EXHIBIT 10.1
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
between
VITALWORKS INC.
and
CERNER CORPORATION
DATED AS OF NOVEMBER 15, 2004
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Definitions....................................................1
Section 1.2 Other Definitional Provisions..................................6
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase and Sale of Assets....................................7
Section 2.2 Consents.......................................................8
Section 2.3 Excluded Assets of the Business................................9
Section 2.4 Assumption of Certain Obligations of the Business.............10
Section 2.5 Retained Liabilities of the Business..........................11
Section 2.6 Purchase Price................................................11
Section 2.7 Purchase Price Adjustment.....................................11
ARTICLE III
CLOSING
Section 3.1 Closing.......................................................13
ARTICLE IV
CONDITIONS TO CLOSING
Section 4.1 Conditions to the Obligations of Purchaser and VitalWorks.....14
Section 4.2 Conditions to the Obligations of Purchaser....................14
Section 4.3 Conditions to the Obligations of VitalWorks...................15
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF VITALWORKS
Section 5.1 Organization..................................................16
Section 5.2 Authority; Binding Effect.....................................16
Section 5.3 Non-Contravention.............................................16
Section 5.4 Governmental Authorization....................................16
Section 5.5 Financial Information.........................................16
Section 5.6 Absence of Material Changes...................................17
Section 5.7 No Litigation.................................................17
Section 5.8 Compliance with Laws..........................................18
Section 5.9 Environmental Matters.........................................19
Section 5.10 Material Contracts............................................19
Section 5.11 Intellectual Property.........................................20
Section 5.12 Real Property.................................................21
Section 5.13 Assets........................................................22
Section 5.14 Taxes.........................................................22
Section 5.15 Employee Benefits.............................................22
Section 5.16 Employees.....................................................23
Section 5.17 Certain Payments..............................................23
Section 5.18 Federal Funding...............................................23
Section 5.19 SEC Filings...................................................24
Section 5.20 Customer Contracts............................................24
Section 5.21 Disclosure....................................................24
Section 5.22 Brokers.......................................................25
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 6.1 Organization and Qualification................................25
Section 6.2 Corporate Authorization.......................................25
Section 6.3 Binding Effect................................................25
Section 6.4 Non-Contravention.............................................25
Section 6.5 Governmental Authorization....................................25
Section 6.6 Third Party Approvals.........................................25
Section 6.7 Financial Capability..........................................26
Section 6.8 Condition of the Business.....................................26
Section 6.9 Litigation....................................................26
Section 6.10 Brokers.......................................................26
ARTICLE VII
COVENANTS
Section 7.1 Information and Documents.....................................27
Section 7.2 Conduct of Business...........................................27
Section 7.3 Reasonable Best Efforts; Certain Governmental Matters.........28
Section 7.4 Employees and Employee Benefits...............................29
Section 7.5 Bulk Transfer Laws............................................30
Section 7.6 No Solicitation...............................................30
Section 7.7 Noncompetition................................................30
Section 7.8 Transitional Services; License Agreements.....................33
Section 7.9 Compliance with WARN, Etc.....................................33
Section 7.10 Litigation Support............................................33
Section 7.11 Insurance.....................................................33
Section 7.12 Interim Reports...............................................33
Section 7.13 Lockbox Accounts..............................................33
ARTICLE VIII
TAX MATTERS
Section 8.1 Transfer Taxes................................................34
Section 8.2 Liability for Taxes and Related Matters.......................34
Section 8.3 Cooperation...................................................35
Section 8.4 Allocation of Purchase Price..................................35
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification by VitalWorks.................................36
Section 9.2 Indemnification by Purchaser..................................36
Section 9.3 Notice of Claims..............................................37
Section 9.4 Third Party Claims............................................37
Section 9.5 Expiration....................................................38
Section 9.6 Certain Limitations...........................................38
Section 9.7 Losses Net of Insurance, Etc..................................39
Section 9.8 Other Limitations.............................................39
Section 9.9 Mitigation....................................................39
Section 9.10 Sole Remedy/Waiver............................................39
Section 9.11 No Consequential Damages......................................40
ARTICLE X
TERMINATION
Section 10.1 Termination...................................................40
Section 10.2 Effect of Termination.........................................41
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices.......................................................41
Section 11.2 Amendment; Waiver.............................................42
Section 11.3 Assignment....................................................42
Section 11.4 Entire Agreement..............................................43
Section 11.5 Fulfillment of Obligations....................................43
Section 11.6 Parties in Interest...........................................43
Section 11.7 Public Disclosure.............................................43
Section 11.8 Return of Information.........................................43
Section 11.9 Expenses......................................................43
Section 11.10 Schedules.....................................................43
Section 11.11 Governing Law; Jurisdiction...................................44
Section 11.12 Counterparts..................................................44
Section 11.13 Headings......................................................44
Section 11.14 Severability..................................................44
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made and entered into as of the
15th day of November, 2004 between VitalWorks Inc., a Delaware corporation
("VitalWorks"), and Cerner Corporation, a Delaware corporation ("Purchaser").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, VitalWorks' Medical Division (the "Division") is engaged in
the business of delivering and supporting physician practice management,
electronic medical record, electronic data interchange and emergency department
information solutions and related products and services to physician practices,
hospital emergency departments, management service organizations and other
related entities (which, for the avoidance of doubt, does not include radiology
practices markets; hospital operations outside the emergency department
including radiology departments; ambulatory imaging centers; and specialty
practices that deal with medical images) (the "Medical Business"); and
WHEREAS, VitalWorks desires to sell, and Purchaser desires to
purchase, substantially all of the assets of the Division relating to the
operation of the Medical Business and certain other assets, properties and
rights owned or held by VitalWorks relating solely to the anesthesiology
business of VitalWorks (the "Anesthesiology Business"; together with the Medical
Business, the "Business"), and in connection therewith, Purchaser has agreed to
assume certain of the liabilities of VitalWorks relating to the Business, on the
terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth or as referenced below:
"Acquisition Proposal" shall mean any proposal or offer made by any
Person other than Purchaser or any Subsidiary of Purchaser to acquire all or a
substantial part of the business or properties of VitalWorks, the Division, the
Purchased Assets or the capital stock of VitalWorks, whether by merger, tender
offer, exchange offer, sale of assets or similar transactions involving
VitalWorks or the Division.
"Affiliate" shall mean, with respect to any Person, any other person
directly or indirectly controlling, controlled by, or under common control with
such Person at any time during the period for which the determination of
affiliation is being made.
"Agreement" shall mean this Agreement, as the same may be amended or
supplemented from time to time in accordance with the terms hereof.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which banks in New York City are authorized or obligated by law or
executive order to close.
"Cash Equivalents" shall mean cash, checks, money orders, marketable
securities, short-term instruments and other cash equivalents, funds in time and
demand deposits or similar accounts (other than deposits described in Section
2.1(a) and 2.1(n)), and any evidence of indebtedness issued or guaranteed by any
Governmental Authority.
"Closing" shall mean the closing of the transactions contemplated by
this Agreement pursuant to the terms of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
from time to time.
"Confidentiality Agreement" shall mean the Confidentiality Agreement
between VitalWorks and Purchaser, dated May 19, 2004.
"Employee Plan" shall mean any employee benefit plan (as defined in
Section 3(3) of ERISA) and all bonus, stock option, stock purchase, incentive,
deferred compensation, supplemental retirement, health, life or disability
insurance, dependent care, severance and other similar fringe or employee
benefit plan, program or arrangement and any current employment or executive
compensation or severance agreements, written or otherwise, maintained or
contributed to for the benefit of or relating to any employee or former employee
of VitalWorks or any trade or business (whether or not incorporated) that is a
member of a controlled group including VitalWorks or that is under common
control with VitalWorks within the meaning of Section 414 of the Code (an "ERISA
Affiliate"), to the extent that VitalWorks or any ERISA Affiliate currently has
or may incur liability for payments or benefits thereunder, as well as with
respect to which VitalWorks or an ERISA Affiliate could incur liability under
Section 4069 (if such plan has been or were terminated) or Section 4212(c) of
ERISA.
"Environmental Claim" means, with respect to any Person, any written
notice or claim by any other Person alleging or asserting such Person's
liability for investigatory costs, cleanup costs, Governmental Authority
response costs, damages to natural resources or other property, personal
injuries, fines or penalties arising out of, based on or resulting from (a) the
presence or release into the environment, of any Hazardous Material or (b)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Law" shall mean any applicable Law, as in effect on
the Closing Date relating directly or indirectly to (i) the environmental
aspects of product approvals, including occupational health and safety; (ii) the
protection of the environment (including air, water vapor, surface water,
groundwater, drinking water supply, surface or subsurface land); or (iii) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, recycling, Release or disposal
of Hazardous Substances or Hazardous Materials.
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"Environmental Liability" means all Liabilities and Losses resulting
from (i) failure to comply with any requirement of an Environmental Law; (ii)
failure to obtain or comply with any required Environmental Permit; (iii) a
Remedial Action; or (iv) harm or injury to any real property, to any Person, to
public health, or to any natural resource (other than Remedial Action) as a
result of exposure to Hazardous Substances or Hazardous Materials.
"Environmental Permit" shall mean a permit, license, certificate,
approval or authorization held by VitalWorks and issued by a Governmental
Authority pursuant to an Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Final Determination" means (i) with respect to Federal Income
Taxes, a "determination" as defined in Section 1313(a) of the Code or execution
of an Internal Revenue Service Form 870-AD and, with respect to Taxes other than
Federal Income Taxes, any final determination of liability in respect of a Tax
that, under applicable law, is not subject to further appeal, review or
modification through proceedings or otherwise (including the expiration of a
statute of limitations or a period for the filing of claims for refunds, amended
returns or appeals from adverse determinations).
"GAAP" shall mean accounting principles and practices generally
accepted in the United States of America as consistently applied by VitalWorks.
"Governmental Authority" shall mean any supranational, national,
federal, state or local judicial, legislative, executive or regulatory
authority.
"Governmental Authorizations" shall mean all licenses, permits,
certificates and other authorizations and approvals required to carry on the
Business as conducted as of the date of this Agreement under the applicable Laws
of any Governmental Authority.
"Governmental Order" shall mean any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"Hazardous Materials" shall mean all materials regulated pursuant to
Environmental Law as capable of causing harm or injury to human health or the
environment, including oils, petroleum, and petroleum products.
"Hazardous Substances" shall mean any pollutant or contaminant that
is regulated under any Environmental Law.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Intellectual Property" shall mean Patent Rights, inventions,
discoveries, trade secrets, know-how and ideas, rights in research and
development, and commercially practiced processes and inventions, whether
patentable or not in any jurisdiction, Trademark Rights in any jurisdiction,
copyrights and registrations or applications for registration of copyrights in
any
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jurisdiction, and any renewals or extensions thereof, and all goodwill relating
thereto, all of the foregoing to the extent relating to the Business.
"Inventories" shall mean all inventory, including raw materials,
packaging supplies, work-in-process or finished goods owned by VitalWorks in
respect of the Business.
"IRS" shall mean the Internal Revenue Service of the United States
of America.
"Knowledge of VitalWorks" shall mean the actual knowledge, after due
inquiry, of any of the individuals listed on Schedule 1.1(A).
"Laws" shall include any federal, state, foreign or local law,
common law, statute, ordinance, rule, regulation, code or Governmental Order.
"Liabilities" shall mean any and all debts, liabilities and
obligations, whether accrued or fixed, known or unknown, absolute or contingent,
matured or unmatured or determined or determinable.
"Liens" shall mean any lien, security interest, mortgage, charge or
similar encumbrance.
"Material Adverse Effect" shall mean an effect that is materially
adverse to the business results, operations or financial condition of the
Business taken as a whole, but shall exclude any changes, effects, events,
circumstances, occurrences or states of facts (a) that are generally applicable
in the United States economy; (b) that arise out of or are attributable to (i)
the acts or omissions of, or circumstances affecting, Purchaser and/or its
Affiliates, or (ii) the transactions contemplated by this Agreement; (c) that
generally affect the industries in which the Business operates; (d) that arise
out of or are attributable to acts of terrorism or war (whether or not
threatened, pending or declared); (e) that is merely a failure by the Business
to meet internal projections or forecasts for any period, provided that a
change, effect, event, circumstance, occurrence or state of facts causing or
contributing to such failure may be a Material Adverse Effect; or (f) that arise
out of or are attributable to the public announcement of this Agreement or the
transactions contemplated hereby.
"Ordinary Course of Business" shall mean the ordinary course of the
Business consistent with VitalWorks' past practices.
"Patent Rights" means all rights to and in the patents and patent
applications identified in Schedule 5.11, together with any extensions,
reexaminations and reissues of such patents, patents of addition, divisions,
continuations, continuations-in-part, and any subsequent filings in any country
claiming priority therefrom.
"Permitted Encumbrances" shall mean (i) all Liens approved in
writing by Purchaser; (ii) statutory Liens arising out of operation of Law with
respect to a Liability incurred in the Ordinary Course of Business and which is
not delinquent; (iii) such Liens and other imperfections of title as do not
materially detract from the value or impair the use of the property subject
thereto or make such property unmarketable; (iv) Liens for Taxes not yet subject
to penalties for nonpayment or which are being actively contested in good faith
by appropriate
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proceedings; (v) purchase money security interests, capital leases, mechanics',
materialmen's, carriers', workmen's, warehousemen's, repairmen's, landlords' or
other like Liens and security obligations that are not delinquent; (vi) the
rights of The Method Factory, Inc. d/b/a Wellogic or its successor as set forth
in the Wellogic Agreement; or (vii) the rights of PracticeWorks, Inc. or its
successor set forth in the PracticeWorks Agreement.
"Person" shall mean an individual, a limited liability company,
joint venture, a corporation, a partnership, an association, a trust, a division
or operating group of any of the foregoing or other entity or organization.
"PracticeWorks Agreement" shall mean the agreement dated March 5,
2001 by and between VitalWorks and PracticeWorks, Inc., which has been amended,
but which amendments do not affect the operation of the Business.
"Purchased Assets" shall have the meaning set forth in Section 2.1,
it being understood that the Purchased Assets do not include the Excluded
Assets.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, injecting, depositing, disposing, discharging, dispersal, escaping,
dumping or leaching into the environment, including surface water, soil or
groundwater (including the abandonment or discarding of barrels, containers, and
other receptacles containing Hazardous Substances or Hazardous Materials) or as
otherwise defined under Environmental Laws.
