section 1060 of the Internal Revenue
Code in accordance with Addendum 3.5, subject to the approval of Lincare's and
Company's independent auditors.
Article 4 - REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE SHAREHOLDERS
Company and each UMI Shareholder (except for the Patterson Trust, J. H.
Caldwell Trust, J.L. Caldwell Trust, Pool Trust, C. Caldwell Trust, K. Caldwell
Trust and Scofield), jointly and severally, represent, warrant and covenant;
Scofield represents, warrants and covenants to the best of his knowledge; and
each Stephens Shareholder jointly and severally represents, warrants and
covenants, to the best knowledge of such Stephens Shareholder, as follows:
4.1 Organization, Standing and Qualification of Company.
Company is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Arkansas, and has all necessary
corporate powers, governmental qualifications and authorizations to own its
assets and to operate its business in each jurisdiction in which such assets are
now owned and such business is now operated by it. Company has furnished to
Lincare true and complete copies of its Articles of Incorporation, as amended to
date, and Certificate of Good Standing, each certified by the Secretary of the
State of Arkansas not earlier than thirty (30) days prior to the date hereof,
and true and complete copies of Company's By-Laws, as amended to date, certified
by the Secretary of Company.
4.2 Capitalization and Stock of Company.
The authorized capital stock of Company consists of Two
Million (2,000,000) shares of common stock, $.01 par value, of which Nine
Hundred Forty Two Thousand One Hundred Ninety One and 34/100 (942,191.34) shares
are currently issued and outstanding. The names of each of the holders of the
issued and outstanding stock of Company and the respective number of shares held
by each holder are listed in Exhibit A. Except as set forth on Exhibit A, there
are no other legal or beneficial owners or holders of any
-11-
<PAGE> 12
equity interests in Company. All of the shares set forth on Exhibit A, in the
aggregate, represent all of the issued and outstanding capital stock of the
Company.
4.3 Affiliates.
(a) Except for Company's ownership of the following
wholly-owned subsidiaries: (i) Tennessee Welding Supply, Inc., d/b/a Argo
Medical Services, Inc.; (ii) Home Oxygen Medical Equipment, Inc.; and (iii)
Transitional Respiratory Care, Inc., a corporation that has never transacted any
business and is presently inactive, Company does not own or control, directly or
indirectly, in whole or in part, any other corporation, partnership,
association, or organization, or any interest therein.
(b) Shareholders do not own or control, directly or
indirectly, in whole or in part, any other corporation, partnership,
association, or organization, or any interest therein which is engaged in the
same business as Company or which is involved in a business which is materially
related to the Company, except for J.E.M. Jacoby's position as a director of
Beverly Enterprises, Inc., a provider of long-term healthcare through the
operation of nursing facilities, rehabilitation therapy services, outpatient
therapy clinics, assisted living centers and home health centers.
4.4 Financial Statements.
(a) Company and Shareholders have delivered to Lincare
copies of the following financial statements for the Company:
(i) Audited Financial Statements containing
Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated
Statements of Shareholders' Equity, Consolidated Statements of Cash Flows and
Notes to Consolidated Financial Statements, each as at the end of Company's
fiscal years ending September 30, 1999, September 30, 1998 and September 30,
1997.
(ii) Consolidated Balance Sheets, Consolidated
Statements of Income and related financial information for Company's seven month
period commencing October 1, 1999 and ending April 30, 2000.
(b) All of the financial statements referenced in Section
4.4(a) above are hereinafter referred to collectively as the "Financial
Statements" and are attached hereto as Exhibit B. The Financial Statements have
been prepared in accordance with Generally Accepted Accounting Principles
("GAAP") on a basis
-12-
<PAGE> 13
consistent in all material respects with that of the preceding year or period.
The Financial Statements present fairly the financial condition of Company as at
the dates stated and the operation of the Company for the periods stated.
Company and Shareholders represent and warrant that there has been no material
adverse change in the assets, liabilities, financial performance or
capitalization of the Company since September 30, 1999, except as set forth in
Exhibit 13 hereto.
4.5 Taxes.
(a) All tax returns required to be filed by or on behalf of
Company on or before the date hereof by any applicable law have been filed
within the times and in the manner prescribed by law, or appropriate filing
extensions have been granted by the applicable taxing authorities, including,
but not limited to, returns covering sales and use taxes, property taxes,
franchise taxes, employment taxes (including payroll and social security
payments) and income taxes (including all federal, state, local and foreign
taxes). All liabilities for taxes, assessments and other charges upon Company or
any of the property, assets or income of Company which are owing to the
government of any nation or state, or any local government within such nations
or states, and which were due and payable on or before the date hereof, have
been duly paid and satisfied on or before all their respective due dates. With
respect to liabilities for any such taxes, assessments or other charges which
are not due and payable as of the Closing Date, Company and each Shareholder
represent, warrant and covenant that Company or Shareholders will pay all such
amounts when due. Any such tax liability (or any such liability of Company
relating to the operation of Company's business or operation of the Assets
transferred hereunder) for federal, state or local taxes (including, without
limitation, interest and penalties) relating to all periods prior to the Closing
Date shall be the sole responsibility of Company and Shareholders. If the
Internal Revenue Service seeks to collect any such liability from Lincare or
from any other member of Lincare's affiliated group, Company and Shareholders
will indemnify and hold harmless any such party for the entire amount of such
liability pursuant to the provisions of Article 7 hereof. Notwithstanding the
foregoing, neither Company nor any Shareholder shall be responsible for any
liability of the Business for the payment of federal, state or local taxes in
connection with or arising out of Lincare's conduct of the Business or ownership
of the Assets on or after the Closing Date.
(b) Company and Shareholders have delivered to Lincare true
and complete copies of the Company's sales, use, personal property and other tax
returns (excluding income tax returns) filed for the fiscal years ending
September 30, 1998 and September 30,
-13-
<PAGE> 14
1999, as well as all such returns filed since September 30, 1999, together with
true and complete copies of all correspondence with taxing authorities relating
to such returns. Except for those tax audits of Company which have been
concluded (all obligations in connection therewith having been fully satisfied),
Company has never been, and is not currently subject to, any federal, state or
local tax audit, and none of the Shareholders nor Company has any information
concerning, or, to the best knowledge of Company and the Shareholders, reason to
believe that Company will be subject to any such audit within the reasonably
foreseeable future. Company and Shareholders shall remain responsible for any
tax liability which arises from an audit of any tax period prior to the Closing
Date.
4.6 Schedules.
Company and Shareholders have delivered to Lincare the
following Schedules, which, subject to the qualifications set forth below, are
true, complete and accurate:
(a) Real Estate. Schedule 1 is a complete list of all land,
warehouses, office buildings, stores and other buildings and real property
rented, leased, used, occupied or otherwise possessed by the Company. Except as
identified on Schedule 1, Company does not own any real property used occupied
or otherwise possessed by the Business. As to each property rented, leased,
used, occupied or otherwise possessed by the Company, Schedule 1 lists the
location of the property; the name and address of the lessor, as applicable; the
expiration date of such lease; and the monthly rent payable under the lease.
Each such property rented or leased is held under a valid and enforceable lease
which, to the best knowledge of Company and the Shareholders, is binding upon
each of the parties thereto, and each such lease is in full force and effect in
accordance with its terms and, to the best knowledge of Company and the
Shareholders, there are no existing defaults or events of default under any such
lease. Neither Company nor any of the Shareholders has given or received notice
of any claimed default or termination with respect to any such lease. Schedule 1
identifies all known violations of any applicable law, statute, ordinance, code,
rule, regulation or standard relating to any building rented, leased, used,
occupied or otherwise possessed by the Company or the operations of the Company
conducted therein. The facilities listed in Schedule 1 have been regularly and
appropriately maintained in the normal course of business and, to the best
knowledge of Company and the Shareholders, the fixtures, mechanical systems
(including electrical, plumbing, heating, ventilation and air conditioning) and
roof and structural systems of the facilities shown on Schedule
-14-
<PAGE> 15
1 are in good working condition and in a good state of maintenance and repair.
(b) Agreements and Contracts.
(i) Schedule 2 is a complete list of all
material contracts and agreements (including, without limitation, agreements
relating to the purchase, sale, lease or rental of equipment, materials,
products, supplies and services; preferred provider agreements, health
maintenance organization agreements or any other managed care contracts or
agreements; service contracts; distributorship agreements; leases of personal
property; licenses of intellectual property rights; security agreements; and
loan agreements) to which Company is a party. Schedule 2 specifies the type of
agreement and the names and addresses of the parties to such agreements. The
agreements listed in Schedule 2 are valid, binding and enforceable upon Company,
and to the best knowledge of Company, the other parties thereto. Except as
indicated in Schedule 2, all such contracts and agreements are in full force and
effect in all material respects and, to the best knowledge of Company and the
Shareholders, there are no existing defaults or events of default under any such
contract or agreement. Neither Company nor any Shareholder has given or received
notice of any claimed default or termination with respect to any such contract
or agreement. Except with respect to the Excluded Assets, and as disclosed on
Schedule 2, neither this Agreement nor consummation of the transactions
contemplated hereby shall result in a default under or breach of, or require the
consent or approval of any party to any agreement listed on Schedule 2 with
respect to the transfer and assignment of such contract or agreement to Lincare
hereunder, except those specific agreements identified on Schedule 2 as
requiring third party consent or approval prior to any such transfer or
assignment. Company and Shareholders shall use their best efforts to obtain such
third party consent or approval prior to the Closing Date or within 30 days of
the Closing Date. Company and Shareholders shall remain responsible for any
contract, agreement or lease which is not disclosed on the Schedules hereto
unless Lincare accepts responsibility for such contract in writing as provided
in Section 1.1(a)(viii) hereof.
