EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
AMONG
MISYS HOSPITAL SYSTEMS, INC.,
MISYS HEALTHCARE SYSTEMS
(INTERNATIONAL) LIMITED,
MISYS PLC,
PST PRODUCTS, LLC
AND
PER-SE TECHNOLOGIES, INC.
DATED AS OF JUNE 18, 2003
TABLE OF CONTENTS
ARTICLE 1 PURCHASE AND SALE OF ASSETS............................................................................ 1
1.1 PURCHASE AND SALE OF ASSETS............................................................................ 1
1.2 EXCLUDED ASSETS........................................................................................ 3
ARTICLE 2 ASSUMPTION OF LIABILITIES.............................................................................. 3
2.1 ASSUMPTION............................................................................................. 3
2.2 EXCLUDED LIABILITIES................................................................................... 4
ARTICLE 3 CALCULATION AND PAYMENT OF PURCHASE PRICE.............................................................. 5
3.1 PURCHASE PRICE......................................................................................... 5
3.2 PAYMENT OF ESTIMATED PURCHASE PRICE.................................................................... 5
3.3 DETERMINATION OF FINAL PURCHASE PRICE.................................................................. 5
3.4 RECONCILIATION OF ESTIMATED AND FINAL PURCHASE PRICE; OTHER ADJUSTMENTS................................ 6
3.5 ALLOCATION OF PURCHASE PRICE........................................................................... 7
ARTICLE 4 PROCEDURE FOR CLOSING.................................................................................. 8
4.1 TIME AND PLACE OF CLOSING.............................................................................. 8
4.2 TRANSACTIONS AT THE CLOSING............................................................................ 8
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLER............................................................... 8
5.1 ORGANIZATION AND QUALIFICATION......................................................................... 8
5.2 AUTHORITY; NO CONFLICTS................................................................................ 9
5.3 SUBSIDIARIES; JOINT VENTURES........................................................................... 9
5.4 FINANCIAL STATEMENTS................................................................................... 10
5.5 ASSIGNED ACCOUNTS RECEIVABLE........................................................................... 10
5.6 PERSONAL PROPERTY...................................................................................... 10
5.7 ABSENCE OF UNDISCLOSED LIABILITIES..................................................................... 11
5.8 ASSIGNED CONTRACTS..................................................................................... 11
5.9 INTELLECTUAL PROPERTY.................................................................................. 13
5.10 LEASED REAL PROPERTY................................................................................... 14
5.11 ENVIRONMENTAL MATTERS.................................................................................. 16
5.12 LITIGATION............................................................................................. 18
5.13 ABSENCE OF CHANGES..................................................................................... 19
5.14 INSURANCE.............................................................................................. 21
5.15 LABOR MATTERS.......................................................................................... 21
5.16 EMPLOYEE BENEFIT PLANS................................................................................. 22
5.17 TAXES.................................................................................................. 24
5.18 COMPLIANCE WITH LAWS; PERMITS AND ORDERS............................................................... 24
5.19 UNCLAIMED OR ABANDONED PROPERTY; ESCHEAT............................................................... 24
5.20 PRIVACY OF CUSTOMER INFORMATION........................................................................ 25
5.21 GOVERNMENTAL APPROVAL AND CONSENTS..................................................................... 25
5.22 ACQUIRED ASSETS........................................................................................ 25
5.23 PRODUCTS............................................................................................... 26
5.24 SUPPLIERS.............................................................................................. 27
5.25 NO GUARANTEES.......................................................................................... 27
5.26 RECORDS................................................................................................ 27
5.27 BROKERS AND FINDERS.................................................................................... 27
5.28 DISCLOSURE............................................................................................. 28
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................................ 28
6.1 ORGANIZATION AND QUALIFICATION......................................................................... 28
6.2 AUTHORITY.............................................................................................. 28
6.3 LITIGATION............................................................................................. 29
6.4 GOVERNMENTAL APPROVAL AND CONSENTS..................................................................... 29
6.5 BROKERS AND FINDERS.................................................................................... 29
6.6 DISCLOSURE............................................................................................. 29
ARTICLE 7 COVENANTS.............................................................................................. 29
7.1 ACCESS AND INFORMATION................................................................................. 29
7.2 CONDUCT OF BUSINESS PRIOR TO CLOSING................................................................... 30
7.3 CERTAIN ACTS PROHIBITED................................................................................ 31
7.4 OTHER TRANSACTIONS..................................................................................... 31
7.5 NOTIFICATION OF CHANGES; SUPPLEMENTAL DISCLOSURE....................................................... 31
7.6 CONSENTS............................................................................................... 31
7.7 WARN NOTICE............................................................................................ 33
7.8 LANCASHIRE GUARANTY.................................................................................... 33
7.9 CUSTOMER CONTRACTS..................................................................................... 33
7.10 CERTAIN EMPLOYEES...................................................................................... 33
7.11 SOFTWARE ESCROW CONTRACTS.............................................................................. 33
ARTICLE 8 MUTUAL COVENANTS....................................................................................... 34
8.1 GOVERNMENTAL FILINGS................................................................................... 34
8.2 FURTHER MUTUAL COVENANTS............................................................................... 34
8.3 PRORATIONS............................................................................................. 35
8.4 ADDITIONAL STRADDLE CONTRACTS.......................................................................... 35
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER....................................................... 36
9.1 CERTIFICATE REGARDING REPRESENTATIONS AND WARRANTIES................................................... 36
9.2 COMPLIANCE BY SELLER................................................................................... 36
9.3 NO INJUNCTION; ETC..................................................................................... 37
9.4 CONSENTS; AUTHORIZATIONS; APPROVAL OF LEGAL MATTERS.................................................... 37
9.5 INSTRUMENTS OF TRANSFER................................................................................ 37
9.6 CERTIFIED RESOLUTIONS.................................................................................. 37
9.7 ACQUISITION DOCUMENTS.................................................................................. 37
9.8 NO ADVERSE CHANGE...................................................................................... 38
9.9 FIRPTA CERTIFICATION................................................................................... 38
ARTICLE 10 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER......................................................... 38
10.1 CERTIFICATE REGARDING REPRESENTATIONS AND WARRANTIES................................................... 38
10.2 COMPLIANCE BY PURCHASER................................................................................ 38
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10.3 NO INJUNCTION; ETC..................................................................................... 39
10.4 CERTIFIED RESOLUTIONS.................................................................................. 39
10.5 ACQUISITION DOCUMENTS.................................................................................. 39
ARTICLE 11 POST CLOSING MATTERS.................................................................................. 39
11.1 EMPLOYMENT OF EMPLOYEES................................................................................ 39
11.2 NON-SOLICITATION....................................................................................... 40
11.3 DELIVERY OF BOOKS AND RECORDS.......................................................................... 40
11.4 VACATION PAY........................................................................................... 40
11.5 PURCHASER'S BENEFIT PLANS.............................................................................. 41
11.6 MAINTENANCE OF BOOKS AND RECORDS....................................................................... 41
11.7 DISCHARGE OF BUSINESS OBLIGATION....................................................................... 42
11.8 PAYMENTS RECEIVED...................................................................................... 42
11.9 COOPERATION............................................................................................ 42
11.10 NON-COMPETITION........................................................................................ 43
11.11 USE OF BUSINESS NAME................................................................................... 43
11.12 FURTHER ASSURANCES..................................................................................... 43
11.13 SUBCONTRACTED SERVICES................................................................................. 43
11.14 CONFIDENTIALITY........................................................................................ 46
11.15 TERMINATION OF CERTAIN EXCLUDED CONTRACTS; FUTURE HUMANITARIAN CITY ARRANGEMENTS....................... 46
ARTICLE 12 INDEMNIFICATION....................................................................................... 47
12.1 OBLIGATIONS OF SELLER AND SELLER'S PARENT.............................................................. 47
12.2 LIMITATIONS ON SELLER'S INDEMNIFICATION................................................................ 48
12.3 OBLIGATIONS OF PURCHASER AND PURCHASER'S PARENT........................................................ 48
12.4 LIMITATIONS ON PURCHASER'S INDEMNIFICATION............................................................. 48
12.5 ADJUSTMENTS TO INDEMNIFICATION PAYMENTS; SUBROGATION................................................... 49
12.6 INDEMNIFICATION PROCEDURES............................................................................. 49
12.7 TIME LIMITATION........................................................................................ 51
12.8 REMEDIES EXCLUSIVE..................................................................................... 51
12.9 CHARACTERIZATION OF INDEMNITY PAYMENTS; TAX DISCLOSURE................................................. 51
ARTICLE 13 CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS................................................................. 52
13.1 CONFIDENTIALITY........................................................................................ 52
13.2 PUBLIC ANNOUNCEMENTS................................................................................... 52
ARTICLE 14 TERMINATION........................................................................................... 52
14.1 TERMINATION............................................................................................ 52
14.2 EFFECT OF TERMINATION.................................................................................. 53
ARTICLE 15 GENERAL PROVISIONS.................................................................................... 53
15.1 DEFINITIONS............................................................................................ 53
15.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES............................................................. 66
15.3 OBLIGATIONS OF SELLER AND PURCHASER.................................................................... 66
15.4 ARBITRATION............................................................................................ 67
15.5 FEES AND EXPENSES...................................................................................... 68
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15.6 BULK SALES LAWS........................................................................................ 69
15.7 NOTICES................................................................................................ 69
15.8 ASSIGNMENT............................................................................................. 70
15.9 NO BENEFIT TO OTHERS................................................................................... 71
15.10 HEADINGS AND GENDER; CONSTRUCTION; INTERPRETATION...................................................... 71
15.11 COUNTERPARTS........................................................................................... 71
15.12 INTEGRATION OF AGREEMENT............................................................................... 71
15.13 GOVERNING LAW.......................................................................................... 72
15.14 PARTIAL INVALIDITY..................................................................................... 72
15.15 INVESTIGATION.......................................................................................... 72
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of June 18, 2003, among Misys Hospital Systems, Inc., a Pennsylvania
corporation ("Purchaser"), Misys Healthcare Systems (International) Limited, a
company organized under the laws of England and Wales ("UK Purchaser"), Misys
plc, a company organized under the laws of England and Wales ("Purchaser's
Parent") (only in respect of Article 12 and Section 15.3 hereof), Per-Se
Technologies, Inc., a Delaware corporation ("Seller's Parent") (only in respect
of Article 12 and Sections 11.12 and 15.3 hereof), and PST Products, LLC, a
California limited liability company ("Seller").
Seller and certain of its Subsidiaries are engaged in the business of
providing clinical information software applications to acute care healthcare
organizations through its Patient 1(R) product and related functionality,
excluding the business associated with the Humanitarian City SIICA, the Japanese
Distributor Agreements and the Brazilian Distributor Agreement (the "Business").
Seller desires to sell and Purchaser and UK Purchaser desire to
purchase the Business, its operations, and certain of the assets of Seller and
its Subsidiaries used therein.
Concurrently with the execution of this Agreement, Seller and Purchaser
have entered into a Transition Services Agreement in the form of Exhibit A
attached hereto, whereby Seller will provide Purchaser certain transition
services from and after the Closing.
Concurrently with the execution of this Agreement, each of the
Employees listed on Exhibit B attached hereto has entered into an employment
agreement with Purchaser.
Certain capitalized terms used in this Agreement are defined in Section
15.1 of this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 PURCHASE AND SALE OF ASSETS
Subject to the terms and conditions of this Agreement, at the Closing,
Seller and its Subsidiaries shall sell, assign, transfer, convey, and deliver to
Purchaser or UK Purchaser (in respect of the UK Lease), free and clear of all
Liens other than Permitted
Encumbrances, and Purchaser and UK Purchaser (as the case may be) shall
purchase, acquire, and accept from Seller and its Subsidiaries, all of the
right, title, and interest of Seller and its Subsidiaries in and to those
assets, properties, rights, claims and Contracts of Seller and its Subsidiaries,
whether tangible or intangible, or personal, real or mixed, used or held for use
primarily in connection with the Business as the same may exist at the Effective
Time, except Excluded Assets, including, without limitation:
(a) the Real Property Leases listed on SCHEDULE 1.1(a) (the "Assigned
Real Property Leases");
(b) the Equipment listed on SCHEDULE 1.1(b) (the "Acquired Equipment");
(c) all of the Contracts listed on SCHEDULE 1.1(c) (the "Assigned
Contracts");
(d) the Intellectual Property listed on SCHEDULE 1.1(d) (the "Assigned
Intellectual Property");
(e) the UK Lease;
(f) the Books and Records of the Business (the "Acquired Books and
Records");
(g) the Permits used primarily in the Business (the "Assigned
Permits");
(h) all prepaid expenses; security deposits, utility deposits and other
deposits with respect to the Business and the Acquired Assets; all marketing and
advertising materials, all supplies and miscellaneous assets with respect to the
Business and the Acquired Assets; the Uniform Product Code Symbols of Seller and
the use of any telephone numbers that are used solely in the operation of the
Business;
(i) the Accounts Receivable reflected on the Closing Balance Sheet and
included in Working Capital (the "Assigned Accounts Receivable");
(j) all of the Information;
(k) all goodwill related to the Business;
(l) the names "Patient 1(R)" and "Decision 1(R)" and all marks (whether
registered or not registered), applications, registrations and goodwill
associated therewith;
(m) all other assets reflected on the Closing Balance Sheet; and
(n) all work in process arising under the Assigned Contracts.
All of the items described in this Section 1.1 to be purchased by
Purchaser and which are not Excluded Assets are hereinafter collectively
referred to as the "Acquired Assets."
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1.2 EXCLUDED ASSETS.
Notwithstanding anything to the contrary in Section 1.1 hereof, the
Acquired Assets shall not include, and Seller and its Subsidiaries shall not
sell, assign, transfer, convey or deliver, and Purchaser and UK Purchaser shall
not purchase, acquire or accept any rights, title or interests in or to any of
the following assets, properties, rights, claims or Contracts of Seller or its
Subsidiaries (collectively, the "Excluded Assets"):
(a) all cash and cash equivalents;
(b) the assets of any Employee Benefit Plan of Seller or any ERISA
Affiliate thereof;
(c) the assets and properties used in the Business that have been
disposed of since the date of this Agreement, provided such disposition has been
made in the Ordinary Course of Business in accordance with the terms hereof;
(d) any rights that accrue or will accrue to Seller under this
Agreement;
(e) any rights to any of Seller's insurance policies, premiums, or
proceeds from insurance coverages relating to the Business as conducted by
Seller prior to the Effective Time;
(f) any refunds or rights to refunds for periods prior to the Effective
Time for any and all Taxes of Seller or its Subsidiaries;
(g) any causes of action related to the Excluded Assets or causes of
action with respect to the Acquired Assets or Business which arose or existed
prior to the Effective Time, whether asserted or not;
(h) any rights under the Assigned Contracts used or held for use
primarily in connection with the businesses or operations of Seller or its
Subsidiaries other than the Business;
(i) the Humanitarian City SIICA, the Japanese Distributor Agreements
and the Brazilian Distributor Agreement; or
(j) any Accounts Receivable associated with the Humanitarian City
SIICA, the Japanese Distributor Agreements and the Brazilian Distributor
Agreement.
ARTICLE 2
ASSUMPTION OF LIABILITIES
2.1 ASSUMPTION.
At the Closing and effective at the Effective Time, Purchaser and UK
Purchaser (in respect of Liabilities attributable to the UK Lease) shall assume
and shall become
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responsible for the payment, performance and satisfaction of the following (and
only the following) Liabilities, (collectively, the "Assumed Liabilities"):
(i) The Balance Sheet Liabilities reflected on the Closing Balance
Sheet, but only in the amount (individually and not in the aggregate) and only
to the extent so reflected; and
(ii) Subject to Section 7.6, all of the executory obligations and
Liabilities of Seller and its Subsidiaries arising from and after the Effective
Time, pursuant to (i) the terms of the Assigned Real Property Leases and (ii)
the Assigned Contracts, but in each case excluding any Liabilities arising from
or relating to any Default under the Assigned Real Property Leases or Assigned
Contracts by Seller and its Subsidiaries.
2.2 EXCLUDED LIABILITIES
Purchaser shall not assume or become liable for any Liability of Seller
and its Subsidiaries that is not specifically an Assumed Liability, whether or
not related to the Acquired Assets (collectively, the "Excluded Liabilities").
Purchaser shall not be the successor to Seller or its Subsidiaries, and
Purchaser expressly does not assume and shall not become liable to pay, perform
or discharge any Liability whatsoever of Seller or its Subsidiaries or relating
to the Business or any of the Acquired Assets other than the Assumed
Liabilities. The Excluded Liabilities include, without limitation, the following
Liabilities:
(a) all Liabilities in respect of product, product warranty, product
liability or Computer Software defects or flaws relating to products shipped,
licensed or otherwise disposed of by Seller and its Subsidiaries, and all
services performed by Seller and its Subsidiaries, on or prior to the Effective
Time, whether based on strict liability, negligence, breach of warranty (express
or implied), breach of contract or otherwise, including, without limitation,
under the Assigned Contracts listed on Schedule 5.8(c).
(b) except as contemplated in Sections 8.3 and 15.5, Liabilities for
any and all Taxes (i) relating to the Acquired Assets or arising from the
operation of the Business for any Pre-Closing Tax Period or (ii) imposed on
Seller and its Affiliates;
(c) any Liability of Seller and its Subsidiaries for periods prior to
the Effective Time to present or former employees (or their dependents or
beneficiaries), consultants or agents related to the Business for any
compensation, pension contribution or other benefits accrued or otherwise
payable;
(d) any Liability of Seller and its Subsidiaries attributable to
Excluded Assets or not related primarily to the Business or the Acquired Assets
(including, without limitation, any Liability under an Assigned Contract
relating to the business and operations of Seller or its Subsidiaries other than
the Business); and
(e) any Liability relating to any Employee who does not become a Hired
Employee pursuant to Section 11.1 hereof, unless such Liability arises from or
relates to alleged acts or omissions of Purchaser in connection with Purchaser's
offer of
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employment to any Offered Employee or failure to make an employment offer to any
Offered Employee.
ARTICLE 3
CALCULATION AND PAYMENT OF PURCHASE PRICE
3.1 PURCHASE PRICE.
(a) The Estimated Purchase Price shall be an amount equal to Thirty
Million Dollars ($30,000,000) (the "Estimated Purchase Price").
(b) The Final Purchase Price shall be an amount equal to the Estimated
Purchase Price subject to increase or decrease as follows (the "Final Purchase
Price"):
(i) increased by the amount by which the Working Capital is greater
than $3 million; and
(ii) decreased by the amount by which the Working Capital is less than
$3 million.