"Remedial Action" shall mean action required under Environmental Law
to clean up soil, surface water or groundwater in response to a Release of
Hazardous Substances or Hazardous Materials, including associated action taken
to investigate, monitor, assess and evaluate the extent and severity of any such
Release; action taken to remediate any such Release; post-remediation monitoring
of any such Release; and preparation of all reports, studies, analyses or other
documents relating to the above. "Remedial Action" also shall refer to any
judicial, administrative or other proceeding relating to any of the above,
including the negotiation and execution of judicial or administrative consent
decrees; responding to information requests by any Governmental Authority; or
defending claims brought by any Governmental Authority or any other Person,
whether such claims are equitable or legal in nature, relating to the cleanup of
the environment, including soil, surface water, groundwater, and sediments in
response to a Release of Hazardous Substances or Hazardous Materials and
associated actions.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Subsidiary" shall mean an entity as to which VitalWorks or
Purchaser or any other relevant entity, as the case may be, owns directly or
indirectly 50% or more of the voting power or other similar interests. Any
Person which comes within this definition as of the date of this Agreement but
thereafter fails to meet such definition shall from and after such time not be
deemed to be a Subsidiary of VitalWorks or Purchaser or any other relevant
entity, as the case may be. Similarly, any Person which does not come within
such definition as of the date of this Agreement but which thereafter meets such
definition shall from and after such time be deemed to be a Subsidiary of
VitalWorks or Purchaser or any other relevant entity, as the case may be.
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"Tax" or "Taxes" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security, unemployment, disability, real
property, personal property, abandoned property, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto.
"Trademark Rights" shall mean registered and unregistered
trademarks, service marks, brand names, certification marks, trade dress,
goodwill associated with the foregoing and registrations in any jurisdiction of,
and applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application.
"Transfer Tax" or "Transfer Taxes" shall mean any federal, state,
county, local, foreign and other sales, use, transfer, conveyance, documentary
transfer, recording or other similar tax, fee or charge imposed upon the sale,
transfer or assignment of property or any interest therein or the recording
thereof, and any penalty, addition to tax or interest with respect thereto.
"WARN" shall mean the Worker Adjustment and Retraining Notification
Act of 1988, as amended.
"Wellogic Agreement" shall mean the agreement dated January 29,
2003, by and between VitalWorks and The Method Factory, Inc., as amended by
amendments dated April 8, 2003, May 14, 2004, August 15, 2004 and October 4,
2004.
"Xxxxx Fargo Credit Facility" shall mean the credit facility
provided for under the Amended and Restated Loan and Security Agreement by and
between VitalWorks Inc. as Borrower, and Xxxxx Fargo Foothill, Inc. as Lender,
as amended and restated as of August 20, 2003.
"Working Capital of the Business" shall mean the current assets
included in the Purchased Assets less the current liabilities of the Business
included in the Assumed Liabilities, determined in accordance with the same
accounting principles, policies and practices that were used in the preparation
of the June 30 Pro Forma Statement, and as otherwise set forth on Schedule 5.5.
Section 1.2 Other Definitional Provisions. (a) The words "hereof",
"herein", "hereto" and "hereunder" and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States of America
dollars.
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(d) The term "including" shall mean "including, without limitation".
(e) When a reference is made in this Agreement to an Article,
Section or Schedule, such reference shall be to an Article of, a Section of or
Schedule to, this Agreement unless otherwise indicated.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase and Sale of Assets. Upon the terms and subject
to the conditions set forth herein, at the Closing, VitalWorks shall sell,
convey, assign, transfer and deliver to Purchaser, and Purchaser shall, or cause
its Subsidiary to, purchase, acquire and accept from VitalWorks, free and clear
of all Liens, other than Permitted Encumbrances, all of VitalWorks' right, title
and interest in the assets, properties and rights owned or held by VitalWorks
related solely to the Business, other than the Excluded Assets (collectively,
the "Purchased Assets"), together with the following:
(a) the leasehold interests, including any prepaid rent, security
deposits and options to renew or purchase in connection therewith, of VitalWorks
in real property (the "Leased Real Property" and the leases relating to such
Leased Real Property, the "Real Property Leases") that are set forth on Schedule
2.1(a);
(b) the furniture, equipment, machinery, computer hardware,
supplies, vehicles, spare parts, tools, personal property and other tangible
property (i) used solely for the Business, (ii) located at the Leased Real
Property (excluding equipment used by non-Business employees), or (iii) listed
on Schedule 2.1(b);
(c) the Customer Contracts, Material Contracts, and any other
contracts, employment agreements, licenses (other than Intellectual Property
Licenses), agreements and commitments relating solely to the Business (excluding
contracts, licenses, agreements and commitments relating to the Excluded Assets)
(the "Assumed Contracts");
(d) all Inventory;
(e) all rights to the Intellectual Property listed on Schedule
2.1(e) and the user manuals associated therewith, subject to Permitted
Encumbrances (the licenses relating to Intellectual Property so licensed is
referred to as the "Intellectual Property Licenses");
(f) transferable Governmental Authorizations, including
Environmental Permits, owned, utilized or licensed (subject to the terms of such
licenses) by VitalWorks relating solely to and required in the operation of the
Business and the Purchased Assets;
(g) the databases and software programs, source codes and user
manuals owned, used, leased by or licensed to VitalWorks and used in the
Business to the extent transferable and except as set forth on Schedule 2.1(g);
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(h) all lists of customers and vendors of the Business, and all
files and documents (including credit information) to the extent relating to
customers and vendors of the Business, and other business and financial records,
files, books and documents (whether in hard copy or computer format), in each
case to the extent primarily used in or primarily relating to the Business (it
being agreed and understood that such lists shall be redacted to exclude all
information not related to the Business);
(i) the accounts and notes receivable of the Business;
(j) the goodwill of the Business;
(k) all advertising, marketing, sales and promotional materials
relating solely to the Business or its products;
(l) all manufacturer's warranties to the extent related to the
Purchased Assets and all claims under such warranties;
(m) all rights to the telephone numbers (and related directory
listings), to the extent assignable, primarily relating to the Business;
(n) all security deposits, xxxxxxx deposits and all other forms of
security placed with VitalWorks for the performance of the Assumed Contracts and
the Real Property Leases;
(o) all other assets set forth on the Closing Date Balance Sheet;
and
(p) all other assets set forth on Schedule 2.1(p).
Section 2.2 Consents. (a) There shall be excluded from the
transactions contemplated by this Agreement any Real Property Lease,
Intellectual Property License, Assumed Contract, agreement, lease, license or
right which is not assignable or transferable without the consent of any Person,
to the extent that such consent shall not have been given prior to the Closing;
provided, however, that each of VitalWorks and Purchaser shall have the
continuing obligation after the Closing to use commercially reasonable efforts
to endeavor to obtain all necessary consents to the assignment thereof (provided
that neither VitalWorks nor any of its Subsidiaries nor Purchaser shall be
required to expend money, commence any litigation or offer or grant any
accommodation (financial or otherwise) to any third party) and, upon obtaining
the requisite third party consents thereto, such Real Property Leases,
Intellectual Property Licenses, Assumed Contracts, agreements, leases, licenses
or rights, if otherwise includable in the Purchased Assets or the transactions
contemplated hereby, shall be transferred and assigned to Purchaser hereunder.
It is further agreed and understood that only such consents set forth on
Schedule 4.2(c) shall be required to be obtained as a condition to Purchaser's
obligation to close.
(b) With respect to any Real Property Lease, Intellectual Property
License, Assumed Contract, agreement, lease, license or right that is not
included in the Purchased Assets or assigned to Purchaser at the Closing by
reason of Section 2.2(a), after the Closing and until any requisite consent is
obtained and the foregoing is sold and assigned to Purchaser, the parties shall
cooperate with each other, upon written request, in endeavoring to obtain for
Purchaser, at
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no cost to VitalWorks, an arrangement to provide for Purchaser substantially
comparable benefits thereof, and Purchaser agrees to indemnify VitalWorks in
respect of all Liabilities of VitalWorks in respect of each such arrangement and
underlying lease, license, contract, agreement or right.
(c) Purchaser acknowledges that certain consents to the transactions
contemplated by this Agreement may be required from parties to the Real Property
Leases, Intellectual Property Licenses, Assumed Contracts, agreements, leases,
licenses or rights and that such consents have not been and may not be obtained.
Purchaser agrees that VitalWorks shall not have any liability whatsoever arising
out of or relating to the failure to obtain any consents that may have been or
may be required in connection with the transactions contemplated by this
Agreement or because of the default under or acceleration or termination of any
Real Property Lease, Intellectual Property License, Assumed Contract, agreement,
lease, license or right, as a result thereof. Purchaser further agrees that,
except with respect to Material Contracts for which Required Consents may be
required to be obtained pursuant to Section 4.2(c), no representation, warranty
or covenant of VitalWorks contained herein shall be breached or deemed breached,
and no condition to Purchaser's obligations to close the transactions
contemplated by this Agreement shall be deemed not satisfied as a result of (i)
the failure to obtain any such consent or as a result of any such default,
acceleration or termination; or (ii) any lawsuit, action, claim, proceeding or
investigation commenced or threatened by or on behalf of any Person arising out
of or relating to the failure to obtain any consent or any such default,
acceleration or termination.
Section 2.3 Excluded Assets of the Business. Notwithstanding any
provision in this Agreement, Purchaser is not purchasing any of the following
(the "Excluded Assets"):
(a) Cash Equivalents;
(b) all current and prior insurance policies and all rights of any
nature with respect thereto, including all insurance recoveries thereunder,
rights to assert claims with respect to any such insurance recoveries and all
prepaid expenses and rights to refunds related thereto;
(c) except as expressly set forth herein, all assets of any Employee
Plan;
(d) subject to the license granted by VitalWorks in the Transition
Services Agreement, the "VitalWorks" name and logo;
(e) all claims for refunds of Taxes paid by VitalWorks prior to the
Closing;
(f) any furniture, equipment, machinery, computer hardware,
supplies, vehicles, spare parts, tools, personal property or other tangible
property that is not used by the Business, other than any such property that is
set forth on Schedule 2.1(p);
(g) all contracts, licenses, agreements and commitments, other than
the Assumed Contracts, Real Property Leases, Intellectual Property Licenses,
warranties described in Section 2.1(l) and accounts and notes receivable of the
Business;
(h) the databases and software programs loaded on computers and
hardware not included in Section 2.1(b), provided that to the extent such
databases relate to the Business,
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VitalWorks shall provide Purchaser with copies (in computer format) of such
databases (with such redactions as VitalWorks may deem necessary to remove data
that does not relate to the Business), which copies shall be deemed Purchased
Assets;
(i) all advertising, marketing, sales and promotional materials not
relating solely to the Business; and
(j) the assets set forth on Schedule 2.3.
Section 2.4 Assumption of Certain Obligations of the Business. Upon
the terms and subject to the conditions of this Agreement, Purchaser agrees,
effective at the Closing, to assume and to satisfy and discharge all Liabilities
of VitalWorks, other than the Retained Liabilities, to the extent relating to
the Purchased Assets or the Business, that arise, and relate to a period, on or
after the Closing, together with the following Liabilities (all of such
liabilities and obligations being herein collectively called the "Assumed
Liabilities"):
(a) all Liabilities reflected on the Closing Date Balance Sheet;
(b) any Liability to the Division's customers incurred by the
Division in the Ordinary Course of Business outstanding as of the Closing Date
(other than any Liability arising out of or relating to a breach that occurred
prior to the Closing Date except for matters listed in Schedule 2.4(i));
(c) any Liability to customers under written warranties set forth in
the Customer Contracts given to customers in the Ordinary Course of Business
prior to the Closing Date (other than any Liability arising out of or relating
to a breach that occurred prior to the Closing Date);
(d) any Liability to be paid or performed on or after the Closing
Date under the Assumed Contracts (other than any Liability arising out of or
relating to a breach that occurred prior to the Closing Date);
(e) all lawsuits commenced and claims made after the Closing to the
extent resulting from the conduct of the Business or the ownership of the
Purchased Assets after the Closing, including lawsuits and claims relating to
alleged Intellectual Property infringement;
(f) all Liabilities for sales and use Taxes to the extent accrued or
reserved against in the Working Capital Statement;
(g) all Environmental Liabilities arising after the Closing;
(h) all Liabilities to Employees with respect to periods after the
Closing, except as set forth in Section 7.4; and
(i) Liabilities resulting from all lawsuits pending as of the
Closing and listed on Schedule 2.4(i).
10
Section 2.5 Retained Liabilities of the Business. Notwithstanding
any provision in this Agreement, VitalWorks shall retain and be responsible for
all Liabilities arising prior to the Closing, other than Assumed Liabilities,
together with the following liabilities relating to the Business (the "Retained
Liabilities"):
(a) Liabilities resulting from all lawsuits pending as of the
Closing (except as set forth on Schedule 2.4(i));
(b) Liabilities for which VitalWorks expressly has responsibility
pursuant to the terms of this Agreement;
(c) Liabilities to the extent related to the Excluded Assets;
(d) Liabilities to Employees with respect to periods prior to the
Closing, except (i) as otherwise provided in this Agreement or (ii) to the
extent reflected in the calculation of the Working Capital of the Business
pursuant to Section 2.7;
(e) any and all Liabilities for Taxes related to the Business or the
Purchased Assets for taxable periods prior to the Closing, except for (i) Taxes
attributable to actions of Purchaser occurring after the Closing or (ii) with
respect to sales and use Taxes to the extent accrued or reserved against in the
Working Capital Statement; and
(f) any and all Liabilities related to VitalWorks' current or prior
participation in, sponsorship, operation or maintenance of, or contributions to,
an Employee Plan, except (i) as otherwise provided in this Agreement or (ii) to
the extent reflected in the calculation of the Working Capital of the Business
pursuant to Section 2.7.
Section 2.6 Purchase Price. (a) The purchase price for the Purchased
Assets shall be $100,000,000 (the "Purchase Price").
(b) The Purchase Price shall be paid in immediately available funds,
by wire transfer in accordance with written instructions given by VitalWorks to
Purchaser not less than 2 Business Days prior to the Closing. The Purchase Price
shall be subject to the adjustment provisions of Section 2.7.
Section 2.7 Purchase Price Adjustment. (a) Within 90 days after the
Closing Date, VitalWorks shall deliver to Purchaser a balance sheet reflecting
only the Purchased Assets and Assumed Liabilities as of the Closing Date (the
"Closing Date Balance Sheet"), prepared in accordance with the same accounting
principles, policies and practices that were used in the preparation of the June
30 Pro Forma Statement (as defined in Section 5.5), together with a statement of
the Working Capital of the Business as of the Closing Date (the "Working Capital
Statement"). Purchaser shall provide VitalWorks with access to the books,
records, and personnel of the Business necessary for VitalWorks to prepare the
Closing Date Balance Sheet and Working Capital Statement.