(ii) Schedules 1, 2 and 3 list each of the
material contracts, agreements and leases which are included in the Assets,
except those contracts, agreements and leases which are designated on such
schedules as Excluded Assets. It is understood and agreed between the parties
that Lincare shall only assume the liabilities, duties and obligations of
Company under the contracts, agreements and leases listed on Schedules 1, 2 or 3
which: (A) are not Excluded Assets; and (B) which liabilities, duties and
obligations
-15-
<PAGE> 16
arise and pertain to periods commencing on or after the Closing Date. Company
and Shareholders shall remain solely liable for all liabilities, duties and
obligations under all contracts, agreements and leases which: (X) are Excluded
Assets; (Y) which are not Excluded Assets but which liabilities, duties and
obligations arise or pertain to periods prior to the Closing Date; or (Z) were
not disclosed to Lincare on any Schedule hereto.
(iii) Notwithstanding anything to the contrary
contained in this Agreement, Lincare shall obtain title to all assets covered
by: (X) those certain contracts, agreements and leases identified on Schedules
1, 2 or 3 as Excluded Assets to which the Contract Asset Purchase Requirements
pertain; and (Y) contracts, agreements or leases which were not disclosed on any
Schedule hereto to the extent that the Contract Asset Purchase Requirements set
forth in Section 3.4 of this Agreement apply, and Company and Shareholder shall
have completed the Contract Asset Purchase Requirements with respect to the
assets covered by such contracts, agreements and leases.
(c) Personal Property. Schedule 3 (including each of the
subparts referenced below) lists by type and quantity the tangible personal
property owned, rented, leased, used or otherwise possessed by Company and
pertaining to the asset classes described below:
(i) Schedule 3A lists, in summary form, the
oxygen equipment, respiratory therapy equipment, infusion therapy equipment and
other items of durable medical equipment and other tangible personal property
owned, leased, rented, used or otherwise possessed by Company (including, but
not limited to, all of such items currently provided to customers in their homes
or alternative site care facilities);
(ii) Schedule 3B lists, in summary form, the
vehicles owned, leased, rented, used or otherwise possessed by Company; and
(iii) Schedule 3C lists, in summary form, all
other personal property owned, leased, rented, used or otherwise possessed by
the Business that are included among the Assets to be acquired by Lincare, such
as phone systems, copiers, postage meters, fax machines and other office
equipment.
Except as disclosed on Schedule 3, Company shall own as of the Closing Date and
have good and marketable title to all of the tangible personal property included
in the Assets (whether or not any such Asset is included within the asset
classes described in
-16-
<PAGE> 17
Sections 4.6(c)(i)-(iii) above), free and clear of any restrictions or
conditions to transfer or assignment and free and clear of all Encumbrances. If
any property included in the Assets and owned by Company is subject to an
Encumbrance, Schedule 3 identifies as to each such item of personal property the
nature of such Encumbrance, the holder thereof, and the amount of such
Encumbrance.
With regard to each item of personal property included in the Assets
and rented or leased by Company, Schedule 3 identifies the party from whom such
property is rented or leased, the date and term of the lease or rental
agreement, the amount of the monthly rent payable and any renewal and purchase
options.
Without limiting the generality of the foregoing, Company and
Shareholders specifically represent that the high pressure cylinders used in the
operation of the Business (except for those certain "H" and "K" high pressure
cylinders, oxygen dewars and liquid oxygen GP-45 bulk tanks referenced on
Schedule 2 hereto) are owned by the Company free and clear of any Encumbrances.
If the personal property is included on Schedule 3 and a claim is made by a
third party that the property is not owned by Company, and that there are rental
or other charges owed for the property or any other Encumbrance on the property,
the Company and Shareholders shall remain responsible for such charges
(including demurrage if applicable) or encumbrances. To the extent Lincare deems
it necessary or appropriate to pay any amounts as a result of such claim after
Company and/or the Shareholders fail to satisfy the same pursuant to the terms
of this Agreement, then Lincare shall have the right to deduct such amounts from
its payment obligations under the Agreement.
Each item of personal property included in the Assets has been
regularly and appropriately maintained and repaired in the normal course of
business and substantially all of such items, when taken together as a whole,
are in good working condition and in a good state of maintenance and repair as
of the Closing Date. Each item of personal property included in the Assets is
transferred with all applicable manufacturers and dealers warranties, to the
extent that such warranties are transferable to Lincare.
(d) Accounts Receivable. Schedule 4 contains a summary of
the billed accounts receivable (herein referred to as the "Accounts Receivable")
of or pertaining to Company, including an aging of such accounts receivable in
thirty (30) day increments for one hundred twenty days (120) days from the date
of original invoice, and the total amount of all Accounts Receivable. Each
Account Receivable listed: (i) arose from valid sales or rentals in the ordinary
course of business; (ii) relates to equipment or products provided to customers
covered under the Medicare, Medicaid
-17-
<PAGE> 18
or other third party public or private insurance program, or were provided on a
direct bill basis, each of which customers were qualified under such programs to
receive such products and services or were otherwise capable of paying for such
products and services; (iii) relates to billings by or on behalf of Company
which were prepared and submitted with all the complete and correct forms,
documents, test results and other information materially necessary to receive
payment with respect to each such Account Receivable and which billings were
prepared and submitted in conformity with all applicable laws, rules,
regulations codes and guidelines of federal, state and local health care
programs and in conformity with the requirements of each third party payor; and
(iv) has been diligently pursued for payment in accordance with the requirements
of the respective payors. Company has not received nor has it applied for any
cash advances from any Medicare, Medicaid or third party public or private
insurance program or carrier, whether or not any such cash advance has been
repaid to or recouped by such insurance program or carrier. Except as already
reflected in the amount of the Accounts Receivable shown on Schedule 4, no
refunds, reimbursements, discounts or other adjustments are payable or
anticipated to be made with respect to any of the Accounts Receivable. There are
no Encumbrances, or rights of setoff, recoupment or assignments with respect to
or affecting the Accounts Receivables. The Accounts Receivable listed on
Schedule 4 are owned, legally and beneficially, by the Company, and none of such
Accounts Receivable is owned, legally or beneficially, by any other person or
entity, or are being collected for, or are to be paid to, or for the benefit of,
any other person or entity.
(e) Customers. Schedule 5 lists each active rental
customer of Company. For each such customer, Schedule 5 lists the customer's
name and address; the customer's account number; and the equipment, products and
services currently supplied to such customer. Each customer included on Schedule
5 has been duly qualified under the Medicare, Medicaid or other third party
public or private insurance program for reimbursement for services rendered by
Company, or is being provided services on a direct bill basis to customers who
Company reasonably believes have the financial capability to pay for such
services.
(f) Employment Matters. Schedule 6 sets forth a list of:
(i) the name of each of the employees of
Company, and the current annual rate of compensation for each such person;
(ii) all pension, retirement, profit-sharing,
savings, bonus, deferred compensation, incentive compensation,
-18-
<PAGE> 19
hospitalization, medical, life and disability insurance, vacation, termination,
and other similar plans in effect which provide benefits to present and past
directors, officers and employees of Company;
(iii) all claims and litigation asserted by or
against Company (or any director, shareholder, officer or employee of Company in
such representative capacity) arising from transactions and occurrences after
January 1, 1998, or any claim or litigation, whenever arising, which is still
pending as of the date hereof, which claims any right to workers compensation
benefits or alleges any claim relating to race discrimination, age
discrimination, harassment, sex discrimination, sexual harassment, or wrongful
termination. As to each such claim or litigation, Schedule 6 lists the identity
of the claimant; a brief description of the matter; and the outcome or status of
the matter. Whether listed or not on any Schedule hereto, Lincare does not
assume the liability or responsibility for any such claim or litigation which
has been asserted or which might be asserted which arose from actions prior to
the Closing Date;
(iv) all collective bargaining agreements or
other contracts with labor unions to which Company is a party; and
(v) all employment agreements, consulting
agreements, independent contractor agreements, and covenants not to compete
(including, but not limited to, covenants not to compete with any predecessors
in interest of Company or the Business) which are currently in effect.
Company represents that any and all such agreements required to be terminated in
connection with consummation of the transactions contemplated by this Agreement,
whether or not listed on Schedule 6, have been terminated effective immediately
prior to the Closing and that the Company will pay when due any amounts which
may be due to employees as a result of early termination of such agreements.
Lincare does not assume the responsibilities or liabilities of any employment
agreement unless it is specifically listed on Schedule 2 or 6 as an Accepted
Liability and the subject employee has provided written consent to the
assignment of the employment contract to Lincare prior to the Closing Date.
For those employees of the Company in respect of the Business who are not
subject to an employment agreement, Company represents that those employees are
at-will employees and (except for those employees that will remain employed by
Company after the Closing) have been terminated from employment effective
immediately prior to the Closing, and Company and Shareholders shall remain
liable for
-19-
<PAGE> 20
any obligations owed to such employees, whether it be wages, benefits, bonuses,
or any other amount arising from employment with the Company.
If Lincare deems it necessary or appropriate to make payment to any employee of
Company for amounts due by Company that are not paid by Company pursuant to the
terms of this Agreement, Lincare shall have the right to deduct such amounts
from its payment obligations under the Agreement.
