SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report: September 18, 1997
QPQ CORPORATION
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(Exact name of registrant as specified in its charter)
FLORIDA 1-12350 65-0611607
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
7777 Glades Road, Suite 211
Boca Raton, Florida 33434
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(Address of executive offices and Zip Code)
Registrant's telephone number, including area code: 561-470-6005
Not Applicable
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On September 3, 1997 QPQ Corporation (the "Company") consummated the sale
of the stock of QPQ Medical Weight Loss Center, Inc. ("QPQ Medical") to Linde
Group, Inc. ("Linde"), a non-affiliated third party, in exchange for $210,000 in
cash and notes, plus the assumption of all liabilities.
The purchase price paid by Linde was the highest offer received by the
Company from bids by non-affiliated third parties. Management believes this
price represents the best attainable market value for QPQ Medical, based upon
the market uncertainties of the weight loss business. This sale completes the
sale of the last of the Company's weight loss clinics, all of which were
consummated prior to the U.S. Food and Drug Administration's recall this week of
two of the most popular and regularly prescribed diet drugs, fenfluramine and
Redux.
Item 5. Other Events.
On September 17, 1997, the Company announced that the Company will, on
October 8, 1997 (the Record Date and the Payable Date), effect a one-for-three
(1-for-3) reverse stock split of the Company's Common Stock, pursuant to which
each three shares of the Company's Common Stock outstanding will be converted
into one share of the Company's Common Stock. Trading in the Company's new
shares will commence at the opening of business on October 9, 1997.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro forma Financial Information.
Not applicable.
(c) Exhibits.
No. Description
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2 Stock Purchase Agreement dated as of September 3, 1997 by
and between QPQ Corporation and Linde Group, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 15, 1997 By: /s/ C. Lawrence Rutstein
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C. Lawrence Rutstein,
President
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AGREEMENT DATED AS OF SEPTEMBER 3, 1997 BETWEEN
QPQ CORPORATION, A FLORIDA CORPORATION AND
LINDE GROUP, INC., A FLORIDA CORPORATION
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 3rd day of September, 1997, by and between
QPQ Corporation, a Florida corporation (hereinafter referred to as the "Seller")
and Linde Group, Inc., a Florida corporation (hereinafter referred to as
"Buyer").
1. Introductory Statement
1.1 Seller is the owner of all of the shares of stock in QPQ Medical
Weight Loss Centers, Inc. ("QPQ Medical") , a Florida corporation.
1.2 QPQ Medical has at various times owned and operated, inter alia,
four (4) weight loss clinics in leased premises located at QPQ Kendall Center,
8700 Kendall Drive, Suite 214, Miami, Florida 33170; QPQ Ft. Lauderdale Center,
2001 NE 49th Court, Ft. Lauderdale, Florida 33308; QPQ Center at Boca Raton, 950
Glades Road, Suite IC, Boca Raton, Florida 33431; and QPQ Aventura Center, 20801
Biscayne Boulevard, Aventura, Florida 33181 (collectively, the "Clinics").
1.3 Linde Group, Inc. is a Florida corporation whose principal address
is 365 N.E. 125th Street, Suite 216, N. Miami, Florida 33181, and is the Buyer
in this agreement.
1.4 On or about July 1, 1997, QPQ Medical sold to High Sierra
Lifestyles, Inc. ("High Sierra',) certain assets of QPQ Medical for cash and two
(2) Promissory Notes in the sum of $25,000.00 and $32,000.00, respectively.
1.5 Buyer desires to acquire all of the stock of QPQ Medical and assume
all outstanding liabilities as set forth herein.
1.6 Seller desires to sell all of the stock of QPQ Medical to Buyer
provided Buyer assumes all liabilities and indemnifier and holds Seller
harmless.
II. Sale of Stock
2.1 Seller agrees to sell and Buyer agrees to purchase all of the stock
of QPQ Medical inclusive of all liabilities of QPQ medical.
III. Purchase Price
The purchase price for the assets described in the preceding Section II
shall be Two Hundred Ten Thousand Dollars ($210,000), which shall be paid as
follows;
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3.1 Sixty Thousand Dollars ($60,000.00) to be paid by cashiers check or
other means acceptable to Seller and delivered to Seller on or before September
3, 1997.