3.2 PAYMENT OF ESTIMATED PURCHASE PRICE.
On the Closing Date, Purchaser shall pay or deliver to Seller the
Estimated Purchase Price by wire transfer in immediately available funds to an
account of Seller designated in writing at least three (3) Business Days prior
to Closing by Seller. A Federal Reserve Reference Number shall be requested by
Purchaser at the time of the transfer for the purpose of assisting Seller in
confirming receipt of the transfer.
3.3 DETERMINATION OF FINAL PURCHASE PRICE.
(a) Not later than forty five (45) days following the Closing Date,
Seller shall furnish to Purchaser (i) the Closing Balance Sheet, prepared by
Seller, including a statement of Working Capital, (ii) a Working Capital
Reconciliation and (iii) a calculation of the Final Purchase Price based on the
Closing Balance Sheet and statement of Working Capital.
(b) Purchaser and Seller shall each provide access to the other and the
other's accountants to the Books and Records that are under their respective
control or custody and that are necessary to prepare the Closing Balance Sheet
and statement of Working Capital and determine the Final Purchase Price and will
cause their respective accountants to provide access to the relevant work
papers.
(c) Purchaser shall have forty-five (45) days from the date of its
receipt of the Closing Balance Sheet and statement of Working Capital and the
determination of Final Purchase Price to review the Closing Balance Sheet and
statement of Working Capital and the determination of Final Purchase Price and
to agree or disagree as to the Final
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Purchase Price reflected thereon. If Purchaser does not agree with the Final
Purchase Price, then Purchaser shall, within such forty-five (45) day period,
deliver a written objection to Seller that shall specify in reasonable detail
the basis for the objection on a line item basis and a computation of the Final
Purchase Price asserted by Seller (the "Working Capital Objection"). If the
Seller's and the Purchaser's calculations of Working Capital are (i) each in
excess of $3 million or (ii) each below $3 million, then, (A) in the case where
both calculations of Working Capital are in excess of $3 million, the Purchaser
shall, within five (5) Business Days after delivery to Seller of the Working
Capital Objection, pay Seller in cash via wire transfer an amount equal to the
difference between Purchaser's calculation of Working Capital and $3 million
(the "Undisputed Increase") and (B) in the case where both calculations of
Working Capital are below $3 million, the Seller shall, within five (5) Business
Days after delivery of to Seller of the Working Capital Objection, pay Purchaser
in cash via wire transfer an amount equal to the difference between $3 million
and Seller's calculation of Working Capital (the "Undisputed Decrease")(each of
the Undisputed Increase and Undisputed Decrease are referred to as the
"Undisputed Portion"). Upon Seller's receipt of the Working Capital Objection,
Purchaser and Seller shall negotiate in good faith to resolve the Working
Capital Objection (except for the Undisputed Portion), but if such Working
Capital Objection cannot be resolved by negotiation between Seller and Purchaser
within thirty (30) days after Purchaser's receipt of such Working Capital
Objection, Purchaser and Seller shall cause the Determination Materials to be
submitted to the Accounting Arbitrator, which shall review the Determination
Materials and, based upon the Determination Materials and any other materials
reasonably requested by the Accounting Arbitrator, determine the Final Purchase
Price based on its determination of each line item relevant to the determination
of Working Capital, and notify the Parties in writing of its determination of
the Final Purchase Price within thirty (30) days following the receipt of the
Determination Materials, which determination shall be final, conclusive and
binding on all Parties.
(d) Seller shall pay the fees and expenses of the Accounting Arbitrator
in an amount that is equal to the product of (i) the total fees and expenses of
the Accounting Arbitrator and (ii) a fraction, the numerator of which is equal
to the Final Purchase Price as submitted by Seller less the Final Purchase Price
as finally determined by the Accounting Arbitrator, and the denominator of which
is equal to the Final Purchase Price as submitted by Seller less the Final
Purchase Price as submitted by Purchaser. Purchaser shall pay that portion of
the total fees and expenses of the Accounting Arbitrator that the Seller is not
obligated to pay in accordance with this subsection (d).
3.4 RECONCILIATION OF ESTIMATED AND FINAL PURCHASE PRICE; OTHER
ADJUSTMENTS.
(a) If the Final Purchase Price (as determined in Section 3.1(b)
hereof) is greater than the Estimated Purchase Price, Purchaser shall pay the
difference between such amounts to Seller. If the Final Purchase Price is less
than the Estimated Purchase Price, Seller shall pay the difference between such
amounts to Purchaser.
(b) The payments required by this Section (other than any payment in
respect of the Undisputed Portion) shall be made within five (5) days after the
earlier to occur of
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(i) the date Purchaser and Seller agree on the Final Purchase Price or (ii) the
Adjustment Date. The payment, whether to or from Purchaser, shall bear interest
from the Closing Date until the date of payment at an annual interest rate
(calculated on the basis of a 365-day year) equal to the prime rate published by
The Wall Street Journal on the Closing Date or, if not published on the Closing
Date there published on the most recent date preceding the Closing Date.
3.5 ALLOCATION OF PURCHASE PRICE.
Purchaser and Seller agree that the Purchase Price and the Assumed
Liabilities, together with the other capitalizable costs ("Allocable
Consideration") shall be allocated among the Acquired Assets in accordance with
(i) the principles set forth in SCHEDULE 3.5 and (ii) Section 1060 of the
Internal Revenue Code and applicable Treasury Regulations (the "Allocation");
provided, however, that to the extent that any of the principles set forth in
SCHEDULE 3.5 conflict with or violate the provisions of Section 1060 of the
Internal Revenue Code and applicable Treasury Regulations, Section 1060 and such
Treasury Regulations shall control. Within thirty (30) days after the
determination of the Final Purchase Price, Purchaser shall prepare and deliver a
proposed Allocation to Seller for Seller's review. If Seller does not agree with
the Allocation, then Seller shall, within such thirty (30) day period, deliver a
written objection to Purchaser that shall specify in reasonable detail the basis
for the objection and set forth Seller's proposed allocation of the Allocable
Consideration (the "Tax Allocation Objection"). Upon Purchaser's receipt of the
Tax Allocation Objection, Purchaser and Seller shall negotiate in good faith to
resolve the Tax Allocation Objection, but if the Tax Allocation Objection cannot
be resolved by negotiation between Seller and Purchaser within thirty (30) days
after Purchaser's receipt of the Tax Allocation Objection, Purchaser and Seller
shall cause the dispute to be submitted to the Tax Arbitrator, which shall
review the Allocation and Seller's proposed Allocation and any other materials
reasonably requested by the Tax Arbitrator and determine the final Allocation
(the "Final Allocation") and notify the Parties in writing of its determination
of the Final Allocation within thirty (30) days following the submission of the
dispute to the Tax Arbitrator. The Final Allocation as determined by the Tax
Arbitrator shall be final, conclusive and binding on all Parties. All fees and
expenses of the Tax Arbitrator shall be equally split between Purchaser and
Seller.
If Seller agrees with the Allocation, or if the Tax Arbitrator
determines the Final Allocation (i) Purchaser and Seller shall make consistent
use of the Allocation, or Final Allocation, as the case may be, for all Tax
purposes and in all filings, declarations and reports with the IRS in respect
thereof, including the reports, such as IRS Form 8594, required to be filed
under Section 1060 of the Internal Revenue Code, and (ii) in any proceeding
related to the determination of any Tax, neither Purchaser nor Seller shall
contend or represent that such Allocation, or Final Allocation, as the case may
be, is not a correct allocation of the Allocable Consideration.
In the event the Allocation is disputed by any taxing authority, the
Party receiving notice of the dispute shall promptly notify and consult with the
other Party and keep the
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other Party reasonably apprised of material developments concerning resolution
of such dispute.
ARTICLE 4
PROCEDURE FOR CLOSING
4.1 TIME AND PLACE OF CLOSING.
The consummation of the purchase and sale contemplated by this
Agreement (the "Closing") shall be held at the offices of Xxxxxx & Bird LLP,
0000 Xxxx Xxxxxxxxx Xxxxxx, XX, Xxxxxxx, Xxxxxxx 00000-0000 as soon as possible,
but in no event later than three (3) Business Days after satisfaction or waiver
of the conditions set forth in Article 9 and Article 10 to the extent such
conditions are capable of being satisfied at or prior to the Closing (the date
on which the Closing actually occurs is hereinafter referred to as the "Closing
Date"). The Closing shall be effective as of 12:01 AM local time on the Closing
Date (the "Effective Time").
4.2 TRANSACTIONS AT THE CLOSING.
At the Closing, each of the following shall be delivered:
(a) Seller shall deliver or cause to be delivered to Purchaser the
items set forth in Article 9. The documents and certificates to be delivered
hereunder by or on behalf of Seller and its Subsidiaries on the Closing Date
shall be in form and substance reasonably satisfactory to Purchaser and its
counsel.
(b) Purchaser shall deliver to Seller (i) a wire transfer in the amount
of $29,951,000 in immediately available funds to an account designated by Seller
and (ii) the items set forth in Article 10. UK Purchaser shall deliver to Seller
or its Subsidiary (i) a wire transfer in the amount of $49,000 in immediately
available funds to an account designated by Seller and (ii) the items set forth
in Article 10. The documents and certificates to be delivered hereunder by or on
behalf of Purchaser and UK Purchaser on the Closing Date shall be in form and
substance reasonably satisfactory to Seller and its counsel.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser that:
5.1 ORGANIZATION AND QUALIFICATION.
Seller's Parent is a corporation duly organized, validly existing, and
in good standing under the Laws of the State of Delaware. Seller is a limited
liability company duly organized, validly existing, and in good standing under
the Laws of the State of California. Seller is duly qualified and is in good
standing in each of the jurisdictions set forth on SCHEDULE 5.1, which include
all of the jurisdictions in which such qualification is
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necessary in respect of the Business. SCHEDULE 5.1 hereto contains the address
(including city, county, state, or other jurisdiction and zip code) of each
location where any of the Acquired Equipment or other tangible property included
in the Acquired Assets is located and each trade name under which Seller
operates at each such address and any additional business and trade names under
which the Business has been operated at each such address or any other location
in the five (5) years preceding the date of this Agreement.
5.2 AUTHORITY; NO CONFLICTS.
(a) Each of Seller's Parent, Seller and Seller's Subsidiaries has full
power and authority to enter into the Acquisition Documents to which it is a
party, and to consummate the transactions contemplated thereby. The execution,
delivery and performance by each of Seller's Parent, Seller and Seller's
Subsidiaries of each of the Acquisition Documents to which it is a party has
been duly and validly authorized and approved by all necessary action on its
part. Each of the Acquisition Documents to which Seller's Parent, Seller or any
Subsidiary of Seller is a party is the legal, valid, and binding obligation of
Seller's Parent, Seller or such Subsidiary enforceable against it in accordance
with its terms.
(b) Except as set forth on SCHEDULE 5.2, neither the execution and
delivery by Seller's Parent, Seller or any Subsidiary of Seller of any of the
Acquisition Documents to which Seller's Parent, Seller or such Subsidiary is a
party, nor the consummation by Seller's Parent, Seller or any Subsidiary of
Seller of the transactions contemplated thereby, will (i) violate Seller's
Parent's Certificate of Incorporation or Bylaws, Seller's Articles of
Organization or Operating Agreement, or the charter documents of the Seller's
Subsidiaries, (ii) violate any provisions of Law or any Order of any Regulatory
Authority to which any of Seller's Parent, Seller or any Subsidiary of Seller is
subject, or by which any of the Acquired Assets may be bound, (iii) conflict
with, result in a breach of, or constitute a Default under any Contract to which
any of Seller's Parent, Seller or any Subsidiary of Seller is a party or by
which it or any of the Acquired Assets may be bound, except to the extent that
any Consent under any Contract not included in the Assigned Contracts may be
required for Seller to provide services to Purchaser under the Transition
Services Agreement (which Consents will be identified between the date hereof
and Closing), or (iv) result in the creation of any Lien upon any of the
Acquired Assets, or result in the acceleration of the maturity of any payment
date of any of the Assumed Liabilities, or increase or adversely affect the
obligations of Seller under any of the Assumed Liabilities.
5.3 SUBSIDIARIES; JOINT VENTURES.
No shares of any corporation or any ownership or other investment
interest, either of record, beneficially or equitably, in any association,
partnership, joint venture or other legal entity are included in the Acquired
Assets.
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5.4 FINANCIAL STATEMENTS.
Attached as SCHEDULE 5.4 are correct and complete copies of the
Financial Statements. The Financial Statements have been prepared from the Books
and Records of Seller and are in accordance with GAAP, and present fairly the
financial position and results of operation of the Business as at the dates and
for the periods indicated. The Financial Statements (i) contain balance sheets
that do not include any material assets or liabilities not intended to
constitute a part of the Business or the Acquired Assets after giving effect to
the transactions contemplated hereby, (ii) do not reflect the operations of any
entity or business not intended to constitute a part of the Business after
giving effect to all such transactions. The Business has no Liabilities which
are not adequately accrued or reserved against in the March 31 Balance Sheet,
other than Liabilities incurred in the Ordinary Course of Business since the
date of the March 31 Balance Sheet, none of which, either individually or in the
aggregate are material in amount, and Liabilities of a type not required by GAAP
to be reflected on a balance sheet of the Business. The books, records, and
accounts maintained with respect to the Business accurately and fairly reflect,
in reasonable detail and in all material respects, the transactions and the
assets and Liabilities of the Business.
5.5 ASSIGNED ACCOUNTS RECEIVABLE.
SCHEDULE 5.5 contains a true, aged list of the unpaid Accounts
Receivable owing in respect of the Business as of March 31, 2003. All of the
Accounts Receivable reflected on the March 31 Balance Sheet represent, and the
Assigned Accounts Receivable outstanding on the Closing Date will represent,
sales actually made or services actually performed in the Ordinary Course of
Business in bona fide transactions completed in accordance with the terms and
provisions contained in any documents relating thereto, and are not subject to
any defenses, counterclaims, or rights of setoff other than those arising in the
Ordinary Course of Business and for which adequate reserves have been
established. The reserves for uncollectible Accounts Receivable reflected on the
March 31 Balance Sheet were established in accordance with GAAP and are adequate
in light of all the facts then known to Seller and Seller's historical methods
and practices in establishing such reserves.
5.6 PERSONAL PROPERTY.
(a) SCHEDULE 1.1(b) contains a true and correct list of all Equipment
used primarily or held for use primarily in connection with the Business as of
the date of this Agreement.
(b) Seller and its Subsidiaries have good and transferable title to all
of the Acquired Equipment and other items of owned personal property included
among the Acquired Assets free and clear of all Liens, other than Permitted
Encumbrances and other than as disclosed on SCHEDULE 5.6(b). True and complete
copies of all documents evidencing Liens disclosed on SCHEDULE 5.6(b) have been
provided to Purchaser.
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(c) True and correct copies of each personal property lease included in
the Assigned Contracts and any amendments, extensions, and renewals thereof have
been provided to Purchaser. Each of such personal property leases is in full
force and effect and there are no existing Defaults by Seller or its
Subsidiaries or, to the Knowledge of Seller, any other party to such lease. No
rights of Seller or its Subsidiaries under such leases have been assigned or
otherwise transferred as security for any obligation of Seller or its
Subsidiaries. Except as described on SCHEDULE 5.2, all of such leases are fully
assignable without the Consent of any Third Party.
5.7 ABSENCE OF UNDISCLOSED LIABILITIES.
There are no Undisclosed Liabilities, and Seller has no Knowledge of
any basis for or threat of an assertion against Seller, the Business or the
Acquired Assets of any Undisclosed Liability, except for Liabilities incurred
since the March 31 Balance Sheet in the Ordinary Course of Business, none of
which are material individually or in the aggregate, and Liabilities of a type
not required by GAAP to be reflected on a balance sheet of the Business.
5.8 ASSIGNED CONTRACTS.
(a) A true and correct copy (and, if oral, an accurate written
description) of each Assigned Contract, including any modifications, amendments,
renewals or extensions thereof (other than purchase orders) that (v) is a
Contract with any of the customers of the Business listed on SCHEDULE 5.8(f),
(w) has a duration of twelve (12) months or more, (x) requires or could require
any party thereto to pay $100,000 or more, (y) is between Seller or any
Subsidiary thereof, on the one hand, and any Related Person, on the other hand,
or (z) is material to the Business has been provided to Purchaser. The Assigned
Contracts represent all of the Contracts that are used primarily in the
Business.
(b) SCHEDULE 5.8(b) contains a true and correct list of all commitments
for capital expenditures that have been approved or made by Seller or any
Subsidiary thereof with respect to the Business prior to the date of this
Agreement in excess of $100,000 and that remain outstanding as of the date
hereof.
(c) Except as set forth on SCHEDULE 5.8(c), each of the Assigned
Contracts is in full force and effect and there exists no Default under any of
the Assigned Contracts by Seller or any Subsidiary thereof or, to the Knowledge
of Seller, any other party to the Assigned Contracts or any event which, will or
is reasonably likely to create a Default thereunder by Seller or any Subsidiary
thereof or, to the Knowledge of Seller, any other party to the Assigned
Contracts. Except as set forth on SCHEDULE 5.2, each Assigned Contract is fully
assignable without the Consent of any Third Party.
(d) Except as indicated on SCHEDULES 5.8(d) OR 5.13, there exists no
actual or, to the Knowledge of Seller, any threatened dispute under,
termination, cancellation, or limitation of, or any amendment, modification, or
change to any Assigned Contract, including (i) the business relationship with
any customer, distributor, or related group of customers or distributors listed
on SCHEDULE 5.8(f) or such other customer, distributor or
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related group of customers or distributors whose purchases individually or in
the aggregate are Material to the operations and financial condition of the
Business, (ii) the requirements of any customer or related group of customers
listed on SCHEDULE 5.8(f) or such other customer or related group of customers
of the Business whose purchases individually or in the aggregate are material to
the operations and financial condition of the Business, or (iii) the business
relationship with any supplier set forth on SCHEDULE 5.24 or any other material
supplier to the Business.
(e) Neither Seller nor any Subsidiary thereof has granted any power of
attorney affecting or with respect to the Business or the Acquired Assets that
remains outstanding.
(f) SCHEDULE 5.8(f) sets forth for the year ended December 31, 2002 and
for the three (3) month period ended March 31, 2003 (a) the names and addresses
of the twenty (20) largest customers of the Business, as ranked by revenues from
such customers and (b) the amount invoiced with respect to each of such
customers during each such period, and except as disclosed on SCHEDULE 5.8(f),
Seller has no Knowledge that any such customer has ceased, or will cease, to
purchase merchandise or services from Seller or its Subsidiaries, or has
substantially reduced or will substantially reduce the use of such merchandise
or services following the Closing Date.
