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Exhibit 10.2
AGREEMENT FOR SALE AND PURCHASE OF ASSETS
AND COVENANT NOT TO COMPETE
THIS
AGREEMENT is made as of the 1st day of September, 2007, by and
between
BEACON RESPIRATORY SERVICES OF COLORADO, INC., a Delaware
corporation (the
"Seller"), an address of which is c/o Arcadia Resources, Inc.,
26777 Central
Park Blvd., Southfield, MI 48706, and ALLCARE, INC., a Colorado
corporation (the
"Buyer"), an address of which is c/o Aerocare Holdings, Inc., 3325
Bartlett
Blvd., Orlando, Florida 32811.
WITNESSETH:
WHEREAS, the Seller operates a durable medical equipment and
respiratory
therapy business in the State of Colorado (all of the business
lines of the
Seller are collectively herein referred to as the "Business");
and
WHEREAS, the Buyer desires to purchase from the Seller
substantially all of
the assets of the Business (together as herein described and
described in
Section 1 sometimes referred to as the "Assets"), including but not
limited to
all personal property, inventory and fixed assets, motor vehicles,
contracts,
franchise agreements, machinery and equipment (including leased
equipment under
any operating leases specifically assumed herein by the Buyer),
office
equipment, computer equipment and software, and furniture,
furnishings and
fixtures, plus all of the Seller's rights in: (a) all of the
intangible assets
of the Business listed on the Schedule of Intangible Assets and
Telephone
Numbers attached hereto as EXHIBIT 1-C1; (b) the telephone numbers
listed on the
Schedule of Intangible Assets and Telephone Numbers attached hereto
as EXHIBIT
1-C1; (c) the Patients' List of the Business with information
current at least
through July 31, 2007 (the "Patients' List of the Business")
attached hereto as
EXHIBIT 1-C2; (d) all of the Seller's prepaid assets and non-bank
deposits; (e)
the "Included Revenues" of the Business as defined below; and (f)
all other
assets of any kind utilized by Seller in the Business, whether in
existence as
of the Closing Date or acquired or on hand at any time thereafter,
including but
not limited to all other assets owned by Seller, and any other
assets disclosed
in Seller's Financial Statements. Expressly excluded from the
Assets
(collectively, the "Excluded Assets") are accounts receivable of
the Business
representing billing for sales up to but not after August 31, 2007,
billing for
rental patients up to but not after August 16, 2007 and billing for
new rental
setups up to but not after August 16, 2007, the cash and bank
deposits of the
Business, and any other assets which the Buyer and Seller deem to
be "Excluded
Assets" by the inclusion of such assets on the Schedule of Excluded
Assets
attached hereto as EXHIBIT 1-C3. Buyer also desires to purchase
from the Seller,
and the Seller desires to sell to Buyer, that certain covenant not
to compete as
described elsewhere in this Agreement (the "Covenant Not to
Compete").
NOW,
THEREFORE, in consideration of the mutual promises contained
herein
and for other good and valuable consideration, the receipt and
sufficiency of
which is hereby acknowledged, it is hereby agreed as follows:
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1.