3.2 A Promissory Note (the "Note") made, executed, and delivered for
value by the Buyer in favor of Seller in the original principal sum of
$150,000.00, a specimen copy of which is attached hereto marked Exhibit "A", and
incorporated herein by reference, said Note to be payable in twelve (12) monthly
installments of $5,000.00 each commencing on October 1, 1997, and with a balloon
payment of $90,000 on or before September 30, 1998, accruing interest at ten
percent (10%) per annum.
IV. Additional Consideration
In addition to the purchase price set forth in Section III, the Buyer
agrees to the following:
4.1 Contemporaneous with the execution of this Agreement, Buyer will
arrange for the gathering of all furniture and equipment now owned by High
Sierra (whether previously owned by Gold Coast Lifetime Medical Centers, Inc. or
QPQ Medical) in order for Seller to recoup all monies owned pursuant to the
Asset Purchase Agreement dated July 1, 1997.
4.2 The assignment to Seller by QPQ Medical of all its rights and
collateral under the Asset Purchase Agreement.
4.3 The assignment to Seller of the first security lien as set forth in
the Asset Purchase Agreement and related documents by and between QPQ Medical
and Buyer.
4.4 Additional security for all outstanding obligations between Buyer
and Seller in the form of a first lien on all assets of QPQ Medical and High
Sierra.
4.5 All IDX equipment owned by QPQ Medical shall be transferred to QPQ
Corporation.
4.6 Buyer shall pay by September 30, 1998, any sums not paid on the
Promissory Notes referred to in paragraph 1.4 contained herein, together with
any contingent liabilities and costs relating to the transaction described
therein which Seller incurs.
V. Security For Promissory Notes
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5.1 Buyer hereby pledges to Seller as security a first lien on all
assets of QPQ Medical and High Sierra with the exception of the three (3) assets
as set forth in a Settlement Agreement attached hereto as Exhibit "B".
Notwithstanding the foregoing, prior to September 30, 1997, Seller shall have a
second lien on all accounts receivable of Buyer, but thereafter, Seller shall
have a first lien on all accounts receivable of Buyer. Buyer shall provide
evidence that Seller has a first lien on all assets within seven (7) business
days from and after September 30, 1997.
5.2 Buyer hereby pledges as additional security a first lien on all
assets of Gold Coast Lifetime Medical Centers, Inc., wherever located. Buyer
will obtain a subordination from any and all prior lienholders of record in a
form acceptable to Seller.
5.3 Buyer will execute a Security Agreement, UCC-1 and UCC-3, and any
other documents reasonably necessary to perfect Sellers security interest in the
assets set forth in the schedule.
VI. Prorations and Adjustments
There will be no prorations or adjustments as Buyer is assuming all
liabilities of QPQ Medical.
VII. Closing
This transaction shall be closed on the 3rd day of September, 1997 (the
"Closing Date") at the offices of David A. Carter, P.A.,2300 Glades Road, Suite
210, West Tower, Boca Raton, Florida 33431.
7.1 At the closing, Buyer shall deliver to the Seller:
7.1.1 The cash called for in the previous sections dealing with the
payment of the purchase price and additional considerations.
7.1.2 The executed Promissory Note in the principal sum of
$150,000.00.
7.1.3 Evidence of fire and liability insurance on the Clinics in
form and amount reasonably acceptable to Buyer and which
includes Buyer as "named insured". (As a continuing covenant
of Buyer following the closing, such insurance policy or
equivalent insurance shall be kept in full force and effect
until the said Promissory Notes
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have been paid in full and all obligations hereunder of the
Buyer have been met.)
7.1.4 The Security Agreement pledging the assets listed in Exhibit
"C" as collateral for the obligations under this Agreement and
the said Promissory Notes.
7.1.5 The UCC-1 and UCC-3 Financing Statement.
7.2 At the closing, Seller shall deliver to Buyer all of the stock of
QPQ Medical properly endorsed and any other instruments reasonably necessary to
transfer the assets to be sold hereunder.
7.3 Any other documents reasonably requested by either party to
effectuate this transaction shall be delivered at the closing.
VIII. Buyer's Indemnification of Seller
8.1 The Buyer shall use Buyer's best efforts to obtain the release of
Seller from each lease guaranteed by Seller. If Buyer is unable to obtain such
releases, Buyer will provide indemnification to Seller in a form acceptable to
Seller.
8.2 Buyer shall indemnify and hold Seller harmless from any and all
liabilities of QPQ Medical.
8.3 Buyer shall indemnify and hold Seller harmless from any and all
employment agreements and/or notes to any of the medical personnel of QPQ
Medical.