(g) SCHEDULE 5.8(g) contains an accurate and complete list of all
Contracts, transfers of assets or liabilities or other commitments or
transactions, whether or not entered into in the Ordinary Course of Business, to
or by which Seller or any Subsidiary thereof, on the one hand, and any Affiliate
thereof, on the other hand, are or have been a party or otherwise bound or
affected, and that are currently pending or in effect and relate to or affect
the Business. Except as disclosed in SCHEDULE 5.8(g), each Contract, transfer of
assets or liabilities or other commitment or transaction set forth or required
to be set forth in SCHEDULE 5.8(g) was on terms and conditions as favorable to
Seller or its Subsidiary as would have been obtainable by it at the time in a
comparable arm's-length transaction with a Third Party other than an Affiliate.
Except as disclosed in SCHEDULE 5.8(g), no Related Person of Seller or any
Subsidiary thereof owns, directly or indirectly, on an individual or joint
basis, any interest in any Acquired Assets. Except as disclosed in SCHEDULE
5.8(g), neither Seller nor any Related Person owns, or has owned, of record or
as a beneficial owner, an equity interest or any other financial or profit
interest in any Person that has (i) had business dealings or a material
financial interest in any transaction with Seller other than business dealings
or transactions disclosed in SCHEDULE 5.8(g), each of which has been conducted
in the Ordinary Course of Business at substantially prevailing market prices and
on substantially prevailing market terms or (ii) engaged in a Competing Business
in any market presently served by Seller or any Subsidiary thereof with respect
to the Business, except for ownership of less than one percent (1%) of the
outstanding capital stock of any Competing Business that is publicly traded on
any recognized exchange or in the over-the-counter market.
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5.9 INTELLECTUAL PROPERTY.
(a) SCHEDULE 5.9 contains a true and correct list of the Assigned
Intellectual Property, including the jurisdiction of grant, registration or
pendency and the nature of the interest of Seller or its Subsidiaries therein.
(b) The Assigned Intellectual Property is free and clear of Liens other
than Permitted Encumbrances, and together with the Intellectual Property
licensed to Seller or any Subsidiary thereof pursuant to the Assigned Contracts,
comprises all of the Intellectual Property used in, held for use in connection
with, or necessary for the conduct of, or otherwise material to the Business.
Immediately after the Closing, subject to obtaining the Consents set forth on
SCHEDULE 5.2, Purchaser will own or have the right to use all of the Assigned
Intellectual Property free from any Liens other than Permitted Encumbrances and
all of the Intellectual Property covered by the Assigned Contracts on the same
terms and conditions as in effect prior to Closing.
(c) Except as disclosed on SCHEDULE 5.9, the use in the Business of any
of the Assigned Intellectual Property owned by Seller or any Subsidiary thereof
does not infringe upon or conflict with any Intellectual Property rights of any
Third Party. Except as disclosed on SCHEDULE 5.9, to the Knowledge of Seller,
the conduct of the Business or the use in the Business of any of the
Intellectual Property licensed to Seller or any Subsidiary thereof does not
infringe upon or conflict with any Intellectual Property rights of any Third
Party.
(d) None of the Assigned Intellectual Property owned by Seller or any
Subsidiary thereof and, to Seller's Knowledge, none of the Assigned Intellectual
Property licensed to Seller or any Subsidiary thereof pursuant to the Assigned
Contracts, is invalid or unenforceable.
(e) To Seller's Knowledge (which for purposes of this sentence only
shall include any facts of which Seller should have reasonably known), the
Assigned Intellectual Property and the Intellectual Property licensed to Seller
or any Subsidiary thereof pursuant to the Assigned Contracts is not being
infringed upon by any Third Party or used by any Third Party without a license
or permission from Seller or any Subsidiary thereof. Neither Seller nor any
Subsidiary thereof has asserted any claim of infringement or conflict against
any Third Party in respect of any Assigned Intellectual Property or any
Intellectual Property licensed to Seller or a Subsidiary thereof pursuant to the
Assigned Contracts.
(f) SCHEDULE 5.9 sets forth all material licenses and other agreements
(i) pursuant to which Seller or any Subsidiary thereof has licensed or otherwise
permitted the use of (through non-assertion, settlement or similar agreements,
or otherwise) the Assigned Intellectual Property and (ii) pursuant to which
Seller or any Subsidiary thereof has had Intellectual Property licensed to it,
or otherwise has been permitted to use Assigned Intellectual Property (through
non-assertion, settlement, or similar agreements, or otherwise), for use in or
in connection with the Business, other than shrink wrap licenses for
commercially available off-the-shelf software.
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(g) Except as set forth on SCHEDULE 5.9, neither Seller nor any
Subsidiary thereof with respect to the Business manufactures products that are
the subject of patents, patent applications, copyrights, trademarks, trade
styles, service marks, or trade secrets owned by or licensed from Third Parties.
(h) SCHEDULE 5.9 sets forth a list of all Persons to whom Seller or any
Subsidiary, during the year ended December 31, 2002, has paid in excess of
$50,000 of royalties, license fees, charges or other payments for use of the
Assigned Intellectual Property including the Intellectual Property used pursuant
to the Assigned Contracts and sets forth the amount so paid. Except as reflected
in the Financial Statements or as shown on SCHEDULE 5.9, no past, present or
future royalties, license fees, charges or other payments are payable by Seller
or any Subsidiary thereof to anyone for use of the Assigned Intellectual
Property including the Intellectual Property licensed to Seller or any
Subsidiary thereof pursuant to the Assigned Contracts. All Assigned Contracts
pursuant to which Seller or any Subsidiary thereof has any license or right to
use any Intellectual Property are in full force and effect and there are no
existing or threatened Defaults, and the execution of this Agreement will not
cause a Default under any such Contract. Seller has delivered to Purchaser
complete and correct copies of all Contracts (including all amendments,
supplements, waivers and other modifications thereto) set forth or required to
be set forth on SCHEDULE 5.9.
(i) Seller and its Subsidiaries have taken commercially reasonably
action to protect the Assigned Intellectual Property and have maintained the
secrecy of all confidential Intellectual Property used in the Business under
applicable Law.
(j) Except as disclosed in SCHEDULE 5.9, with respect to any
Computer Software owned by Seller or any Subsidiary thereof included in the
Assigned Intellectual Property, all rights in such Computer Software are owned
by Seller or a Subsidiary thereof and have been duly assigned to the Seller or a
Subsidiary thereof by their creators or developers, or by employees of Seller or
a Subsidiary thereof. There are no viruses, worms, Trojan horses or similar
programs in the Computer Software owned by Seller or any Subsidiary thereof
included in the Acquired Assets as delivered at Closing. To Seller's Knowledge,
there are no viruses, worms, Trojan horses or similar programs in the Computer
Software licensed to Seller or any Subsidiary thereof included in the Acquired
Assets as delivered at Closing. There are no defects or flaws in the Computer
Software owned by Seller or a Subsidiary thereof or to Seller's Knowledge in the
Computer Software licensed to Seller or any Subsidiary thereof from Third
Parties and used in the Business that would prevent such Computer Software from
performing in all material respects the tasks and functions that it was intended
to perform.
5.10 LEASED REAL PROPERTY.
(a) Neither Seller nor any Subsidiary thereof owns any Real Property
with respect to the Business.
(b) SCHEDULE 1.1(a) contains a true and correct list of each parcel of
Leased Real Property used in or in connection with the Business. A true and
correct copy of each
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Assigned Real Property Lease has been provided to Purchaser. Seller is the
lessee under each of the Assigned Real Property Leases. Each Assigned Real
Property Lease is legal, valid, binding, in full force and effect and
enforceable against each party thereto. Seller has no Knowledge of an existing
Default by it or any other party to such Assigned Real Property Leases. Each
Assigned Real Property Lease grants the tenant under the Assigned Real Property
Lease the exclusive right to use and occupy the Leased Real Property thereunder.
Seller enjoys peaceful and undisturbed possession under its respective Assigned
Real Property Leases for the Leased Real Property. Except for Permitted
Encumbrances or as described in SCHEDULE 5.10(b), Seller's interest in the
Assigned Real Property Leases is free and clear of any Liens other than
Permitted Encumbrances, and is not subject to any deeds of trust, assignments,
subleases, or rights of any Third Parties known to or created or permitted by
Seller other than the lessor thereof or any mortgagees of such lessors. The
assignment of any of Seller's rights in and to the Assigned Real Property Leases
to Purchaser will not cause a Default under any Assigned Real Property Leases,
except for those leases identified on SCHEDULE 5.2 as requiring Consents.
(c) All improvements on the Leased Real Property conform to all
applicable state and local Laws or use restrictions, and the property is zoned
for the various purposes for which such Leased Real Property and improvements
thereon are presently being used.
(d) Seller has received no written notice and has no Knowledge of any
pending or threatened condemnations, planned public improvements, annexation,
special assessments, zoning or subdivision changes, or other adverse claims
affecting the Leased Real Property. Seller has received no written or oral
notice of any material unscheduled increase in the rent or other amounts payable
in respect of any Assigned Real Property Lease, whether as a result of the
transactions contemplated by this Agreement or otherwise.
(e) There is no private restrictive covenant or governmental use
restriction (including zoning) on all or any portion of the Leased Real Property
which prohibits the current use of the Leased Real Property. Seller has all
easements, rights-of-way, and similar authorizations required for the use of the
Leased Real Property as heretofore conducted, except to the extent that the
failure to have such easements, rights of way or similar authorizations would
not, individually or in the aggregate, have a material adverse effect on the
value or use of the applicable parcel of Leased Real Property.
(f) There is no material violation of any covenant, condition,
restriction, easement or agreement or order of any Regulatory Authority that
affects in any material respect the Leased Real Property or the ownership,
operation, use or occupancy thereof. All licenses, permits and approvals
required for the occupancy and operation of the Leased Real Property (with
appurtenant parking uses) as presently being used have been obtained and are in
full force and effect and Seller has received no written notices of violations
in connection with such items. No material damage or destruction has occurred
with respect to any of the Leased Real Property.
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(g) Seller does not have in its possession any studies or reports which
indicate any defects in the design or construction of any of the improvements on
the Leased Real Property included in the Assigned Real Property Leases.
(h) No Person has any right, option, right of first refusal or any
other Contract, whether oral or written, with respect to the purchase,
assignment or transfer of all or any portion of the Leased Real Property.
(i) The Leased Real Property is not subject to or affected by any
special assessment for public improvements or otherwise, whether or not a Lien
presently exists upon such Leased Real Property. Seller has not made any
commitment to any Regulatory Authority, utility company, school board, church or
other religious body, homeowner or homeowner's association or any other
organization, group or individual relating to any of the Leased Real Property
which would impose an obligation upon Seller or its successors or assigns to
make any contributions or dedications of money or land, or to construct, install
or maintain any improvements of a public or private nature as part of such
Leased Real Property. No Regulatory Authority has imposed any requirement that
Seller pay, directly or indirectly, any special fees or contributions or incur
any expenses or obligations in connection with the development of the Leased
Real Property or any portion thereof, other than any regular and
nondiscriminatory local real estate or school Taxes assessed against such Leased
Real Property. The parcels comprising the Leased Real Property are separately
assessed for Real Property Taxes and are not combined with any other real
property for Tax assessment purposes. Seller has not received any notice of any
contemplated or actual reassessment of the Leased Real Property included in the
Assigned Real Property Leases or any portion thereof for general real estate Tax
purposes. As of the date hereof, to Seller's Knowledge, all due and payable
Taxes, water charges and sewer charges affecting the Leased Real Property
included in the Assigned Real Property Leases, or any portion thereof have been
paid.
(j) The parcels comprising the Leased Real Property constitute
separately subdivided, legally distinct parcels of land. Seller has complied in
all material respects with all applicable Laws and restrictions pertaining to
and affecting such Leased Real Property which relate to such subdivision.
(k) There is no Default by Seller nor, to Seller's Knowledge, any other
party thereto, under any Liens which may affect the Leased Real Property or any
portion thereof which are to be performed or complied with by the owner of such
Leased Real Property, and no condition or circumstance exists which, would
constitute a Default by Seller nor, to Seller's knowledge, any other party
thereto, under any such Liens.
5.11 ENVIRONMENTAL MATTERS.
(a) Except as set forth in SCHEDULE 5.11(a) hereto,
(i) Seller, with respect to the Business and each
Acquired Asset, the use and ownership thereof, and the operation of the Business
is, and has been at all times, in compliance with all Environmental Laws. Seller
has not (A) been notified that it is
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potentially liable under or (B) received any requests for information or other
correspondence concerning any site or facility under, nor has Seller any reason
to believe that it is considered potentially liable under any Environmental Law
with respect to the Business or any Acquired Asset;
(ii) Seller has accurately prepared and timely filed with
the appropriate jurisdictions all reports and filings required pursuant to any
federal, state or local Law or Order, including any Environmental Law or Order
relating to environmental protection applicable to or affecting the Business or
the Acquired Assets;
(iii) Seller has not entered into or received, nor is
Seller in Default under, any Order relating to environmental protection with
respect to the Business or any Acquired Asset;
(iv) Seller has obtained all Environmental Permits with
respect to the Business or any Acquired Asset, and SCHEDULE 5.11(a)(iv) contains
a complete list and description of each such Environmental Permit. Subject to
Section 7.6 hereof, each Environmental Permit shall be validly transferred to
Purchaser on the Closing Date. Except as described in SCHEDULE 5.11(a)(iv),
Seller is in compliance with each such Environmental Permit (including any
information provided on the applications therefor), no such Environmental Permit
restricts Seller from operating the Business or any Acquired Asset covered by
such Environmental Permit as currently being conducted, and Seller has not been
notified by any relevant Regulatory Authority that any Environmental Permit will
be modified, suspended, canceled or revoked, or cannot be renewed in the
ordinary course of business. No Third Party has alleged any violation by Seller
of any Environmental Permits; and
(v) Seller has not been, and currently Seller is not, a
"generator" of "hazardous waste" (as those terms are defined by the Resource
Conservation and Recovery Act of 1976 and the regulations promulgated
thereunder) with respect to the Business or any Acquired Asset, for the purposes
of obtaining an EPA identification number under 40 C.F.R. Section 262.12(a) or
complying with the manifest system under Subpart 8 of 40 C.F.R. Part 262.
(b) With respect to the Business and the Acquired Assets,
(i) there is no Litigation pending or, to Seller's
Knowledge, threatened by any Regulatory Authority, municipality, community,
citizen, or other entity, against Seller or any other Person (including any
tenant or subtenant) or against any Acquired Asset relating to environmental
protection, compliance with Environmental Laws, or the condition of the Leased
Real Property, or any property currently or previously owned, leased, operated
or used by Seller nor is Seller aware of any unasserted Litigation relating to
the foregoing the assertion of which is probable;
(ii) except as set forth on SCHEDULE 5.11(b)(ii) there has
been no disposal, release, burial, placement, migration or Offsite Migration of
Hazardous Materials on, in,
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at, or about any of the Leased Real Property or any facilities or property
currently or previously owned, leased, operated or used by Seller;
(iii) all above-ground and underground storage tanks,
sumps, oil/water separators, and septic systems now or previously located on the
Leased Real Property have been identified on SCHEDULE 5.11(b)(iii), together
with a description of the materials stored therein and a statement as to whether
such tanks are currently used by Seller, and none of such tanks, sumps,
oil/water separators and septic systems is leaking or has leaked;
(iv) no Lien has arisen or, to the Knowledge of Seller, is
threatened, on any of the Acquired Assets under or as a result of any
Environmental Law;
(v) except as identified in SCHEDULE 5.11(b)(v), no audit
or other investigation has been conducted as to environmental matters at any of
Seller's properties, including the Leased Real Property, or to Seller's
knowledge, any property previously owned, operated, leased or used by Seller,
and any such audit or other investigation report is attached to SCHEDULE
5.11(b)(v). Seller has disclosed and made available to Purchaser all
information, including, without limitation, all studies, analyses and test
results, in the possession, custody or control of or otherwise known to Seller
relating to the environmental conditions on, under or about the Leased Real
Property or other properties or assets owned, leased, operated or used by Seller
or any predecessor in interest thereto at the present time or in the past in
connection with the Business.
(vi) all waste containing any Hazardous Materials
generated, used, handled, stored, treated or disposed of (directly or
indirectly) by Seller or at the Leased Real Property or property currently or
previously owned, operated, leased or used by Seller, has been stored or
disposed of in compliance with all applicable Environmental Laws. Without
limiting the generality of any of the foregoing, all onsite and offsite
locations where Seller has stored, disposed or arranged for the disposal of
Hazardous Materials are identified in SCHEDULE 5.11(b)(vi);
(vii) none of the Leased Real Property contains any
asbestos-containing materials and PCBs are not used or stored on or in any such
properties; and
(viii) there are no conditions or restrictions that have
been imposed, at any time for any period of time, on the use, ownership,
occupancy or transferability, including a closure or limitation of access, with
respect to the Business or any Leased Real Property due to the use, manufacture,
storage, handling, disposal or transport of Hazardous Materials.
5.12 LITIGATION.
Except as listed and briefly described on SCHEDULE 5.12, there is no
Litigation pending or, to Seller's Knowledge, threatened against, or adversely
affecting the Business or any of the Acquired Assets, or that would restrain,
enjoin or otherwise prevent the consummation of the transactions contemplated by
this Agreement, at law or in equity, or before or by any Regulatory Authority,
nor is Seller aware of any unasserted Litigation
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the assertion of which is probable. Seller has made available to Purchaser
copies of all filed pleadings with respect to the matters referred to in
SCHEDULE 5.12. Seller, with respect to the Business is not in Default under any
Order affecting the Business or the Acquired Assets. Seller is not a party to or
bound by any Order that affects the Business or the Acquired Assets.