Company is in compliance in all material respects with all federal, state and
local laws, statutes, ordinances, rules, regulations, codes and orders relating
to conditions of employment, and neither Company nor any Shareholder knows of or
has any reasonable grounds to anticipate, any labor dispute. Company has not
incurred any liability for any arrearage of wages or other payments in respect
of employment and Company has made all contributions to employee benefit plans
required by such plans to be made on or before the date hereof. Company has
notified its employees that it has discontinued all bonus and incentive programs
effective April 30, 2000. All liabilities and expenses with respect to
compensation or benefits applicable to all directors, shareholders, officers and
employees of Company under any employee benefit plan, including, without
limitation, the obligation to provide all COBRA benefits to present or former
employees of Company, shall be the sole responsibility of Company.
(g) Claims, Investigations and Litigation. Schedule 7
lists all claims and litigation asserted by or against Company arising from
transactions and occurrences after January 1, 1998, or any such claim or
litigation, whenever arising, which was filed and is still pending as of the
date hereof alleging personal injury, property damage or economic loss and
involving Company (or any director, shareholder, officer or employee of Company
in such representative capacity) or any property of, or product or service sold,
rented, leased or provided by Company, and any litigation, or to the best of
Company's and each Shareholder's knowledge, any investigation (including
government investigations or audits) commenced after January 1, 1998, or
whenever commenced, if still pending. Schedule 7 also lists each judgment,
order, writ, corporate integrity agreement, settlement agreement, injunction and
decree of any federal, state or local court or governmental authority to which
Company is a party or by which it is bound or which relates to any of the
ownership interests in Company. As to each such claim, investigation, audit or
litigation, Schedule 7 lists the type of proceeding; the identity of the
claimant or investigating agency; a brief description of the matter; the damages
claimed or relief sought; and the outcome or status of the
-20-
<PAGE> 21
matter. Except as set forth on Schedule 7, there are no claims, lawsuits,
arbitrations, government proceedings, investigations or audits pending to which
Company or any of its directors, shareholders, officers or employees is a party
(as plaintiff, defendant or otherwise) or which relate to any of the ownership
interests in Company. To the best of Company's and each Shareholder's knowledge,
there are no grounds for the filing or receipt of any other claim or the
commencement of any other lawsuit, arbitration or proceeding by or against, or
investigation of, Company or involving the assets of, or equity interests in,
Company except as set forth in Schedule 7. Whether listed or not on any Schedule
hereto, Lincare does not assume the liability or responsibility for any such
claim or litigation which has been asserted or which might be asserted and arose
from actions prior to the Closing Date.
(h) Health Care Compliance. Schedule 8A lists all claims,
statements and other matters (including, but not limited to, all correspondence
or communications with governmental agencies, intermediaries or carriers)
concerning or relating to any federal or state government funded health care
program that involves, implies, relates to, or alleges: (A) any violation or
irregularity with respect to any activity, practice or policy of Company; or (B)
any violation or irregularity with respect to any claim for payment or
reimbursement made by Company, or any payment or reimbursement paid to Company.
Schedule 8B lists all claims, statements and other matters (including, but not
limited to, all correspondence or communications with any agency) concerning or
relating to any federal or state regulatory agency, including the FDA, DOT,
state or local licensure entities, investigation of the Company or notice of
irregularity to the Company in respect of the Business. Except as set forth on
Schedule 8A and B, there are no violations or irregularities nor, to the best of
Company's and each Shareholder's knowledge, are there any reasonable grounds to
anticipate the commencement of any investigation or inquiry, or the assertion of
any claim or demand by any such government agency, intermediary or carrier
against Company with respect to any of the activities, practices, policies or
claims of the Business, or any payments or reimbursements received by Company in
respect of the Business. Company is not currently subject to any outstanding
audit by any such government agency, intermediary or carrier in respect of the
Business, and to the best of Company's and each Shareholder's knowledge, there
are no reasonable grounds to anticipate any such audit of the Business in the
foreseeable future. Specifically, Company and Shareholders represent that the
Company is not in violation of any federal or state false claims act or anti
kick-back statutes. For any claim or investigation, whether listed or not on any
Schedule hereto, which arose from actions prior to the Closing Date, the Company
and Shareholders
-21-
<PAGE> 22
shall remain responsible for defending the claim and cooperating with the
investigation. If Lincare deems it necessary or appropriate to expend monies to
defend or resolve such investigations, it shall have the right to deduct such
amounts from its payment obligations under this Agreement.
(i) Licenses and Permits. Schedule 9 lists all
governmental licenses, permits and authorizations which are held or used by
Company. With respect to each such license, permit or authorization, Schedule 9
contains a brief description of the license, permit or authorization; the
identity of the issuing agency or authority; the license or permit number; and
the expiration date of each such license, permit or authorization. Such
licenses, permits and authorizations are the only governmental licenses, permits
and authorizations currently required by Company for the operation of its
business and all such licenses, permits and authorizations are in effect as of
the date hereof. Company has complied in all material respects with all
conditions or requirements imposed by such licenses, permits and authorizations.
Neither Company nor any Shareholder has received any notice of, nor, to the best
of the Company's and each Shareholder's knowledge, is there any reason to
believe, that any appropriate authority intends to cancel or terminate any of
such licenses, permits or authorizations or, to the best knowledge of Company
and Shareholders, that valid grounds for such cancellation or termination
currently exist.
(j) Environmental Matters. Schedule 10 lists any and all
claims, suits, actions or proceedings (including government investigations and
audits) relating to the release, discharge or emission of any pollutants or
contaminants, or to the generation, treatment, storage or disposal of any
wastes, resulting from the operation of Company, or otherwise relating to the
protection of the environment since January 1, 1997 or any which are presently
pending. With respect to each such pending or prior matter, Schedule 10 lists
the date of the claim, suit, action or proceeding (including governmental
investigations and audits); the claimant or investigating agency; the nature and
a brief description of the matter; the damages claimed or relief sought; and the
status, outcome or disposition of the matter. Except as set forth in Schedule
10, there are no claims, suits, actions, or proceedings (including governmental
investigations and audits), asserted or threatened, relating to environmental
matters of the types specified in this Section 4.6(j) or otherwise, to which
Company is a party; nor does Company or any Shareholder know or have any
reasonable grounds to know of any activity of Company or potential liability of
Company involving or relating to the release, discharge or emission of any
pollutants or contaminants, or to the
-22-
<PAGE> 23
generation, treatment, storage or disposal of any wastes, or otherwise relating
to the protection of the environment. For any claim or investigation, whether
listed or not on any Schedule hereto, which arose from actions prior to the
Closing Date, Company and the Shareholders shall remain responsible for
defending the claim and cooperating with the investigation. If Lincare deems it
necessary or appropriate to expend monies to defend or resolve such
investigations, it shall have the right to deduct such amounts from its payment
obligations under the Agreement.
(k) Directors and Officers. Schedule 11 lists the
officers and directors of Company in office as of the date hereof. Schedule 11
also lists all contracts, agreements, commitments, leases, instruments, debts,
or obligations: (i) between Company and any of its directors, officers or
shareholders affecting the Business or the Assets (other than those employment
agreements and real property leases disclosed on Schedules 2 and 6 hereto); and
(ii) among or between any directors, officers or shareholders of Company
affecting the Business or the Assets (other than as disclosed on Schedule 3
hereto). If not expressly assumed by Lincare, Company and the Shareholders shall
remain responsible for such contract, agreement, commitment, lease, instrument,
debt or other obligation, whether listed or not on any Schedule hereto.
(l) Intangible Property. Schedule 12 lists all corporate
names, patents, trademarks, trade names, service marks, and applications
therefor and all copyrights owned, held, used or otherwise possessed by Company,
and all patent, trademark and service mark licenses to which Company is a party.
Company owns or possesses adequate licenses or other rights to use all corporate
names, patents, trademarks, trade names, service marks and copyrights, if any,
used in the conduct of its business as now operated. Schedule 12 lists each
registration, application, license or other agreement to which Company is a
party with respect to the use of any corporate name, trademark, trade name,
service mark, copyright or patent and the expiration date of such registration
or license, as it relates to the Business. Neither Company nor any Shareholder
knows, nor has any reasonable grounds to know, of any claims asserted by third
parties with respect to such rights.
(m) Changed Conditions. Except as listed in Schedule 13,
since September 30, 1999, the business of Company has been conducted in
substantially the same manner as theretofore and there has not been any:
(i) material transaction by Company except in
the ordinary course of business as conducted on that date;
-23-
<PAGE> 24
(ii) material adverse change in the condition
(financial or otherwise) of the liabilities, assets, equity, properties,
business, or prospects of Company;
(iii) labor dispute, or other similar event or
condition of any character, materially or adversely affecting the financial
condition, business, assets, or prospects of Company;
(iv) material change in business or accounting
methods or practices (including, without limitation, any change in depreciation
or amortization policies or rates) by Company;
(v) revaluation by Company of any of its assets;
(vi) lease, sale or transfer of any material
tangible or intangible asset of Company, except in the ordinary course of
business and for fair market value;
(vii) entry into, or amendment or termination of,
any material contract, agreement, or license, except in the ordinary course of
business and upon fair market value, terms and conditions;
(viii) waiver or release of any material right or
claim of Company, except in the ordinary course of business;
(ix) other event or condition of any character
that has, or might reasonably have, a material and adverse effect on the
financial condition, business, assets, or prospects of Company which are not
otherwise reflected in the Financial Statements;
(x) amendment of Company's Articles of
Incorporation or By-Laws materially affecting the Business or the Assets; or
(xi) agreement by Company to do any of the things
described in the preceding clauses (i) through (x).
4.7 Title to Assets and Condition of Assets.
Company has good and marketable title to, or holds by valid
and enforceable agreement of lease or license, all of the Assets, and such
Assets are free and clear of any restrictions or conditions to transfer or
assignment and are free and clear of all Encumbrances, except for the Accepted
Liabilities.