IX. Representations and Warranties of Buyer
Buyer represents and warrants the following to Seller:
9.1 Buyer is a Florida corporation, in good standing, and has the
authority to execute this Agreement and carry on its business following the
conclusion of the transaction described hereunder.
9.2 The execution, delivery and performance of this Agreement by Buyer
is not in violation of any other agreement or instrument to which the Buyer is a
party or by which the Buyer is bound.
9.3 The foregoing representations and warranties shall be true on the
closing date.
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9.4 As additional consideration, and as a material inducement to the
Seller to sell, in the event that the Buyer or any entity controlled by the
Buyer which operates the Clinics file bankruptcy, then Buyer consents to the
lifting of the automatic stay in favor of Seller for the purpose of re-entering
the premises and taking possession of the collateral located in the Clinics or
at any other location.
9.5 Buyer has inspected the assets and the premises at which QPQ
Aventura Center operates, and accepts the transfer of the assets and the
premises in "where is/as is" condition.
9.6 Buyer will transfer or apply for new licenses or permits to operate
the Clinics in Buyer's name within three (3) business days of the execution of
this Agreement.
9.7 Buyer warrants and represents that Buyer will not use the QPQ name
in any capacity other than the Medical Weight Loss business whatsoever without
the express written consent of Seller.
9.8 Buyer warrants and represents that all revenues generated from the
operations of Aventura Center will be used solely and exclusively for the
operations of Aventura Center.
X. Representations and Warranties of Seller
Seller represents and warrants the following to Buyer:
10.1 Seller is a Florida corporation, in good standing, duly authorized
to enter into this Agreement, and owns all of the assets and other items to he
transferred to Buyer pursuant to this Agreement.
10.2 No litigation or claims of any nature whatsoever are pending or
threatened against or involving the Clinics except as set forth in Exhibit 10.2.
10.3 The representations and warranties of Seller shall be true as of the
date of closing.
10.4 Seller and QPQ Medical (the "Company"), jointly and severally,
represent, warrant, and covenant to and with the Buyer as an inducement to the
Buyer to enter into this Agreement and to consummate the transaction
contemplated hereby as follows:
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10.4.1 Seller and QPQ Medical are each fully able, authorized
and empowered to execute and deliver this Agreement and any other agreement or
instrument contemplated by this Agreement and to perform his or its covenants
and agreements hereunder and thereunder. This Agreement and any such other
agreement or instrument, upon execution and delivery by Seller and QPQ Medical
(and assuming due execution and delivery hereof and thereof by the other parties
hereto and thereto), will constitute a valid and legally binding obligation of
Seller, in each case enforceable against Seller in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws from time to time in
affect which affect creditor's rights generally and by legal and equitable
limitations on the availability of specific performance and other equitable
remedies against Seller under or by virtue of this Agreement or such other
agreement or instrument.
10.4.2 Seller and the Company are corporations duly organized,
validly existing and in good standing under the laws of Florida and has full
power and authority to own, lease and operate its properties and to carry on its
business as now being and as heretofore conducted. The Company is not qualified
or licensed to do business as a foreign corporation in any other jurisdiction
and neither the location of its assets nor the nature of its business requires
it to be so qualified.
10.4.3 As of the date of this Agreement, there are 1000 shares
of the Company's Common Stock authorized and l00 shares of the Company's Common
Stock issued and outstanding, of which 100 shares of the Company's Common Stock
are owned by Seller. There are no subscriptions, options or other agreements or
commitments obligating the Company to issue any shares of its capital stock or
securities convertible into its capital stock.
10.4.4 Annexed hereto as Exhibit 10.4.4 is a true and complete
copy of the Certificate of Incorporation and By-Laws of the Company as in effect
on the date hereof.
10.4.5 Seller is the sole record and beneficial owner of the
100 shares of the Company's Common Stock. Seller holds the Shares free and clear
of any lien, pledge, encumbrance, charge, security interest, claim or right of
another and has the absolute right to sell and transfer the Shares to the Buyer
without the consent of any other person or entity. Upon transfer of the Shares
to the Buyer hereunder, the Buyer will acquire good and marketable title to the
Shares free and clear of any lien, pledge, encumbrance, charge, security
interest, claim or right of another of any kind and nature whatsoever.