Sale of Assets and Covenant Not to Compete. The Seller shall as of
the
Closing Date referred to below, sell, assign and transfer to the
Buyer all of
the Seller's Assets, including but not limited to:
a. Inventory and Fixed Assets. All of the Seller's rights, title
and
interest in the inventory and fixed assets of the Business,
including but not
limited to those set forth on the Schedule of Inventory and Fixed
Assets
attached hereto as EXHIBIT 1-A;
b. Motor Vehicles. All of the Seller's rights, title and interest
in
the motor vehicles of the Business, including but not limited to
those set forth
on the Schedule of Motor Vehicles attached hereto as EXHIBIT
1-B;
c. Other Assets. All of the Seller's rights, title and interest in
all
contracts, franchise agreements, machinery and equipment (including
leased
equipment under any operating leases specifically assumed herein by
the Buyer),
office equipment, computer equipment and software, and furniture,
furnishings
and fixtures of the Business, plus all of the Seller's rights in:
(a) all of the
intangible assets of the Business listed on the Schedule of
Intangible Assets
and Telephone Numbers attached hereto as EXHIBIT 1-C1; (b) the
telephone numbers
listed on the Schedule of Intangible Assets and Telephone Numbers
attached
hereto as EXHIBIT 1-C1; (c) the Patients' List of the Business
attached hereto
as EXHIBIT 1-C2; (d) all of the Seller's prepaid assets and
non-bank deposits;
(e) any and all revenues of the Business resulting from: (1) sales
of the
Business after August 31, 2007, (2) billings pertaining to rental
patients after
August 16, 2007, and (3) billings pertaining to new rental setups
after August
16, 2007 (collectively, the "Included Revenues"), and (f) all other
assets of
any kind utilized by Seller in the Business, whether in existence
as of the
Closing Date or acquired or on hand at any time thereafter,
including but not
limited to all other assets owned by Seller, and any other assets
disclosed in
Seller's Financial Statements. The Excluded Assets listed on the
Schedule of
Excluded Assets attached hereto as Exhibit 1-C3 are not being sold
by this
Agreement. In the event any person or entity asserts a claim that
any Assets
purchased by Buyer hereunder are not owned by Seller, Seller shall
be solely
responsible for satisfying such claim by use of the proceeds of the
Purchase
Price for that purpose; and
d. Covenant Not to Compete. Grant to Buyer, the Covenant Not to
Compete.
2.
Purchase Price Provisions.
a. Purchase Price. The purchase price for the Assets and the
Covenant
Not to Compete (the "Purchase Price") shall be One Million Two
Hundred Thousand
Dollars ($1,200,000), less Forty-Eight Thousand Dollars ($48,000)
),
representing the amount owed by the Seller to Steven Richards &
Associates, Inc.
on the Closing Date (the "SRA Commission Obligation"), which amount
shall be
paid by Buyer to Steven Richards & Associates, Inc. by wired
funds delivered to
Steven Richards & Associates, Inc. on the Closing Date (or on
the next banking
day following the Closing Date if all documents contemplated to be
executed at
Closing were fully executed after 12:01 p.m., E.D.T. on the Closing
Date). The
SRA Commission Obligation to be paid on the Closing Date does not
include any
commission payable by Seller to Steven Richards & Associates,
Inc. after the
Closing Date. The net Purchase Price shall be payable pursuant to
Section 2.b
hereof. Seller represents and warrants that no payoff is required
to be made at
Closing with respect to Seller's obligations for assumed leases and
other
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obligations for the reason that the amount of such obligations as
of the Closing
Date is Zero Dollars ($-0-) as more specifically described on the
Schedule of
Assumed Leases and Other Obligations attached hereto as EXHIBIT
2-A1.
The Purchase Price shall be allocated among the Assets and the
Covenant Not to
Compete on a post-Closing basis with the agreed upon allocation set
forth on an
Allocation Schedule to be attached hereto as EXHIBIT 2-A2. The
Buyer and Seller
shall jointly prepare and agree to an allocation of the Purchase
Price no later
than by September 30, 2007.
b. Method of Payment. The net Purchase Price will be paid by Buyer
to
Seller on the Closing Date (or on the next banking day following
the Closing
Date if all documents contemplated to be executed at Closing were
fully executed
after 12:01 p.m., E.D.T., on the Closing Date) by wired funds to
Seller's
designated account number as set forth on the Schedule of Wire
Instructions
attached hereto as EXHIBIT 2-B.