4.8 No Violation.
-24-
<PAGE> 25
Neither this Agreement nor the consummation of the
transactions contemplated hereby by Company or the Shareholders violate or will
violate in any material respect any statute, law, regulation, rule, ordinance,
code, standard, order, writ, judgment, injunction, decree, determination or
award applicable to Company or the Shareholders, or conflict with or constitute
a default under Company's Articles of Incorporation or By-Laws or any indenture,
mortgage, lease, lien, instrument or other agreement by which Company or any
Shareholder is bound, nor will it result in an event which, whether immediately
or upon the giving of notice or lapse of time or both, will permit the
acceleration of the maturity date of any obligation under any such indenture,
mortgage, lease, lien, instrument or other agreement or the creation of any lien
or encumbrance on any property or asset of Company, nor will it enable any party
to any agreement to which Company is a party to exercise a right to terminate or
otherwise modify the terms thereof which would result in a material and adverse
effect on the Assets or the Business.
4.9 Compliance With Law.
Company has complied with, and is not in violation of, in any
material respect, any federal, state, or local statutes, laws, ordinances,
rules, regulations, codes or standards which affect the operation of its
business (including, but not limited to, compliance with all statutes, laws,
ordinances, rules, regulations relating to any federal or state government
funded health care program, including, but not limited to, the provisions of the
federal fraud and abuse statutes, laws, rules and regulations). Neither Company
nor any Shareholder has received any notice of any claimed material violation of
any federal, state or local statute, law, ordinance, rule, regulation, code,
standard or order, nor to the best knowledge of Company and the Shareholders,
has any such violation occurred.
4.10 Legal Power and Authority To Enter Transaction.
Company and Shareholders have the full right, power, legal
capacity, and authority to enter into and deliver this Agreement and to perform
their respective obligations hereunder and the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly authorized by Company and the Shareholders,
and a copy of such resolutions so authorizing the execution, delivery and
performance of this Agreement, certified by Secretary of Company has been
delivered to Lincare. This Agreement constitutes the valid and binding
obligation of Company and the Shareholders and is enforceable in accordance with
its terms.
-25-
<PAGE> 26
Except as stated above, no approvals or consents of any persons or entities are
required for Company and Shareholders to execute and deliver this Agreement to
perform their respective obligations hereunder and the transactions contemplated
hereby.
4.11 Shareholder Assets.
The Assets sold, conveyed, transferred, assigned, and
delivered to Lincare hereunder constitute all of the assets necessary for the
operation of the Business, as currently conducted, other than the Excluded
Assets, and no Shareholder currently provides nor has any historically provided
to Company any during the six (6) month period immediately preceding the Closing
any tangible or intangible assets necessary for the operation of the Business as
presently conducted, other than the Excluded Assets. The Assets sold, conveyed,
transferred, assigned, and delivered to Lincare hereunder are all of the assets
owned, leased, rented, used or otherwise possessed by the Company, except for
the Excluded Assets.
4.12 Books and Records.
The books and records of the Company, including, without
limitation, the minute books, stock certificate books and stock ledger, are
complete, true and correct in all material respects and fairly reflect the
conduct of the business of Company.
4.13 Disclosure.
No representation or warranty by Company or any Shareholder
contained in this Agreement, or in any schedule, exhibit or other document
furnished to Lincare pursuant to this Agreement, contains any untrue statement
of material fact, or omits to state a material fact necessary in order to make
the statements and information contained therein not misleading. To the extent
the Company or any Shareholder fails to disclose any information which creates a
liability of the Business or Lincare which Lincare did not expressly accept,
that liability shall remain the responsibility of the Company and the
Shareholders.
4.14 Survival of Representations and Warranties.
All representations, warranties, covenants and agreements made
by Company or any Shareholder in or pursuant to this Agreement or in any
schedule, exhibit or other document furnished to Lincare pursuant to this
Agreement, shall be true on and as of the Closing Date with the same effect as
if made on and as of Closing Date, and shall survive the execution, delivery and
performance of this
-26-
<PAGE> 27
Agreement and the Closing, subject to any time limitations imposed by law;
provided, however, that the representations and warranties contained in
Sections 4.1, 4.2, 4.3, 4.4, Sections 4.6(a)-(f),(i),(k)-(m), Sections 4.8,
4.10, 4.11 and 4.12 of this Agreement shall only survive for a period of two
(2) years after the Closing Date.
Article 5 - REPRESENTATIONS AND WARRANTIES OF LINCARE
Lincare represents, warrants and covenants as follows:
5.1 Organization, Standing and Qualification.
Lincare is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all necessary
corporate powers, governmental qualifications and authorizations necessary to
own its assets and to operate its business in each jurisdiction in which such
assets are now owned and such business is now operated by it.
5.2 Legal Power and Authority To Enter Transaction.
Lincare has the full right, power, legal capacity, and
authority to enter into and deliver this Agreement and to perform its
obligations hereunder and the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the transactions contemplated
hereby have been duly authorized by Lincare's Board of Directors, a copy of
such resolutions so authorizing the execution, delivery and performance of this
Agreement, certified by the Secretary of Lincare, has been delivered to Company
and Shareholders. This Agreement constitutes the valid and binding obligation
of Lincare and is enforceable in accordance with its terms.
5.3 No Violation.
The execution, delivery and performance of this Agreement by
Lincare in accordance with its terms will not conflict with, or result in any
violation of any of the terms or provisions of, or constitute a default under
any note, indenture, mortgage, deed of trust, loan agreement, lease,
concession, grant, franchise, license, contract or other agreement or
instrument to which Lincare is a party or by which Lincare, its properties or
assets, may be bound, or by any statute, order, decree, ordinance, law, rule or
regulation applicable to Lincare or its properties or assets.
5.4 Survival of Representations and Warranties.
-27-
<PAGE> 28
All representations, warranties covenants and agreements made
by Lincare in or pursuant to this Agreement shall survive the execution,
delivery and performance of this Agreement and the Closing; provided, however,
that the representations and warranties contained in this Article 5 shall only
survive for a period of two (2) years after the Closing Date.
Article 6 - CLOSING
6.1 Date, Time and Place.
The closing under this Agreement (herein referred to as the
"Closing") shall take place at the offices of Johnson Law Firm, P.A., 111
Center Street, Suite 1200, Little Rock, Arkansas 72201, on the date first set
forth above (said date shall herein be referred to as the "Closing Date"). All
transactions at the Closing shall be deemed to have taken place simultaneously
and no transaction shall be deemed to have been completed and no document,
instrument or certificate shall be deemed to have been delivered until all
transactions are completed and all documents delivered.
6.2 Obligations of Company and Shareholders.
At the Closing, Company and Shareholders shall have delivered
to Lincare the following:
(a) lease agreements between Lincare and Company, in form and
substance reasonably satisfactory to Lincare and Company, for Company's
headquarters facilities located at 999 South Falls Boulevard, Wynne, Arkansas
72396, and Company's operating facilities located at 259 North Highway 425,
Monticello, Arkansas 71655; and a lease agreement between Lincare and JC
Partners, LLC, in form and substance reasonably satisfactory to Lincare and JC
Partners, LLC, for Company's warehouse facilities located at 907 South Rowena,
Wynne, Arkansas 72396;
(b) subject to the provisions of Section 6.4(j) hereof, lease
assignments, assumption agreements and estoppel certificates, in form and
substance reasonably satisfactory to Lincare, sufficient to transfer to Lincare
all of Company's rights with respect to the premises leased or rented by
Company at the locations listed on Schedule 1 hereto which are not identified
as Excluded Assets;
(c) a general bill of sale, in form and substance reasonably
satisfactory to Lincare, sufficient to convey to Lincare good and marketable
title to the Assets;
-28-
<PAGE> 29
(d) a certificate of title and a bill of sale for each
automobile, truck or other vehicle included in the Assets, in the form required
by the applicable statutes, laws, rules and regulations of the state of
registration;
(e) a document authorizing Lincare to endorse the name of
Company on any checks, drafts, notes or instruments acquired by Lincare as part
of the Assets which are received by Company or by Lincare after the Closing
Date in connection with Lincare's purchase of the Assets pursuant to this
Agreement;
(f) an incumbency certificate, dated as of the Closing Date
and executed by the Secretary of Company certifying the identity and signature
of the officers executing any documents required by or relating to this
Agreement;
(g) a copy of all corporate resolutions necessary to
authorize the execution, delivery and performance of this Agreement by Company
and copies of Company's Articles of Incorporation, as amended, and Certificate
of Good Standing, each certified by the Secretary of the State of Arkansas, and
the By-Laws of Company, as amended, certified by the Secretary of Company;
(h) all required consents of third parties to the sale,
conveyance, transfer, assignment and delivery of the Assets of the Business to
Lincare by virtue of its purchase of the Assets (or an agreement that such
consents shall be obtained within 30 days of the Closing Date);
(i) any other consents, waivers, instruments or documents as
may be reasonably requested by Lincare; and
(j) subject to the provisions of Section 6.4(j) hereof,
Uniform Commercial Code termination statements, lease termination statements,
releases and any other documents necessary to evidence that each of the Assets
is being sold, conveyed, transferred, assigned and delivered to Lincare free
and clear of any Encumbrances.