(b) Purchaser may dispute the amounts reflected on the line items of
the Closing Date Balance Sheet and Working Capital Statement (a "Disputed
Item"), but only (i) on the basis that an entry contained on such Closing Date
Balance Sheet or Working Capital
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Statement is based on facts or occurrences arising between the date of the June
30 Pro Forma Statement and the date of the Closing Date Balance Sheet; (ii) on
the basis that a Disputed Item does not reflect, or has not been made in a
manner consistent with, the provisions of this Agreement; and (iii) to the
extent the amount disputed with respect to any one Disputed Item exceeds $25,000
and all such allowable Disputed Items exceed $100,000 in the aggregate;
provided, however, Purchaser shall notify VitalWorks in writing of each Disputed
Item, and specify the amount thereof in dispute and the specific basis therefor,
within 60 days after receipt of the Closing Date Balance Sheet and Working
Capital Statement. The failure by Purchaser to provide a notice of Disputed
Items to VitalWorks within such 60-day period will constitute Purchaser's
acceptance of all the items in the Closing Date Balance Sheet and Working
Capital Statement. Any item in the Closing Date Balance Sheet and Working
Capital Statement which is not a Disputed Item shall constitute Purchaser's
acceptance of such items after the 60-day period.
(c) If a notice of Disputed Items shall be timely delivered pursuant
to subclause (b) above, VitalWorks and Purchaser shall, during the 10 Business
Days following the date of such delivery (the "Resolution Period"), negotiate in
good faith to resolve the Disputed Items. If, during such Resolution Period the
parties are unable to reach agreement, VitalWorks and Purchaser shall refer all
unresolved Disputed Items to Deloitte & Touche LLP, or any other independent
accounting firm as VitalWorks and Purchaser shall mutually agree upon (the
"Independent Accountant"). To the extent practical, the Independent Accountant
shall make a determination with respect to each unresolved Disputed Item within
15 Business Days after its engagement by VitalWorks and Purchaser to resolve
such Disputed Items, which determination shall be made in accordance with the
rules set forth in this Section 2.7. The Independent Accountant shall deliver to
VitalWorks and Purchaser, within such 15-Business-Day period, a report setting
forth its adjustments, if any, to the Closing Date Balance Sheet and/or the
Working Capital Statement and the calculations supporting such adjustments. Such
report shall be final, binding on the parties and conclusive. VitalWorks and
Purchaser shall each pay one-half of all the costs incurred in connection with
the engagement of the Independent Accountant. As used herein, "Final Working
Capital" shall mean (i) if no notice of Disputed Items is delivered by Purchaser
within the period provided in subclause (b) above, Working Capital of the
Business as shown in the Working Capital Statement as prepared by VitalWorks; or
(ii) if such a notice of Disputed Items is delivered by Purchaser, either (x)
Working Capital of the Business as agreed to in writing by VitalWorks and
Purchaser; or (y) Working Capital of the Business as adjusted by the Independent
Accountant's calculation delivered pursuant to this subclause (c).
(d) If the Final Working Capital is less than $(2,278,739), then
VitalWorks shall, within 10 days after the determination of the Final Working
Capital, pay to Purchaser, by wire transfer of immediately available funds in
accordance with written instructions given to VitalWorks by Purchaser, the
amount of such shortfall, together with interest on such amount from the Closing
Date to the date of such payment at the Applicable Rate. If the Final Working
Capital is greater than $(2,278,739), then Purchaser shall, within 10 days after
the determination of the Final Working Capital, pay to VitalWorks, by wire
transfer of immediately available funds in accordance with written instructions
given by VitalWorks to Purchaser, the amount of such excess, together with
interest on such amount from the Closing Date to the date of such payment at the
Applicable Rate. For purposes of this Section 2.7(d), (x) the "Applicable Rate"
shall be Closing Date LIBOR plus one percent (1%), and (y) "Closing Date LIBOR"
shall be the London Interbank Offered Rate (LIBOR) as reported on the Closing
Date in The Wall Street Journal for
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the specified interval of calendar months (expressed as the 3-month LIBOR rate,
6-month LIBOR rate, 9-month LIBOR rate and so on, as applicable) that most
closely corresponds to the time period between the Closing Date and the date
that payment in full pursuant to this Section 2.7(d) is made.
ARTICLE III
CLOSING
Section 3.1 Closing. (a) The Closing shall take place at the offices
of Cadwalader, Xxxxxxxxxx & Xxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx, at
10:00 a.m., New York time on January 3, 2005; provided, however, that in the
event the conditions precedent specified in Article IV have not been satisfied
or waived on or prior to such date (other than the conditions to be satisfied on
the Closing Date, but subject to the waiver or satisfaction of such conditions),
the Closing shall take place on the 2nd Business Day following the satisfaction
or waiver of the conditions precedent specified in Article IV (other than the
conditions to be satisfied on the Closing Date, but subject to the waiver or
satisfaction of such conditions), or at such other times and places as the
parties hereto may mutually agree. The date on which the Closing occurs is
called the "Closing Date". The Closing shall be deemed to occur and be effective
as of the close of business on the Closing Date.
(b) At the Closing, VitalWorks shall deliver or cause to be
delivered to Purchaser the following instruments and documents, in each case in
a form reasonably acceptable to Purchaser:
(i) executed copies of the Transitional Services Agreement and
License Agreement (the "Related Agreements");
(ii) a receipt for payment of the Purchase Price at Closing;
(iii) the certificate referred to in Section 4.2(a);
(iv) executed general warranty deeds, assignments, a general
intellectual property assignment including a general trademark assignment
(with trademark assignments in recordable form to be delivered after the
Closing), lease assignments (where appropriate, in recordable or
registrable form), bills of sale or certificates of title, in each case
dated the Closing Date, transferring to Purchaser the Purchased Assets;
(v) executed copies of the Required Consents referred to in Section
4.2(c) hereof;
(vi) an opinion of counsel to VitalWorks, in the form and to the
effect set forth on Schedule 3.1(b);
(vii) the release of all Liens, other than Permitted Encumbrances
(including the release of the Liens under the Xxxxx Fargo Credit
Facility); and
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(viii) all other previously undelivered documents required to be
delivered by VitalWorks to Purchaser at or prior to the Closing in
connection with the transactions contemplated by this Agreement.
(c) At the Closing, Purchaser shall deliver to VitalWorks the
following: (i) the Purchase Price, by wire transfer in immediately available
funds, to one or more accounts specified in writing by VitalWorks at least two
Business Days prior to the Closing Date and (ii) the following instruments and
documents, in each case in a form reasonably acceptable to VitalWorks:
(i) executed assumption agreements and all other instruments
appropriate to evidence Purchaser's assumption of the Assumed Liabilities;
(ii) executed copies of the Transitional Services Agreement and
License Agreement;
(iii) the certificate referred to in Section 4.3(a);and
(iv) an opinion of counsel to Purchaser, in the form and to the
effect set forth on Schedule 3.1(c).
ARTICLE IV
CONDITIONS TO CLOSING
Section 4.1 Conditions to the Obligations of Purchaser and
VitalWorks. The respective obligations of each of the parties to consummate the
transactions contemplated by this Agreement shall be subject to the satisfaction
of the following conditions precedent:
(a) There shall not (i) be in effect any Law or Governmental Order
that makes illegal or enjoins or prevents in any respect the consummation of the
transactions contemplated by this Agreement, (ii) have been commenced and
continuing any action or proceeding that seeks to prevent, retrain or enjoin in
any respect the transactions contemplated by this Agreement and which VitalWorks
is using its reasonable best efforts to defend or resolve such action or
proceeding or (iii) have been threatened in writing any action or proceeding by
any Governmental Authority that seeks to prevent, restrain or enjoin in any
respect the transactions contemplated by this Agreement; and
(b) The waiting period required under the HSR Act, including any
extensions thereof, shall have expired and any investigations relating to the
sale hereunder that may have been opened by either the Department of Justice or
the Federal Trade Commission by means of a request for additional information or
otherwise shall have terminated.
Section 4.2 Conditions to the Obligations of Purchaser. The
obligation of Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction of the following conditions
precedent:
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(a) VitalWorks shall have performed in all respects its agreements
and obligations contained in this Agreement required to be performed by it at or
before the Closing, and the representations and warranties of VitalWorks
contained herein shall have been true and correct when made and shall be true
and correct as of the Closing, as if made as of the Closing (except for (i)
changes contemplated or permitted by this Agreement or attributable to matters
disclosed by VitalWorks in the Schedules hereto; (ii) failures to perform
covenants or breaches of representations and warranties that would not,
individually or in the aggregate, have a Material Adverse Effect (provided that
if a representation or warranty is qualified by "materiality" or "Material
Adverse Effect", such qualification shall be disregarded for purposes of this
Section 4.2(a)); and (iii) those representations and warranties that address
matters as of a particular date, which, subject to clause (ii) above, need be
true only as of such date). Purchaser shall have received a certificate of
VitalWorks, dated as of the Closing Date and signed by a senior officer of
VitalWorks, certifying as to the fulfillment of the foregoing;
(b) VitalWorks shall have made or caused to be made delivery to
Purchaser of the items required by Section 3.1(b);
(c) VitalWorks and Purchaser shall have received duly executed
consents to the assignment and transfer of the Assumed Contracts set forth on
Schedule 4.2(c) (the "Required Consents"); and
(d) Purchaser shall have received an opinion of counsel to
VitalWorks, in the form and to the effect set forth on Schedule 3.1(b).
Section 4.3 Conditions to the Obligations of VitalWorks. The
obligation of VitalWorks to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction of the following conditions
precedent:
(a) Purchaser shall have performed in all material respects its
agreements and obligations contained in this Agreement required to be performed
by it at or before the Closing, and the representations and warranties of
Purchaser contained herein shall have been true and correct in all material
respects when made and shall be true and correct in all material respects as of
the Closing, as if made as of the Closing (except for (i) changes contemplated
or permitted by this Agreement or attributable to matters disclosed by Purchaser
in the Schedules hereto, and (ii) those representations and warranties that
address matters as of a particular date, which need be true in all material
respects only as of such date). VitalWorks shall have received a certificate of
Purchaser, dated as of the Closing Date and signed by a senior officer of
Purchaser, certifying as to the fulfillment of the foregoing.
(b) Purchaser and its Affiliates shall have made or caused to be
made delivery to VitalWorks of the items required by Section 3.1(c).
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF VITALWORKS
VitalWorks hereby represents and warrants to Purchaser as follows:
Section 5.1 Organization. VitalWorks is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware.
Section 5.2 Authority; Binding Effect. (a) VitalWorks has all
requisite corporate power and authority to carry on its business as it is now
being conducted and to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery by VitalWorks of this
Agreement and the Related Agreements, the performance by VitalWorks of its
obligations hereunder and thereunder, have been or will have been at the Closing
duly authorized by all requisite corporate action.
(b) This Agreement constitutes, and the Related Agreements when
executed will constitute, valid and binding obligations of VitalWorks,
enforceable against VitalWorks in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting creditors' rights generally or
by general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or law).
Section 5.3 Non-Contravention. The execution, delivery and
performance of this Agreement and the Related Agreements by VitalWorks and the
consummation of the transactions contemplated hereby and thereby do not and will
not (i) violate any provision of the certificate of incorporation or bylaws of
VitalWorks; (ii) subject to obtaining the consents referred to in Schedule 5.3,
conflict with, or result in the breach of, constitute a default under, result in
the termination, cancellation or acceleration (whether after the giving of
notice or the lapse of time or both) of any right or obligation of VitalWorks,
or to a loss of any benefit of the Business to which VitalWorks is entitled
under, any Material Contract, lease of real estate or license of Intellectual
Property to which VitalWorks is a party or to which its assets are subject and
which relate to the Purchased Assets; and (iii) assuming compliance with the
matters set forth in Sections 5.4 and 6.5, violate or result in a breach of or
constitute a default under any Law or other restriction of any Governmental
Authority to which VitalWorks or any of its properties or assets is subject.
Section 5.4 Governmental Authorization. Other than as set forth in
Schedule 5.4, the execution and delivery of this Agreement by VitalWorks does
not require any consent or approval of any Governmental Authority.
Section 5.5 Financial Information. VitalWorks has delivered to
Purchaser an unaudited pro forma statement reflecting only the Purchased Assets
and Assumed Liabilities as of June 30, 2004 (the "June 30 Pro Forma Statement"),
a copy of which is attached hereto as Schedule 5.5. VitalWorks has also
delivered to Purchaser unaudited statements of operations of the Division for
each of the fiscal years ended December 31, 2002 and December 31, 2003 and the
three month periods ending March 31, 2004, June 30, 2004 and September 30, 2004
(such
16
financial statements and the June 30 Pro Forma Statement are hereinafter
collectively referred to as the "Financial Statements"). The Financial
Statements (i) are true and correct in all material respects and fairly present
in all material respects the financial condition, results of operations and
changes in financial position of the Division, as of the respective dates
thereof and for the respective periods covered thereby (except for the absence
of information that would ordinarily be contained in the footnotes to audited
financial statements), (ii) were compiled from books and records regularly
maintained by management of VitalWorks used to prepare the financial statements
of VitalWorks in accordance with the principles stated therein, and (iii) were
prepared in accordance with GAAP, with the exception of certain allocations and
estimates and the exclusion of certain assets and liabilities not purchased or
assumed herein.
Section 5.6 Absence of Material Changes. Since June 30, 2004, except
as set forth in Schedule 5.6 and Schedule 7.2, the Division has conducted its
business only in the Ordinary Course of Business and there has not been any:
(a) change that has had or is reasonably likely to have, a Material
Adverse Effect;
(b) sale, lease, license, abandonment or other disposition by
VitalWorks of any material assets used in the Business, except in the Ordinary
Course of Business;
(c) increase or enhancement of the compensation or benefits of
Employees other than in the Ordinary Course of Business;
(d) incurrence of any Liability exceeding $100,000 (counting
obligations or liabilities arising from one transaction or a series of similar
transactions, and all periodic installments or payments under any lease or other
agreement providing for periodic installments or payments, as a single
obligation or liability, in each case solely to the extent arising after June
30, 2004), except items incurred in the Ordinary Course of Business;
(e) cancellation of any debts or waiver of any claims or rights
related to the Business other than in the Ordinary Course of Business;
(f) commitments in excess of $100,000 for additions to property,
plant, equipment or intangible capital assets related to the Business;
(g) material change in any method of accounting or accounting
practice related to the Business;
(h) except for advances for travel or other expenses incurred in the
Ordinary Course of Business, payment, loan or advance of any amount to any
Affected Employees; or
(i) agreement to take any action described in this Section 5.6.
Section 5.7 No Litigation. (a) Except with respect to Environmental
Laws (which are the subject of Section 5.9) or as set forth on Schedule 5.7, no
litigation, investigation or proceeding by or before any Governmental Authority
is pending against or, to the Knowledge of VitalWorks, threatened against
VitalWorks or any of its assets or properties which relates to
17
the Business or which challenges the validity of this Agreement or any action to
be taken by VitalWorks pursuant to this Agreement. VitalWorks is not subject to
any judgment, order or decree which may have an adverse effect on the Business'
practices or on the Business' ability to acquire any property or to conduct the
Business in any area.