c. Indemnity Against Creditors Claims; Limited Assumption of
Liabilities. Seller warrants and represents to Buyer that this
Agreement is not
subject to any bulk sales requirements, and Seller shall indemnify
Buyer against
all costs and expenses in the event Buyer is required to pay any
claim, debt or
demand of or against Seller relating thereto. The Seller represents
that, as of
the Closing Date, there are no liens, encumbrances or security
interests on any
of the Assets. Notwithstanding anything contained in this Agreement
to the
contrary, the Buyer expressly states that it is assuming no
existing liabilities
or obligations of any kind in connection with its purchase of the
Assets except
for the obligations of Seller after August 31, 2007 under that
certain Business
Lease dated February 21, 2005 (pertaining to the building space
having a street
address of 955 East 58th Avenue, Unit O, Denver, Colorado 80216),
between the
Seller and Ogden North Enterprises, LLC (the "Denver Landlord"), a
copy of which
is attached hereto as part of EXHIBIT 2-C, with such assumption
contingent upon
the execution by the Seller of that certain related Assignment of
Lease dated as
of September 1, 2007, and the execution by the Denver Landlord of
that certain
related Landlord's Consent.
3.
Effective Date; Closing Date. The effective date for the
transactions
contemplated under this Agreement will be 12:01 a.m. on September
1, 2007 (the
"Effective Date"). The date upon which this Agreement and the other
documents
contemplated hereby are to be executed by the parties hereto or
thereto is
hereinafter referred to as the "Closing" or "Closing Date." Closing
shall take
place at such time and place or in such a manner as may be agreed
upon by the
parties. Buyer shall be entitled to the Included Revenues and to
all other
revenues generated by the Assets on and after the Effective
Date.
4.
Instruments of Conveyance and Transfer. At the Closing:
a. The Seller will deliver to the Buyer on the Closing Date,
such
bills of sale, assignments and other good and sufficient
instruments of
conveyance and transfer in form sufficient to sell, assign and
transfer the
Assets, such documents to contain full warranties of title, and
which documents
shall be effective to vest in the Buyer good, absolute, and
marketable title to
the Assets of the Business being transferred to the Buyer by
Seller, free and
clear of all liens, charges, encumbrances and restrictions of any
kind.
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b. Simultaneously with such delivery, the Seller will take all
steps
as may be requisite to put the Buyer in actual possession,
operation and control
of the Assets to be transferred hereunder.
5.
Sales and Transfer Taxes Fees. All applicable sales, transfer,
use,
filing and other taxes and fees that may be due or payable as a
result of the
conveyance, assignment, transfer or delivery of the Assets of the
Business to be
conveyed and transferred as provided herein, whether levied on the
Seller or the
Buyer, shall be borne by the Buyer, and the Buyer indemnifies the
Seller in the
event the Seller incurs expenses pertaining to such taxes and
fees.
6.
Certain Seller Covenants Through the Closing Date; Certifications
of
Seller at Closing.
a. Certain Seller Covenants Through the Closing Date. From July
31,
2007 until the Closing Date, the Seller: (i) used Seller's best
efforts to
conduct the Business in a reasonable and prudent manner in
accordance with past
practices; (ii) did not engage in any transactions out of the
ordinary course of
business; (iii) used Seller's best efforts to preserve the existing
business
organization of the Seller and the Seller's relations with its
employees,
customers, franchisors, suppliers and others with whom it has a
business
relationship; (iv) used Seller's best efforts to preserve and
protect the
Seller's Assets; (v) did not sell, encumber or dispose of any of
Seller's
assets, except such as are retired or replaced in the ordinary
course of
business; (vi) conducted Seller's business in compliance with all
applicable
laws and regulations; (vii) did not make any distributions to any
of the
shareholders or unit holders of the Seller, or make either interest
or principal
payments on shareholder, unit holder or related party notes or
loans, or make
any other withdraws other than in the ordinary course of business,
unless
disclosed to and approved in writing by the Buyer; (viii) did not
pay any
bonuses or make any salary or wage increases to employees of the
Seller, unless
disclosed to and approved by the Buyer; and (ix) took no actions
which might be
adverse to the interests of the Seller, the Buyer, or the
Business.
b. Certifications of Seller At Closing. The Seller hereby
certifies
that, during the period from July 31, 2007 through the Closing
Date:
i. There has
been no material deterioration or other material
adverse effect to the Assets being acquired or operating
results of Seller and there has been no material adverse
change in the financial affairs of Seller which has not been
disclosed to the Buyer in writing prior to the Closing Date
and that none is anticipated subsequent to the Closing Date.
ii. Seller has all
permits, licenses, consents, certificates and
approvals required by all federal, state and local
governmental agencies to operate its businesses and to use
its assets for the intended purposes of such assets.
iii. Except as disclosed in the exhibits hereto, there are no
management, service, supply, maintenance or other contracts
or
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agreements which are applicable to or affect the assets of
the Seller or the
operation of the Business.