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10.4.6 Neither the execution and delivery of this Agreement,
nor the transfer and sale of the Shares and the consummation of the transaction
contemplated hereby, violates any statute, ordinance, regulation, order,
judgment or decree of any court or governmental agency, or conflicts with or
will result in any breach of any of the terms of or constitute a default under
or result in the termination of or the creation of any lien upon the Shares
pursuant to the terms of any contract or agreement to which Seller or the
Company is a party or by which Seller or the Company or its respective assets
are bound.
10.4.7 Neither Seller nor the Company is (i) in violation of
any judgment, order, injunction, award or decree which is binding on either of
them or any of their assets, properties, operations or business which violation,
by itself or in conjunction with any other such violation, would materially and
adversely affect the consummation of the transaction contemplated hereby; or
(ii) in violation of any law or regulation or any other requirement of any
governmental body, court or arbitrator relating to him or it, or to his or its
assets, operations or businesses which violation, by itself or in conjunction
with other violations of any other law, regulation or other requirement, would
materially adversely affect the consummation of the transaction contemplated
hereby.
10.4.8 All requisite consents of third parties, including, but
not limited to, court, governmental or other regulatory agencies, federal, state
or municipal, required to be received by or on the part of Seller or the Company
for the execution and delivery of this Agreement and the performance of their
respective obligations hereunder have been obtained and are in full force and
effect. Seller and the Company have fully complied with all conditions of such
consents.
10.4.9 The financial statements of the Company (i) are in
accordance with the books and records of the Company, (ii) are correct and
complete in all material respects, (iii) present fairly the financial position
and results of operations of the Company as of the respective dates indicated
(subject, in the case of unaudited statements, to normal, recurring adjustments,
none of which were material) and (iv) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis.
10.4.10 C. Lawrence Rutstein is the only officer and director of
the Company and hereby resigns in all capacities of the date of this Agreement.
10.4.11 The Company has filed all federal, state and local tax
returns which are required to be filed by it and all taxes shown to be due
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thereon (together with any applicable penalties and interest) have been paid as
of July 31, 1997. The Company has paid or provided adequate reserves for all
such taxes which have become due for all periods prior to the date of this
Agreement or pursuant to any assessments received by it or which the Company is
obligated to withhold from amounts owing to any employee, creditor or other
third party as at or with respect to any period prior to the date of this
Agreement. To the best knowledge of Seller, the federal income tax returns of
the Company have never been audited by the Internal Revenue Service. The Company
has not waived any statute of limitations in respect of taxes, nor agreed to any
extension of time with respect to a tax assessment or deficiency.
10.4.12 Exhibit "D" attached hereto lists the payables of which
the Seller is aware as of the date of closing. Buyer acknowledges that claims by
employees for past vacation time, termination pay, etc. shall be Buyer's
responsibility. Buyer shall be responsible for the payable list on Exhibit "D"
attached hereto.
XI. Conduct of Business Prior to Closing
Between the date of this Agreement and September 3, 1997, Buyer shall
operate and maintain the Business in the usual course, and will use its best
efforts to preserve intact the business relationship with suppliers, customers,
distributors and employees.
XII. Default
No party may be held in default under this Agreement or under the
Promissory Note unless it has received five (5) business days written notice
from the other party. However, interest and penalties shall accrue under the
terms of the said Promissory Notes without regard to such notice.
XIII. Miscellaneous
13.1 Captions. The captions of this Agreement are for convenience and
reference only and in no way define, describe, extend or limit the scope or
intent of this Agreement or the intent; of any provision in it.
13.2 Invalidity of Provisions. The unenforceability, for any reason, of
any term, condition, covenant or provision of this Agreement shall neither limit
nor impair the operation, enforceability or validity of any other terms,
conditions, provisions or covenants of the Agreement.
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13.3 Construction. This Agreement shall not be construed against either
party regardless of who is responsible for its drafting.
13.4 Arbitration. In the event that any dispute arises under this
Agreement which cannot be resolved between the parties, the parties hereto
stipulate and agree to submit such dispute to nonbinding pre-suit mediation. The
parties shall select a mediator from the list of certified Circuit Court
mediators maintained by the office of the Palm Beach County Circuit Court and no
suit shall be filed until fifteen (15) days after the mediator has declared an
impasse.