(b) Except as set forth on Schedule 5.7, the lawsuits set forth on
Schedule 2.4(i) are either not covered by a VitalWorks' insurance policy or, if
so covered, the estimated exposure under such lawsuits are not in excess of the
applicable deductibles under such policies.
Section 5.8 Compliance with Laws. Except with respect to
Environmental Laws (which are the subject of Section 5.9), or except as to
matters otherwise set forth in the Agreement or set forth in Schedule 5.8:
(a) VitalWorks is in compliance in all material respects with all
Laws applicable to the ownership or operation of the Business, except to the
extent that the failure to comply therewith would not have a Material Adverse
Effect. No notice, charge, claim, action or assertion has been received by
VitalWorks or has been filed, commenced or, to the Knowledge of VitalWorks,
threatened against VitalWorks alleging any such violation of Law.
(b) To the extent that the Division's products or services are sold
or transferred to or used by any entity receiving payments, directly or
indirectly, from a federal health care program, as defined in Social Security
Act ss. 1128B(f), all sales or transfers are in compliance with all legal
requirements under applicable state and federal anti-referral laws (see e.g.,
Social Security Act ss. 1877), anti-kickback laws (see e.g., Social Security Act
ss. 1128B(b)), and all other federal and state health care fraud and abuse laws
including, but not limited to Social Security Act ss. 1128B(a), (c)-(e).
VitalWorks is not the subject of any investigation regarding the Business by any
state or federal official that could lead to the exercise of the Secretary of
Health and Human Services' exclusion authority under Social Security Act ss.
1128, the imposition of civil money penalties under Social Security Act ss.
1128A, or other criminal or civil penalties, as set out in the Social Security
Act or in the Civil or Criminal False Claims Act (31 U.S.C. xx.xx. 3729 et seq.
or 18 U.S.C. ss. 287, respectively). Neither VitalWorks nor to the Knowledge of
VitalWorks, any of its employees has ever been the subject of federal debarment,
exclusion, or suspension or an attempt by the federal government to debar,
exclude or suspend that employee.
(c) As of the Closing Date, the Division's products or services, are
not subject to premarket approval under the Federal, Food, Drug, and Cosmetic
Act (FFDCA) ss. 515, performance standards under FFDCA ss. 514, or premarket
notification under FFDCA ss. 510(k), or the respective implementing regulations
or policies of the Food and Drug Administration (FDA). The Business (i) has
never been the subject of an FDA or applicable state inspection, (ii) has never
received an FDA Form 483 or an FDA warning letter or other communication from
the FDA of whatever type, or comparable communication from applicable state
agencies, and (iii) has never had one or more of its products subject to a
voluntary or involuntary recall, seizure, or libel action, or comparable adverse
action or threat by the FDA or applicable state agency.
18
(d) VitalWorks possesses all Governmental Authorizations necessary
for the conduct of the Business as it is currently conducted and is in material
compliance with all such Governmental Authorizations.
Section 5.9 Environmental Matters. No Governmental Order has been
issued, no Environmental Claim has been filed, no penalty has been assessed and,
to the Knowledge of VitalWorks, no investigation or review is pending or
threatened by any Governmental Authority with respect to any alleged failure by
VitalWorks to have any license required under Environmental Laws in connection
with the conduct of the Business and there are no facts or circumstances in
existence which could reasonably be expected to form the basis for any of the
foregoing; (ii) to the Knowledge of VitalWorks, no Hazardous Materials are or
have been present on any of the real properties operated or leased by VitalWorks
in connection with the conduct of the Business where such presence or release
would result in any liability of Purchaser after the Closing; and (iii) to the
Knowledge of VitalWorks, VitalWorks is not in violation of, and has not received
any claim or notice that it is in violation of, any Environmental Law in
connection with the conduct of the Business and there are no past or present
actions, activities, circumstances, conditions or events that could form the
basis of any material claim against, or any violation by VitalWorks pursuant to
any Environmental Laws.
Section 5.10 Material Contracts. (a) Except for agreements entered
into after the date hereof as permitted pursuant to the provisions of this
Agreement or as set forth on Schedule 5.10 (the "Material Contracts"),
VitalWorks is not a party to or bound by any written:
(i) contract, agreement or other arrangement for the purchase of
Inventory or other personal property with any supplier or for the
furnishing of services to the Business providing for annual financial
commitments on the part of VitalWorks in excess of (A) $50,000 and
extending beyond one year from the date hereof or (B) $100,000;
(ii) contract, agreement and other arrangement for the sale of
Inventory or other personal property with any supplier or for the
furnishing of services by the Business, in each case with firm commitments
in excess of three years from the date hereof other than Customer
Contracts entered into in the Ordinary Course of Business;
(iii) broker, distributor, dealer, manufacturer's representative,
franchise or agency agreements related to the Business the terms of which
provide for annual financial commitments on the part of VitalWorks in
excess of $50,000;
(iv) contract or agreement relating to indebtedness for borrowed
money, the creation of any guarantee or security interest, factoring
arrangements, sale and leaseback transactions or the deferred purchase
price of property, in each case relating to the Business and with respect
to which VitalWorks is an obligor in excess of $50,000;
(v) research and development or design agreement relating to the
Business the terms of which provide for aggregate commitments to be paid
by VitalWorks in excess of (A) $50,000 and extending beyond one year from
the date hereof or (B) $100,000;
(vi) lease, rental or occupancy agreement, license, installment or
conditional sale agreement, or other contract affecting the ownership of,
leasing of, title to, use of,
19
or any leasehold or other interest in, any real or personal property, in
each case relating to the Business;
(vii) any joint venture, partnership, and other contract (however
named) involving a sharing of profits, losses, costs, or liabilities with
respect to the Business with any other Person;
(viii) any contract containing covenants that restrict the business
activity of the Business or limit its freedom to engage in any line of
business or to compete with any Person;
(ix) any power of attorney that is currently effective and
outstanding with respect to the Business;
(x) any contract for capital expenditures in excess of $250,000; and
(xi) any written warranty or guaranty with respect to contractual
performance extended by VitalWorks with respect to the Business, other
than in the Ordinary Course of Business.
(b) Except as disclosed in Schedule 5.10, (i) each Material Contract
is valid and binding on VitalWorks, and, to the Knowledge of VitalWorks, the
other party thereto, and is in full force and effect; and (ii) VitalWorks has
not received notice of any breach or default under any such Material Contract
and, to the Knowledge of VitalWorks, the other party thereto is not in breach
of, or default under, any such Material Contract.
Section 5.11 Intellectual Property. (a) Schedule 5.11 sets forth a
list of all material Intellectual Property owned by or licensed to VitalWorks
and which are used in connection with the Business. Except as set forth herein
or in Schedules 5.11 or 2.4(i), (i) there is no notice of any objection or claim
being asserted in writing by any Person with respect to the ownership, validity
or enforceability of any Intellectual Property; (ii) VitalWorks owns, controls,
or licenses such Intellectual Property; and (iii) such Intellectual Property is,
free and clear of any Liens, other than Permitted Encumbrances.
(b) No other Intellectual Property is necessary for the conduct of
the Business in all material respects as currently conducted.
(c) Schedule 5.11 sets forth the registrations and applications for
Intellectual Property that are owned by VitalWorks and which are used in the
Business. Such registrations and applications (i) are valid, subsisting, and
have been duly maintained, including the submission of all necessary filings and
fees in accordance with the legal and administrative requirements of the
appropriate jurisdictions, (ii) have not lapsed, expired or been abandoned, and
(iii) no Patent Rights, Trademark Rights, Internet Domain Name, registration or
application for Intellectual Property is the subject of any opposition,
interference, cancellation proceeding or other legal or governmental proceeding
before any Governmental Authority in any jurisdiction.
(d) VitalWorks has no further payment obligations to any third
parties for use of Intellectual Property used in connection with the Business,
except (i) as set forth in
20
Schedule 5.11 and (ii) for payment obligations incurred in connection with the
sale or license of third party products or services to customers of the
Business. Except as set forth in Schedule 5.11, to the Knowledge of the
VitalWorks, there are no conflicts with or infringements of any Intellectual
Property by any third party and the conduct of the Business as currently
conducted does not conflict with or infringe in any way on any proprietary right
of any third party. Except as set forth in Schedule 2.4(i), there is no claim,
suit, action or proceeding pending or, to the Knowledge of VitalWorks,
threatened against VitalWorks with respect to the Intellectual Property used or
owned in connection with the Business (i) alleging any such conflict or
infringement with any third party's proprietary rights or (ii) challenging the
ownership, use, validity or enforceability of the Intellectual Property.
(e) Except as set forth in Schedule 5.11, the Intellectual Property
owned by VitalWorks used in connection with the Business was either (i)
developed by employees of VitalWorks or its predecessors within the scope of
their employment, (ii) developed on behalf of VitalWorks by a third party, and
all ownership rights therein have been assigned or otherwise transferred to or
vested in VitalWorks, as the case may be, pursuant to written agreements or
(iii) licensed or acquired from a third party pursuant to a written license,
assignment, or other contract that is in full force and effect and of which
VitalWorks is not in breach and has no further payment obligation.
(f) Except as set forth in Schedule 5.11, VitalWorks has not entered
into any consent, indemnification, forbearance to xxx, settlement agreement or
cross-licensing arrangement with any Person relating to the Intellectual
Property owned by VitalWorks and used in the Business. To the Knowledge of
VitalWorks, no other person has entered into any consent, indemnification,
forbearance to xxx, settlement agreement or cross-licensing arrangement that
would adversely affect the use of any Intellectual Property licensed by
VitalWorks and used in the Business.
(g) Subject to the consent of those entities which are a party to
those agreements listed on Schedule 4.2(c) or as set forth on Schedule 5.3,
VitalWorks is not, nor will it be as a result of the execution and delivery of
this Agreement or the performance of its obligations under this Agreement, or in
the conduct of the Business as presently conducted, in breach of any license,
sublicense or other agreement relating to the Intellectual Property owned or
used in connection with the Business.
Section 5.12 Real Property. VitalWorks does not own any interests in
real property that is used by the Business other than the Real Property Leases.
(a) Schedule 2.1(a) sets forth a list of all of the Real Property
Leases and all leasehold interests in real property of VitalWorks used in
connection with the Medical Business. A true and complete copy of each Real
Property Lease has been delivered to Purchaser. Each Real Property Lease is
valid, binding and enforceable in accordance with its terms and is in full force
and effect. The leasehold estate created by each Real Property Lease is free and
clear of all Liens, other than Permitted Encumbrances. There are no existing
material defaults by VitalWorks under any of the Real Property Leases. No event
has occurred that (whether with or without notice, lapse of time or the
happening or occurrence of any other event) would constitute
21
a default by VitalWorks or, to the Knowledge of VitalWorks, by the applicable
lessor under any Real Property Lease.
Section 5.13 Assets. Except as set forth on Schedule 5.13 or as
otherwise provided in this Agreement, VitalWorks owns, leases or has the legal
right to use all of the Purchased Assets (other than Intellectual Property and
Real Property, which are the subject of Sections 5.11 and 5.12, respectively).
Except as disclosed on Schedule 5.13, VitalWorks has good title to (or in the
case of leased Purchased Assets, valid leasehold interests in) all Purchased
Assets (other than Intellectual Property and Real Property, which are the
subject of Sections 5.11 and 5.12, respectively) in each case except for
Permitted Encumbrances. The Purchased Assets (including the Intellectual
Property and Real Property) include all such rights, properties and other assets
necessary to permit VitalWorks to conduct the Business in all material respects
in the manner such business has been conducted prior to the date hereof. The
equipment, machinery, computers, computer peripherals and fixtures included in
the Purchased Assets are generally in good operating condition and repair
(except for ordinary wear and tear), and are adequate in all material respects
for the uses to which they are being put.
Section 5.14 Taxes. Except as otherwise disclosed on Schedule 5.14:
(a) VitalWorks has filed all material Tax Returns that it was
required to file. All such Tax Returns were correct and complete in all material
respects. All material Taxes owed by VitalWorks (whether or not shown on any Tax
Return) have been paid.
(b) There are no Liens for material Taxes on any of the Purchased
Assets except (i) liens for current Taxes not yet due and payable, or (ii) liens
listed on Schedule 5.14 with respect to unpaid Taxes that are being contested in
good faith.
Section 5.15 Employee Benefits. (a) Each Employee Plan entered into,
maintained or contributed to, or required to be maintained or contributed to, by
VitalWorks for the benefit of any employees of the Business has been
administered in all material respects in accordance with its terms and in
accordance with applicable laws, rules and regulations, including ERISA and the
Code, applicable to such Employee Plan. Schedule 5.15 sets forth a complete list
of each Employee Plan of VitalWorks or an ERISA Affiliate for the benefit of any
Employee of the Business.
(b) None of VitalWorks, the Business nor an ERISA Affiliate (at any
relevant time) of VitalWorks or the Business has maintained, sponsored,
contributed to or otherwise participated in, or had any Liability to or with
respect to, any employee pension benefit plan subject to Title IV or Section 302
of ERISA or Section 412 of the Code.
(c) None of VitalWorks, the Business nor an ERISA Affiliate (at any
relevant time) of VitalWorks or the Business has maintained, sponsored,
contributed to or otherwise participated in any "multiemployer plan" (as such
term is defined in Section 3(37) of ERISA) or have actual or potential
liabilities under Section 4201 of ERISA for any complete or partial withdrawal
from a "multiemployer plan."
(d) Without limiting any other provision of this Section 5.15 and
with respect to any Employee Plan, no event has occurred, no condition exists,
and no event has occurred or
22
will occur in connection with VitalWorks' sale of the Business that will subject
Purchaser to any Liability.
Section 5.16 Employees. (a) Schedule 5.16(a) contains a complete and
accurate list of the following information for each employee that works for the
Division as of the date set forth therein (the "Employees"), including each
Employee on leave of absence or layoff status: name; job title; date of hire,
years of service; current compensation paid or payable, including bonus payment;
options granted; severance level, insurance, medical, dental or vision plan and
vacation eligibility. Except as set forth on Schedule 5.16(a), each Affected
Employee has executed an employment agreement substantially in one of the forms
attached to Schedule 5.16(a).
(b) To the Knowledge of VitalWorks, except as set forth on Schedule
5.16(b) no Employee is a party to, or is otherwise bound by, any agreement or
arrangement, including any confidentiality, noncompetition, or proprietary
rights agreement, between such Employee and any other Person ("Proprietary
Rights Agreement") that in any way adversely affects or will affect (i) the
performance of his duties as an Employee, or (ii) the ability to conduct the
Business. To the Knowledge of VitalWorks, no Employee has entered into any
agreement that requires the Employee to transfer, assign or disclose information
concerning his or her work to anyone other than VitalWorks.