7.
Representations and Warranties by Seller. The Seller represents
and
warrants to Buyer that each of the following representations and
warranties is
true and correct as of the Effective Date and again as of the
Closing Date, and
are made with the full understanding that such representations and
warranties
constitute a material inducement to Buyer to enter into the
transactions
contemplated hereby:
a. Organization of Seller; Qualification; Power and Authority.
The
Seller is a corporation duly organized, validly existing and in
good standing
under the laws of the State of Delaware, with all requisite
corporate power and
authority to carry on its business as presently conducted, and is
registered or
qualified to do business in all jurisdictions where the nature of
its business
requires such registration or qualification, except where failure
to be so
qualified could not have a material adverse affect on the Business,
the Assets
or its results of operations, prospects or conditions (financial or
otherwise).
The Seller is not in default under any provisions of its Articles
of
Incorporation, as amended, or its By-laws, as amended. The Seller
has no
subsidiaries and has no direct or indirect equity interest in any
other firm,
corporation, company or business enterprise. Marvin R. Richardson
is the
President and a Director of the Seller. Lynn K. Fetterman is
the
Secretary/Treasurer and a Director of the Seller. Arcadia Products,
Inc., a
Delaware corporation, is the sole stockholder of the Seller and is
the holder of
all of the equity ownership interest in the Seller. Arcadia
Resources, Inc., a
Nevada corporation, is the ultimate parent corporation of Arcadia
Products, Inc.
b. Corporate Acts and Proceedings; Valid and Binding Obligations.
The
sale and transfer of the Assets by the Seller, as provided for in
this
Agreement, have been approved and consented to by the Board of
Directors of the
Seller, and all actions required by any applicable law by the
stockholders of
the Seller, if any, with regard to such sale or transfer of the
Assets by
Seller, have been appropriately authorized and accomplished. This
Agreement and
all other agreements contemplated hereby have been duly and validly
executed and
delivered by Seller and, assuming this Agreement and the agreements
contemplated
hereby constitute the valid and binding obligation of Buyer, will
constitute
valid and binding obligations of Seller enforceable against Seller
in accordance
with each agreement's terms, except to the extent that such
enforcement may be
subject to applicable bankruptcy, insolvency, reorganization,
moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights
generally, and the remedy of specific performance and injunctive
and other forms
of equitable relief may be subject to equitable defenses and to the
discretion
of the court before which any proceeding therefor may be
brought.
c. Related Party Obligations; Certain Distributions.
i. Except as set forth in the Schedule of Related Party
Obligations and Certain Distributions attached hereto as EXHIBIT
7-C, there are
no outstanding or unpaid loans or other obligations to or from
stockholders,
members, unit holders, directors, officers, managers or any other
affiliate or
related entity, except for compensation paid by the Seller to
employees in the
ordinary course of business.