6.3 Obligations of Lincare.
At the Closing, Lincare shall have delivered to Company and
Shareholders the following:
(a) payment and delivery of all consideration required to be
paid and delivered by Lincare to Company at the Closing pursuant to the
provisions of Section 3.1(a) hereof;
-29-
<PAGE> 30
(b) an incumbency certificate, dated as of the Closing Date
and executed by the Secretary of Lincare, certifying the identity and signature
of the officers of Lincare executing any documents required by or relating to
this Agreement; and
(c) a copy of all corporate resolutions of Lincare necessary
to authorize the execution, delivery and performance of this Agreement by
Lincare, certified by the Secretary of Lincare.
6.4 Cooperation After the Closing.
(a) Promptly after the Closing, Company and Shareholders will
put Lincare into full possession and enjoyment of the Assets.
(b) Lincare, Company and Shareholders will, at any time, and
from time to time, after the Closing Date, execute and deliver such further
instruments of conveyance and transfer and take such additional action as may
be reasonably necessary to effect, consummate, confirm or evidence the
transactions contemplated by this Agreement.
(c) Company and Shareholders shall be responsible for all
income, franchise, sales, use, property, employment (including social security
payments), payroll or other tax liabilities, including, without limitation, any
interest and penalties thereon, which are attributable to operation or
ownership of Company or the Assets or the operation of the Business for periods
prior to the Closing Date. Lincare shall be responsible for any such taxes
attributable to its ownership of the Assets or the operation of the Business
for periods following the Closing Date. Any such taxes requiring apportionment
(because Company or a Shareholder has paid such taxes attributable to a period
subsequent to the Closing Date or Lincare will pay such taxes attributable to a
period prior to the Closing Date) shall be pro-rated on the basis of the fiscal
year covered by such taxes, or otherwise on a mutually acceptable equitable
basis. If Company or a Shareholder shall have paid any taxes for which Lincare
is responsible as aforesaid, or if Lincare will, or deems it necessary or
appropriate to, pay taxes for which Company or Shareholder is responsible as
aforesaid, appropriate adjustments will be made by the parties at or as
promptly as practicable after the Closing Date.
(d) Company and Shareholders agree, on behalf of themselves
and each of their respective parents, subsidiaries and affiliates that, from
and after the Closing Date, they shall cease and desist from all use of the
names "United Medical, Inc.", "Tennessee Welding Supply, Inc., d/b/a Argo
Medical Services, Inc.", "Home Oxygen Medical Equipment, Inc.", "Transitional
-30-
<PAGE> 31
Respiratory Care" and "T.R.C.", and any other trademarks, trade names or
service marks included in the Assets, and any name containing any variations,
combinations or derivatives thereof, or any forms or acronyms of the same;
provided, however, Shareholders shall be permitted to rename the Company "UMI
Holdings, Inc." in conjunction with Lincare's filing of the fictitious name
"United Medical, Inc." after the Closing. Company shall be permitted to use the
name "UMI Holdings, Inc." to wind up Company's affairs on and after the Closing
Date.
(e) It is acknowledged that Lincare has waived compliance by
Company and Shareholders with the provisions of any bulk sales or transfer law
of any state that is or may be applicable to the transactions contemplated
hereby, and Company and Shareholders agree, jointly and severally, to indemnify
Lincare with respect to such waiver and non-compliance in accordance with the
provisions of Article 7 hereof.
(f) Company and Shareholders shall use their best efforts to
obtain all consents of third parties and to make all filings with and give all
notices to third parties and to do any and all other acts and things which may
be necessary or reasonably required in order to transfer to Lincare all of the
Assets, free and clear of any Encumbrances, and to effect fully the
transactions contemplated by this Agreement. Lincare will provide reasonable
cooperation, and reasonable assistance as required, to Company and Shareholders
in connection with such efforts on and after the Closing Date. In case any
Assets or rights have not at the Closing been transferred effectively, or are
subject to any Encumbrance, Company and Shareholders shall use their best
efforts to cooperate with Lincare in any lawful arrangement to provide that
Lincare shall receive the benefit of Company's interest in any of such Assets
and rights.
(g) Company and Shareholders agree that, after the Closing,
they shall provide reasonable cooperation and assistance to Lincare, with
respect to any matters, disputes, suits or claims by or against any person not
a party to this Agreement.
(h) If, for a period of three (3) years after the Closing
Date, Lincare is required to have an audit performed of Company's Financial
Statements for Company's interim period of October 1, 1999 through the Closing
Date pursuant to SEC filing requirements or an acquisition involving Lincare,
its parent or any of its subsidiaries or affiliates, Company and Shareholders
agree to cooperate with Lincare and to provide Lincare with all reasonable
assistance required to prepare such audited financial statements, including,
without limitation, the following: (i)
-31-
<PAGE> 32
providing Lincare and its representatives with all necessary information, data,
documents and records relating to the Business in Company's and Shareholders'
possession for the time periods covered by the Financial Statements; and (ii)
delivery of representation letters by Company and Shareholders, and Company's
legal counsel, to Lincare or its auditors. If requested by Lincare, Company and
Shareholders shall use their best efforts to cause the Company's accountants,
auditors and legal counsel to cooperate with and to assist Lincare and its
representatives in the preparation of any such audited financial statements, it
being expressly agreed and understood that Lincare shall be solely responsible
for the fees and expenses of the Company's accountants, auditors and legal
counsel in rendering such assistance and cooperation to Lincare and its
representatives. Lincare shall also reimburse Company and Shareholders for
their reasonable out-of-pocket payroll and related expenses incurred for
employee time dedicated to assisting Lincare with its preparation of such
audited financial statements pursuant to this Section 6.4(h).
(i) Except for those certain "H" and "K" high pressure
cylinders, oxygen dewars and liquid oxygen GP-45 bulk tanks rented by Company
as set forth on Schedule 2 hereto, it is understood and agreed by the parties
that on the Closing Date, Company and Shareholders shall cause to be delivered
to Lincare title to all other high pressure cylinders owned, leased, rented,
used or otherwise possessed by Company, free and clear of all Encumbrances
(including, but not limited to, any lease or rental obligations). Company shall
be responsible for any shortfall of high pressure cylinders which were rented
or leased by Company prior to the Closing Date, including, but not limited to,
settling and paying for any such cylinder shortfall with the suppliers thereof.
To the extent that there is a shortfall in the number of cylinders rented or
leased by Company prior to the Closing Date, such shortfall shall not be setoff
against any cylinders owned by Company.
(j) If it is impracticable for Company and Shareholders to
provide to Lincare at the Closing all of the Uniform Commercial Code
termination statements, lease termination statements, releases and other
documents necessary to evidence delivery to Lincare of title to the Assets as
required hereunder, Company and the Shareholders shall deliver all such
statements, releases and documents to Lincare no later than thirty (30) days
after the Closing.
(k) If, after the Closing Date, the Company requests access
to Company records possessed by Lincare relating to periods prior to the
Closing Date in connection with: (i) any examination or audit of the Company by
any taxing or other governmental
-32-
<PAGE> 33
authority relating to periods prior to the Closing Date; (ii) any tax filings
of the Company relating to periods prior to the Closing Date; (iii) defending
any third party claims which are subject of indemnification pursuant to the
provisions of this Agreement; or (iv) pursuant to any other lawful order of any
court or other governmental agency; then Lincare agrees to provide Company or
its authorized agents with reasonable access to such records at the location
and in the form which such records are maintained at the date of any such
request. Upon Company's request and at its sole cost and expense, Lincare shall
provide copies of any such records to Company or its authorized agents. Lincare
agrees to maintain such Company records for all applicable statutes of
limitations time periods.
(l) Company and the Shareholders permit Lincare to use all
tax identification numbers of Company and its subsidiaries for billing purposes
on and after the Closing Date, until such time that Lincare has obtained new
provider numbers for the Business. Lincare agrees to use its best efforts to
obtain new provider numbers promptly after the Closing. Lincare shall defend,
indemnify and hold Company and the Shareholders harmless from, against, and in
respect of, any and all claims, demands, lawsuits, proceedings, losses,
obligations, assessments, fines, penalties, administrative or judicial orders,
costs, expenses, liabilities and damages, including interest, penalties and
reasonable attorneys' fees that any of them may incur which arise, result from
or relate to Lincare's use of such tax identification numbers.
Article 7 - INDEMNIFICATION
7.1 Indemnification.
(a) Company and the UMI Shareholders, jointly and severally;
and the Stephens Shareholders, jointly and severally, shall defend, indemnify
and hold Lincare harmless from, against, and in respect of, any and all claims,
demands, lawsuits, proceedings, losses, obligations, assessments, fines,
penalties, administrative or judicial orders, costs, expenses, liabilities and
damages, including interest, penalties and reasonable attorneys' fees Lincare
may incur, which arise or result from or relate to: (i) Company's or any
Shareholder's misrepresentation or breach of any of their respective
representations or warranties under this Agreement (including, without
limitation, any misrepresentation in, or omission from, any schedule, exhibit,
or other document furnished to Lincare pursuant to this Agreement), or
Company's or any Shareholder's failure to perform any of their respective
covenants, obligations, liabilities, commitments or agreements under this
Agreement; (ii) Lincare's being required to assume or
-33-
<PAGE> 34
discharge any of the Excluded Liabilities as a result of Company's and/or any
Shareholder's failure to promptly assume and discharge any of the Excluded
Liabilities pursuant to this Agreement; or (iii) Lincare's being required to
assume or discharge by operation of law any debt, liability or obligation of
Company or any Shareholder, including, but not limited to, any liability or
obligation arising under any federal, state or local bulk sales, bulk transfer
or fraudulent conveyance law, other than the Accepted Liabilities.