(c) VitalWorks is not a party to any collective bargaining agreement
or any other contract to or with any labor union or other employee
representative of a group of employees.
(d) Schedule 5.16(d) lists (in the case of written documents) or
describes (in the case of unwritten material) any of the following with respect
to which VitalWorks has or may have any existing or future obligation (the
"Employment Obligations") to any past or present employee of the Business (other
than the obligations set forth in Section 5.16(a)), consultant, individual
independent contractor, director, officer or person engaged in any similar
capacity with regard to the Business: contracts between VitalWorks and any such
Employee, consultant, individual independent contractor, director, officer or
person; or policies, plans, terms, conditions or practices of VitalWorks
relating to any aspect of VitalWorks' relations with Employees generally, or any
individual or class of Employees, consultants, individual independent
contractors, directors, officers or persons.
Section 5.17 Certain Payments. Neither VitalWorks nor, to the
Knowledge of VitalWorks, any director, officer, agent, or Employee of
VitalWorks, has directly or indirectly made any contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or other payment to any Person,
private or public, regardless of form, whether in money, property, or services
(i) to obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, or (iii) to obtain special concessions
or for special concessions already obtained, for or in respect of the Business.
Section 5.18 Federal Funding. Except as set forth on Schedule 5.18,
none of the products or services of the Division currently offered or in
development were invented, developed, conceived or reduced to practice with
Federal funding or other Federal assistance.
23
Section 5.19 SEC Filings. (a) VitalWorks has filed all reports,
filings, registration statements and other documents required to be filed by it
with the Securities and Exchange Commission since January 1, 2002 (the
"VitalWorks SEC Documents"). As of its filing date, each VitalWorks SEC Document
complied as to form in all material respects with the applicable requirements of
the Securities Act and/or the Exchange Act, as the case may be.
(b) No VitalWorks SEC Document filed pursuant to the Exchange Act
contained, as of its filing date, any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. No VitalWorks SEC Document, as amended or supplemented, if
applicable, filed pursuant to the Securities Act contained, as of the date such
document or amendment became effective, any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
Section 5.20 Customer Contracts. (a) At least seventy percent (70%)
of the customer contracts of the Business ("Customer Contracts") are
substantially in one of the forms attached hereto on Schedule 5.20(a) which
forms may have been amended by addendum. None of such addenda grant a customer
any exclusive license, joint ownership, or exclusive ownership of any of the
Intellectual Property listed on Schedule 5.11. Substantially all such addenda do
not grant a customer any indemnification regarding intellectual property
infringement beyond the United States, a perpetual fixed fee or no fee for
services, unusual source code escrow provision, support guaranty, unlimited
liability, indemnity other than for intellectual property infringement, an
express refund provision for all license fees paid, unusual performance
warranty, response time warranty, unusual engineering commitments, an unlimited
scope of use license or any payments tied to acceptance of product or services
provided by VitalWorks.
(b) Schedule 5.20(b) lists the Division's 100 largest customers
(ranked by revenue for the period October 1, 2003 through September 30, 2004)
(the "Top 100 Customers").
(c) Without limiting the foregoing, to the Knowledge of VitalWorks,
the Business is being conducted in conformity with the Customer Contracts and
all applicable laws with respect thereto. To the Knowledge of VitalWorks,
VitalWorks is performing its obligations under the Customer Contracts in all
material respects and such contracts are in full force and effect in accordance
with their terms.
(d) To the Knowledge of VitalWorks, except as set forth on Schedule
5.20(d), neither (a) five of the Top 100 Customers, nor (b) one or more
customers of the Business having aggregate revenue for the 12 most recently
completed months prior to the date hereof of more than $2,000,000, have informed
VitalWorks of their intent to alter or terminate their respective Customer
Contracts.
Section 5.21 Disclosure. No representation or warranty made by
VitalWorks in this Agreement or in the certificate provided to Purchaser
pursuant to Section 4.2(a) contains any untrue statement or omits to state a
material fact necessary to make any of them, in light of the circumstances in
which it was made, not misleading.
24
Section 5.22 Brokers. Except for Xxxxxxx Xxxxx & Company and
American Appraisal Associates, no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of VitalWorks. VitalWorks is solely responsible for the
fees and expenses of Xxxxxxx Xxxxx & Company and American Appraisal Associates.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to VitalWorks as follows:
Section 6.1 Organization and Qualification. Purchaser is a
corporation duly organized, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation and has full corporate power and
authority to conduct its business as it is presently being conducted and to own
and lease its properties and assets.
Section 6.2 Corporate Authorization. Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement, and to
perform its obligations hereunder. The execution, delivery and performance by
Purchaser of this Agreement have been duly authorized by all requisite corporate
action on the part of Purchaser.
Section 6.3 Binding Effect. This Agreement constitutes a valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or law).
Section 6.4 Non-Contravention. The execution, delivery and
performance by Purchaser of this Agreement, and the consummation of the
transactions contemplated hereby, do not and will not (i) violate any provision
of the certificate of incorporation, bylaws or other organizational documents of
Purchaser; (ii) result in a breach of, or default under, or right to accelerate
with respect to, any term or provision of any contract, commitment or other
obligation to which Purchaser and any of its Affiliates is a party or is
subject; or (iii) assuming compliance with the matters set forth in Sections 5.4
and 6.5, violate or result in a breach of or constitute a default under any Law
or other restriction of any Governmental Authority to which Purchaser is
subject.
Section 6.5 Governmental Authorization. Except as set forth in
Schedule 6.5, the execution and delivery of this Agreement by Purchaser do not
and will not require any material consent or approval of any Governmental
Authority.
Section 6.6 Third Party Approvals. Except as set forth on Schedule
6.6, the execution, delivery and performance by Purchaser of this Agreement and
the transactions contemplated hereby do not require any consents, waivers,
authorizations or approvals of, or filings with, any third Persons which have
not been obtained by Purchaser.
25
Section 6.7 Financial Capability. As of the date hereof and on the
Closing Date, Purchaser has and will have sufficient funds to make the Purchase
Price on the terms and conditions contemplated by this Agreement.
Section 6.8 Condition of the Business. Purchaser and its
representatives and agents have made all inspections and investigations of the
Business and the Purchased Assets deemed necessary or desirable by Purchaser.
Purchaser is purchasing the Purchased Assets based solely on the results of its
inspections and investigations, and not on any representation or warranty of
VitalWorks not expressly set forth in this Agreement. In light of these
inspections and investigations and the representations and warranties made to
Purchaser by VitalWorks in Article V hereof, Purchaser is relinquishing any
right to any claim based on any representations and warranties other than those
specifically included in this Agreement or in the certificate provided to the
Purchaser pursuant to Section 4.2(a). Any claims Purchaser may have for breach
of representation or warranty shall be based solely on the representations and
warranties of VitalWorks set forth in this Agreement or in the certificate
provided to the Purchaser pursuant to Section 4.2(a). EXCEPT AS EXPRESSLY
PROVIDED HEREIN, ALL WARRANTIES OF HABITABILITY, MERCHANTABILITY AND FITNESS FOR
ANY PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES ARISING UNDER THE UNIFORM
COMMERCIAL CODE (OR SIMILAR FOREIGN LAWS), ARE HEREBY WAIVED BY PURCHASER.
Purchaser further represents that neither VitalWorks nor any other Person has
made any representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding, the Business, the Purchased Assets or
the Assumed Liabilities not expressly set forth in this Agreement, and neither
VitalWorks nor any other Person will have or be subject to any liability to
Purchaser or any other Person resulting from the distribution to Purchaser or
its representatives, or Purchaser's use of, any such information, including any
confidential memoranda distributed on behalf of VitalWorks relating to the
Business or other publication provided to Purchaser or its representatives, or
any other document or information provided to Purchaser or its representatives
in connection with the sale of the Business.
Section 6.9 Litigation. There is no material action, order, writ,
injunction, judgment or decree outstanding, or suit, litigation, proceeding,
labor dispute (other than routine grievance procedures or routine, uncontested
claims for benefits under any benefit plans for any officers, employees or
agents of Purchaser), arbitration, investigation or reported claim, pending or,
threatened, before any court, governmental entity or arbitrator, which seeks to
delay or prevent the consummation of the transactions contemplated by this
Agreement or would, if successful, materially and adversely affect the ability
of Purchaser to consummate the transactions contemplated by this Agreement.
Section 6.10 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser.
26
ARTICLE VII
COVENANTS
Section 7.1 Information and Documents. (a) From and after the date
hereof and pending Closing, upon reasonable advance notice, VitalWorks shall
permit Purchaser and its representatives to have reasonable access, during
regular normal business hours, to the assets, employees, books and records of
VitalWorks relating to the Business, and shall furnish, or cause to be
furnished, to Purchaser, such financial, tax and operating data and other
available information with respect to the Business as Purchaser shall from time
to time reasonably request; provided, however, that no such access shall
unreasonably interfere with VitalWorks' operation of its business, including the
Business; and provided, further, that VitalWorks shall not be required to take
any action which could constitute a waiver of attorney-client privilege.
(b) All information received by Purchaser and given by or on behalf
of VitalWorks in connection with this Agreement and the transactions
contemplated hereby will be held by Purchaser and its Affiliates, agents and
representatives as "Evaluation Material", as defined in, and pursuant to the
terms of, the Confidentiality Agreement.
(c) VitalWorks shall use commercially reasonable efforts to provide
the following items to a reasonable number of Purchaser employees, upon advance
notice: (i) access to relevant VitalWorks' employees (in addition to those set
forth on Schedule 7.1), (ii) side-by-side training as reasonably necessary,
(iii) access to written company-wide processes and policies, and (iv) reasonable
use of VitalWorks' property. All of the above shall be provided solely in
support of the transition of the processes and systems listed on Schedule 7.1
from VitalWorks to Purchaser; provided, however, that items (i), (iii) and (iv)
of this Section 7.1(c), must not unreasonably interfere with VitalWorks'
operation of its business, including the Business; and provided, further, that
VitalWorks shall not be required to take any action which could constitute a
waiver of attorney-client privilege. In addition, those employees set forth on
Schedule 7.1 or such other employee(s) with similar qualifications will dedicate
a majority of such employees working time in support of the transition of the
processes and systems listed on Schedule 7.1 from VitalWorks to Purchaser.
Section 7.2 Conduct of Business. From and after the date hereof and
to the Closing, except (i) as set forth on Schedule 7.2 or as otherwise
contemplated by this Agreement or (ii) as Purchaser shall otherwise consent in
writing, which consent shall not be unreasonably withheld, VitalWorks agrees
that it will conduct the Business, and will cause the Business to be conducted,
in the Ordinary Course of Business, and use commercially reasonable efforts to
preserve intact the Business and related relationships with customers, suppliers
and other third parties and keep available the services of the present employees
of the Business. From and after the date hereof and to the Closing, except (i)
as set forth on Schedule 7.2 or as otherwise contemplated by this Agreement and
(ii) as Purchaser shall otherwise consent in writing, which consent shall not be
unreasonably withheld, VitalWorks covenants and agrees that it shall:
(a) maintain insurance coverage at levels consistent with presently
existing levels so long as such insurance is available at commercially
reasonable rates;
27
(b) not incur, create or assume any Lien, other than Permitted
Encumbrances, with respect to any material asset;
(c) not acquire or dispose of any material assets outside of the
Ordinary Course of Business;
(d) not enter into any material contract or material lease relating
to the Business other than in the Ordinary Course of Business;
(e) except for customary merit, cost-of-living and promotional
increases in the Ordinary Course of Business, not increase the rate of
compensation for any employee of the Business;
(f) not waive any material right, forgive any material debt (other
than intercompany debt) or release any material claim relating to the Business,
except in the Ordinary Course of Business;
(g) not accelerate or delay the sale of services or equipment
constituting the conduct of the Business or the collection of accounts
receivable of the Company in a manner that is not in the Ordinary Course of
Business;
(h) not take any action that would cause or result in, or that would
reasonably be expected to cause or result in (i) any of the representations or
warranties set forth in this Agreement not to be true and correct as of the
Closing Date or (ii) the nonperformance in any material respect of VitalWorks'
covenants set forth in this Agreement;
(i) not amend any material term of, or waive any material right
under, any Material Contract; and
(j) not agree to take any of the foregoing actions.
Section 7.3 Reasonable Best Efforts; Certain Governmental Matters.
(a) Upon the terms and subject to the conditions herein provided, each of the
parties hereto agrees to use reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary for it
to do under applicable Laws to consummate and make effective the transactions
contemplated by this Agreement, including (i) to comply promptly with all legal
requirements which may be imposed on it with respect to this Agreement and the
transactions contemplated hereby (which actions shall include furnishing all
information required by applicable Law in connection with approvals of or
filings with any Governmental Authority); (ii) to satisfy the conditions
precedent to the obligations of such party hereto; and (iii) to obtain any
consent, authorization, order or approval of, or any exemption by, any
Governmental Authority or other public or private third party required to be
obtained or made by Purchaser or VitalWorks in connection with the acquisition
of the Purchased Assets or the taking of any action contemplated by this
Agreement.
(b) Subject to appropriate confidentiality protections, each of the
parties hereto will furnish to the other party such necessary information and
reasonable assistance as such other party may reasonably request in connection
with the foregoing and will provide the
28
other party with copies of all filings made by such party with any Governmental
Authority and, upon request, any other information supplied by such party to a
Governmental Authority in connection with this Agreement and the transactions
contemplated hereby.
(c) Without limiting the generality of the undertakings pursuant to
this Section 7.3, Purchaser and VitalWorks agree to (i) provide or cause to be
provided promptly to Governmental Authorities with regulatory jurisdiction over
enforcement of any applicable Competition Laws ("Governmental Antitrust Entity")
information and documents requested by any Governmental Antitrust Entity or
necessary, proper or advisable to permit consummation of the acquisition of the
Purchased Assets and the transactions contemplated by this Agreement; and (ii)
file any notification and report form and related material required under the
HSR Act as soon as practicable and in any event not later than 15 Business Days
after the date hereof, and thereafter comply with any requests for additional
information or documentary material that may be made under the HSR Act and
cooperate with the other party in connection with such filing. Notwithstanding
the foregoing, Purchaser shall not be required to hold separate (including by
trust or otherwise) or to divest any of its businesses or assets, or to take or
agree to take any other action or agree to any limitation with respect to the
ownership or holding of any of its businesses or assets, in order to comply with
this Section 7.3.
Section 7.4 Employees and Employee Benefits.