5.13 ABSENCE OF CHANGES.
Except as set forth on SCHEDULE 5.13, since March 31, 2003 there has
not been any transaction or occurrence in which Seller or any Subsidiary
thereof, with respect to the Business, has:
(a) had any Material Adverse Effect on the business, results of
operations, or financial condition of the Business nor has there been any event
that has occurred or, to Seller's Knowledge, been threatened, which would
reasonably be expected to have a Material Adverse Effect on any of the
foregoing;
(b) incurred any Liabilities of any nature other than items incurred in
the Ordinary Course of Business or increased (or experienced any change in the
assumptions underlying or the methods of calculating) any bad debt, contingency,
or other reserve, other than in the Ordinary Course of Business;
(c) paid, discharged, or satisfied any Lien or Liability other than the
payment, discharge, or satisfaction in the Ordinary Course of Business of Liens
or Liabilities of the type reflected or reserved against in the Financial
Statements or which were incurred since March 31, 2003 in the Ordinary Course of
Business;
(d) permitted, allowed, or suffered any of its properties, assets, or
rights (real, personal or mixed, tangible or intangible) to be subjected to any
Lien, other than Permitted Encumbrances;
(e) canceled any debts or waived any claims or rights in excess of
$100,000 individually or $100,000 in the aggregate;
(f) entered into, terminated, modified, failed to renew or received any
notice of termination of any material contract, license, agreement, lease,
commitment or insurance policy;
(g) waived, compromised or extended any claim or delayed payment of any
accounts payable other than in the Ordinary Course of Business;
(h) disposed of or permitted to lapse any right to the use of any of
the Intellectual Property used in or in connection with the Business or disposed
of or disclosed to any Person not authorized to have such information any of the
Intellectual Property used in or in connection with the Business not previously
a matter of public knowledge or existing in the public domain;
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(i) except for the capital expenditure commitments described on
SCHEDULE 5.8(b), made any material capital expenditure or commitment for
additions to property, plant, equipment, intangible, or capital assets or for
any other purpose, other than for emergency repairs or replacement;
(j) incurred any long-term Indebtedness;
(k) paid, loaned, distributed, or advanced any amounts to (i) any
Related Person of Seller or any Subsidiary thereof, (ii) any corporation or
partnership in which any Related Person of Seller or any Subsidiary thereof is a
Related Person, or (iii) any Person controlling, controlled by, or under common
control with any such Related Person except as permitted by Section 5.13(n) and
for routine travel advances to officers and employees;
(l) entered into any settlement or agreement to settle any Litigation,
action or proceeding;
(m) sold, transferred, or otherwise disposed of any assets, properties,
or rights used in the Business that would otherwise constitute Acquired Assets,
except in the Ordinary Course of Business;
(n) granted or incurred any obligation for any increase in the
compensation of any Employee (including any increase pursuant to any bonus,
pension, profit-sharing, retirement, or other plan or commitment) except for
raises to the Employees in the Ordinary Course of Business;
(o) made any material change in any method of accounting or accounting
principle, practice, or policy;
(p) made any material write-down of the value of any asset used in
connection with the Business or any material write-off as uncollectible of any
Accounts Receivable or any portion thereof;
(q) made any material change in policies or practices relating to
sales, pricing or discounts;
(r) suffered any casualty Loss or damage in excess of $100,000 in the
aggregate (whether or not insured against);
(s) made or agreed to make any charitable contributions or incurred or
agreed to incur any non-business expenses in excess of $100,000 in the
aggregate;
(t) acquired or acquired any right to any material assets, properties
or rights for use in or in connection with the Business;
(u) taken any other action which is not either in the Ordinary Course
of Business and consistent with past practice or provided for in this Agreement;
or
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(v) agreed, so as to legally bind Seller or any Subsidiary thereof
whether in writing or otherwise, to take any of the actions set forth in this
Section 5.13 and not otherwise permitted by this Agreement or omitted to take
any action that would result in the occurrence of any of the foregoing.
5.14 INSURANCE.
The Acquired Assets, the business operations of the Business and its
employees are insured under policies of general liability and other forms of
insurance listed on SCHEDULE 5.14. Seller has not been refused any insurance
with respect to the Business, by any insurance carrier to which it has applied
for insurance or with which it has carried insurance during the past five (5)
years. There are no outstanding requirements or recommendations by any current
insurer or underwriter with respect to the Business or the Acquired Assets which
require or recommend changes in the conduct of the Business, or require any
repairs or other work to be done with respect to any of the Acquired Assets or
operations of the Business. All premiums payable under all such policies have
been paid and Seller is otherwise in compliance in all material respects with
the terms and conditions of all such policies.
5.15 LABOR MATTERS.
(a) SCHEDULE 5.15(a) contains a true and correct and complete list of
all present employees and sales representatives employed or engaged by Seller in
the Business (the "Employees"), any bonus earned by any of them during the
twelve months ended December 31, 2002, their current remuneration, and a
description of all perquisites and fringe benefits they receive or are eligible
to receive. Except as disclosed on SCHEDULE 5.15(a), Seller has not received any
notice of intent to terminate employment from any Employee. Seller, within the
last three (3) years, has not experienced any organized slowdown, work
interruption, strike, or work stoppage by its Employees. Except as set forth in
SCHEDULE 5.15(a), Seller is not a party to nor does Seller have any obligation
pursuant to any oral and legally binding or written agreement, collective
bargaining or otherwise, with any party regarding the rates of pay or working
conditions of any of the Employees, nor is Seller obligated under any Contract,
Order or Law to recognize or bargain with any labor organization or union on
behalf of such Employees. Except as set forth in SCHEDULE 5.15(a), neither
Seller, with respect to the Business, nor any of its officers, directors, or
employees have been charged or, to Seller's Knowledge, threatened with the
charge of any unfair labor practice, with respect to the Business within the
last two (2) years. Seller, with respect to the Business, has complied in all
material respects with all Contracts relating to any of the Employees and with
applicable federal, state, local and foreign Laws concerning its employment
relationship with the Employees, including applicable wage and hour Laws, fair
employment Laws, safety Laws, worker compensation Laws, unemployment Laws, Laws
regarding hiring, Laws regarding termination of employment and social security
Laws. With respect to the Business, there are no pending or, to Seller's
Knowledge, threatened Labor Claims. With respect to the Business, other than as
will be set forth on the Closing Balance Sheet, Seller is not liable for any
unpaid wages, bonuses, or commissions (other than those not yet due) or any Tax,
penalty, assessment, or forfeiture for failure to comply with any of the
foregoing. Except
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as set forth in SCHEDULE 5.16, there is no outstanding policy, practice, plan,
agreement or arrangement with respect to severance payments with respect to any
Employee. None of the Employees is an independent contractor or has been treated
as an independent contractor by Seller within the past five (5) years.
(b) Seller, with respect to the Business, is in full compliance with
and has not violated the terms and provisions of the Immigration Laws. With
respect to each employee (as defined in Section 274a.1(f) of Title 8, Internal
Revenue Code of Federal Regulations) of Seller employed in the Business for whom
compliance with the Immigration Laws by an employer (as defined in Section
274a.1(g) of Title 8, Internal Revenue Code of Federal Regulations) is required,
Seller, has made available to Purchaser prior to the Closing Date, copies of
such employee's Form I-9 (Employment Eligibility Verification Form) and all
other records, documents or other papers which are retained with the Form I-9 by
the employer pursuant to the Immigration Laws. Seller, with respect to the
Business, has never been the subject of any inspection or investigation relating
to its compliance with or violation of the Immigration Laws, nor has it been
warned, fined or otherwise penalized by reason of any failure to comply with the
Immigration Laws, nor is any such proceeding pending or, to Seller's Knowledge,
threatened.
(c) In the nine (9) months prior to the execution of this Agreement,
Seller, with respect to the Business, has not effectuated (i) a "plant closing"
(as defined in the Worker Adjustment and Retraining Notification (WARN) Act Pub.
L. 100-379, 102 stat. 890 (1988) (the "WARN Act")) affecting any site of
employment or one or more facilities or operating units within any site of
employment or facility of Seller or any Subsidiary; or (ii) a "mass layoff" (as
defined in the WARN Act) affecting any site of employment or facility of Seller
or any Subsidiary; and Seller has not been affected by any transaction or
engaged in layoffs or employment terminations sufficient in number to trigger
application of any similar state or local Law. Except as set forth on SCHEDULE
5.15(c) none of Seller's employees who are employed in the Business has suffered
an "employment loss" (as defined in the WARN Act) since six (6) months prior to
the Closing Date.
(d) Except as set forth in SCHEDULE 5.15(d), Seller in the operation of
the Business has complied in all material respects with all applicable Laws
relating to employee health and safety; and Seller has not received any written
notice that past or present conditions of the Acquired Assets violate any
applicable legal requirements or otherwise can be made the basis of any
Litigation, whether related to regulatory compliance, personal injury (including
death) or property damage, based on, arising out of, caused by or related to
violations of any Law or Order relating to employee health and safety.
5.16 EMPLOYEE BENEFIT PLANS.
(a) SCHEDULE 5.16 contains a true and complete list of all Employee
Benefit Plans which are presently in effect or which have previously been in
effect, which cover Employees and which Seller, with respect to Employees, has
any outstanding, present, or future Liability, or under which any Employee has
any present or future right to benefits.
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(b) Except as set forth on SCHEDULE 5.16, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
by this Agreement will (i) entitle any current or former employee or director of
Seller to severance pay, unemployment compensation or any payment contingent
upon a change in control or ownership of Seller, (ii) increase or enhance any
benefits payable under any Employee Benefit Plan maintained by Seller or (iii)
accelerate the time of payment or vesting, or increase the amount, of any
compensation due to any such employee or former employee or director which could
become a Liability of Purchaser.
(c) Seller has complied in all material respects with the continuation
coverage requirements of Section 1001 of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and ERISA Sections 601 through 608
("COBRA"). Seller shall be responsible for complying with the requirements of
Code Section 4980-B and Part 6 of Title I of ERISA for the Employees and their
"qualified beneficiaries" whose "qualifying event" (as such terms are defined in
Code Section 4980-B) occurs on or prior to the Closing Date. Purchaser shall
have no liability under COBRA or under Code Section 4980-B relating to the
Employees for events occurring on or prior to the Closing Date.
(d) Each of Seller's Employee Benefit Plans that is intended to satisfy
Code Section 401(a), are in compliance in all material respects with the
requirements prescribed by all applicable Laws including ERISA and the Internal
Revenue Code; and each such plan has received a favorable determination letter
from the Internal Revenue Service and Seller is not aware of any circumstances
(including any amendment) reasonably likely to result in the revocation of such
favorable determination letter.
(e) Neither Seller nor any ERISA Affiliate of Seller has at any time
sponsored, contributed to or been obligated under Title I or Title IV of ERISA
to contribute to a "defined benefit plan" (as defined in ERISA Section 3(35)).
(f) Except as described on SCHEDULE 5.16, neither Seller nor any ERISA
Affiliate of Seller has had an "obligation to contribute" (as defined in ERISA
Section 4212) to a "multiemployer plan" (as defined in ERISA Sections 4001(a)(3)
and 3(37)(A)) or incurred a "complete or partial withdrawal" (as defined in
ERISA Sections 4203 and 4205).
(g) All contributions to, and payments from, Seller's Employee Benefit
Plans which may have been required to be made in accordance with Seller's
Employee Benefit Plans or a collective bargaining agreement and, when
applicable, Section 302 of ERISA or Section 412 of the Internal Revenue Code,
have been timely made.
(h) Each of Seller's Employee Benefit Plans has been operated and
administered in all material respects in compliance with its terms and
applicable Law. There are no material pending or, to the Seller's Knowledge,
threatened claims by or on behalf of any of Seller's Employee Benefit Plans or
any Employees (other than routine claims for benefits).
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5.17 TAXES.
(a) All Tax Returns for Taxes relating to the Business or the Acquired
Assets with respect to which Purchaser or any of its Affiliates could be liable
("Successor Liability Taxes") have been timely filed by Seller (or its
Affiliates) or requests for extensions have been timely filed, granted, and have
not expired for periods ended on or before Closing, and all Tax Returns filed
are complete and accurate. Subject to Section 15.5, all Successor Liability
Taxes that are due and owing with respect to periods (or portions thereof)
ending on or prior to the Closing Date have been paid, whether or not such Taxes
are shown on filed Tax Returns. There are no Liens on any of the Acquired Assets
resulting from the failure (or alleged failure) to pay any Tax. Seller has
provided true and correct copies of all Real Property Tax and Personal Property
Tax bills of Seller for the year 2003 that have been received by Seller prior to
the date hereof, relating to the Acquired Assets.
(b) No Litigation is pending, or to Seller's Knowledge, threatened by
any jurisdiction alleging that Seller, with respect to the Acquired Assets or
the Business, has a duty to file Tax Returns and pay Successor Liability Taxes
or is otherwise subject to the taxing authority of any jurisdiction where it
does not currently file Tax Returns, nor has Seller or any of its Affiliates
received any notice or questionnaire from any such jurisdiction which suggests
or asserts that Seller or any of its Affiliates, with respect to the Acquired
Assets or the Business, may have a duty to file such Tax Returns and pay such
Taxes.
5.18 COMPLIANCE WITH LAWS; PERMITS AND ORDERS.
Neither Seller nor any Subsidiary thereof is engaging in any activity
or omitting to take any action with respect to the Business or the Acquired
Assets that is or creates a material violation of any Law applicable to the
Business or the Acquired Assets. Neither the Business nor any of the Acquired
Assets is subject to any Order issued by any Regulatory Authority. Seller and
its Subsidiaries possess all Permits necessary for the lawful operation of the
Business as presently conducted. Seller and its Subsidiaries are in compliance
with all such Permits and all applicable Laws and Orders issued by any
Regulatory Authority where a failure to so comply would have a Material Adverse
Effect on either the Business or the Acquired Assets. Neither Seller nor any
Subsidiary thereof, with respect to the Business, has not at any time during the
last five (5) years (i) made any unlawful contribution to any political
candidate, or failed to disclose fully any contribution in violation of Law, or
(ii) made any payment to any federal, state or local governmental, regulatory or
administrative officer or official, or other Person charged with similar public
or quasi-public duties, other than payments required or permitted by the Laws of
the United States or any jurisdiction thereof.
5.19 UNCLAIMED OR ABANDONED PROPERTY; ESCHEAT.
Seller, with respect to the Business, is in compliance with the Laws of
the various states dealing with abandoned or unclaimed property or escheat.
Seller has reported and remitted to each state as required by Law all amounts
held, due or owing by Seller in the
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course of the operations of the Business and remaining unclaimed or unpaid for a
period of time such that they are presumed abandoned under the Laws of the state
of residence of the owner of such amounts as reflected on the Books and Records
of Seller (or, if the owner(s) of any such amounts are unknown or the state of
residence of the owner(s) of any such amounts cannot be determined from the
Books and Records of Seller, then under the Laws of the state in which Seller is
incorporated). No amounts which are, or would be, or would become, unclaimed
property or presumed abandoned under state Laws dealing with abandoned or
unclaimed property have been written off, written or reversed to income, or
otherwise removed or excluded from the Balance Sheet Liabilities of the March 31
Balance Sheet. All Liabilities of Seller which are owing in connection with the
operations of the Business and which have remained payable or distributable for
more than one (1) year after they first became payable or distributable,
including all such amounts for which a check or other form of payment or credit
has been issued but not negotiated or paid, are identified on SCHEDULE 5.19.
5.20 PRIVACY OF CUSTOMER INFORMATION.
Seller and its Subsidiaries have the right to transfer all individually
identifiable personal information ("IIPI") relating to customers, former
customers and prospective customers of the Business that will be transferred to
Purchaser pursuant to this Agreement. For purposes of this Section 5.20, "IIPI"
shall mean any information relating to an identified or identifiable natural
Person. The collection and use of such IIPI by Seller and its Subsidiaries and
the transfer of such IIPI to Purchaser as contemplated by this Agreement
complies with Seller's privacy policy and the Health Insurance Portability and
Accountability Act.
5.21 GOVERNMENTAL APPROVAL AND CONSENTS.
No Consent of any Regulatory Authority is required in connection with
the execution, delivery, and performance of this Agreement by Seller or Seller's
Parent or the consummation by Seller or Seller's Parent of the transactions
contemplated hereby.
5.22 ACQUIRED ASSETS.
Except as disclosed in SCHEDULE 5.22, Seller and its Subsidiaries own
and have good title to all of the owned Acquired Assets, free and clear of any
and all Liens other than Permitted Encumbrances. The Acquired Assets conveyed to
Purchaser and UK Purchaser at Closing, together with the Acquired Assets the
benefits of which are obtained for Purchaser in accordance with Section 7.6, and
those assets, services and arrangements described in the Transition Services
Agreement, comprise all assets and services required (i) for the continued
conduct of the Business by Purchaser as now being conducted or, together with
all assets, services and arrangements to be purchased, leased, licensed or
otherwise acquired under the current budget for the Business for the year ending
December 31, 2003, as contemplated to be conducted in accordance with the
current budget for the Business for the year ending December 31, 2003 and (ii)
to produce the revenues set forth in the Financial Statements. Except for the
Excluded Assets and subject to Section 7.6, there are no assets, properties or
rights used by Seller
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or any Subsidiary thereof in the operation of the Business and owned by any
Third Party that will not be leased or licensed to Purchaser under valid
Contracts. The Acquired Equipment and other tangible personal property included
in the Acquired Assets is in all material respects adequate for the purposes for
which it is currently used or is held for use, and is in reasonably good repair
and operating condition (subject to normal wear and tear) and, to the Knowledge
of Seller, there are no facts or conditions affecting the Acquired Equipment or
the other tangible personal property included in the Acquired Assets which
could, individually or in the aggregate, interfere in any material respect with
the use, occupancy or operation thereof as currently used, occupied or operated,
or their adequacy for such use.
5.23 PRODUCTS.
(a) Warranties. Purchaser has been furnished with complete and correct
copies of the standard terms and conditions of sale for each of the products and
services of Seller and its Subsidiaries (containing applicable guaranty,
warranty and indemnity provisions) with respect to the Business. Except as set
forth in SCHEDULE 5.23(a) and except for warranties under applicable Law, (i)
there are no warranties express or implied, written or oral, with respect to the
products and services of the Business and (ii) there are no pending or, to the
Knowledge of Seller, threatened claims with respect to any such warranty, and,
to the Knowledge of Seller, Seller does not have any Liability with respect to
any such warranty that is not otherwise fully and adequately reserved against as
reflected in the March 31 Balance Sheet or the Closing Balance Sheet, as the
case may be.
(b) Product Liability. Except as set forth in SCHEDULE 5.23(b), Seller
has no Knowledge of any Liability, whether based on strict liability,
negligence, breach of warranty (express or implied), breach of contract or
otherwise, in respect of any product, component or other item manufactured,
sold, designed or produced prior to the Closing by, or service rendered prior to
the Closing by or on behalf of, Seller or any predecessor thereto with respect
to the Business, that (i) is not fully and adequately covered by policies of
insurance or by indemnity, contribution, cost sharing or similar agreements or
arrangements by or with other Persons and (ii) is not otherwise fully and
adequately reserved against as reflected in the March 31 Balance Sheet or the
Closing Balance Sheet, as the case may be.
(c) There are no material defects or flaws in the Computer Software
owned by Seller and its Subsidiaries included in the Acquired Assets and that is
sold or licensed to their customers in the Ordinary Course of Business, which
defects or flaws would prevent such Computer Software from performing in all
material respects the tasks and functions for which it was designed in
accordance with, and subject to the limitations described in, the manuals,
license and sale agreements and other documentation furnished to such customers
in connection with such Computer Software.
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5.24 SUPPLIERS.