(b) Lincare shall defend, indemnify and hold Company and
Shareholders harmless from, against, and in respect of, any and all claims,
demands, lawsuits, proceedings, losses, obligations, assessments, fines,
penalties, administrative or judicial orders, costs, expenses, liabilities and
damages, including interest, penalties and reasonable attorneys' fees Company
or any Shareholder may incur, which arise or result from or relate to: (i)
Lincare's misrepresentation or breach of any of its representations or
warranties under this Agreement (including, without limitation, any
misrepresentation in, or omission from, any schedule, exhibit, or other
document furnished by Lincare pursuant to this Agreement), or Lincare's failure
to perform any of its covenants, obligations, liabilities, commitments or
agreements under this Agreement; or (ii) Company or any Shareholder being
required to assume or discharge any of the Accepted Liabilities.
(c) Notwithstanding anything to the contrary contained in
this Article 7, Lincare shall not make a claim for indemnification against
Company or the Shareholders under Section 7.1(a)(i) in respect of their
representations and warranties contained in Sections 4.1, 4.4, Sections
4.6(a)-(f),(i),(k)-(m) and Section 4.12 of this Agreement unless the amount of
all such claims, in the aggregate, exceeds Five Hundred Thousand Dollars
($500,000), and then the Lincare shall be entitled to assert all such claims,
including those aggregated to reach the claims threshold amount.
(d) The aggregate liability of Company and the Shareholders
to indemnify Lincare under this Agreement and in connection with the
transactions contemplated hereby shall not exceed Sixty Five Million Dollars
($65,000,000). Lincare agrees that any claim under or pursuant to this
Agreement, or otherwise at law or in equity, which can be brought against any
or all of the Stephens Shareholders (the "Stephens Group") and Company and/or
any or all of the UMI Shareholders (collectively, the "UMI Group") shall be the
responsibility of each such group in accordance with their respective equity
interests, as follows: the UMI Group shall be responsible for Thirty Point
Seven Percent (30.7%) of any such
-34-
<PAGE> 35
claim, up to a maximum aggregate of Twenty Million Dollars ($20,000,000) and
the Stephens Group shall be responsible for Sixty Nine Point Three Percent
(69.3%) of any such claim, up to a maximum aggregate of Forty Five Million
Dollars ($45,000,000).
(e) In the event that Lincare pursues any claim under or
pursuant to this Agreement or otherwise at law or in equity, the parties
acknowledge and agree that Lincare shall have the right to deduct from its
payment obligations under this Agreement in respect of any such claim;
provided, however, prior to making any such deduction, Lincare shall first seek
indemnification from Company and/or Shareholders pursuant to the provisions of
this Article 7, and Company and/or Shareholders shall have indemnified Lincare,
subject to the applicability, if at all, of Section 7.1(c) hereof in respect of
any such claim.
(f) The aggregate liability of Scofield to indemnify Lincare
under this Agreement and in connection with the transactions contemplated
hereby shall not exceed Two Million One Hundred Thousand Dollars ($2,100,000)
Dollars.
(g) Nothing in this Article 7 shall prevent Lincare from
taking all actions necessary to preserve any and all rights it may have against
any party to this Agreement.
7.2 Procedures.
With respect to any claim, demand, lawsuit, action,
proceeding, or assessment (hereinafter referred to as a "Claim") brought by a
third party which may give rise to indemnification under this Agreement from an
indemnitor ("Indemnitor") to an indemnified party ("Indemnified Party"), the
following procedure shall be followed:
(a) Promptly after the assertion of any Claim by a third
party, the Indemnified Party shall notify the Indemnitor in writing of such
Claim. The notice shall specify the facts then known to the Indemnified Party
relating to the Claim and the amount or estimated amount of the liability
claimed by such third party. Promptly after receipt of the written notice, the
Indemnitor shall advise the Indemnified Party whether the Indemnitor intends to
contest such Claim. Indemnitor and Indemnified Party agree that Indemnitor
shall have the right to submit claims properly covered by liability insurance
to the appropriate carrier of such insurance, and both parties agree to
cooperate in such effort.
(b) The Indemnitor shall have the absolute right, in its sole
discretion and at its sole expense, to elect to defend, contest, settle or
otherwise protect against any Claim or action
-35-
<PAGE> 36
which may give rise to a Claim with legal counsel of its own selection;
provided, however, that the Indemnitor shall not agree or consent to any
judgment or settlement that imposes injunctive or equitable relief against the
Indemnified Party without the prior written consent of the Indemnified Party.
The Indemnified Party shall have the right, but not the obligation, to
participate, at its own expense, in the defense thereof through counsel of its
own choice and shall have the right, but not the obligation, to assert any and
all crossclaims and counterclaims it may have. Each party shall, and shall
cause its affiliates to, at all times cooperate in all reasonable ways with,
make its relevant files and records available for inspection and copying by,
and make its employees available or otherwise render reasonable assistance to,
the other party in its defense of any Claim. In the event that the Indemnified
Party shall, before notice is given to the Indemnitor, make any settlement with
respect to any Claim, the Indemnitor shall not be bound to such settlement and
shall not be bound to indemnify for any costs, damages, expenses or other
liabilities resulting from such Claim. Once notice is given to the Indemnitor,
and if the Indemnitor fails timely to accept defense of the Claim, the
Indemnified Party shall have the right, but not the obligation, to defend,
contest, assert crossclaims or counterclaims to otherwise protect against the
same and may make any compromise or settlement thereof and recover and be
indemnified for the entire cost thereof from the Indemnitor including, without
limitation, reasonable legal expenses, disbursements and all amounts paid as a
result of such matter.
7.3 Cumulative Remedies.
In no event shall the rights and remedies afforded by this
Article 7 restrict or impair in any respect the rights or remedies otherwise
available to the parties hereto at law or in equity, which rights and remedies
shall be cumulative and in addition to any other available remedies; provided,
however, nothing in this Section 7.3 shall act to extend the scope or the
duration of any of the rights, remedies, representations, warranties, covenants
or obligations of the parties as set forth in this Agreement.
Article 8 - CONFIDENTIALITY
8.1 Proprietary and Confidential Information.
Company and Shareholders agree, on behalf of themselves and
each of their respective parents, subsidiaries and affiliates that from and
after the Closing, no such person or entity shall, directly or indirectly, use
or disclose to any third party any of
-36-
<PAGE> 37
the proprietary or confidential information of Company, except when, after, and
only to the extent that: (a) such proprietary or confidential information is or
becomes generally available to the public through no fault of Company, any
Shareholder, or any of their respective parents, subsidiaries and affiliates;
(b) such information is required by Company or a Shareholder in connection with
any tax returns heretofore or hereafter filed; or (c) disclosure of such
information is required by court order or applicable law. As used herein, the
term "proprietary and confidential information" of Company shall include all
information of or relating to Company, the Assets and the Business (including,
but not limited to, present or prospective market, sales, product, customer and
referral source information; prices and pricing structure; contractual
arrangements; operating information, policies, procedures and practices;
financial information; product and process knowledge; cost and supplier
information; personnel data relating to employees hired by Lincare; and any
strategy or plans related to any of the foregoing) which has not been generally
available or disclosed to the public by Lincare.
8.2 No Solicitation.
(a) From and after the Closing, neither Company nor any
Shareholder shall:
(i) directly or indirectly, hire, offer to hire, or
entice away, or in any other manner persuade or attempt to persuade, any
officer, employee or agent of Lincare (including, but not limited to, any
former officer, employee or agent of Company), or in any other manner persuade
or attempt to persuade, any officer, employee or agent of Lincare (including,
but not limited to, any former officer, employee or agent of Company) to
discontinue his or her relationship with Lincare. It is understood and agreed
that the prohibitions contained in this Section 8.2(a)(i) shall apply to all
current and future officers, employees and agents of Lincare (including, but
not limited to, any former officer, employee or agent of Company), whether or
not any such person is then currently an officer, employee or agent of Lincare
or whether any such prohibited activity is in connection with employment, an
offer of employment or other action within or outside the Territory.
Notwithstanding anything to the contrary in this Section 8.2(a)(i), Company and
the Shareholders shall have the right to hire as an employee, or engage as an
independent contractor: (A) any employee of Company to whom Lincare, in its
sole discretion, does not extend an offer of employment; (B) any employee of
Company who accepts employment with Lincare and whose employment relationship
with Lincare has been terminated by either party for any reason whatsoever and
such employee has not been
-37-
<PAGE> 38
employed by Lincare for a period of at least one (1) year from any such date of
termination; and (C) former employees of Company who were not employed by
Company at any time on or after June 1, 2000; and Randal Caldwell shall have
the right to hire as an employee, or engage as an independent contractor: (D)
any of his children who are or were employed by Company and/or Lincare; and (E)
up to four (4) "non-management employees" of Lincare (the term "non-management
employees" shall mean any employee to whom no other employee directly reports)
who were formerly Company employees; and (F) Tim McNatt shall have the right to
hire as an employee, or engage as an independent contractor, up to four (4)
non-management employees of Lincare who were formerly Company employees; or
(ii) directly or indirectly solicit, divert or take
away, or attempt to solicit, divert or take away any business or customers
Company had enjoyed or solicited prior to the date hereof or which Lincare may
enjoy or solicit in the Territory after the date hereof.
(b) It is expressly understood and agreed by the parties
hereto that it shall be a breach hereof for Company or any Shareholder to
assist in any way any business associate, or any other person, firm,
corporation, partnership, joint venture, association, trust or other entity, to
engage in any activity which is prohibited by this Section 8.2.
Article 9 - COVENANTS NOT TO COMPETE.