13.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without giving effect to the
conflict of laws rules of the State of Florida. The parties agree that any
action brought by and party against another party in connection with any rights
or obligations arising out of this Agreement shall be instituted properly in a
federal or state court of competent jurisdiction with venue only in the
Seventeenth Judicial Circuit Court in and for Broward County, Florida or the
United States District Court for the Southern District of Florida, Fort
Lauderdale Division. A party to this Agreement named as a Defendant in any
action brought in connection with this Agreement in any court outside of the
above named designated county or district shall have the right to have the venue
of said action changed to the above designated county or district or, if
necessary, have the case dismissed, requiring the other party to refile such
action in an appropriate court in the above designated county or federal
district. If a party is not a resident of or does not maintain a presence in the
above designated state in which the designated county of venue is situated, then
such party hereby consents to personal jurisdiction of a court of competent
subject matter jurisdiction located in the above designated state and county of
federal district. The parties acknowledge that this Agreement is executed in,
and that a material portion of each party's obligations under this Agreement are
to be performed in, the above designated State and county and federal district.
13.6 Good Faith Efforts and Further Steps. The parties to this Agreement
covenant to use their best efforts in good faith to comply with the provisions
of this Agreement, both before and after execution of this Agreement or any
documents required by this Agreement. In this regard the parties agree to take
such further steps and execute such documents as are reasonably required by
another party.
13.7 Assignment. Seller shall have the right to assign this Agreement
without the prior written consent of Buyer.
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13.8 Entire Agreement. This Agreement constitutes the entire Agreement of
the parties and may not he amended or modified except in writing signed by all
parties. All prior understandings and Agreements among the parties are merged in
this Agreement, which alone fully and completely expresses their understanding.
Any prior agreements among any of the parties to this Agreement concerning the
subject hereof are hereby declared null and void.
13.9 Notice. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if the same shall be in
writing and shall be delivered personally or sent by registered or certified
mail, postage prepaid and addressed as follows;
If to Buyer: Linde Group, Inc.
365 N.E. 125th Street, Suite 216
N. Miami, Florida 33181
With a copy to: Leonard S. Gorman, Esq.
2655 S. LeJeune Road
Penthouse I-D
Coral Cables, Florida 33134
If to Seller: C. Lawrence Rutstein, President
QPQ Corporation
7777 Glades Road, Suite 211
Boca Raton, Florida 33434
With a copy to: David A. Carter, P.A.
2300 Glades Road
Suite 210, West Tower
Boca Raton, Florida 33431
13.10 Attorney Fees and Costs. In connection with any litigation arising
out of this Agreement, the prevailing Party shall be entitled to recover all
costs incurred including attorney's fees for services rendered in connection
with any enforcement or breach of contract, including appellate proceedings and
post judgment proceedings. In connection with any legal fees for the
transactions herein contemplated, Buyer and Seller will each pay their own legal
fees and costs.
13.11 Successors. This Agreement shall be binding on and inure to the
benefit of the parties and their respective successors, assigns and personal
representatives.
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13.12 Legal and/or Tax Consequences. The parties acknowledge and agree
that the transactions contemplated herein involves' significant legal and tax
consequences, and that they have been advised to seek independent professional
legal and tax advice to carefully analyze the consequences, risks and merits of
this transaction.
13.13 Legal Representation. The parties acknowledge that each has been
represented and advised by separate counsel and have signed this document of
his, her or its owns volition.
13.14 Execution in Counterparts. This Agreement may be signed in
counterparts, but all such counterparts shall be considered as a single
document.
13.15 Accounting. Commencing October 15, 1997, and the fifteenth of each
month thereafter, Buyer shall provide to Seller monthly operating statements
prepared in accordance with generally accepted accounting principles.
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IN WITNESS WHEREOF, the parties hereunto executed this agreement as of the
date set forth above.
QPQ CORPORATION
By: /s/ C. Lawrence Rutstein
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C. Lawrence Rutstein, President
LINDE GROUP, INC.
By: /s/ Michael Linde
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Michael Linde, President
STATE OF FLORIDA )
) SS
COUNTY OF PALM BEACH )
I HEREBY CERTIFY that on this day, before me, personally appeared C.
Lawrence Rutstein, President of QPQ Corporation, and that he, as such officer,
being authorized so to do, executed the foregoing instrument for the purposes
therein contained and did (did not) take an oath.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal this
3rd day of September, 1997.
/s/ Notary Public
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Notary Public
STATE OF FLORIDA )
) SS
COUNTY OF PALM BEACH )
I HEREBY CERTIFY that on this day, before me, personally appeared Michael
Linde, who is President of Linde Group, Inc., and that he, as such officer,
being authorized so to do, executed the foregoing instrument for the purposes
therein contained and did (did not) take an oath.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal this
3rd day of September, 1997.
/s/ Notary Public
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Notary Public
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