SCHEDULE 5.24 sets forth for the year ended December 31, 2002 and for
the three (3) month period ended March 31, 2003 (a) the names of the ten (10)
largest suppliers of goods and services to the Business and (b) the amount for
which each such supplier invoiced Seller and its Subsidiaries or was otherwise
owed during each such period. Seller has furnished to Purchaser true and correct
copies of each existing Contract with such suppliers and each additional
Contract with such suppliers covering the periods referenced above. Neither
Seller nor any of its Affiliates has received any notice that there has been any
material adverse change in the price of such goods or services or that any such
supplier will not sell goods or services to Seller and its Subsidiaries at any
time after the Effective Time on terms and conditions substantially the same as
those used in its current sales to Seller, subject to general and customary
price increases. Seller has no reason to believe that the terms of the
arrangements with its suppliers with respect to the Business would be adversely
affected by the consummation of the transactions contemplated by this Agreement.
5.25 NO GUARANTEES.
Other than the Lancashire Guaranty (as defined in Section 7.8), (i)
none of the obligations or liabilities of the Business or of Seller incurred in
connection with the operation of the Business is guaranteed by or subject to a
similar contingent obligation of any other Person, (ii) neither Seller nor any
Subsidiary thereof has guaranteed or become subject to a similar contingent
obligation in respect of the Liabilities of any other Person, and (iii) there
are no outstanding letters of credit, surety bonds or similar instruments of
Seller or any of its Affiliates in connection with the Business or the Acquired
Assets.
5.26 RECORDS.
The minute books of Seller insofar as they relate to or affect the
Business and the Acquired Assets are substantially complete and correct in all
material respects. The books of account of Seller, insofar as they relate to or
affect the Business and the Acquired Assets, are sufficient to prepare the
Financial Statements in accordance with GAAP, subject to the exceptions set
forth in SCHEDULE 5.4, and there have been no transactions involving the
Business which properly should have been set forth therein and which have not
been so set forth.
5.27 BROKERS AND FINDERS.
Neither Seller nor any Related Person of Seller has incurred any
obligation or Liability to any party for any brokerage fees, agent's
commissions, or finder's fees in connection with the transactions contemplated
by the Acquisition Documents, except for fees paid or owing to Xxxxxxx Xxxxx &
Company, whose fees shall be the sole responsibility of Seller.
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5.28 DISCLOSURE.
There is no fact (other than matters of a general economic or political
nature which do not affect the Business uniquely) of which the Seller has
Knowledge that has not been disclosed by Seller to Purchaser that, individually
or in the aggregate, (i) would reasonably be expected to have or result in a
Material Adverse Effect or (ii) might reasonably be expected to affect a
reasonable purchaser's decision to purchase the Business in accordance with the
terms of this Agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
6.1 ORGANIZATION AND QUALIFICATION.
Purchaser is a corporation duly organized, validly existing, and in
good standing under the Laws of the State of Pennsylvania. Each of Purchaser's
Parent and UK Purchaser is a company duly organized, validly existing and in
good standing under the Laws of England and Wales. Each of Purchaser,
Purchaser's Parent and UK Purchaser has all necessary power and authority to
conduct its business, to own, lease, or operate its properties in the places
where such business is conducted and such properties are owned, leased, or
operated.
6.2 AUTHORITY.
Each of Purchaser, UK Purchaser and Purchaser's Parent has full power
and authority to enter into each of the Acquisition Documents to which it is a
Party and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by each of Purchaser, UK Purchaser and
Purchaser's Parent of each of the Acquisition Documents to which it is a Party
have been duly and validly authorized and approved by all necessary action on
its part. Each of the Acquisition Documents to which either Purchaser, UK
Purchaser or Purchaser's Parent is a Party is the legal, valid, and binding
obligation of Purchaser, UK Purchaser and Purchaser's Parent enforceable against
it in accordance with their terms. Neither the execution and delivery by
Purchaser, UK Purchaser or Purchaser's Parent of any of the Acquisition
Documents to which Purchaser, UK Purchaser or Purchaser's Parent is a party nor
the consummation by Purchaser, UK Purchaser or Purchaser's Parent of the
transactions contemplated hereby or thereby will (i) violate Purchaser's, UK
Purchaser or Purchaser's Parent's charter documents, (ii) violate any provisions
of Law or any Order of any Regulatory Authority to which Purchaser, UK Purchaser
or Purchaser's Parent is subject, or by which its assets are bound, or (iii)
conflict with, result in a breach of, or constitute a Default under any Contract
to which Purchaser, UK Purchaser or Purchaser's Parent is a Party or by which
its assets or properties are bound.
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6.3 LITIGATION.
There is no Litigation pending or, to Purchaser's knowledge,
threatened, against Purchaser, UK Purchaser or Purchaser's Parent in respect of
the consummation of the transactions contemplated hereby.
6.4 GOVERNMENTAL APPROVAL AND CONSENTS.
No Consent of any Regulatory Authority is required in connection with
the execution, delivery, and performance by Purchaser, UK Purchaser or
Purchaser's Parent of this Agreement or the consummation by Purchaser, UK
Purchaser or Purchaser's Parent of the transactions contemplated hereby.
6.5 BROKERS AND FINDERS.
Neither Purchaser nor any Related Person of Purchaser has incurred any
Liability to any party for any brokerage fees, agent's commissions, or finder's
fees in connection with the transactions contemplated by the Acquisition
Documents.
6.6 DISCLOSURE.
There is no fact (other than matters of a general economic or political
nature which do not affect the Business uniquely) known to Purchaser that has
not been disclosed by Purchaser to Seller that, individually or in the
aggregate, (i) would reasonably be expected to have or result in a material
adverse effect on the ability of Purchaser to consummate the transactions
contemplated by this Agreement or (ii) might reasonably be expected to affect a
reasonable seller's decision to sell the Business in accordance with the terms
of this Agreement.
ARTICLE 7
COVENANTS
7.1 ACCESS AND INFORMATION.
Subject to the confidentiality restrictions set forth in Section 13.1
hereof, from the date hereof to the Closing Date and during normal business
hours, Seller shall, and shall cause its Subsidiaries to, afford to Purchaser,
its lenders, counsel, accountants, and other representatives, reasonable access
to the offices, properties, books, contracts, commitments, records, vendors, and
customers of Seller and its Subsidiaries, insofar as the same relate to the
Business or the Acquired Assets, and shall furnish such persons with all
information (including financial and operating data) concerning the Business or
the Acquired Assets as they reasonably may request. Requests for such
information shall be coordinated with Seller's designated representatives, and
Seller shall use its best efforts to assist Purchaser, its Affiliates, lenders,
counsel, accountants, and other representatives in their examination.
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7.2 CONDUCT OF BUSINESS PRIOR TO CLOSING.
From the date hereof to the Closing, and except to the extent that
Purchaser shall otherwise Consent, Seller, with respect to the Business, shall,
and shall cause its Subsidiaries to:
(a) operate the Business substantially as previously operated and only
in the Ordinary Course of Business;
(b) maintain the Acquired Equipment and the other tangible personal
property included in the Acquired Assets in their present order and condition,
reasonable wear and use excepted, and maintain all policies of insurance
covering the Acquired Assets in amounts and on terms substantially equivalent to
those in effect on the date hereof;
(c) take all steps reasonably necessary to maintain their respective
rights in and to the Intellectual Property and other intangible assets of Seller
or its Subsidiaries included in the Acquired Assets;
(d) pay all accounts payable arising out of the conduct of the Business
in accordance with past practice and collect all Accounts Receivable arising out
of the conduct of the Business in accordance with past practice;
(e) comply in all material respects with all Laws applicable to the
conduct of the Business;
(f) perform all obligations under the Assigned Contracts and any other
documents relating to or affecting the Acquired Assets or the Business;
provided, however, that with respect to any good faith dispute between Seller or
any Subsidiary thereof with the other party to any Assigned Contract or such
other document, Purchaser shall not unreasonably withhold, delay or condition
Purchaser's Consent to Seller or such Subsidiary suspending its performance
under the Assigned Contract or such other document;
(g) maintain the Books and Records in the usual, regular, and ordinary
manner, on a basis consistent with past practices and prepare and conduct all
Tax affairs relating to the Business (including filing all Tax Returns and
amendments thereto required to be filed after taking into account any extensions
of time granted by any taxing authorities) only in the Ordinary Course of
Business;
(h) continue advertising and other promotional activities in accordance
with past practice, use its commercially reasonable efforts to keep the Business
and its operations intact and preserve the goodwill and patronage of the
customers, Employees and suppliers of the Business and others having a business
relationship with respect to the Business; and
(i) satisfy, terminate and discharge all Liens, including title
defects, that are not Permitted Encumbrances and deliver evidence reasonably
satisfactory to Purchaser and its counsel of such satisfaction, termination and
discharge at or prior to Closing.
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7.3 CERTAIN ACTS PROHIBITED.
Except as may be necessary to discharge or deal with the Excluded
Liabilities, from the date hereof to the Closing Date, with respect to the
Business Seller shall not, and shall not permit its Subsidiaries to, take any of
the actions described in Section 5.13 hereof, without the prior written consent
of Purchaser.
7.4 OTHER TRANSACTIONS.
Seller shall deal exclusively and in good faith with Purchaser with
regard to the sale of the Acquired Assets to Purchaser and will not, and will
direct its Related Persons financial advisors, accountants, agents, and counsel
not to (i) solicit submission of any Acquisition Proposals, (ii) participate in
any discussions or negotiations regarding, or furnish any non-public information
to any other Person regarding the Business or the Acquired Assets other than
Purchaser and its representatives or otherwise cooperate in any way or assist,
facilitate, or encourage any Acquisition Proposal by any Person other than
Purchaser or, (iii) enter into any agreement or understanding, whether in
writing or, if legally binding, oral, that would have the effect of preventing
the consummation of the transactions contemplated by this Agreement. If,
notwithstanding the foregoing, Seller, or its Related Persons, representatives
or agents should receive any Acquisition Proposal or any inquiry regarding any
such proposal from a Third Party, such persons shall promptly inform Purchaser
and its counsel in writing of the facts and terms thereof.
7.5 NOTIFICATION OF CHANGES; SUPPLEMENTAL DISCLOSURE.
At all times prior to the Closing, Seller shall promptly notify
Purchaser in writing of any fact, condition, event or occurrence that (i) will,
or is reasonably likely to, result in the failure of any of the conditions
contained in Article 9 or (ii) makes any representation and warranty made by
Seller in Article 5 not be true and correct in all material respects on and as
of the Closing Date.
7.6 CONSENTS.
(a) Notwithstanding anything to the contrary contained in this
Agreement, this Agreement shall not constitute an agreement or attempt to
transfer, sublease or assign any Assigned Contract or any claim or right of any
benefit arising thereunder or resulting therefrom or any Assigned Permit if an
attempted transfer, sublease or assignment thereof, without the Consent of any
Third Party or Regulatory Authority would constitute a breach thereof or in any
way adversely affect Purchaser's rights to receive the benefits thereunder.
Seller shall use reasonable best efforts to obtain prior to the Closing all
Consents which, in the reasonable judgment of Purchaser, are necessary or
appropriate for the transfer or assignment of each of the Acquired Assets from
Seller and its Subsidiaries to Purchaser hereunder. All such Consents shall be
in writing and in form and substance reasonably satisfactory to Purchaser, and
executed counterparts thereof will be delivered to Purchaser promptly after
receipt thereof.
(b) In any case where a Consent required to be obtained in connection
with the transactions contemplated under this Agreement has not been obtained at
or prior to the
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Closing, or if any attempted assignment would be ineffective or would impair
Purchaser's rights under the Acquired Asset in question or result in a Default
under the Acquired Asset so that Purchaser would not in effect acquire the
benefit of all such rights, (i) Seller shall assist Purchaser, at Purchaser's
request, after Closing in every reasonable effort to obtain such Consent and
(ii) from and after the Closing until such time as such Consent is obtained,
Purchaser and Seller or the appropriate Subsidiary of Seller shall enter into
alternative arrangements (to the maximum extent permitted by Law and the
specific Acquired Asset or applicable Contract), including, without limitation:
(x) Seller or the appropriate Subsidiary of Seller acting as Purchaser's agent
in order to obtain for Purchaser the benefits thereunder, and (y) Seller or the
appropriate Subsidiary of Seller cooperating with Purchaser in any other
reasonable arrangement designed to provide such benefits to Purchaser, including
any sublease, sublicense or subcontract or similar arrangement; provided that
the Purchaser shall receive under any such Consent or alternative arrangement,
any and all benefits and shall have any and all detriments (including payment
obligations) that Purchaser would have received or had if Seller had obtained
such Consent prior to the Closing. Seller and Purchaser shall share equally the
cost of all Consents and alternative arrangements.
(c) With respect to any Assigned Contract that is a Straddle Contract
with a supplier, in addition to using reasonable best efforts to seek a Consent,
Seller shall use reasonable best efforts to obtain from the Third Party to such
Straddle Contract the Third Party's acknowledgment and agreement that the
Assigned Contract is not being assigned to Purchaser and Purchaser is not
assuming any obligations under the Assigned Contract with respect to any right
or obligation of Seller thereunder that is not primarily used or held for use in
connection with the Business and that with respect to the non-Business rights
and obligations under such Assigned Contract, such Third Party will look solely
to Seller, rather than Purchaser, for performance or payment of the non-Business
obligations following such assignment. Purchaser hereby acknowledges and agrees
that from and after the Effective Time, Purchaser is not permitted to and shall
not, without the prior Consent of Seller: (i) use or exercise any right
(including the purchase or consumption of any good, product, right or service)
under a Straddle Contract, unless that right is primarily used or held for use
in connection with the Business or (ii) take any action under a Straddle
Contract that creates an obligation or Liability that would constitute an
Excluded Liability under this Agreement.
(d) The obligations of Seller and its Subsidiaries under this Section
7.6 shall not be in limitation of Purchaser's right to terminate this Agreement
as provided in Section 14.1(b) hereof (including with respect to Section 9.4) in
accordance with the terms thereof, at or prior to the Closing Date. Nothing in
this Section 7.6 shall be deemed a waiver by Purchaser of its right to have
received an effective assignment of all of the Acquired Assets (except as may be
limited by Section 9.4 hereof), nor shall this Section 7.6 be deemed to
constitute an agreement to exclude from the Acquired Assets any asset that
constitutes an Acquired Assets under Section 1.1.
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7.7 WARN NOTICE.
To the extent that any obligations under the WARN Act arise as a
consequence of a transaction contemplated by this Agreement, Seller shall be
responsible for any WARN Act obligations arising as a result of any employment
losses from the Seller occurring at or prior to the Effective Time.
7.8 LANCASHIRE GUARANTY.
Purchaser shall use commercially reasonable efforts to release Seller
and its Affiliates from that certain Deed of Guarantee between Lancashire
Teaching Hospitals NHS Trust and Seller (the "Lancashire Guaranty").
7.9 CUSTOMER CONTRACTS.
From the date hereof until Closing, Seller shall not, without obtaining
Purchaser's Consent (which shall not be unreasonably withheld, delayed or
conditioned) enter into any Contract that would constitute an Acquired Asset
hereunder and that is reasonably expected to have a cost of completion in excess
of $100,000.
7.10 CERTAIN EMPLOYEES.
From the date hereof until the Closing Date, (i) Seller shall and shall
cause its Affiliates to cooperate with Purchaser in Purchaser's efforts to
employ the Offered Employees and (ii) neither Seller nor any of its Affiliates
shall, directly or indirectly, (a) interfere with Purchaser's efforts to employ
the Offered Employees, (b) induce or attempt to induce any Subject Employee to
terminate his or her employment agreement with Purchaser, (c) solicit for
employment or hire or agree to hire any Subject Employee, or (d) induce or
attempt to induce any Offered Employee to accept employment or enter into any
independent contract agreement with any Person other than Purchaser and its
Affiliates. Seller acknowledges and agrees that in no way is this Section 7.10
intended to limit, restrict, supersede or be inconsistent with Section 11.2 as
it applies to the Offered Employees and Subject Employees.
7.11 SOFTWARE ESCROW CONTRACTS.
With respect to any Contract (other than an Assigned Contract)
regarding the escrow of source code of any Computer Software owned by Seller or
any Subsidiary thereof that is included in the Acquired Assets, including
Patient1 and its related functionality, promptly after the Closing Seller shall
and shall cause its Subsidiaries to instruct the escrow agent under and in
accordance with such Contract to (i) release the source code of such Computer
Software to Purchaser in accordance with Purchaser's reasonable instructions and
(ii) confirm that no copies of such source code have been retained by the escrow
agent.
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ARTICLE 8 MUTUAL COVENANTS
8.1 GOVERNMENTAL FILINGS.
In the event any Litigation is threatened or instituted challenging the
transactions contemplated by this Agreement as violative of Antitrust Laws, each
Party shall use its commercially reasonable efforts to avoid the filing of, or
resist or resolve such Litigation. Each Party shall use its commercially
reasonable efforts to take such action as may be required by: (i) the United
States Federal Trade Commission ("FTC") and/or the United States Department of
Justice ("DOJ") in order to resolve such objections as either of them may have
to the transactions contemplated by this Agreement under the Antitrust Laws, or
(ii) any federal or state court of the United States, or similar court of
competent jurisdiction in any foreign jurisdiction, in any Litigation brought by
any Regulatory Authority or any other Person challenging the transactions
contemplated by this Agreement as violative of the Antitrust Laws, in order to
avoid the entry of any Order (whether temporary, preliminary or permanent) that
has the effect of preventing the consummation of the transactions contemplated
by this Agreement and to have vacated, lifted, reversed or overturned any such
Order. Notwithstanding anything to the contrary in this Section, none of
Purchaser or Seller or any of their respective Related Persons shall be required
to divest any of its businesses, product lines or assets, or to take or agree to
take any other action or agree to any limitation, that is reasonably likely to
have a Material Adverse Effect on Purchaser, Seller or the Business after the
Effective Time. Purchaser shall be entitled to direct any proceedings or
negotiations with any Regulatory Authority relating to any of the foregoing,
provided that it shall permit Seller to review any communication given by it to,
and consult with each other in advance of any meeting or conference with, the
DOJ, the FTC or any other Regulatory Authority or, in connection with any
proceeding by a private party, with any other Person, and to the extent
appropriate or permitted by the DOJ, the FTC or such other applicable Regulatory
Authority or other Person, give Seller the opportunity to attend and participate
in such meetings and conferences.
8.2 FURTHER MUTUAL COVENANTS.
Purchaser and Seller shall each take all actions contemplated by this
Agreement, and, subject to Purchaser's and Seller's, as applicable, right to
terminate this Agreement pursuant to Article 14 hereof, do all things reasonably
necessary to effect the consummation of the transactions contemplated by this
Agreement. Except as otherwise provided in this Agreement, Purchaser and Seller
shall each refrain from knowingly taking or failing to take any action which
would render any of the representations or warranties contained in Article 5 or
Article 6, as applicable, of this Agreement in any material respect inaccurate
as of the Closing Date. Each Party shall promptly notify the other Party of any
action, suit, or proceeding that shall be instituted or threatened against such
Party to restrain, prohibit, or otherwise challenge the legality of any
transaction contemplated by this Agreement.