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ii. Except as set forth in the Schedule of Related Party
Obligations and Certain Distributions attached hereto as EXHIBIT
7-C, the Seller
has not made any payments, dividends or other distributions to any
stockholders,
members, unit holders, directors, officers, managers or any other
affiliate or
related entity between July 31, 2007 and the Closing Date.
d. Financial Statements. Seller has furnished Buyer with
balance
sheets of the Seller (collectively, the "Balance Sheets") dated
December 31,
2006, January 31, 2007, February 28, 2007, March 31, 2007, April
30, 2007, May
31, 2007, June 30, 2007 and July 31, 2007 (the July 31, 2007 date
is sometimes
herein referred to as the "Last Balance Sheet Date"), and the
related statements
of income for the Seller (collectively, the "Income Statements")
for the periods
ended December 31, 2006, January 31, 2007, February 28, 2007, March
31, 2007,
April 30, 2007, May 31, 2007, June 30, 2007 and July 31, 2007,
copies of which
are attached hereto as EXHIBIT 7-D (the Balance Sheets and Income
Statements are
collectively referred to herein as the "Financial Statements"). The
Financial
Statements: (i) are in accordance with the books and records of the
Seller; (ii)
fairly represent the financial condition of the Seller at such date
and the
results of its operations for the periods specified; (iii) were
prepared on a
basis consistent with prior accounting periods; (iv) with respect
to all
contracts and commitments of the Seller, reflect adequate reserves
for all
reasonably anticipated losses and costs in excess of anticipated
income; and (v)
with respect to the Balance Sheets, disclose all of the debts,
liabilities and
obligations of any nature (whether absolute, accrued, contingent,
or otherwise)
of the Seller at the Last Balance Sheet Date and include the
appropriate
reserves for all taxes and other accrued liabilities, except that
certain
contingent liabilities, if not disclosed on the Balance Sheets,
shall be
considered to be disclosed pursuant to this subsection, if
disclosed on an
Exhibit to this Agreement. The Seller covenants and agrees to
deliver to Buyer,
post-Closing, the balance sheet of the Seller and the related
statement of
income for the month ended August 31, 2007, promptly following
completion of
such financial statements by Seller but in no event later than
September 30,
2007.
e. Existing Obligations. All of the debts, liabilities and
obligations
of the Seller are listed on the Schedule of Liabilities attached
hereto as
EXHIBIT 7-E and such schedule accurately reflects all of the
Seller's "Existing
Obligations" (as hereinafter defined) as of the Closing Date. The
term "Existing
Obligations" shall mean and refer to all of the Seller's debts,
liabilities and
obligations of any nature (whether absolute, accrued, contingent,
or otherwise)
on the Closing Date, including but not limited to any and all
accounts payable,
trade payables, lease obligations, indebtedness for borrowed money,
accrued
interest, contractual obligations, etc. The Seller warrants and
represents that
the aggregate amount of the Existing Obligations is not in excess
of Zero
Dollars ($-0-) as of the Closing Date. The Seller acknowledges that
the purchase
price for the Assets is based on the accuracy of Seller's
representations and
warranties contained in this Agreement, including but not limited
to the
Seller's representations and warranties contained in this
subsection. Seller
shall continue to be liable for all Existing Obligations and shall
pay in full,
no later than the Closing Date, any and all Existing Liabilities
including any
Existing Obligations which encumber any of the Assets. Promptly
upon payment of
any Existing Obligations which encumber any of the Assets, Seller
shall obtain
and cause to be filed of public record, all releases and
terminations necessary
to extinguish all liens of record encumbering the Assets.
f. Undisclosed Liabilities. The Seller has no debt, liability
or
obligation of any kind (and, to the knowledge of Seller, there are
no facts in
existence as of the Closing Date
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that could reasonably be expected to result in any present or
future action,
suit, proceeding, hearing, investigation, charge, complaint, claim
or demand
against the Seller that would give rise to any debt, liability or
obligation),
whether accrued, absolute, contingent or otherwise, including,
without
limitation any liability or obligation on account of taxes or any
governmental
charge or penalty, interest or fine, except liabilities incurred
after July 31,
2007 in the ordinary course of business that did not, individually
or in the
aggregate, have a material adverse effect on the Business, assets,
results of
operations, prospects or condition (financial or otherwise) of the
Seller as of
the Closing Date.