9.1 UMI Covenant.
(a) In consideration of the purchase by Lincare of the Assets
and the Business pursuant to the terms and conditions of this Agreement, and
for other good and valuable consideration, Company and each of the UMI
Shareholders, on behalf of themselves, each of their respective trustees,
beneficiaries, directors and shareholders, and each of their respective
parents, subsidiaries and commonly controlled affiliates (each hereinafter
referred to individually as a "UMI Covenantor" and collectively as the "UMI
Covenantors") hereby represent, warrant, covenant and agree, jointly and
severally (except for Scofield, who hereby represents, warrants, covenants and
agrees severally, but not jointly), that, no UMI Covenantor will, directly or
indirectly, engage in the business of marketing, advertising, selling, leasing,
renting, distributing, or otherwise providing oxygen, oxygen equipment, aerosol
inhalation therapy equipment and respiratory medications, nasal continuous
positive airway pressure devices, infant monitoring equipment and services,
home sleep studies and related therapy equipment, infusion therapy equipment,
drugs, products,
-38-
<PAGE> 39
supplies or services (including, but not limited to, those related to
antibiotic, parenteral, enteral, hydration, chemotherapy, chelation,
terabutaline, pain management, diabetic or renal therapies, drugs for
congestive heart failure, anti-infectives and narcotic analgesics), or any
other respiratory therapy, durable medical or infusion therapy equipment,
products, supplies and services to customers in their homes or other
alternative site care facilities within the Territory. Each UMI Covenantor's
covenant not to compete contained in this Section 9.1 shall commence on the
date hereof and shall continue: (i) for all UMI Covenantors (other than Corbin,
Scofield, Patterson Trust, J. H. Caldwell Trust, J.L. Caldwell Trust, Pool
Trust, C. Caldwell Trust and K. Caldwell Trust) for a period of five (5) years
after the date hereof; (ii) for UMI Covenantor Corbin, until the later of two
(2) years from the date hereof or two (2) years from the date that Corbin's
employment with Lincare ceases for any reason whatsoever; (iii) for UMI
Covenantor Scofield, for a period of three (3) years after the date hereof; and
(iv) for UMI Covenantors Patterson Trust, J. H. Caldwell Trust, J.L. Caldwell
Trust, Pool Trust, C. Caldwell Trust and K. Caldwell Trust, until the later of
three (3) years from the date hereof or three (3) years from the date that any
such UMI Covenantor's employment with Lincare ceases for any reason whatsoever.
Notwithstanding anything to the contrary in this Section 9.1(a), this covenant
not to compete shall not be deemed to apply to Randal E. Caldwell and/or Stacy
Lynn Patterson acting in a professional capacity as a pharmacist for a retail
or hospital pharmacy within the Territory, provided that he or she is not
involved in the sale or marketing of respiratory unit dose medications or
infusion therapy medications (other than to walk-in retail pharmacy customers)
to customers in their homes or other alternative site care facilities or any
other activities which conflict with the provisions of this Section 9.1(a).
(b) Without limiting the generality of the provisions of
Section 9.1(a) hereof, this Covenant Not to Compete shall be construed so that
the UMI Covenantors shall also be in breach hereof if any of them is an
employee, officer, director, shareholder, investor, trustee, agent, principal
or partner of, or a consultant or advisor to or for, or a subcontractor or
manager for, a person, firm, corporation, partnership, joint venture,
association, trust or other entity which is engaged in such business in the
Territory, or if any of them receives any compensation or remuneration from or
owns, directly or indirectly, any outstanding stock or shares or has a
beneficial or other financial interest in the stock or assets of any such
person, firm, corporation, partnership, joint venture, association, trust or
other entity engaged in such business in the Territory. Notwithstanding
anything to the contrary contained in this Section
-39-
<PAGE> 40
9.1(b), the UMI Covenantors shall not be deemed to be in breach of this
Covenant Not to Compete solely by reason of owning an interest of less than
five percent (5%) of the shares of any company traded on a national securities
exchange or in the over the counter market.
(c) It is expressly understood and agreed by UMI Covenantors
that it shall be a breach of this Covenant Not to Compete for any UMI
Covenantor to assist in any way any family member, any business associate, or
any other person, firm, corporation, partnership, joint venture, association,
trust or other entity, to engage in any activity which a UMI Covenantor is
prohibited from engaging in by this Covenant Not to Compete.
9.2 Stephens Covenant.
(a) In consideration of the purchase by Lincare of the Assets
and the Business pursuant to the terms and conditions of this Agreement, and for
other good and valuable consideration, each of the Stephens Shareholders, on
behalf of themselves, each of their respective trustees, beneficiaries,
directors, officers and shareholders, and each of their respective parents,
subsidiaries and commonly controlled affiliates (each hereinafter referred to
individually as a "Stephens Covenantor" and collectively as the "Stephens
Covenantors") hereby represent, warrant, covenant and agree, severally but not
jointly, that commencing on the date hereof and continuing for a period of five
(5) years thereafter, no Stephens Covenantor will, directly or indirectly,
engage in the business of marketing, advertising, selling, leasing, renting,
distributing, or otherwise providing oxygen, oxygen equipment, aerosol
inhalation therapy equipment and respiratory medications, nasal continuous
positive airway pressure devices, infant monitoring equipment and services, home
sleep studies and related therapy equipment, infusion therapy equipment, drugs,
products, supplies or services (including, but not limited to, those related to
antibiotic, parenteral, enteral, hydration, chemotherapy, chelation,
terabutaline, pain management, diabetic or renal therapies, drugs for congestive
heart failure, anti-infectives and narcotic analgesics), or any other
respiratory therapy, durable medical or infusion therapy equipment, products,
supplies and services to customers in their homes or other alternative site care
facilities within the Territory.
(b) Without limiting the generality of the provisions of
Section 9.2(a) hereof, this Covenant Not to Compete shall be construed so that
the Stephens Covenantors shall also be in breach hereof if any of them is an
employee, officer, director, shareholder, investor, trustee, agent, principal
or partner of, or
-40-
<PAGE> 41
a consultant or advisor to or for, or a subcontractor or manager for, a person,
firm, corporation, partnership, joint venture, association, trust or other
entity which is engaged in such business in the Territory, or if any of them
receives any compensation or remuneration from or owns, directly or indirectly,
any outstanding stock or shares or has a beneficial or other financial interest
in the stock or assets of any such person, firm, corporation, partnership,
joint venture, association, trust or other entity engaged in such business in
the Territory.
(c) It is expressly understood and agreed by the Stephens
Covenantors that it shall be a breach of this Covenant Not to Compete for any
Stephens Covenantor to assist in any way any family member, any business
associate, or any other person, firm, corporation, partnership, joint venture,
association, trust or other entity, to engage in any activity which a Stephens
Covenantor is prohibited from engaging in by this Covenant Not to Compete.
Notwithstanding anything to the contrary in this Section 9.2, no Stephens
Covenantor shall be deemed to be in breach of this Covenant Not to Compete: (i)
solely by reason of owning an interest of less than five percent (5%) of the
shares of any company traded on a national securities exchange or in the over
the counter market; or (ii) by reason of conducting investment banking services
for a fee by Stephens, Inc., provided that such investment banking services do
not in any way involve the operation of any business which is engaged in any
activity from which a Stephens Covenantor is prohibited to engage in by this
Covenant Not to Compete.
9.3 Remedies.
UMI Covenantors and Stephens Covenantors (collectively, the
"Covenantors") agree that the remedy at law for any breach of obligation under
the Covenants Not to Compete contained in this Article 9 will be inadequate and
that in addition to any other rights and remedies to which it may be entitled
hereunder, at law or in equity, Lincare shall be entitled to injunctive relief,
and reimbursement for all reasonable attorneys' fees and other expenses
incurred in connection with the enforcement hereof. It is the intention of
Covenantors and Lincare that the Covenants Not to Compete contained in this
Article 9 be fully enforceable in accordance with their respective terms and
that the provisions hereof be interpreted so as to be enforceable to the
maximum extent permitted by applicable law. To the extent that any obligation
to refrain from competing within an area for a period of time as provided in
these Covenants Not to Compete is held invalid or unenforceable, it shall, to
the extent that it is invalid or unenforceable, be deemed void ab initio. The
remaining obligations imposed by the provisions of these Covenants Not to
Compete shall
-41-
<PAGE> 42
be fully enforceable as if such invalid or unenforceable provisions had not
been included herein and shall be construed, to the extent possible, such that
the purpose of these Covenants Not to Compete, as intended by Covenantors and
Lincare, can be achieved in a lawful manner.
9.4 Condition Precedent.
Covenantors acknowledge and agree that their representations,
warranties, covenants, agreements, commitments and obligations contained in the
Covenants Not to Compete contained in this Article 9 are an inducement for, and
a condition precedent to, Lincare's entering into this Asset Purchase Agreement
and that Lincare is specifically relying on such representations, warranties,
covenants, agreements, commitments and obligations of Covenantors in entering
into and performing its obligations under this Asset Purchase Agreement.
Article 10 - EXPENSES; TAXES
10.1 Expenses.
Each of the parties hereto shall bear the fees and expenses
incurred by it in connection with the preparation, negotiation, execution,
delivery, and performance of this Agreement; provided, however, Lincare shall
be responsible for the filing fees associated with the Hart-Scott-Rodino
Antitrust Improvements Act filing referenced in Section 14.11 hereof.
10.2 Taxes.
Lincare shall be responsible for the payment of all taxes,
excises and other governmental charges and/or fees payable in connection with
the sale, conveyance, transfer, assignment and delivery of the Assets hereunder
(including, without limitation, all sales, use, transfer, filing or recording
taxes or fees). Company shall be responsible for the costs of obtaining all
notices and consents and for the preparation of all necessary assignments in
connection with the sale, conveyance, transfer, assignment, and delivery of the
Assets to Lincare hereunder.