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8.3 PRORATIONS.
(a) To the extent not included in the Assumed Liabilities, all
Proration Items and all other items, if any, that shall be paid by Purchaser or
otherwise affect the Business or the Acquired Assets and that relate, in whole
or in part, to periods prior to the Effective Time, shall be apportioned to the
Effective Time, and representatives of Seller and Purchaser will examine all
relevant Books and Records as of the Effective Time in order to make the
determination of the apportionments, which determinations shall be calculated in
accordance with the past practices of the Business to the extent applicable,
provided that for the purposes of determining whether a particular Tax shall be
prorated or allocated to a Pre-Closing Tax Period, Real Property Taxes and
Personal Property Taxes shall be prorated or allocated on a per diem basis, and
all other Taxes shall be prorated or allocated on the basis of an interim
closing of the books of the Business at the Effective Time. The net amount of
all Proration Items known by the Parties at Closing will be settled and paid on
the Closing Date. In the event that the amount of any of the Proration Items is
not known by Seller and Purchaser at the Closing, the proration shall be made
based upon the amount of the most recent cost of such Proration Item to Seller.
After Closing, Purchaser and Seller each shall provide to the other, written
notice five (5) Business Days after receipt, of each Third Party invoice
relating to any Proration Item so estimated. Within ten (10) business days
thereafter, Purchaser and Seller each shall make any payments to the other that
are necessary to compensate for any difference between the proration made at the
Closing and the correct proration based on the Third Party invoice. The Parties
shall reasonably cooperate to avoid, to the extent legally possible, the payment
of duplicate Personal Property Taxes, and each Party shall furnish, at the
request of the other, proof of payment of any Personal Property Taxes or other
documentation that is a prerequisite to avoiding payment of a duplicate Tax.
(b) In the event that either Party (the "Payor") pays a Proration Item
(other than if and to the extent included in the Assumed Liabilities) for which
the other Party (the "Payee") is obligated in whole or in part under this
Section 8.3 the Payor shall present to the Payee evidence of payment and a
statement setting forth the Payee's proportionate share of such Proration Item,
and the Payee shall promptly pay such share to the Payor. In the event either
Party (the "Recipient") receives payments, or the benefits of payments, of a
Proration Item to which the other Party (the "Beneficiary") is entitled in whole
or in part under this Agreement, the Recipient shall promptly pay such amount to
the Beneficiary.
(c) In the event there exists as of the Closing Date any pending
appeals of ad valorem Tax assessments with regard to any Acquired Assets, the
continued prosecution and/or settlement of such appeals shall be subject to the
direction and control of Purchaser with respect to assessments for the year
within which the Closing occurs.
8.4 ADDITIONAL STRADDLE CONTRACTS.
If after the date hereof any Party identifies any additional Contracts
that would have constituted Acquired Assets had such Contract been identified
prior to the date hereof because it is used or held for use primarily in
connection with the Business, and
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that Contract also is held for use in any other business or operations of Seller
and its Affiliates other than the Business, such Contracts shall be deemed to be
Straddle Contracts hereunder and subject to Section 11.13. Each of Purchaser and
Seller shall and shall cause their respective Affiliates to work together in
good faith from and after the date hereof to identify any such additional
Straddle Contracts and to take such other actions consistent with Section 11.13
in order that Purchaser shall receive the benefits and assume the Liabilities
related to the Business under any such Contracts.
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction, on or before the Closing
Date, of each of the following conditions all or any of which may be waived in
writing, in whole or in part, by Purchaser:
9.1 CERTIFICATE REGARDING REPRESENTATIONS AND WARRANTIES.
All information required to be furnished or delivered by Seller
pursuant to this Agreement shall have been furnished or delivered in all
material respects as of the date hereof and as of the Closing Date, as required
hereunder; each of the representations and warranties made by Seller in Article
5 shall be true and correct in all respects on and as of the Closing Date with
the same force and effect as though such representations and warranties had been
made on and as of the Closing Date, except where the failure of such
representations or warranties to be so true and correct would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect
and except that such representations and warranties may be untrue or incorrect
as a result of actions or transactions required by this Agreement or actions or
transactions of Seller made with the prior written consent of Purchaser;
provided that for purposes of this Section 9.1, if any representation or
warranty made by Seller includes within its terms a qualifier relating to
materiality or Material Adverse Effect, such qualifier shall be disregarded
solely for purposes of determining compliance with this Section 9.1; and
Purchaser shall have received a certificate dated as of the Closing Date
executed by an authorized officer of Seller to such effect.
9.2 COMPLIANCE BY SELLER.
Seller shall have duly performed in all material respects all of the
covenants, agreements, and conditions contained in this Agreement to be
performed by Seller on or prior to the Closing Date and Purchaser shall have
received a certificate dated the Closing Date, executed by an authorized officer
of Seller, to such effect. Purchaser shall have received from Seller all such
certificates or other evidence, dated as of the Closing Date, as Purchaser or
its counsel shall reasonably request to evidence the performance of all
covenants and the fulfillment by Seller, or such other satisfaction at or prior
to the Closing Date, of the terms and conditions of this Agreement.
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9.3 NO INJUNCTION; ETC.
There shall be no Order, regulation, legislation or Law which enjoins
or prohibits Purchaser from completing the consummation of the transactions
contemplated hereby, or enjoins or prohibits the operation of all or a material
portion of the Business or the Acquired Assets and no action or proceeding shall
be pending by any Regulatory Authority seeking any such Order.
9.4 CONSENTS; AUTHORIZATIONS; APPROVAL OF LEGAL MATTERS.
Seller shall have obtained and made available to Purchaser, in form and
substance reasonably satisfactory to Purchaser, a true and correct copy of each
Consent that is listed on SCHEDULE 9.4. All Permits (including Environmental
Permits) or Orders of any Regulatory Authority, reasonably required for the
conduct of the Business by Purchaser substantially in the manner presently
conducted, shall have been obtained or otherwise assigned or transferred and
reissued to Purchaser, and Purchaser shall be satisfied with the conditions, and
restrictions of and obligations under each such Permit or Order.
9.5 INSTRUMENTS OF TRANSFER.
Seller and its Subsidiaries shall have delivered to Purchaser such
bills of sale, assignments, endorsements, licenses, and other good and
sufficient instruments of conveyance and transfer and any other instruments
reasonably deemed appropriate by counsel to Purchaser all in form and substance
reasonably satisfactory to counsel to Purchaser to vest in Purchaser all of
their rights, title, and interest, in and to all of the Acquired Assets owned by
Seller and its Subsidiaries, in each case free and clear of all Liens other than
Permitted Encumbrances, and good, insurable (as to Real Property Leases) and
valid leasehold interests in and to all of the Acquired Assets leased to Seller
or any Subsidiary thereof, and all of the rights of Seller and it Subsidiaries
under the Assigned Contracts.
9.6 CERTIFIED RESOLUTIONS.
Purchaser shall have received a certificate of the Secretary or
Assistant Secretary of Seller containing a true and correct copy of the
resolutions duly adopted by the manager of Seller, approving and authorizing
each of the Acquisition Documents to which Seller is a party and each of the
transactions contemplated hereby and thereby. The Secretary or Assistant
Secretary of Seller shall also certify that such resolutions have not been
rescinded, revoked, modified, or otherwise affected and remain in full force and
effect.
9.7 ACQUISITION DOCUMENTS.
Purchaser shall have received the Acquisition Documents to which Seller
or any Subsidiary thereof is a party, executed by Seller or such Subsidiary.
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9.8 NO ADVERSE CHANGE.
There shall not have been any events or changes that individually or in
the aggregate have had, or would reasonably be expected to have, a Material
Adverse Effect on the Acquired Assets or the Business since March 31, 2003, and
Purchaser shall have received a certificate dated as of the Closing Date,
executed by an authorized officer of Seller to such effect.
9.9 FIRPTA CERTIFICATION.
On the Closing Date, Seller shall deliver to Purchaser a certificate of
non-foreign status in accordance with Section 1445(a) of the Internal Revenue
Code and the U.S. Treasury Regulations thereunder.
ARTICLE 10
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date hereunder, of each of the following conditions, all or any of which may be
waived, in whole or in part, by Seller.
10.1 CERTIFICATE REGARDING REPRESENTATIONS AND WARRANTIES.
All information required to be furnished or delivered by Purchaser
pursuant to this Agreement shall have been furnished or delivered in all
material respects as of the date hereof and as of the Closing Date, as required
hereunder; each of the representations and warranties made by Purchaser in
Article 6 shall be true and correct in all respects on and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date, except where the failure
of such representations or warranties to be so true and correct would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; provided that for purposes of this Section 10.1, if any
representation or warranty made by Purchaser includes within its terms a
qualifier relating to materiality or Material Adverse Effect, such qualifier
shall be disregarded solely for purposes of determining compliance with this
Section 10.1; and Seller shall have received a certificate dated as of the
Closing Date executed by an authorized officer of Purchaser to such effect.
10.2 COMPLIANCE BY PURCHASER.
Purchaser and UK Purchaser shall have duly performed in all material
respects all of the covenants, agreements, and conditions contained in this
Agreement to be performed by Purchaser and UK Purchaser on or before the Closing
Date, and Seller shall have received a certificate dated the Closing Date,
executed by an authorized officer of Purchaser, to such effect. Seller shall
have received from Purchaser and UK Purchaser all such certificates or other
evidence, including an instrument or instruments of assumption of the Assumed
Liabilities, duly executed by Purchaser and UK Purchaser, dated as of the
Closing Date, as Seller or its counsel shall reasonably request to evidence the
performance of all covenants and the fulfillment by Purchaser and UK Purchaser,
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dated as of the Closing Date, as Seller or its counsel shall reasonably request
to evidence the performance of all covenants and the fulfillment by Purchaser
and UK Purchaser, or such other satisfaction at or prior to the Closing Date, of
the terms and conditions of this Agreement.
10.3 NO INJUNCTION; ETC.
There shall be no Order, regulation, or legislation which enjoins
Seller or any Subsidiary thereof from completing the consummation of the
transactions contemplated hereby and no action or proceeding shall be pending by
any Regulatory Authority seeking any such Order.
10.4 CERTIFIED RESOLUTIONS.
Seller shall have received from Purchaser a certificate executed by the
Secretary of Purchaser containing a true and correct copy of resolutions duly
adopted by Purchaser's Board of Directors approving and authorizing and each of
the Acquisition Documents to which Purchaser is a party and each of the
transactions contemplated hereby and thereby. The Secretary or Assistant
Secretary of Purchaser shall also certify that such resolutions have not been
rescinded, revoked, modified, or otherwise affected and remain in full force and
effect.
10.5 ACQUISITION DOCUMENTS.
Seller shall have received the Acquisition Documents to which Purchaser
and/or UK Purchaser is a party, executed by Purchaser or UK Purchaser, as the
case may be.
ARTICLE 11
POST CLOSING MATTERS
11.1 EMPLOYMENT OF EMPLOYEES.
No later than the Closing Date, Purchaser will offer employment to all
of the Employees set forth on SCHEDULE 11.1 (the "Offered Employees") to be
effective as of the Closing Date. Unless otherwise required under applicable
Law, each such offer shall be (i) for either full-time or part-time employment,
consistent with and the same as, such Employee's employment with Seller as of
the Closing Date, (ii) with similar duties and responsibilities as Employee is
engaged in for the Seller as of the Closing Date, (iii) with base salary that is
no less than the base salary such Employee received from the Seller as of the
Closing Date, and (iv) a package of benefits, privileges and perquisites that is
no less favorable than those offered to similarly-situated employees of the
Purchaser. Seller shall be responsible for the payment of all earned but unpaid
salaries, bonus, vacation pay, sick pay, holiday pay, severance pay and other
like obligations and payments to the Employees for all periods ending on or
prior to the Effective Time. Seller shall be responsible for the payment of any
amounts due to the Employees pursuant to the Employee Benefit Plans of Seller as
a result of the employment of the Employees prior to the Effective Time. Seller
shall be responsible for all incurred but unreported or unpaid
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medical claims occurring prior to the Effective Time and for the cost associated
with confinement in any medical care, nursing, rehabilitation or similar
facility which commences prior to the Effective Time. Seller shall be
responsible for all Liabilities associated with any medical leaves of absence
taken prior to the Closing Date in connection with the Family and Medical Leave
Act of 1993 or any other policy, program or plan of Seller, except that
Purchaser agrees that at the Effective Time all Offered Employees who become
Hired Employees shall become employees of Purchaser at the Effective Time
notwithstanding their inability to report to work at the Effective Time and
Seller shall hold their positions open until they are released by a physician to
return to work as an employee of Purchaser. Effective at the Effective Time,
Seller shall, and hereby does, release all Offered Employees from any employment
and/or confidentiality agreement previously entered into between Seller and such
Offered Employees relating to the Business to the extent (but only to the
extent) necessary for Purchaser to operate the Business in the same manner as
operated by Seller prior to the Closing Date. Seller does not release any
Offered Employee from any confidentiality agreement executed by such Offered
Employee in favor of Third Parties relating to receipt of confidential
information in connection with potential business acquisitions.
11.2 NON-SOLICITATION.
From the Effective Time hereof until the expiration of two (2) years
after the Effective Time, (i) Seller shall not directly or indirectly solicit
for employment any Person who is then an employee of Purchaser or who has
terminated his or her employment without the consent of Purchaser within one (1)
year of such solicitation or offer and (ii) except as contemplated under Section
11.1, Purchaser shall not directly or indirectly solicit for employment any
employee of Seller who is then an employee of Seller, or who has terminated such
employment without the consent of Seller within one (1) year of such
solicitation or offer.
11.3 DELIVERY OF BOOKS AND RECORDS.
Seller shall deliver to Purchaser copies of all Acquired Books and
Records within thirty (30) days following the Closing Date. Purchaser shall
direct the possessor of all other records, files and other documents that
pertain to each Hired Employee but which are not in Seller's possession to
deliver such documents (or copies of such documents) to Seller within thirty
(30) days following the Closing Date, unless otherwise directed by Purchaser.
11.4 VACATION PAY.
At the time of each Hired Employee's termination of employment with
Seller and in accordance with applicable Law and Seller's vacation policies,
Seller shall pay each Hired Employee for all unused vacation that has been
accrued by, purchased by or awarded to such Employee during his or her
employment with Seller up to and including the Closing Date. Beginning on the
Closing Date, Purchaser shall provide the Hired Employees with pro-rated
vacation benefits pursuant to the vacation policy of Purchaser in an amount to
be determined and pro-rated for each Hired Employee based on such
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Hired Employee's first day of employment with Purchaser; provided, however, that
the Hired Employees shall be given credit for their prior years of service with
Seller for the purpose of determining vacation benefits under such policy and
any and all waiting periods for the accrual of vacation provided under
Purchaser's vacation policy shall be waived.
11.5 PURCHASER'S BENEFIT PLANS.
For purposes of Purchaser's Employee Benefit Plans, each Hired Employee
shall receive credit for prior years of service with Seller for purposes of
eligibility and vesting under such plans and shall be entitled to participate in
the Employee Benefit Plans of Purchaser without the application of any
applicable waiting periods to the extent required by Law or permitted under the
terms of Purchaser's Employee Benefit Plan. Purchaser shall not be required to
waive any waiting periods or any restrictions and limitations on preexisting
medical conditions under its medical plans, except as required by Law.
11.6 MAINTENANCE OF BOOKS AND RECORDS.
Each of Seller and Purchaser shall preserve until the 7th anniversary
of the Closing Date all Books and Records possessed or to be possessed by such
Party relating to any of the assets, Liabilities or business of the Business
prior to the Effective Time. Seller shall promptly deliver to Purchaser any
Acquired Books and Records discovered by Seller that were not delivered to
Purchaser because such Acquired Books and Records were not located on the Leased
Real Property. After the Closing Date, where there is a legitimate purpose
(which shall include, without limitation, with respect to any Litigation between
Seller and its Affiliates, on one hand, and any of the parties to the
Humanitarian City SIICA, the Japanese Distributor Agreements or the Brazilian
Distributor Agreement, on the other hand), such Party shall provide the other
Party and its representatives with access, upon prior reasonable written request
specifying the need therefor, during regular business hours, to (i) the officers
and employees of such Party and (ii) the books of account and records of such
Party, but, in each case, only to the extent relating to the assets, Liabilities
or business of the Business prior to the Effective Time, and the other Party and
its representatives shall have the right to make copies of such Books and
Records; provided, however, the foregoing right of access shall not be
exercisable in such a manner as to interfere unreasonably with the normal
operations and business of such Party; and provided further, as to so much of
such information as constitutes trade secrets or confidential business
information of such Party, the requesting Party, its Related Persons, officers,
directors and representatives will use due care to not disclose such information
except (i) with the prior written consent of such Party, which consent shall not
be unreasonably withheld, (ii) where such information becomes available to the
public generally, or becomes generally known to competitors of such Party,
through sources other than the requesting Party, its Related Persons or its
officers, directors or representatives or (iii) for a disclosure that is
required by Law or by a Regulatory Authority or a securities exchange or in
connection with a filing by the requesting Party under federal or state
securities Laws or is reasonably believed to be so required. Such records may
nevertheless be destroyed by a Party if such Party sends to the other Parties
written notice of its intent to destroy records, specifying with particularity
the contents of
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the records to be destroyed. Such records may then be destroyed after the 60th
day after such notice is given unless another Party objects to the destruction
in which case the Party seeking to destroy the records shall deliver such
records to the objecting Party at the cost and expense of the objecting Party.
11.7 DISCHARGE OF BUSINESS OBLIGATIONS.
From and after the Effective Time, Seller shall pay and discharge, in
accordance with past practice but not less than on a timely basis, all Excluded
Liabilities that were related to the Business (other than those with respect to
the Humanitarian City SIICA, the Japanese Distributor Agreements or the
Brazilian Distributor Agreement) immediately preceding the Effective Time.
11.8 PAYMENTS RECEIVED.
Seller and Purchaser each agree that after the Effective Time they will
hold and will promptly transfer and deliver to the other, from time to time as
and when received by them, any cash, checks with appropriate endorsements (using
their best efforts not to convert such checks into cash), or other property that
they may receive on or after the Closing which properly belongs to the other
Party, including any insurance proceeds, and will account to the other for all
such receipts. From and after the Closing, Purchaser shall have the right and
authority to endorse without recourse the name of Seller on any check or any
other evidences of Indebtedness received by Purchaser on account of the Business
and the Acquired Assets transferred to Purchaser hereunder.