(a) As of the Closing Date, subject to Purchaser's standard hiring
practices (including without limitation completion of Purchaser's standard
application, background check and personnel requirements) Purchaser shall offer
employment (or cause its Subsidiary to offer employment) to substantially all
employees of the Business who are employed by the Business on the Closing Date
("Affected Employees") on terms and conditions (including, without limitation,
base salary or hourly wages and bonus opportunities) that are substantially
comparable in the aggregate to those in effect with respect to the Affected
Employees on the date hereof as set forth on Schedule 5.16. Purchaser agrees to
fully indemnify and defend and hold harmless VitalWorks with respect to all
claims (including, without limitation, severance or discharge claims), actions,
judgments, awards, settlements, payments and any other liability incurred by
VitalWorks as a result of (i) Purchaser's failure to comply with the
requirements of the foregoing provisions of this Section 7.4(a) or (ii) the
manner in which Purchaser undertakes to fulfill its obligations with respect to
the requirements of the foregoing sentence. Purchaser shall be responsible for
all severance obligations, including any liability arising under WARN, to
employees of the Business who are employed by the Business on the Closing Date
that are not offered employment by Purchaser.
(b) For not less than six months following the Closing Date,
Purchaser shall maintain, or shall cause its Affiliates to maintain,
compensation and Benefit Plans for Affected Employees who accept employment with
Purchaser or an affiliate of Purchaser (each, a "Hired Employee") that are, in
the aggregate, no less favorable on balance than as provided under the
compensation arrangements and Benefit Plans as in effect on the date hereof as
set forth on Schedules 5.15 and 5.16; provided, that nothing in this Section 7.4
shall be deemed to change the status of the Hired Employees as "at-will"
employees.
29
(c) Purchaser shall, or shall cause its Affiliates to, honor all
vacation days earned by Hired Employees as of the Closing Date. All such
vacation days have been awarded in accordance with VitalWorks policies, attached
hereto as Schedule 7.4(c). To the extent permitted by law and applicable tax
qualification requirements, and subject to any generally applicable break in
service or similar rule, Purchaser shall, or shall cause its Affiliates to, give
all Hired Employees full credit for all services with VitalWorks (or any
predecessor employer) for purposes of benefit accrual, eligibility, and vesting
under the following employee benefit plan arrangements maintained by Purchaser
or any affiliate thereof: 401(k) retirement plan, short term disability
insurance and vacation.
(d) To the extent required by the Health Insurance Portability and
Accountability Act of 1996, as amended, Purchaser shall, or shall cause its
Affiliates to, (i) with respect to any life, health or long-term disability
insurance plan, waive all limitations as to preexisting conditions, exclusions
and waiting periods with respect to participation and coverage requirements with
respect to such life, health or long-term disability plans in which such Hired
Employees may be eligible to participate after the Closing Date other than
limitations or waiting periods that are already in effect with respect to such
Hired Employee and that have not been satisfied as of the Closing Date under any
life, health or long-term disability insurance plans maintained for the Hired
Employee immediately prior to the Closing Date, and (ii) with respect to any
health insurance plan, provide each Hired Employee with credit for any
deductibles paid prior to the Closing Date in satisfying any applicable
deductible or out-of-pocket requirements under any such plan that such Hired
Employees are eligible to participate in after the Closing Date.
Section 7.5 Bulk Transfer Laws. Purchaser acknowledges that
VitalWorks has not taken, and does not intend to take, any action required to
comply with any applicable bulk sale or bulk transfer laws or similar laws.
Section 7.6 No Solicitation. (a) VitalWorks shall not, and shall not
authorize or permit any of its Subsidiaries, or any officers, directors,
employees, agents, or representatives of VitalWorks or any of its Subsidiaries
(including, without limitation, any investment banker, financial advisor,
attorney or accountant retained by VitalWorks or any of its Subsidiaries), to,
directly or indirectly, (i) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action designed to
facilitate, any inquiries, any expression of interest, or the making of any
proposal that constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal, (ii) enter into or maintain or continue discussions or
negotiations regarding, or furnish to any person or entity any information with
respect to, any Acquisition Proposal or agree to or endorse any Acquisition
Proposal, (iii) grant any waiver or release under any standstill or similar
agreement with respect to any of voting securities of VitalWorks or the
Business, or (iv) enter into any agreement with respect to any Acquisition
Proposal for VitalWorks; provided, however, that, VitalWorks shall not in any
way be restricted by the preceding sentence from discussing, negotiating or
otherwise taking any action with regard to a proposal that does not involve the
Purchased Assets or does not prevent VitalWorks from completing the transaction
contemplated by this Agreement.
Section 7.7 Noncompetition. (a) Subject to the provisions of this
Section 7.7, VitalWorks agrees that for a period of five years from the Closing
Date (the "Non Compete
30
Period"), VitalWorks shall not, and it shall cause its Subsidiaries not to,
compete in any material respect with the Business as conducted as of the Closing
Date ("Competitive Activity") or directly or indirectly own any interest in any
party that is engaged primarily in a Competitive Activity; provided, however,
that it shall not be deemed to be a violation of this subsection for VitalWorks
or any of its Subsidiaries; (i) to invest in or own any non-voting debt
securities or other non-voting debt obligations; (ii) to invest in any third
Person (including any corporation or mutual or other fund) which invests in,
manages or operates a Competitive Activity, so long as VitalWorks' or any of its
Subsidiary's investment is less than 10% of the outstanding ownership interest
in such third Person and VitalWorks and its Subsidiaries do not control or
conduct such third Person or Competitive Activity; (iii) to invest in, own an
interest in, or acquire all or a majority of the stock or assets of any Person
which is not engaged primarily in a Competitive Activity; (iv) to invest in
securities having less than 5% of the outstanding voting power of any Person,
the securities of which are publicly traded or listed on any securities exchange
or automated quotation system; or (v) to own any equity interests through any
employee benefit plan or pension plan. For purposes of this Section 7.7,
"engaged primarily in a Competitive Activity" shall mean that greater than 20%
of the aggregate net revenue derived during the last complete fiscal year of
such Person (calculated on a consolidated basis) is derived from the Competitive
Activity. Each investment or acquisition made by VitalWorks or its Subsidiaries
which is subject to the provisions of this Section 7.7 must be permissible
hereunder at the time of such investment; provided, however, that any such
investment which was permissible when made cannot thereafter be the basis of a
claim of violation of this Section 7.7.
(b) Notwithstanding anything in this Agreement to the contrary, in
the event of (i) any merger, combination, consolidation or similar business
transaction involving VitalWorks in which the holders of VitalWorks stock
immediately prior to such closing are not the holders, directly or indirectly,
of a majority of the voting securities of the surviving or continuing Person in
such transaction, (ii) the sale or transfer by VitalWorks of all or
substantially all of its assets to an acquiring Person in which the holders of
VitalWorks stock immediately prior to such closing are not the holders of a
majority of the voting securities of the acquiring Person, or (iii) the sale by
the holders of VitalWorks stock of an amount of VitalWorks stock that equals or
exceeds a majority of the shares of VitalWorks stock issued and outstanding
immediately prior to such closing to a Person in which the holders of the
VitalWorks stock immediately prior to such closing are not the holders of a
majority of the voting securities of such Person, where at the time of such
transaction the surviving or continuing Person, as the case may be, is engaged
in whole or in part, directly or indirectly, in Competitive Activity (such
surviving or continuing Person, an "Acquirer") Section 7.7(a) shall not apply to
such Acquirer and such Acquirer shall not be bound by the terms and restrictions
of Section 7.7(a).
(c) Notwithstanding anything in this Agreement to the contrary,
VitalWorks shall be permitted to engage in Competitive Activity during the Non
Compete Period, provided such Competitive Activity does not involve the sale of
EDIS (Emergency Department Information System) software or anesthesiology
practice management software, and such Competitive Activity includes the license
of PACS Software (defined below); provided, however, that the sale of EMR
(Emergency Medical Records) software by VitalWorks shall be prohibited for the
eighteen month period immediately following the Closing. PACS Software shall
mean software that allows the user to manage, store, retrieve and manipulate
medical images.
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(d) For a period of five years after the Closing Date, VitalWorks
shall not, and it shall cause its Subsidiaries not to, directly or indirectly,
induce or attempt to induce any customer or prospective customer of the Business
to alter or terminate their relationship with the Purchaser solely as it relates
to the Business as conducted as of the Closing Date, or, violate the terms of
their customer contracts with Purchaser at any time after the Closing Date.
(e) For a period of five years after the Closing Date, VitalWorks
shall not, and it shall cause its Subsidiaries not to, directly or indirectly,
induce or attempt to induce any Hired Employees, officers, employees,
representatives, independent contractors or agents of Purchaser or any of its
Affiliates engaged solely in the Business to leave the employ of Purchaser or
any such Affiliate for employment with VitalWorks or its Subsidiaries, or
violate the terms of their contracts, or any employment arrangements, with
Purchaser or any such Affiliate, except that nothing in this sentence shall
restrict or preclude (i) the hiring of employees or independent contractors of
Purchaser or any of its Affiliates who approach VitalWorks regarding employment
on an unsolicited basis and (ii) the rights of VitalWorks and its Subsidiaries
to make generalized searches for employees or independent contractors by the use
of advertisements in the media (including trade media) or by engaging search
firms to engage in searches that are not targeted or focused on the employees or
independent contractors employed by the Business. Notwithstanding the foregoing,
for a period of five years after the Closing Date, VitalWorks shall not hire the
individuals set forth on Schedule 7.7(e).
(f) Prior to Closing, except with respect to Affected Employees or
as otherwise agreed in writing, neither Purchaser nor any of its Affiliates will
offer or provide employment on a full-time or part-time or consulting basis to
any individual employed by VitalWorks or any of its Affiliates. For a period of
five years after the Closing Date, neither Purchaser nor any of its Affiliates
shall, directly or indirectly, induce or attempt to induce any officers,
employees, representatives or agents of VitalWorks or any of its Subsidiaries to
leave the employ of VitalWorks or any of its Subsidiaries, for employment with
Purchaser or any of its Affiliates, or violate the terms of their contracts, or
their employment arrangements, except that nothing in this sentence shall
restrict or preclude, (i) the hiring of the Hired Employees, (ii) the hiring of
employees of VitalWorks or its subsidiaries who approach Purchaser regarding
employment on an unsolicited basis, and (iii) the rights of Purchaser or its
Affiliates to make generalized searches for employees by the use of
advertisements in the media (including trade media) or by engaging search firms
to engage in searches that are not targeted or focused on the employees employed
by VitalWorks or its Subsidiaries.
(g) VitalWorks and Purchaser acknowledge that this Section 7.7
constitutes an independent covenant and shall not be affected by performance or
nonperformance of any other provision of this Agreement. Each of VitalWorks and
Purchaser has independently consulted with its counsel and after such
consultation agrees that the covenants set forth in this Section 7.7 are
reasonable and proper. It is the desire and intent of the parties that the
provisions of this Section 7.7 shall be enforced to the fullest extent permitted
under applicable Law. If all or part of this Section 7.7 is held invalid,
illegal or incapable of being enforced by any Law or public policy, all other
terms and provisions of this Agreement shall nevertheless remain in full force
and effect. If any part of this Section 7.7 is held to be excessively broad as
to duration, scope, activity or subject, such part will be construed by limiting
and reducing it so as to be enforceable to the maximum extent compatible with
applicable Law.
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Section 7.8 Transitional Services; License Agreements. (a) At the
Closing, Purchaser and VitalWorks shall enter into, execute and deliver a
transitional services agreement substantially to the effect set forth on
Schedule 7.8(a) (the "Transitional Services Agreement").
(b) At the Closing, Purchaser and VitalWorks shall enter into,
execute and deliver a license agreement substantially to the effect set forth on
Schedule 7.8(b) (the "License Agreement"), in order to effectuate the licensing
of certain items, as set forth on Schedule 5.11.
Section 7.9 Compliance with WARN, Etc. With respect to WARN or other
similar Laws of any jurisdiction, Purchaser will timely give any notices and
take any other actions as may be required thereunder, provided that the
foregoing shall not apply with respect to any WARN notices and other actions
required with regard to VitalWorks' Connecticut headquarters. VitalWorks shall
assist Purchaser in complying with WARN, if required.
Section 7.10 Litigation Support. Purchaser and its Affiliates on the
one hand and VitalWorks and its Affiliates on the other hand will cooperate with
each other in the defense or settlement of any Liabilities or lawsuits involving
the Business or its former employees for which they have responsibility under
this Agreement by providing the other party and such other party's legal counsel
and other designated Persons access to employees, records, documents, data,
equipment, facilities, products, parts, prototypes and other information
regarding the Business and its products as such other party may request, to the
extent maintained or under the possession or control of the requested party. The
requesting party shall reimburse the other party for its reasonable
out-of-pocket expenses paid to third parties in performing its obligations under
this Section 7.10. VitalWorks shall keep Purchaser informed of the status of the
pendency of the relevant Liabilities and lawsuits involving the Business for
which it has responsibility under this Agreement, will advise Purchaser of
material issues involved in the litigation and will use commercially reasonable
efforts to seek a confidentiality agreement with respect to any settlements of
such lawsuits. For so long as any Liabilities or lawsuits involving the Business
for which VitalWorks has responsibility under this Agreement remain outstanding,
Purchaser will advise VitalWorks of material issues involved in the lawsuits
involving the Business for which it has responsibility and will use commercially
reasonable efforts to seek a confidentiality agreement with respect to any
settlements of such lawsuits.
Section 7.11 Insurance. As of the Closing Date, the coverage under
all insurance policies related to the Business shall continue in force only for
the benefit of VitalWorks and not for the benefit of Purchaser, and Purchaser
agrees to arrange for its own insurance policies with respect to the Business
covering all periods after the Closing.
Section 7.12 Interim Reports. Until the Closing Date, VitalWorks
shall deliver to Purchaser within 30 days after the end of each calendar month
(beginning with November 2004) a copy of the Division's internal income
statement as of the last day of such month prepared in a manner and containing
information consistent with VitalWorks' current practices.
Section 7.13 Lockbox Accounts. Within thirty days after the
Effective Date, VitalWorks shall open a separate lockbox for the Business only
(the "Business Lockbox") and send written notice advising the Business customers
of the new Business Lockbox. As of such date subsequent Business customers
statements will be modified to reflect the new Business
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Lockbox. VitalWorks will use reasonable efforts to open such Business Lockbox at
a bank to be selected by Purchaser. Effective as of the Closing Date, VitalWorks
shall transfer to, and otherwise vest in, Purchaser the exclusive right to the
Business Lockbox. After the Closing, if Vitalworks comes into possession of any
payments with respect to any accounts receivable related to the Business, it
shall deposit such payments into the Business Lockbox accounts or other
depository accounts, or transfer such payments to another account designated by
Purchaser. If Purchaser comes into possession of any payments that Purchaser's
records indicate are not made with respect to an account receivable related to
the Business and owned by Purchaser, it shall deposit such payments into the
separate lockbox account or other depository account designated by VitalWorks.