Article 11 - BROKERS' FEES AND COMMISSIONS
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on directly among Lincare, Company and
Shareholders without the intervention or assistance of any party not a party to
this Agreement (other than to provide accounting, legal counsel or investment
banking services). No party to this Agreement, nor any third party, has any
-42-
<PAGE> 43
right or claim to any commission, brokerage fee, finder's fee, expenses or
other compensation relative to this Agreement or the transactions contemplated
hereby (other than for accounting, legal and investment banking services). Each
party shall indemnify, defend and hold the other parties hereto harmless from,
against and in respect of all claims for commission, brokerage fee, finder's
fee, expenses or other compensation claimed by or through such party.
Article 12 - GOVERNING LAW
The interpretation and performance of this Agreement shall be governed
by the laws of the State of Arkansas, without giving effect to its conflicts of
law provisions. If a Claim is brought by a third party and a claim for
indemnification becomes necessary, such claim shall be brought in the court
where the original Claim by the third party was filed and each party hereby
consents to the subject matter and personal jurisdiction of such courts,
provided jurisdiction is proper in the jurisdiction where the original Claim
was brought. The laws of the State of Arkansas shall govern all questions
concerning the construction, validity and interpretation of this Agreement and
performance of the obligations hereunder.
Article 13 - NOTICES
All notices, requests, demands, reports, statements or other
communications required to be given hereunder or relating to this Agreement
shall be in writing and shall be deemed to have been duly given on the date of
service if personally served on the respective representative named below of
the party to whom notice is to be given, or on the date of receipt if mailed to
the respective representative named below of the party to whom notice is to be
given, by first class mail, registered or certified, return receipt requested,
postage prepaid, or by nationally recognized overnight courier, and properly
addressed to any such party at the address listed for such party in the first
paragraph of this Agreement. Any party may at any time direct in writing that
all communications or particular communications or particular types of
communications be delivered to specific designees other than those specified
herein by notifying the named representatives of the other parties in the
manner prescribed herein. The names and addresses of the respective
representatives of each of the parties on whom any notice under this Agreement
is to be given pursuant to this Article 13 are as follows:
-43-
<PAGE> 44
If to Company and/or UMI Shareholders:
Randal E. Caldwell
4 Galway Drive
Wynne, Arkansas 72396
If to the Stephens Shareholders:
Stephens, Inc.
c/o Jackson Farrow, Jr., Esq.
111 Center Street
Suite 2400
Little Rock, Arkansas 72201
If to Lincare:
Lincare Inc.
19337 U.S. 19 North, Suite 500
Clearwater, Florida 33764
Attn: President
Article 14 - MISCELLANEOUS
14.1 Entire Agreement.
The terms and conditions of this Agreement (including the
exhibits and schedules hereto) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede any prior
understandings, agreements or representations by or between the parties,
written or oral. There are no understandings, representations or warranties of
any kind whatsoever, except as expressly set forth herein. The exhibits and
schedules attached to this Agreement constitute an integral part hereof for all
purposes, including, without limitation, the construction and interpretation of
the respective rights and obligations of the parties hereto.
14.2 Amendment.
No amendment or modification of this Agreement or waiver of
the terms or conditions hereof shall be binding upon any party unless approved
in writing by, such party or by an authorized representative of such party.
14.3 Non-Waiver.
The failure of any party hereto to enforce at any time any of
the provisions of this Agreement shall not be construed to be a waiver of any
such provisions, nor in any way affect the validity of this Agreement or any
part hereof or the right of any
-44-
<PAGE> 45
party thereafter to enforce any such provisions. No waiver of any breach of
this Agreement shall be deemed a waiver of any other or subsequent breach,
whether of the same provision or otherwise.
14.4 Assignment.
This Agreement shall inure to the benefit of and be binding
on the parties hereto and their respective successors, assigns, legal
representatives and heirs. This Agreement shall not be assigned by any party
without the prior written consent of the other parties. Any attempted
assignment without such consent shall be void. Notwithstanding anything to the
contrary contained in the foregoing, Lincare shall have the right at any time,
and from time to time, to assign this Agreement to its parent or any affiliate
or subsidiary or any successor to its business, without the consent of the
other parties to this Agreement.
14.5 No Third Party Beneficiaries.
This Agreement is intended for the sole and exclusive benefit
of the parties hereto, and no third party or person is intended as a third
party beneficiary of this Agreement or any part hereof in any respect
(including, but not limited to, any employee of Company) and no third party or
person shall obtain any rights, claims, benefits or privileges under or by
virtue of this Agreement whatsoever.
14.6 Construction.
This Agreement has been negotiated at arm's length among the
parties, and each of the parties has been represented by legal counsel.
Accordingly, each of the parties shall be deemed to have participated in the
preparation of this Agreement and this Agreement shall not be construed more
strictly against one party than the other.
14.7 Counterparts.
This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become a
binding agreement when one or more counterparts have been signed by each of the
parties and delivered to the other parties.
14.8 Number.
In this Agreement, where applicable, references to the
singular shall include the plural and references to the plural
-45-
<PAGE> 46
shall include the singular. Without limiting the generality of the foregoing,
the term "UMI Shareholders" when used herein shall be construed to mean any and
each of the UMI Shareholders individually, in addition to all of the UMI
Shareholders, jointly and severally, and the term "Stephens Shareholders" when
used herein shall be construed to mean any and each of the Stephens
Shareholders individually, in addition to all of the Stephens Shareholders,
jointly and severally.
14.9 Gender.
In this Agreement, where applicable, references to the male,
female or neuter gender shall include reference to all other such genders where
the context so requires.
14.10 Headings.
The subject headings of the Articles, Sections and
Subsections of this Agreement are included for purposes of convenience and
reference only, and shall not affect the construction or interpretation of any
of its provisions.
14.11 Hart-Scott-Rodino Act Approvals.
Lincare, Company and Shareholders have obtained all approvals
of the United States Federal Trade Commission or the Antitrust Division of the
United States Department of Justice, as the case may be, which are required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR" Act),
as amended, for the consummation of the transactions contemplated by this
Agreement.
-46-
<PAGE> 47
IN WITNESS WHEREOF, the parties to this Agreement have duly executed
it as of the day and year first above written.
LINCARE INC.
By:
----------------------------------
Title:
-------------------------------
UNITED MEDICAL, INC.
By:
----------------------------------
Title:
-------------------------------
J.T STEPHENS TRUST ONE, UID 9/7/94
By:
----------------------------------
Jackson T. Stephens, Trustee
By:
----------------------------------
Warren A. Stephens, Trustee
WARREN A. STEPHENS TRUST, UID 9/30/87
By:
----------------------------------
Warren A. Stephens, Trustee
-47-
<PAGE> 48
HARRIET CALHOUN STEPHENS TRUST,
UID 3/22/84
By:
----------------------------------
Harriet C. Stephens, Trustee
JOHN CALHOUN STEPHENS 1995 TRUST,
UID 12/4/95
By:
----------------------------------
Jon E.M. Jacoby, Trustee
WARREN MILES AMERINE STEPHENS 1995 TRUST,
UID 12/4/95
By:
----------------------------------
Jon E.M. Jacoby, Trustee
----------------------------------
CAROLINE STEPHENS
LAURA WHITAKER STEPHENS 1995 TRUST,
UID 12/4/95
By:
----------------------------------
Jon E.M. Jacoby, Trustee
BESS C. STEPHENS TRUST, UID 1/4/85
-48-
<PAGE> 49
By:
----------------------------------
Bess C. Stephens, Trustee
ELIZABETH ANN STEPHENS CAMPBELL
REVOCABLE TRUST, U/I/D 8/25/92
By:
----------------------------------
Elizabeth Ann Stephens Campbell,
Trustee
PAMELA DIANE STEPHENS TRUST,
UID 4/10/92
By:
----------------------------------
Pamela Diane Stephens, Trustee
W.R. STEPHENS, JR. REVOCABLE TRUST,
UID 2/19/93
By:
----------------------------------
W.R. Stephens, Jr., Trustee
----------------------------------
Risa J. Lavizzo-Mourey
----------------------------------
Earl Clemmons
By:
----------------------------------
Curtis F. Bradbury
-49-
<PAGE> 50
By:
----------------------------------
Jackson Farrow, Jr.
----------------------------------
C. Ray Gash
----------------------------------
James O. Jacoby, Jr.
----------------------------------
Jon E.M. Jacoby
----------------------------------
Douglas H. Martin
----------------------------------
Robert L. Schulte
----------------------------------
K. Rick Turner
----------------------------------
Nancy Weaver
----------------------------------
Ronnie Corbin
-50-
<PAGE> 51
STACY LYNN PATTERSON TRUST
By:
----------------------------------
Stacy Lynn Patterson, Trustee
JAMES H. CALDWELL TRUST
By:
----------------------------------
James H. Caldwell, Trustee
JODY LEA CALDWELL TRUST
By:
----------------------------------
Jody Lea Caldwell, Trustee
AARON GLEN POOL TRUST
By:
----------------------------------
James H. Caldwell, Trustee
CARLY CALDWELL TRUST
By:
----------------------------------
James H. Caldwell, Trustee
-51-
<PAGE> 52
KATIE CALDWELL TRUST
By:
----------------------------------
James H. Caldwell, Trustee
----------------------------------
JOHN SCOFIELD
----------------------------------
TIMOTHY E. MCNATT
----------------------------------
RANDAL E. CALDWELL
-52-