11.9 COOPERATION.
Seller and Purchaser shall cooperate with each other in all reasonable
respects in connection with the preparation or filing of any Tax Return of the
Parties or their Affiliates or any matter relating to Taxes of the Acquired
Assets or the Business or in connection with the defense of any claim included
within any Assumed Liability or Excluded Liability, as the case may be,
including making available records relating to such claim and furnishing,
without expense (other than reasonable out-of-pocket expenses), management
employees of the Party as may be reasonably necessary for the preparation of the
defense of any such claim or for testimony as a witness in any proceeding
relating to such claim; provided, however, that the foregoing right to
cooperation shall not be exercisable by one Party in such a manner as to
interfere unreasonably with the normal operations and business of the other
Party. Purchaser and Purchaser's Parent shall, and shall cause their respective
Subsidiaries to, and shall use reasonable best efforts to cause their respective
employees to, reasonably cooperate and work in good faith with Seller and its
Affiliates with respect to any Litigation that may arise between Seller and its
Affiliates, on one hand, and any party to the Humanitarian City SIICA, the
Japanese Distributor Agreements or the Brazilian Distributor Agreement, on the
other hand. Seller shall reimburse Purchaser, Purchaser's Parent and their
respective Subsidiaries and employees for all reasonable out-of-pocket expenses
incurred in connection with such cooperation.
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11.10 NON-COMPETITION.
Seller hereby acknowledges and recognizes Seller's possession of
confidential or proprietary information and the highly competitive nature of the
Business and accordingly agrees that, in consideration of Purchaser entering
into this Agreement and the other transactions contemplated hereby and the
premises contained herein, Seller will not, at any time within the three-year
period immediately following the Closing Date, for any reason whatsoever, either
individually or as stockholder, partner, agent or principal of another business
firm, (i) directly or indirectly engage in any Competing Business, (ii) assist
others in engaging in any Competing Business in the manner described in the
foregoing clause (i), or (iii) solicit, professionally contact or provide
consulting services in respect of a Competing Business to any client of the
Business.
11.11 USE OF BUSINESS NAME.
After the Closing, except as required by Law or to enforce any rights
of Seller with respect to the Excluded Assets, including those described in
Section 1.2(g), Seller will not, directly or indirectly, use or do business, or
allow any Affiliate to use or do business, or assist any third party in using or
doing business, under the names and marks "Patient 1(R)" or "Decision 1(R)" (or
any other name confusingly similar to such names and marks).
11.12 FURTHER ASSURANCES.
Seller and Seller's Parent from time to time after the Closing Date, at
Purchaser's request, shall and shall cause their affiliates to execute,
acknowledge, and deliver to Purchaser such other instruments of conveyance and
transfer and shall take such other actions and execute and deliver such other
documents, certifications, and further assurances as Purchaser may reasonably
require in order to vest more effectively in Purchaser, or to put Purchaser more
fully in possession of, any of the Acquired Assets or any assets, properties or
rights that constitute Acquired Assets, but were not identified as such prior to
Closing, or to better enable Purchaser to pay, perform or satisfy any of the
Assumed Liabilities. Each of the Parties hereto shall cooperate with the other
and execute and deliver to the other Parties hereto such other instruments and
documents and take such other actions as may be reasonably requested from time
to time by any other Party hereto as necessary to carry out, evidence, and
confirm the intended purposes of this Agreement. Each Party shall bear its own
costs and expenses in compliance with this Section 11.12.
11.13 SUBCONTRACTED SERVICES.
(a) Purchaser acknowledges that there are Contracts that are used or
held for use primarily in connection with the Business that also cover
businesses or operations of the Seller and its Subsidiaries that are not part of
the Business (the "Straddle Contracts") and that the Parties do not intend to
transfer the economic effects of the non-Business portions of any such Straddle
Contract from Seller and its Subsidiaries to Purchaser as
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part of the transactions contemplated hereby. A list of the Straddle Contracts
as of the date hereof is set forth on SCHEDULE 11.13.
(b) The Parties hereby agree that:
(i) Seller and Purchaser shall use reasonable best efforts to
obtain the Consent, as soon as practicable after the date hereof, of any
applicable Third Party to terminate each Straddle Contract, or the non-Business
portion thereof, as the case may be, effective as of the Closing Date, and (A)
replace it with two separate Contracts, one between Seller (or a Subsidiary
thereof) with respect to the non-Business portion of the Straddle Contract and
the other between Seller (or a Subsidiary thereof) with respect to the Business
portion of the Straddle Contract, which shall be assigned to Purchaser hereunder
as an Assigned Contract or (B) assign the portion that is used or held for use
primarily in connection with the Business to Purchaser hereunder as an Assigned
Contract and terminate the remaining rights and obligations of Seller or its
Subsidiaries under such Contract.
(ii) If, on or before the Closing Date, any customer Straddle
Contract identified as such on SCHEDULE 11.13 has not been terminated and
replaced in accordance with clause (b)(i) of this Section 11.13, then:
(A) if the customer has consented to the assignment of
the Straddle Contract to Purchaser, such Straddle Contract shall be
included in the Acquired Assets and assigned to Purchaser in accordance
with the terms of this Agreement;
(B) if the customer has not consented to the assignment
of the Straddle Contract to Purchaser, or any customer Straddle
Contract identified as such on SCHEDULE 11.13 has not been terminated
and replaced in accordance with clause (b)(i) of this Section 11.13
prior to Closing, Section 7.6 shall apply with respect to the Business
portion of the Straddle Contract and the Parties will work together and
use reasonable best efforts to obtain the Consent of any applicable
Third Party to terminate such customer Straddle Contract and replace it
with two separate agreements in the manner contemplated by clause
(b)(i) of this Section 11.13 as promptly as practicable following the
Closing; and
(C) until such time as all customer Straddle Contracts
identified as such on SCHEDULE 11.13 have been terminated and replaced
in accordance with clause (b)(i) of this Section 11.13, the Purchaser
shall subcontract and delegate to Seller and its Subsidiaries all
obligations under such customer Straddle Contracts that are not part of
the Business (the "Retained Services"), and Seller and its Subsidiaries
shall perform all such Retained Services under the customer Straddle
Contracts and Purchaser shall receive and remit to Seller any payments
received from any Third Party in connection with the Retained Services
rendered by Seller or its Subsidiaries, it being understood that in the
event of any payment due to Seller in connection with the Retained
Services is not received by Purchaser or its Affiliates, Purchaser
shall use efforts to collect such amounts from the customer
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that are no less than those used by Purchaser with respect to
collection of Purchaser's own accounts. Seller shall have no recourse
against Purchaser hereunder with respect to such payments, except to
the extent that such amount has been collected by Purchaser or its
Affiliates from such Third Party. Purchaser acknowledges and agrees
that Seller and its Affiliates shall have the right, to the extent
permitted under applicable Law or the applicable Straddle Contract, to
(i) take any and all legal action against the customer in order to
collect payment for the Retained Services and/or (ii) suspend
performance of the Retained Services until such time as the customer
pays all amounts outstanding to Seller and its Affiliates for Retained
Services rendered by Seller and its Affiliates.
(iii) if, on the Closing Date, any supplier Straddle Contract
identified as such on SCHEDULE 11.13 has not been terminated and replaced in
accordance with clause (b)(i) of this Section 11.13, then the Seller shall use
reasonable best efforts to procure any Consent or alternative arrangement from
or with such Third Party supplier in accordance with Section 7.6 hereof and
Section 1.12 of the Transition Services Agreement and shall provide the benefit
of such supplier Straddle Contract as a Service (as defined in the Transition
Services Agreement) pursuant to the Transition Services Agreement until such
time as Purchaser has entered into a separate Contract with such Third Party or
informed Seller that it has made an alternative arrangement. Once it is
reasonably apparent to Purchaser and Seller that the Third Party to any supplier
Straddle Contract will not provide its Consent to the separation of such
supplier Straddle Contract as contemplated in clause (b)(i) of this Section
11.13 or any alternative arrangement contemplated in Section 7.6, Purchaser
shall use reasonable efforts to make arrangements with another Third Party
supplier.
(c) All proprietary or non-public information relating to the
non-Business portion of the Straddle Contracts and Seller's performance of the
non-Business obligations thereunder, including the Retained Services, shall be
deemed confidential and subject to Section 11.14.
(d) The costs and expenses of obtaining any Consent to the termination
and replacement of any Straddle Contract or the procuring of any alternative
arrangement shall be shared equally by Seller and Purchaser.
(e) The Parties will cooperate with each other and work in good faith
with respect to the Straddle Contracts so as not to harm the other Party's
relationship with the Third Parties to the Straddle Contracts.
(f) Purchaser acknowledges and agrees that Purchaser is not, by virtue
of the relationship under this Section 11.13: (i) creating a joint venture or
similar venture with Seller, (ii) authorized to act as Seller's agent or
otherwise bind Seller with respect to the non-Business portions of the Straddle
Contracts and (iii) being granted any ownership, license or other rights in the
Intellectual Property of the Seller and its Affiliates that is used in the
performance of the non-Business portions of the Straddle Contracts.
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11.14 CONFIDENTIALITY.
After the Closing, Seller and its Affiliates shall not, and shall cause
its officers, directors and employees not to, use for any purpose or disclose to
any Person any proprietary or non-public information relating to the Acquired
Assets or the Business, except (i) as required by Law, (ii) as necessary for use
in the Seller's financial reports or to conduct business of the Seller or its
Affiliates in the ordinary course of business, (iii) to the extent that such
information is or becomes public through no fault of the Seller or its
Affiliates or (iv) to enforce any rights with respect to the Excluded Assets,
including those described in Section 1.2(g). If Seller or any of its officers,
directors, employees or Affiliates are required to disclose any such information
under any Law, such Person shall, to the extent reasonably practicable and
permitted by Law, promptly notify Purchaser of such requirement so that
Purchaser may seek an appropriate protective order or injunctive relief or waive
compliance with this Section 11.14. After the Closing, Purchaser and its
Affiliates shall not, and shall cause its officers, directors and employees not
to, use for any purpose or disclose to any Person any proprietary or non-public
information relating to the Excluded Assets or the business of Seller or its
Affiliates (other than the Business), including any such information to which
Purchaser obtains access through the subcontractor relationship contemplated in
Section 11.13, except (i) as required by Law or (ii) to the extent that such
information is or becomes public through no fault of the Seller or its
Affiliates. If Purchaser or any of its officers, directors, employees or
Affiliates are required to disclose any such information under any Law, such
Person shall, to the extent reasonably practicable and permitted by Law,
promptly notify Seller of such requirement so that Seller may seek an
appropriate protective order or injunctive relief or waive compliance with this
Section 11.14.
11.15 TERMINATION OF CERTAIN EXCLUDED CONTRACTS; FUTURE HUMANITARIAN CITY
ARRANGEMENTS; BRAZILIAN SUBCONTRACT SERVICES.
(a) Promptly after Closing, to the extent permitted under applicable
Law and the terms of each of the Humanitarian City SIICA, the Japanese
Distributor Agreements and the Brazilian Distributor Agreement, Seller shall and
shall cause its Subsidiaries to terminate each of the Humanitarian City SIICA,
the Japanese Distributor Agreements and the Brazilian Distributor Agreement.
(b) From and after Closing, if, and only if, in connection with the
execution of any Contract between Purchaser (or any Affiliate thereof) and any
Third Party related to the Humanitarian City SIICA regarding the license,
installation or implementation of Patient1 Computer Software, all or any portion
of the Account Receivable existing on the Closing Date arising under the
Humanitarian City SIICA is collected, each of Seller and Purchaser shall be
entitled to half of any such amount collected and the Party that collected such
amount shall promptly remit the other half to the other Party. In no event shall
Purchaser have the authority to waive any rights of Seller or its Affiliates
with respect to such Account Receivable or any remaining unpaid portion thereof
without the prior Consent of Seller.
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(c) From and after Closing, to the extent that prior to termination of
the Brazilian Distributor Agreement, Seller is obligated thereunder to provide
services or perform any other obligation with respect to end users that enter
into agreements with the other party to the Brazilian Distributor Agreement
after the Closing Date, Seller shall delegate and subcontract such services and
obligations to Purchaser, and Purchaser shall perform such services and
obligations, in accordance with the terms of the Brazilian Distributor
Agreement. In the event that Purchaser renders any such services, Seller shall
promptly remit to Purchaser any amounts received by Seller or its Affiliate from
the other party to the Brazilian Distributor Agreement with respect to such
services.
ARTICLE 12
INDEMNIFICATION
12.1 OBLIGATIONS OF SELLER AND SELLER'S PARENT.
From and after the Effective Time, Seller's Parent and Seller jointly
and severally covenant and agree to defend, indemnify and hold harmless
Purchaser and its Affiliates, officers, directors, employees, agents, advisers
and representatives (collectively, "Purchaser Indemnitees") from and against,
and pay or reimburse Purchaser Indemnitees for Losses, resulting from or arising
out of:
(a) any (i) inaccuracy or misrepresentation of any representation or
warranty made by Seller's Parent or Seller herein or in any certificate,
instrument or other document required to be delivered by Seller's Parent or
Seller hereunder or in connection with the consummation of the transactions
contemplated hereby, or (ii) breach of any covenant made by Seller's Parent or
Seller in Sections 7.2 or 7.3 hereof that is not a knowing breach. For purposes
of determining whether a representation or warranty by Seller's Parent or Seller
has been breached, resulting in an obligation to indemnify Purchaser Indemnitees
under this Article, and for purposes of determining the extent of a Loss, all
references to "Material Adverse Effect" or other materiality qualifiers
contained in the representations and warranties shall be disregarded;
(b) the non-fulfillment in any material respect by Seller of any
covenant or agreement made by Seller in this Agreement, other than a breach of
any covenant in Sections 7.2 or 7.3 hereof that is not a knowing breach (which
shall be subject to indemnification under Section 12.1(a));
(c) all Excluded Liabilities;
(d) the failure of Seller to comply with any applicable Bulk Sales
Laws;
(e) the matter described in Schedule 5.12; and
(f) the performance or non-performance by Seller and its Subsidiaries
of the Retained Services.
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12.2 LIMITATIONS ON SELLER'S INDEMNIFICATION.
Except for inaccuracies in the representations and warranties contained
in Sections 5.1, 5.2, 5.17, 5.22 (only with respect to representations regarding
title to the Acquired Assets) and 5.27, Seller's Parent and Seller shall not be
required to indemnify and hold harmless Purchaser Indemnitees, and shall not
have any liability with respect to any claim for indemnification pursuant to (i)
Section 12.1(a) or (ii) Sections 12.1(b) or (c) to the extent such
indemnification claim is for an Excluded Liability related to a product, product
warranty, product liability or Computer Software defect or flaw of which Seller
has no Knowledge at Closing (collectively, the "Product Claims"), unless and
until the aggregate amount of all such claims against Seller's Parent and Seller
exceeds $1,000,000 and then only to the extent such aggregate amount exceeds
$1,000,000. In no event shall the aggregate indemnification to be paid by
Seller's Parent and Seller under (i) Section 12.1(a) or (ii) under Article 12
with respect to any Product Claim, exceed 25% of the Final Purchase Price,
provided that such limitation shall not apply to claims based upon a breach of
representations or warranties in Sections 5.1, 5.2, 5.9, 5.17, 5.22 and 5.27 or
to a Product Claim that arises under an Excess Liability Contract; provided,
further that in no event shall the aggregate indemnification to be paid by
Seller's Parent and Seller under Section 12.1(a) with respect to claims based
upon a breach of representations or warranties in Sections 5.9 or 5.22 exceed
the Final Purchase Price.
12.3 OBLIGATIONS OF PURCHASER AND PURCHASER'S PARENT.
From and after the Effective Date, Purchaser and Purchaser's Parent
jointly and severally covenant and agree to defend, indemnify and hold harmless
Seller and its Affiliates, officers, directors, employees, agents, advisers and
representatives (collectively, "Seller Indemnitees") from and against, and pay
or reimburse Seller Indemnitees for Losses, resulting from or arising out of:
(a) any inaccuracy or misrepresentation of any representation or
warranty made by Purchaser or Purchaser's Parent herein or in any certificate,
instrument or other document required to be delivered by Purchaser or
Purchaser's Parent hereunder or in connection with the consummation of the
transactions contemplated hereby;
(b) the non-fulfillment by Purchaser in any material respect of any
covenant or agreement made by Purchaser in this Agreement;
(c) all Assumed Liabilities; and
(d) the Lancashire Guaranty.
12.4 LIMITATIONS ON PURCHASER'S INDEMNIFICATION.
Except for inaccuracies in the representations and warranties contained
in Sections 6.1, 6.2 and 6.5, Purchaser shall not be required to indemnify and
hold harmless Seller Indemnitees, and shall not have any liability with respect
to any claim for indemnification pursuant to Section 12.3(a) unless and until
the aggregate amount of all claims against Purchaser under such clause exceeds
$1,000,000 and then only to the
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extent such aggregate amount exceeds $1,000,000. In no event shall the aggregate
indemnification for breaches of representations and warranties to be paid by
Purchaser under Section 12.3(a) exceed 25% of the Final Purchase Price, provided
that such limitation shall not apply to claims based upon a breach of
representations or warranties in Sections 6.1, 6.2 and 6.5.
12.5 ADJUSTMENTS TO INDEMNIFICATION PAYMENTS; SUBROGATION.
Any payment made by Seller's Parent or Seller to Purchaser Indemnitees,
on the one hand, or by Purchaser or Purchaser's Parent to Seller Indemnitees, on
the other hand, pursuant to this Article 12 in respect of any claim shall be net
of any insurance proceeds realized by and paid to the Indemnified Party in
respect of such claim. Upon payment by Seller and Seller's Parent in full of any
indemnification claim made by the Purchaser Indemnitees under Section 12.1 or
the payment of any judgment or settlement with respect to a Third Party Claim,
in each case, in respect of a Product Claim that arises under an Excess
Liability Contract, and to the extent that Seller has first made reasonable
efforts to collect the amount of such payment under any insurance policy held by
Seller that covers the subject matter of the claim or Third Party Claim (to the
extent that Seller has any such policy), Seller shall be subrogated to the
extent of such payment to the rights of the Purchaser Indemnitee against any
Person with respect to such subject matter, including, without limitation, any
insurance company with whom the Purchaser Indemnitee has a policy covering such
subject matter.