The parties acknowledge and agree that, following the Closing, Purchaser or its
designees shall have sole dominion and control over the Business Lockbox account
including, without limitation, the exclusive right to revoke any instructions
given to the bank that maintains the Business Lockbox and the exclusive right to
cancel or change the automatic transfer instructions related to the Business
Lockbox account. Each party shall have the right to inspect the records of the
other upon reasonable request in connection with this Section 7.13.
ARTICLE VIII
TAX MATTERS
Section 8.1 Transfer Taxes. All Transfer Taxes attributable to the
transfer of the Purchased Assets and any Transfer Taxes required to effect any
recording or filing with respect thereto shall be borne by Purchaser, and
Purchaser, shall indemnify VitalWorks, its Affiliates and each of their
respective officers, directors, employees, stockholders, agents, and
representatives for any such Taxes imposed on VitalWorks. VitalWorks and
Purchaser shall cooperate to timely prepare any returns or other filings
relating to such Transfer Taxes, including any claim for exemption or exclusion
from the application or imposition of any Transfer Taxes. Unless otherwise
required by applicable law, Purchaser will file all returns or other filings
with respect to Transfer Taxes, and promptly following the filing thereof,
Purchaser will furnish to VitalWorks a copy of such return or other filing and a
copy of a receipt showing payment of any such Transfer Tax. With respect to any
such returns or filings required to be filed by VitalWorks, Purchaser shall pay
to VitalWorks, not later than five (5) Business Days before the due date for
payment of such Transfer Taxes, an amount equal to the Transfer Taxes shown on
such return or other filing, and VitalWorks will furnish to Purchaser a copy of
such return or other filing and a copy of a receipt showing payment of any such
Transfer Tax.
Section 8.2 Liability for Taxes and Related Matters. (a) VitalWorks
shall prepare or cause to be prepared all Tax Returns relating to the Purchased
Assets for periods ending on or prior to the Closing.
(b) VitalWorks shall prepare and file all Tax Returns relating to
all real property Taxes, personal property Taxes or similar ad valorem
obligations levied with respect to the Purchased Assets for any taxable period
that begins before the Closing and ends after the Closing (each such taxable
period, a "Straddle Period", and such Taxes, "Straddle Period Taxes"), whether
imposed or assessed before or after the Closing. Purchaser shall be liable for
and shall indemnify VitalWorks, its Affiliates and each of their respective
officers, directors,
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employees, stockholders, agents, and representatives against all liability for
(i) in the case of any Straddle Period Taxes other than Straddle Period Taxes
based upon income or receipts, the amount of such Straddle Period Tax for the
entire Tax period multiplied by a fraction the numerator of which is the number
of days in the Tax period ending after the Closing and the denominator of which
is the number of days in the entire Tax period, and (ii) in the case of any
Straddle Period Taxes based upon or related to income or receipts, the amount
which would be payable if the relevant Tax period began after the Closing. Any
credits relating to a Straddle Period shall be taken into account as though the
relevant Straddle Period ended on the Closing. All determinations necessary to
give effect to the foregoing allocations shall be made in a manner that does not
accelerate deductions or defer income. With respect to any such Straddle Period
returns or filings, Purchaser shall pay to VitalWorks, not later than five (5)
Business Days before the due date for payment of such Straddle Period Taxes, an
amount equal to the portion of such Straddle Period Taxes for which Purchaser is
liable under this Section 8.2(b), and VitalWorks shall, following the filing
thereof, furnish to Purchaser a copy of such return or other filing and a copy
of a receipt showing payment of any such Straddle Period Tax. For the avoidance
of doubt, sales and use Taxes (the liability for which is provided in Section
2.4(f) and 2.5(e)) shall not be considered Straddle Period Taxes for purposes of
this Section 8.2(b).
Section 8.3 Cooperation. Purchaser and VitalWorks agree to furnish
or cause their Affiliates to furnish, to each other, upon request, as promptly
as practicable, such information and assistance relating to the Purchased Assets
or the Business (including, access to books and records) as is reasonably
necessary for the filing of all Tax Returns and other Tax filings, the making of
any election related to Taxes, the preparation for any audit by any taxing
authority, and the prosecution or defense of any claim, suit or proceeding
relating to any Tax Return. Purchaser and VitalWorks shall cooperate, or cause
their Affiliates to cooperate, with each other in the conduct of any audit or
other proceeding related to Taxes and each shall execute and deliver such other
documents as are necessary to carry out the intent of this Section 8.3.
Purchaser and VitalWorks shall provide, or cause their Affiliates to provide,
timely notice to each other in writing of any pending or threatened Tax audits,
assessments or litigation with respect to the Purchased Assets or the Business
for any taxable period for which the other party may have liability under this
Agreement. Purchaser and VitalWorks shall furnish, or cause their respective
Affiliates to furnish, to each other copies of all correspondence received from
any taxing authority in connection with any Tax Audit or information request
with respect to any taxable period for which the other party or its Affiliates
may have liability under this Agreement.
Section 8.4 Allocation of Purchase Price. (a) Within 90 calendar
days after the Closing Date VitalWorks shall prepare and deliver to the
Purchaser a schedule (the "Allocation Schedule") allocating the Purchase Price
and the liabilities assumed by Purchaser pursuant to this Agreement among the
Purchased Assets in accordance with Section 1060 of the Code and the regulations
promulgated thereunder (or any comparable provisions of state or local tax law)
or any successor provision.
(b) Purchaser will have the right to make reasonable objections to
the Allocation Schedule, if and to the extent Purchaser believes in good faith
that the Allocation Schedule was not prepared in accordance with Section 1060 of
the Code and the regulations promulgated thereunder, within ten (10) Business
Days after its receipt thereof, in which event Purchaser and VitalWorks will
negotiate in good faith to resolve such objections. If Purchaser
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and VitalWorks cannot resolve Purchaser's reasonable objections to the
Allocation Schedule within ten (10) Business Days after VitalWorks' receipt of
such objections, such dispute with respect to the Allocation Schedule shall be
presented on the next day to a nationally recognized independent accounting firm
jointly chosen by the parties, or, if they cannot agree, jointly chosen by their
respective accounting firms. The accounting firm, whose review shall be limited
to whether a disputed item has been prepared in accordance with Section 1060 of
the Code and the regulations promulgated thereunder, shall render a decision
within five (5) Business Days thereafter, which decision shall be final and
binding upon each of the parties. The fees, costs and expenses incurred in
connection therewith shall be shared in equal amounts by Purchaser and
VitalWorks.
(c) Purchaser and VitalWorks each shall report all Taxes and file
all Tax Returns (including amended Tax Returns and claims for refund) consistent
with the Allocation Schedule, and shall take no position contrary thereto or
inconsistent therewith (including, in any audits or examinations by any taxing
authority or any other proceedings), unless, and then only to the extent,
required by a Final Determination. Purchaser and VitalWorks shall exchange
completed and executed forms with respect to the allocation (including Internal
Revenue Service Form 8594) at least 30 days prior to the due date for filing
such forms and shall cooperate in the filing of any forms (including Form 8594)
with respect to such allocation, including any amendments to such forms required
with respect to any adjustment to the Purchase Price, pursuant to this
Agreement. Notwithstanding any other provisions of this Agreement, the foregoing
agreement shall survive the Closing without limitation.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification by VitalWorks. Subject to the provisions
of this Article IX, VitalWorks agrees to defend, indemnify and hold harmless
Purchaser, its Affiliates, and, if applicable, their respective directors,
officers, agents, employees, successors and assigns from and against any and all
claims, actions, causes of action, judgments, awards, Liabilities, losses, costs
or damages (collectively, a "Loss" or the "Losses") arising directly from (i)
any Retained Liability, (ii) any breach by VitalWorks of any of its covenants or
agreements contained in this Agreement, (iii) any breach of any warranty or
representation of VitalWorks contained in this Agreement or in the certificate
provided to Purchaser pursuant to Section 4.2(a), or (iv) any non-compliance
with bulk transfer or similar Laws to the extent the underlying obligation to
the creditor is not an Assumed Liability.
Section 9.2 Indemnification by Purchaser. Subject to the provisions
of this Article IX, Purchaser agrees to defend, indemnify and hold harmless
VitalWorks and its Affiliates, and, if applicable, their respective directors,
officers, agents, employees, successors and assigns from and against any and all
Loss claimed or arising directly from (i) any Assumed Liability, (ii) any breach
by Purchaser of any of its covenants or agreements in this Agreement, or (iii)
any breach of any warranty or representation of Purchaser contained in this
Agreement or in the certificate provided to VitalWorks pursuant to Section
4.3(a).
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Section 9.3 Notice of Claims. (a) If any of the Persons to be
indemnified under this Article IX (the "Indemnified Party") has suffered or
incurred any Loss, the Indemnified Party shall so notify the party from whom
indemnification is sought (the "Indemnifying Party") promptly in writing
describing such Loss, the amount or estimated amount thereof, if known or
reasonably capable of estimation, and the method of computation of such Loss,
all with reasonable particularity and containing a reference to the provisions
of this Agreement or any other agreement, instrument or certificate delivered
pursuant hereto in respect of which such Loss shall have occurred. If any action
at Law or suit in equity is instituted by or against a third party with respect
to which the Indemnified Party intends to claim any Liability as a Loss under
this Article IX, the Indemnified Party shall promptly notify the Indemnifying
Party of such action or suit and tender to the Indemnifying Party the defense of
such action or suit. A failure by the Indemnified Party to give notice and to
tender the defense of the action or suit in a timely manner pursuant to this
Section 9.3 shall not limit the obligation of the Indemnifying Party under this
Article IX, except (i) to the extent such Indemnifying Party is prejudiced
thereby, (ii) to the extent expenses are incurred during the period in which
notice was not provided, and (iii) as provided by Section 9.5.
(b) Each party will provide notice and an opportunity to comment to
the other party before filing any report, notification or filing with any
Governmental Authority or third party in connection with an event that would be
reasonably likely to result in a Loss subject to the indemnification provisions
of this Article. In the event a party is required to file any report,
notification or filing immediately, such party will provide simultaneous notice
to the other party when it files the report with the Governmental Authority.
Section 9.4 Third Party Claims. (a) If an Indemnified Party gives
notice to the Indemnifying Party pursuant to Section 9.3 of the assertion of any
third party claim, action, suit or proceeding (a "Third-Party Claim"), the
Indemnifying Party shall be entitled to participate in the defense of such
Third-Party Claim and, to the extent that it wishes (unless (i) the Indemnifying
Party is also a Person against whom the Third-Party Claim is made and the
Indemnified Party determines in good faith that joint representation would be
inappropriate or (ii) the Indemnifying Party fails to defend such Third-Party
Claim and provide indemnification with respect to such Third-Party Claim), to
assume the defense of such Third-Party Claim with counsel reasonably
satisfactory to the Indemnified Party. After notice from the Indemnifying Party
to the Indemnified Party of its election to assume the defense of such
Third-Party Claim, the Indemnifying Party shall not, so long as it diligently
conducts such defense, be liable to the Indemnified Party under this Article IX
for any fees of other counsel or any other expenses with respect to the defense
of such Third-Party Claim, in each case subsequently incurred by the Indemnified
Party in connection with the defense of such Third-Party Claim. If the
Indemnifying Party assumes the defense of a Third-Party Claim, no compromise or
settlement of such Third-Party Claims may be effected by the Indemnifying Party
without the Indemnified Party's prior written consent unless (A) there is no
finding or admission of any violation of law or any violation of the rights of
any person or entity; (B) the sole relief provided is monetary damages that are
paid in full by the Indemnifying Party; and (C) the Indemnified Party shall have
no liability with respect to any compromise or settlement of such Third-Party
Claims effected without its consent. If notice is given to an Indemnifying Party
of the assertion of any Third-Party Claim and the Indemnifying Party does not,
within fifteen (15) days after the Indemnified Party's notice is given, give
notice to the Indemnified Party of its election to assume the defense
37
of such Third-Party Claim, the Indemnifying Party will be bound by any
determination made in such Third-Party Claim or any compromise or settlement
effected by the Indemnified Party.
(b) The parties hereto shall cooperate in the defense or prosecution
of any Third Party Claim, with such cooperation to include (i) the retention and
the provision of the Indemnifying Party records and information that are
reasonably relevant to such Third Party Claim, and (ii) the making available of
employees on a mutually convenient basis for providing additional information
and explanation of any material provided hereunder.
(c) Notwithstanding the foregoing, if an Indemnified Party
determines in good faith that there is a reasonable probability that a
Third-Party Claim may materially adversely affect it other than as a result of
monetary damages, the Indemnified Party may, by notice to the Indemnifying
Party, have the right to control and direct, through counsel of its own
choosing, which counsel shall be reasonably acceptable to the Indemnifying
Party, the defense and settlement of such Third-Party Claim. In any such
Third-Party Claim, the party having the right to control and direct the defense
or settlement of the Third-Party Claim is referred to herein as the "Controlling
Party" and the other Party is referred to as the "Participating Party". The
Participating Party in any such Third-Party Claim shall be entitled to
participate fully in the defense of such claim with internal counsel or with
outside counsel reasonably acceptable to the Controlling Party, and the
Controlling Party shall permit counsel for the Participating Party to attend all
significant internal meetings, all meetings with representatives of plaintiffs,
hearings and the like. Counsel for the Participating Party also shall be given a
reasonable opportunity to comment upon all memoranda of law, pleadings and
briefs and other documents relating to the Third-Party Claim, and the
Controlling Party and its counsel shall give reasonable consideration to the
comments of counsel for the Participating Party. The Indemnifying Party will not
be bound by any determination of any Third-Party Claim so defended for the
purposes of this Agreement or any compromise or settlement effected without its
prior consent, (not to be unreasonably withheld).
Section 9.5 Expiration. Notwithstanding anything in this Agreement
to the contrary, if the Closing shall have occurred, all covenants, agreements,
warranties and representations made herein or in any certificate delivered
pursuant to Sections 3.1(b) or (c), shall survive the Closing. Notwithstanding
the foregoing, all representations and warranties made herein or in any
certificate delivered pursuant to Sections 3.1(b) or (c), and all
indemnification obligations under Sections 9.1 and 9.2 with respect to any such
representation or warranty, shall terminate and expire on, and no action or
proceeding seeking damages or other relief for breach of any thereof or for any
misrepresentation or inaccuracy with respect thereto shall be commenced after
the date which is eighteen months following the Closing Date, unless prior to
such date a claim for indemnification with respect thereto shall have been made
with reasonable specificity, by written notice given under Section 9.3.
Notwithstanding the foregoing, the representations and warranties contained in
Sections 5.2, 5.9, 5.13, 5.14 and 6.2 shall survive the Closing and continue in
full force and effect for a period beginning on the Closing Date and ending upon
the expiration of the applicable statute of limitations, and they shall
thereafter be of no further force and effect.