g. Present Status. Except as disclosed on the Schedule of
Exempted
Transactions attached hereto as EXHIBIT 7-G, since July 31, 2007,
the Seller has
not made any expenditures nor incurred any obligations or
liabilities, except in
the ordinary course of business; discharged or satisfied any liens
or
encumbrances, except in the ordinary course of business; declared
or made any
payment or distribution to any of the stockholders of Seller or
purchased or
redeemed any of its common capital stock or ownership units or
agreed to do so;
mortgaged, pledged or subjected to lien or encumbrance any of its
assets; sold
or transferred any assets, except in the ordinary course of
business; suffered
any damage or loss (whether or not covered by insurance),
materially affecting
its properties; waived any rights of substantial value; nor entered
into any
transaction other than in the ordinary course of business.
h. Tax Returns and Audits. The Seller has duly filed all
Federal,
State and local tax returns required to be filed by, or with
respect to, the
Seller, and has paid the taxes for all periods covered by such
returns. The
Seller has not been delinquent in the payment of any tax,
assessment or
governmental charge. The Seller has not had, and, to the knowledge
of the
Seller, there are no facts in existence as of the Closing Date that
could
reasonably be expected to result in, any tax deficiencies proposed
or assessed
against it and has not executed any waiver of the statute of
limitations on the
assessment or collection of any tax. The Seller's Federal and State
tax returns
have never been audited by the Internal Revenue Service or the
Department of
Revenue of the State of Colorado. Copies of the Seller's Federal
Income tax
return for the periods ending March 31, 2005 and March 31, 2006,
are attached
hereto as EXHIBIT 7-H. The Seller is not a party to any tax sharing
agreements
with any other affiliates. The Seller covenants and agrees to
deliver to Buyer,
post-Closing, the Seller's Federal Income tax return for the twelve
(12) month
tax period ending March 31, 2007, promptly after the same is filed
with the
Internal Revenue Service.
i. Litigation. Except as disclosed on the Schedule of Litigation
and
Other Legal Proceedings attached hereto as EXHIBIT 7-I, there are
no legal
actions, suits, arbitrations, or other legal, administrative, or
other
governmental proceedings pending or, to the knowledge of Seller,
threatened
against the Seller, which, if adversely determined, could
reasonably be expected
to, individually or in the aggregate, materially impair the right
of the Seller
to carry on the Business substantially as now being conducted or
would result in
a material adverse effect on the business, assets, results of
operations,
prospects or conditions (financial or otherwise) of the Seller, and
Seller is
not aware of any facts or circumstances which to the knowledge of
Seller may
(with or without notice or lapse of time) reasonably give rise to,
serve as a
basis for or result in any such action, suit, claim, arbitration,
or other
proceedings against or involving the Seller.
j. Compliance With Articles, Bylaws and Other Instruments and
Laws;
Noncontravention. The Seller is not in violation of any provisions
of, nor will
the performance
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of this Agreement by the Seller violate, its Articles of
Incorporation, as
amended, its Bylaws, as amended, or any indebtedness, mortgage,
contract, lease
or other agreement or commitment. The business and operation of the
Seller have
been and are being conducted in accordance with all applicable
laws, rules and
regulations of all authorities, except those which do not (either
individually
or in the aggregate) materially and adversely affect the Seller or
its
properties, assets, businesses or prospects. Neither the execution
and the
delivery of this Agreement, nor the consummation of the
transactions
contemplated hereby, will (i) to the knowledge of the Seller,
violate any
constitution, statute, regulation or rule, (ii) violate any
injunction,
judgment, order, decree, ruling, charge, or other restriction of
any government,
governmental agency, or court to which the Seller is subject or
(ii) conflict
with, result in a breach of, constitute a default under, result in
the
acceleration of, create in any party the right to accelerate,
terminate, modify,
or cancel, or require any notice under any agreement, contract,
lease, license,
instrument, or other arrangement to which the Seller is a party or
by which it
is bound or to which any of the Assets are subject (or result in
the imposition
of any lien or encumbrance upon any of the Assets). The Seller does
not need to
give any notice to, make any filing with, or obtain any
authorization, consent,
or approval of any government or governmental agency in order for
the parties to
consummate the transactions contempl