Section 9.6 Certain Limitations. (a) Notwithstanding the other
provisions of this Article IX, neither party hereto shall have any
indemnification obligations for Losses under
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Section 9.1(iii) (except in connection with a breach of representations and
warranties contained in Sections 5.2, 5.9, 5.13 and 5.14) or Section 9.2(iii)
(except in connection with a breach of a representation and warranty contained
in Section 6.2), (i) for any individual item where the Loss relating thereto is
less than $37,500 and (ii) in respect of each individual item where the Loss
relating thereto is equal to or greater than $37,500, unless the aggregate
amount of all such Losses exceeds $1,250,000, in which event VitalWorks shall be
required to pay the amount of such Losses which exceeds $1,250,000, but only up
to a maximum amount of $18,000,000.
Section 9.7 Losses Net of Insurance, Etc. The amount of any Loss for
which indemnification is provided under Section 9.1 or 9.2 shall be net of (i)
any amounts recovered by the Indemnified Party pursuant to any indemnification
by or indemnification agreement with any third party, (ii) any insurance
proceeds or other cash receipts or sources of reimbursement received as an
offset against such Loss (each Person named in clauses (i) and (ii), a
"Collateral Source"), and (iii) an amount equal to the present value (utilizing
a discount rate equal to the Applicable Rate defined in Section 2.7(d) of the
tax benefit, if any, attributable to such Loss. Indemnification under this
Article IX shall not be available unless the Indemnified Party first uses
commercially reasonable efforts to seek recovery from all Collateral Sources.
The Indemnifying Party may require an Indemnified Party to assign the rights to
seek recovery pursuant to the preceding sentence; provided, however, that the
Indemnifying Party will then be responsible for pursuing such claim at its own
expense. If the amount to be netted hereunder from any payment required under
Section 9.1 or 9.2 is determined after payment by the Indemnifying Party of any
amount otherwise required to be paid to an Indemnified Party to this Article IX,
the Indemnified Party shall repay to the Indemnifying Party, promptly after such
determination, any amount that the Indemnifying Party would not have had to pay
pursuant to this Article IX had such determination been made at the time of such
payment.
Section 9.8 Other Limitations. No claim for breach of representation
or warranty shall be made by Purchaser under Section 9.1(iii) if (a) such claim
is based on a fact or an event occurring prior to Closing (whether or not also
occurring prior to the date of this Agreement), (b) such fact or event was
disclosed by VitalWorks prior to Closing, and (c) but for an express waiver of
the closing condition set forth in Section 4.2(a) with respect to such breach,
Purchaser would have had no obligation to consummate the transactions
contemplated by this Agreement.
Section 9.9 Mitigation. Each Indemnified Party shall use all of its
commercially reasonable efforts to mitigate any Losses that an Indemnified Party
asserts or is reasonably likely to assert under this Article IX. In the event
that an Indemnified Party shall fail to make such commercially reasonable
efforts to mitigate any such Losses, then notwithstanding anything else to the
contrary contained herein, neither VitalWorks nor Purchaser, as the case may be,
shall be required to indemnify any Indemnified Party for that portion of any
Losses that could reasonably be expected to have been avoided through the
exercise of such commercially reasonable efforts.
Section 9.10 Sole Remedy/Waiver. The parties hereto acknowledge and
agree that the remedies provided for in this Agreement shall be the parties'
sole and exclusive remedy for monetary damages with respect to the subject
matter of this Agreement; other than in the case of fraud by another party. In
furtherance of the foregoing, the parties hereby waive, to the fullest
39
extent permitted by applicable Law, any and all other rights, claims and causes
of action (including rights of contributions, if any) for monetary damages known
or unknown, foreseen or unforeseen, which exist or may arise in the future, that
it may have against VitalWorks or any of its Affiliates, or Purchaser or any of
its Affiliates, as the case may be, arising under or based upon any federal,
state or local Law (including any such Law relating to environmental matters or
arising under or based upon any securities Law, common Law or otherwise);
provided, however, that the foregoing shall not limit any available remedy for
fraud by another party.
Section 9.11 No Consequential Damages. NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED HEREIN, NO PARTY TO THIS AGREEMENT SHALL BE LIABLE TO OR
OTHERWISE RESPONSIBLE TO ANY OTHER PARTY HERETO OR ANY AFFILIATE OF ANY OTHER
PARTY HERETO FOR CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR FOR DIMINUTION
IN VALUE OR LOST PROFITS THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE
PERFORMANCE OR BREACH HEREOF OR ANY LIABILITY RETAINED OR ASSUMED HEREUNDER.
ARTICLE X
TERMINATION
Section 10.1 Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by written agreement of Purchaser and VitalWorks;
(b) by either Purchaser or VitalWorks, by giving written notice of
such termination to the other party, if the Closing shall not have occurred on
or prior to January 31, 2005 (the "Termination Date") (unless the failure to
consummate the Closing by such date shall be due to the failure of the party
seeking to terminate this Agreement to have fulfilled any of its obligations
under this Agreement); provided, however, that the Termination Date shall
automatically be extended for an additional ninety (90) days in the event that
all conditions to Closing have been satisfied other than those set forth in
Section 4.1(a) or 4.1(b).
(c) by either VitalWorks or Purchaser if any court of competent
jurisdiction or other competent Governmental Authority shall have issued a
Governmental Order or taken any other action permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this Agreement and
such Governmental Order or other action shall have become final and
nonappealable;
(d) by Purchaser, if a breach of any representation, warranty,
covenant or agreement on the part of VitalWorks set forth in this Agreement
shall have occurred that would cause the condition set forth in Section 4.2(a)
of this Agreement not to be satisfied, and such condition shall be incapable of
being satisfied by the Termination Date; or
(e) by VitalWorks, if a breach of any representation, warranty,
covenant or agreement on the part of Purchaser set forth in this Agreement shall
have occurred that would
40
cause the condition set forth in Section 4.3(a) of this Agreement not to be
satisfied, and such condition shall be incapable of being satisfied by the
Termination Date.
Section 10.2 Effect of Termination. In the event of the termination
of this Agreement in accordance with Section 10.1 hereof, this Agreement shall
thereafter become void and have no effect, and no party hereto shall have any
liability to the other party hereto or their respective Affiliates, directors,
officers or employees, except for the obligations of the parties contained in
Sections 7.1 ("Information and Documents"), 11.1 ("Notices"), 11.7 ("Public
Disclosure"), 11.8 ("Return of Information"), 11.9 ("Expenses") and 11.11
("Governing Law; Jurisdiction") and Section 10.2(b), and except that nothing
herein will relieve any party from Liability for any breach of any covenant set
forth in this Agreement prior to such termination.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices. All notices or other communications hereunder
shall be deemed to have been duly given and made if in writing and if served by
personal delivery upon the party for whom it is intended, if delivered by
registered or certified mail, return receipt requested, or by a national courier
service, or if sent by facsimile, provided that the facsimile is promptly
confirmed by telephone confirmation thereof, to the Person at the address set
forth below, or such other address as may be designated in writing hereafter, in
the same manner, by such Person:
To VitalWorks:
VitalWorks Inc.
000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxxx Xxxxx, Esq.
and
AMICAS, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxxx Xxxxxx
41
with a copy to:
Cadwalader, Xxxxxxxxxx & Xxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxx, Esq.
to Purchaser:
Cerner Corporation
0000 Xxxxxxxxx Xxxxxxx
Xxxxx Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: President
with a copy to:
Cerner Corporation
0000 Xxxxxxxxx Xxxxxxx
Xxxxx Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: General Counsel
and
Shook, Hardy & Bacon LLP
0000 Xxxxx Xxxx.
Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxx, Esq.
Section 11.2 Amendment; Waiver. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Purchaser and VitalWorks, or in the case
of a waiver, by the party against whom the waiver is to be effective. No failure
or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
Section 11.3 Assignment. No party to this Agreement may assign any
of its rights or obligations under this Agreement including by sale of stock,
operation of Law in connection with a merger or sale of substantially all the
assets of Purchaser without the prior
42
written consent of the other party hereto; provided, however, that Purchaser may
assign its rights hereunder to a wholly owned U.S. Subsidiary of Purchaser,
provided that no such assignment shall relieve Purchaser of any of its
obligations under this Agreement to VitalWorks.
Section 11.4 Entire Agreement. This Agreement (including all
Schedules hereto) contains the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters, except for (i)
the Confidentiality Agreement which will remain in full force and effect for the
term provided for therein and (ii) any written agreement of the parties that
expressly provides that it is not superseded by this Agreement.
Section 11.5 Fulfillment of Obligations. Any obligation of any party
to any other party under this Agreement, which obligation is performed,
satisfied or fulfilled by an Affiliate of such party, shall be deemed to have
been performed, satisfied or fulfilled by such party.
Section 11.6 Parties in Interest. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any Person other than Purchaser, or VitalWorks, or
their successors or permitted assigns, any rights or remedies under or by reason
of this Agreement.
Section 11.7 Public Disclosure. Notwithstanding anything herein to
the contrary, each of the parties to this Agreement hereby agrees with the other
parties hereto that, except as may be required to comply with the requirements
of any applicable Laws, and the rules and regulations of each stock exchange
upon which the securities of one of the parties is listed, if any, no press
release or similar public announcement or communication shall, if prior to the
Closing, be made or caused to be made concerning the execution or performance of
this Agreement unless the parties shall have consulted in advance with respect
thereto.
Section 11.8 Return of Information. If for any reason whatsoever the
transactions contemplated by this Agreement are not consummated, Purchaser shall
promptly return to VitalWorks all books and records furnished by VitalWorks or
any of its Affiliates, agents, employees, or representatives (including all
copies, summaries and abstracts, if any, thereof) in accordance with the terms
of the Confidentiality Agreement.
Section 11.9 Expenses. Whether or not the transactions contemplated
by this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be borne by
the party incurring such expenses.
Section 11.10 Schedules. The disclosure of any matter in any
Schedule to this Agreement, as may be amended or supplemented prior to the
Closing, shall be deemed to be a disclosure for all purposes of this Agreement,
but shall expressly not be deemed to constitute an admission by VitalWorks, or
to otherwise imply, that any such matter is material for the purposes of this
Agreement.
43
Section 11.11 Governing Law; Jurisdiction. (a) This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware, without regard to the conflicts of law rules of such state.
(b) With respect to any suit, action or proceeding relating to this
Agreement (each, a "Proceeding"), each party hereto irrevocably (i) agrees and
consents to be subject to the jurisdiction of any state or federal court located
in the State of Delaware and (ii) waives any objection which it may have at any
time to the laying of venue of any Proceeding brought in any such court, waives
any claim that such Proceeding has been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceeding, that such
court does not have any jurisdiction over such party.
Section 11.12 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same agreement and shall become effective when one
or more counterparts have been signed by each of the parties and delivered to
the other party, it being understood that both parties need not sign the same
counterpart.
Section 11.13 Headings. The heading references herein and the table
of contents hereto are for convenience purposes only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
Section 11.14 Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions hereof.
If any term or other provision of this Agreement, or the application thereof to
any person or entity or any circumstance, is invalid, illegal or unenforceable,
(a) a suitable and equitable provision shall be substituted therefor in order to
carry out, so far as may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision and (b) the remainder of this Agreement
and the application of such provision to other persons, entities or
circumstances shall not be affected by such invalidity, illegality or
unenforceability, nor shall such invalidity, illegality or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
44
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
VITALWORKS INC.
By: /s/ Xxxxxxx X. Xxxxxx MD
--------------------------------------
Name: Xxxxxxx X. Xxxxxx MD
Title: President & CEO
CERNER CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
INDEX OF DEFINED TERMS
A
Acquirer..........................31
Acquisition Proposal...............1
Affected Employees................29
Affiliate..........................1
Agreement..........................2
Allocation Schedule...............35
Anesthesiology Business............1
Applicable Rate...................12
Assumed Contracts..................7
Assumed Liabilities...............10
B
Business...........................1
Business Day.......................2
Business Lockbox..................33
C
Cash Equivalents...................2
Closing............................2
Closing Date......................13
Closing Date Balance Sheet........11
Closing Date LIBOR................12
Code...............................2
Collateral Source.................39
Competitive Activity..............31
Confidentiality Agreement..........2
Controlling Party.................38
Customer Contracts................24
D
Disputed Item.....................11
Division...........................1
E
Employee Plan......................2
Employees.........................23
Employment Obligations............23
Environmental Claim................2
Environmental Law..................2
Environmental Liability............3
Environmental Permit...............3
ERISA..............................3
ERISA Affiliate....................2
Evaluation Material...............27
Excluded Assets....................9
Expenses..........................41
F
Final Determination................3
Final Working Capital.............12
Financial Statements..............17
G
GAAP...............................3
Governing Law; Jurisdiction.......41
Governmental Antitrust Entity.....29
Governmental Authority.............3
Governmental Authorizations........3
Governmental Order.................3
H
Hazardous Materials................3
Hazardous Substances...............3
Hired Employee....................29
HSR Act............................3
I
Indemnified Party.................37
Indemnifying Party................37
Independent Accountant............12
Information and Documents.........41
Intellectual Property..............3
Intellectual Property Licenses.....7
Inventories........................4
IRS................................4
J
June 30 Pro Forma Statement.......16
K
Knowledge of VitalWorks............4
L
Laws...............................4
Leased Real Property...............7
Liabilities........................4
License Agreement.................33
Liens..............................4
Loss..............................36
Losses............................36
M
Material Adverse Effect............4
Material Contracts................19
Medical Business...................1
N
Non Compete Period................31
Notices...........................41
O
Ordinary Course of Business........4
A-1
P
Participating Party...............38
Patent Rights......................4
Permitted Encumbrances.............4
Person.............................5
PracticeWorks Agreement............5
Proceeding........................44
Proprietary Rights Agreement......23
Public Disclosure.................41
Purchase Price....................11
Purchased Assets................5, 7
Purchaser..........................1
R
Real Property Leases...............7
Related Agreements................13
Release............................5
Remedial Action....................5
Required Consents.................15
Resolution Period.................12
Retained Liabilities..............11
Return of Information.............41
S
SEC................................5
Straddle Period...................34
Straddle Period Taxes.............34
Subsidiary.........................5
T
Tax................................6
Tax Return.........................6
Taxes..............................6
Termination Date..................40
Third-Party Claim.................37
Top 100 Customers.................24
Trademark Rights...................6
Transfer Tax.......................6
Transfer Taxes.....................6
Transitional Services Agreement...33
V
VitalWorks.........................1
VitalWorks SEC Documents..........24
W
WARN...............................6
Wellogic Agreement.................6
Xxxxx Fargo Credit Facility........6
Working Capital of the Business....6
Working Capital Statement.........11
A-2