12.6 INDEMNIFICATION PROCEDURES.
(a) In the case of any claim, demand or liability asserted by any
Third Party or entity who is not a Party to this Agreement ("Third Party Claim")
against a Party who may be entitled to indemnification under this Agreement (the
"Indemnified Party"), written notice shall be given promptly by the Indemnified
Party to the Party who may be required to provide indemnification (the
"Indemnifying Party"), and the Indemnified Party shall permit the Indemnifying
Party (at the expense of such Indemnifying Party) to assume the defense,
compromise and settlement of any claim or any litigation resulting therefrom,
provided that (i) the counsel for the Indemnifying Party, who shall conduct the
defense of such claim or litigation, shall be reasonably satisfactory to the
Indemnified Party and (ii) the omission by any Indemnified Party to promptly
give notice as provided herein shall not relieve the Indemnifying Party of its
indemnification obligation under this Agreement except to the extent, and only
to the extent, that the Indemnifying Party is prejudiced thereby. The assumption
of the defense, compromise and settlement of such claim or litigation by the
Indemnifying Party will not be an acknowledgment of the obligation of the
Indemnifying Party to indemnify the Indemnified Party with respect to such claim
or litigation. If the Indemnifying Party fails to assume the defense of any
Third Party Claim within thirty (30) days notice thereof by the Indemnified
Party, the Indemnified Party may assume control of the defense of the Third
Party Claim. In all cases, the Party without the right to control the defense of
the Third Party Claim may participate in, but not control, the defense with
counsel of its own choice at its own expense and shall have the right to have
its recommendations taken into consideration by the Party which has assumed
control of the defense of the Third Party Claims, without
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any obligation by such Party controlling the defense to act or not act upon such
recommendation. Notwithstanding the foregoing, if a settlement offer solely for
money damages is made by the applicable Third Party claimant, and the
Indemnifying Party notifies the Indemnified Party in writing of the Indemnifying
Party's willingness to accept the settlement offer and, subject to the
limitations of Sections 12.2, 12.4, and 12.5, pay the amount called for by such
offer, and the Indemnified Party declines to accept such offer, the Indemnified
Party may continue to contest such Third Party Claim, free of any participation
by the Indemnifying Party, and the amount of any ultimate liability with respect
to such Third Party Claim that the Indemnifying Party has an obligation to pay
hereunder, if it is ultimately determined that the Indemnified Party is entitled
to indemnification for such claim or litigation under this Article 12, shall be
limited to the lesser of (i) the amount of the settlement offer that the
Indemnified Party declined to accept plus the Losses of the Indemnified Party
relating to such Third Party Claim through the date of its rejection of the
settlement offer or (ii) the aggregate Losses of the Indemnified Party with
respect to such Third Party Claim.
(b) In the event that the Indemnified Party shall in good faith
determine that (i) the conduct of the defense of any claim subject to
indemnification hereunder or any proposed settlement of any such claim by the
Indemnifying Party might be expected to affect adversely the Indemnified Party's
Tax liability, (ii) the conduct of the defense of any claim subject to
indemnification hereunder or any proposed settlement of any such claim by the
Indemnifying Party might be expected to affect adversely the ability of
Purchaser to conduct its business, or (iii) the Indemnified Party may have
available to it one or more defenses or counterclaims that are inconsistent with
one or more of those that may be available to the Indemnifying Party in respect
of such claim or any litigation relating thereto, in each case, the Indemnified
Party shall have the right, at its own cost and expense, at all times to take
over and assume control over the defense, settlement, negotiations or litigation
relating to any such claim. If it is ultimately determined that the Indemnified
Party is entitled to indemnification for such claim under this Article 12, (a)
all of the reasonable costs and expenses of such counsel with respect to the
defense, settlement, negotiation or litigation relating to such claim shall be
reimbursed by the Indemnifying Party if the Indemnified Party assumed control
therefor pursuant to clause (iii) and (b) one-half of the reasonable costs and
expenses of such counsel shall be reimbursed by the Indemnifying Party if the
Indemnified Party assumed control therefor pursuant to clause (i). In no event
shall the Indemnifying Party be required to reimburse the Indemnified Party for
any costs or expenses of counsel with respect to the defense, settlement,
negotiation or litigation relating to such claim if the Indemnified Party
assumed control therefor pursuant to clause (ii). If the Indemnified Party does
so take over and assume control of the defense, compromise and settlement, the
Indemnified Party shall not settle such claim or litigation without the written
consent of the Indemnifying Party, such consent not to be unreasonably withheld,
and the Indemnifying Party shall not be responsible for the fees of counsel to
the Indemnified Party. In the event that the Indemnifying Party does not accept
the defense of any matter as above provided, the Indemnified Party shall have
the full right to defend against any such claim or demand and shall be entitled
to settle or agree to pay in full such claim or demand. In any event, the
Indemnifying Party and the Indemnified Party shall cooperate and render to each
other such assistance as may reasonably be requested in order to ensure the
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proper and adequate defense of any claim or litigation subject to this Article
12 and the records of each shall be available to the other with respect to such
defense.
12.7 TIME LIMITATION.
All claims for indemnification and reimbursement under Section
12.1(a)(other than claims for breaches of the representations and warranties in
Section 5.23) or 12.3(a) hereunder must be asserted on or prior to January 31,
2005 (the "Expiration Date"), except (i) as to any claims for, or any claims
that may result in, Losses for which indemnity may be sought hereunder of which
the Indemnifying Party has received written notice from the Indemnified Party on
or before the Expiration Date or (ii) as to any representation, warranty or
agreement expressly surviving beyond the Expiration Date as set forth in Section
15.2, and then such claims must be asserted on or prior to the expiration of the
applicable period set forth in Section 15.2 with respect to such representation,
warranty or agreement. Any claim for indemnification and reimbursement under
Article 12 with respect to a Product Claim, whether based on a breach of
representation or warranty or as an Excluded Liability, to the extent that such
claim is based on a breach of warranty of an Assigned Contract, must be asserted
on or prior to the expiration of the applicable warranty to the customer with
respect to such Product Claim.
12.8 REMEDIES EXCLUSIVE.
From and after the Effective Time, the rights and remedies provided in
this Article 12 shall be the sole and exclusive remedy for any breach of or
inaccuracy in any representation or warranty or any breach of any covenant or
agreement contained in this Agreement or any certificate, instrument or other
document provided pursuant to this Agreement, other than the Transition Services
Agreement (other than in the case of fraud or any willful breach of any
representation and warranty prior to the date of the Closing).
12.9 CHARACTERIZATION OF INDEMNITY PAYMENTS; TAX DISCLOSURE.
Any payment made pursuant to Sections 12.1 and 12.3 shall be treated by
the Parties as an adjustment to the Purchase Price unless otherwise required by
applicable Law. Notwithstanding any provision of this Agreement, the other
Acquisition Documents and the Confidentiality Agreement described in Section
13.1 below to the contrary, each Party (and each employee, representative, or
other agent of the Parties) is hereby expressly authorized to disclose to any
and all Persons, without limitation of any kind, the Tax treatment and Tax
structure of the transactions contemplated by this Agreement, the other
Acquisition Documents and the Confidentiality Agreement; provided that the
confidentiality provisions of this Agreement, other Acquisition Documents and
the Confidentiality Agreement shall continue to apply to the extent that any
information (e.g., names of the Parties) is not necessary to understand the Tax
treatment or Tax structure of the transactions contemplated hereby and thereby.
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ARTICLE 13
CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
13.1 CONFIDENTIALITY.
The provisions of that certain Confidentiality Agreement dated March 4,
2002 by and between Purchaser and Seller's Parent, or a subsidiary thereof, as
amended by Section 12.9 hereof, are hereby incorporated herein in their
entirety, except that the restrictions of such Confidentiality Agreement shall
terminate at the Effective Time.
13.2 PUBLIC ANNOUNCEMENTS.
Except with respect to the disclosure of Tax treatment and Tax
structure of the transactions contemplated hereby as described in Section 12.9
hereof, Seller and Purchaser will consult with each other before issuing any
press releases or otherwise making any public statements or filings with
governmental entities with respect to this Agreement or the transactions
contemplated hereby and shall not issue any press releases or make any public
statements or filings with governmental entities prior to such consultation and
shall modify any portion thereof if the other Party reasonably objects thereto,
unless the same may be required by applicable Law.
ARTICLE 14
TERMINATION
14.1 TERMINATION.
This Agreement may be terminated:
(a) by the mutual consent of Purchaser and Seller;
(b) by written notice of Purchaser if any condition in Article 9
becomes impossible of performance (other than as a result of a breach or Default
by Purchaser in the performance of its obligations hereunder);
(c) by written notice of Seller if any condition in Article 10 becomes
impossible of performance (other than as a result of a Default by Seller in the
performance of its obligations hereunder);
(d) by written notice of any Party not in material default of its
obligations under this Agreement if the other Party is in material default of
its obligations (the "Defaulting Party") and the Defaulting Party has failed to
cure such breach within 45 days after written notice is delivered by the
non-defaulting Party to the Defaulting Party; or
(e) by written notice of either Party (other than a Party that is in
material default of its obligations under this Agreement) if the Closing shall
not have occurred on or before August 31, 2003.
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14.2 EFFECT OF TERMINATION.
As to any Losses of either Party arising from the effect of termination
or abandonment of this Agreement by the other Party, such Party is entitled to
pursue its rights or remedies against the other Party to the extent such rights
or remedies may be available at law or in equity.
ARTICLE 15
GENERAL PROVISIONS
15.1 DEFINITIONS.
Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
(a) "ACCOUNTING ARBITRATOR" means KPMG LLP, to the extent it is not
then retained as auditor or adviser to Purchaser, Seller or their respective
Affiliates.
(b) "ACCOUNTS RECEIVABLE" means accounts receivable, notes receivable
and other monies due for sales and deliveries of goods or performance of
services arising out of the conduct of the Business.
(c) "ACQUIRED ASSETS" has the meaning set forth in Section 1.1.
(d) "ACQUIRED BOOKS AND RECORDS" has the meaning set forth in Section
1.1(f).
(e) "ACQUIRED EQUIPMENT" has the meaning set forth in Section 1.1(b).
(f) "ACQUISITION DOCUMENTS" means this Agreement and the other
documents or agreements to be executed in connection herewith.
(g) "ACQUISITION PROPOSAL" means any proposal or offer from any Person
other than Purchaser relating to any acquisition of all or any material part of
the Acquired Assets, or the sale or issuance of any equity interests of Seller
or any Person formed by Seller or any Related Person of Seller to which any of
the Acquired Assets may be contributed, or any merger or consolidation of Seller
or of any Person formed by Seller or any Related Person of Seller to which any
Acquired Assets may be contributed.
(h) "ADJUSTMENT DATE" means the date the Accounting Arbitrator notifies
Purchaser and Seller of its determination of the Final Purchase Price according
to the provisions of Section 3.3.
(i) "AFFILIATE" of a Person, means a Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, the first Person. "Control" (including the terms
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of voting securities, by
contract or credit arrangement, as trustee or executor, or otherwise.
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(j) "AGREEMENT" has the meaning set forth in the introductory paragraph
of this Agreement.
(k) "ALLOCABLE CONSIDERATION" shall have the meaning set forth in
Section 3.5.
(l) "ALLOCATION" shall have the meaning set forth in Section 3.5.
(m) "ANTITRUST LAWS" means the HSR Act, the Xxxxxxx Act, as amended,
the Xxxxxxx Act, as amended, the Federal Trade Commission Act, as amended, and
any other federal, state or foreign Law or Order designed to prohibit, restrict
or regulate actions for the purpose or effect of monopolization or restraint of
trade.
(n) "ASSIGNED ACCOUNTS RECEIVABLE" has the meaning set forth in Section
1.1(i).
(o) "ASSIGNED CONTRACTS" has the meaning set forth in Section 1.1(c).
(p) "ASSIGNED INTELLECTUAL PROPERTY" has the meaning set forth in
Section 1.1(d).
(q) "ASSIGNED PERMITS" has the meaning set forth in Section 1.1(g).
(r) "ASSIGNED REAL PROPERTY LEASES" has the meaning set forth in
Section 1.1(a).
(s) "ASSUMED LIABILITIES" has the meaning set forth in Section 2.1.
(t) "BALANCE SHEET LIABILITIES" means the amount of (i) trade accounts
payable of the Business (excluding those accounts that have been paid by Seller
pursuant to issued checks that remain outstanding at the Effective Time) that
are related directly to the Business or the Acquired Assets, but only to the
extent such trade accounts payable are reflected on the March 31 Balance Sheet,
or incurred after March 31, 2003 in the Ordinary Course of Business and (ii) all
current liabilities of Seller other than the Excluded Liabilities, but only to
the extent such Liabilities are reflected on the March 31 Balance Sheet, or
incurred after March 31, 2003 in the Ordinary Course of Business.
(u) "BENEFICIARY" shall have the meaning set forth in Section 8.3(b).
(v) "BOOKS AND RECORDS" means all existing data, Databases, books,
records (except those records in Seller's corporate offices or at off-site
storage facilities which are duplicates of the Books and Records of the
Business), correspondence, business plans and projections, records of sales,
customer and vendor lists, files, papers, and, to the extent permitted under
applicable Law, copies of historical personnel, payroll and medical records of
each of the Employees in the possession of Seller, including employment
applications, employment agreements, confidentiality and non-compete agreements,
corrective action reports, disciplinary reports, notices of transfer, notices of
rate changes, other similar documents, and any summaries of such documents
regularly prepared by Seller; all reported medical claims made for each
Employee; and all manuals and printed instructions of Seller.
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(w) "BRAZILIAN DISTRIBUTOR AGREEMENT" means that certain Master
Distributor Agreement between Health Data Sciences Corporation d/b/a Per-Se
Technologies and Kontrol Negocios e Participacoes S/C LTDA, dated May 1, 2000,
together with that certain Letter Amendment to the Master Distributor Agreement,
dated June 19, 2001.
(x) "BULK SALES LAWS" shall have the meaning set forth in Section 15.6.
(y) "BUSINESS" shall have the meaning set forth in the second
introductory paragraph of this Agreement.
(z) "BUSINESS DAY" means any day on which national banks are open for
business in New York, NY.
(aa) "CLOSING" shall have the meaning set forth in Section 4.1.
(bb) "CLOSING BALANCE SHEET" means the unaudited balance sheet of the
Business as of the Effective Time (without giving effect to the Closing)
furnished to Purchaser and prepared in accordance with the same methodology used
by Seller to prepare the Financial Statements.
(cc) "CLOSING DATE" shall have the meaning set forth in Section 4.1.
(dd) "COBRA" shall have the meaning set forth in Section 5.18(c).
(ee) "COMPETING BUSINESS" means any business involving the development,
sale and maintenance of facility-wide computerized clinical patient record
software for acute care facilities in any jurisdiction in which such activities
are at any time conducted by the Business (including, without limitation, the
States of California and New York). A "Competing Business" does not include (i)
any operations being conducted at the Effective Time by Seller or Seller's
Parent or any direct or indirect subsidiary of Seller's Parent outside of the
Business; (ii) any business subsequently acquired by Seller, Seller's Parent or
any direct or indirect subsidiary of Seller's Parent, provided, that less than
10% of the revenues of such acquired business are derived from a Competing
Business; and (iii) with respect to the activities that it conducts at the time
of the acquisition, the business of any Person that acquires the Seller or the
Seller's Parent or any of their respective assets.
(ff) "COMPUTER SOFTWARE" means all computer programs, materials, tapes,
source and object codes, and all prior and proposed versions, releases,
modifications, updates, upgrades and enhancements thereto, as well as all
documentation and listings related thereto.
(gg) "CONSENT" means any consent, approval, authorization, clearance,
exception, waiver or similar affirmation by any Person pursuant to any Contract,
Law, Order or Permit.
(hh) "CONTRACT" means any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, License,
obligation,
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mortgage, plan, practice, restriction, understanding, or undertaking of any kind
or character, or other document to which a Person is a party or that is binding
on a Person.
(ii) "DATABASES" means databases in all forms, versions and media,
together with prior and proposed updates, modifications and enhancements
thereto, as well as all documentation and listings therefor.
(jj) "DEFAULT" means (A) any breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, (B) any
occurrence of any event that with the passage of time or the giving of notice or
both would constitute a breach or violation of, default under, contravention of,
or conflict with, any Contract, Law, Order, or Permit, or (C) any occurrence of
any event that with or without the passage of time or the giving of notice would
give rise to a right of any Person to exercise any remedy or obtain any relief
under, terminate or revoke, suspend, cancel, or modify or change the current
terms of, or renegotiate, or to accelerate the maturity or performance of, or to
increase or impose any Liability under, any Contract, Law, Order, or Permit.
(kk) "DEFAULTING PARTY" shall have the meaning set forth in Section
14.1(d).
(ll) "DETERMINATION MATERIALS" means the statement of Working Capital,
the Closing Balance Sheet, the Working Capital Objection, the Working Capital
Reconciliation and all work papers related thereto.
(mm) "DISPUTE NOTICE" shall have the meaning set forth in Section
15.4(a).
(nn) "EFFECTIVE TIME" shall have the meaning set forth in Section 4.1.
(oo) "EMPLOYEES" shall have the meaning set forth in Section 5.15(a).
(pp) "EMPLOYEE BENEFIT PLAN" means each pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
share purchase, severance pay, vacation, bonus, retention, change in control or
other incentive plan, medical, vision, dental or other health plan, any life
insurance plan, flexible spending account, cafeteria plan, vacation, holiday,
disability or any other employee benefit plan or fringe benefit plan, including
any "employee benefit plan," as that term is defined in Section 3(3) of ERISA
and any other plan, fund, policy, program, practice, custom, agreement,
understanding or arrangement providing compensation or other benefits, whether
or not such Employee Benefit Plan is or is intended to be (A) covered or
qualified under the Internal Revenue Code, ERISA or any other applicable Law,
(B) written or oral, (C) funded or unfunded, (D) actual or contingent or (E)
arrived at through collective bargaining or otherwise.
(qq) "ENVIRONMENTAL LAW" means any and all Laws relating to pollution
or protection of human health or the environment (including ambient air, surface
water, ground water, land surface, or subsurface strata), or emissions,
discharges, releases, or threatened releases of, or the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of, any
Hazardous Material, including, (A) the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C.
- 56 -
Sections 9601 et seq. ("CERCLA") and the Occupational Safety and Health Act; (B)
the Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Sections 6901 et seq., ("RCRA"); (C) the
Emergency Planning and Community Right to Know Act (42 U.S.C. Sections 11001 et
seq.); (D) the Clean Air Act (42 U.S.C. Sections 7401 et seq.); (E) the Clean
Water Act (33 U.S.C. I 1251 et seq.); (F) the Toxic Substances Control Act (15
U.S.C. I 2601 et seq.); (G) the Hazardous Materials Transportation Act (49
U.S.C. Sections 5101 et seq.); (H) the Safe Drinking Water Act (41 U.S.C. I 300f
et seq.); (I) any state, county, municipal or local Laws similar or analogous to
the federal Laws listed in parts (A)-(H) of this subparagraph, including, but
not limited to: the Georgia Solid Waste Management Act, O.C.G.A. Sections
13-8-20 et seq., the Georgia Hazardous Waste Management Act, O.C.G.A. Sections
12-8-60 et seq., and the Georgia Hazardous Site Response Act, O.C.G.A. Sections
12-8-90 et seq. ("HSRA"), (J) any amendments to the Laws listed in parts (A)-(I)
of this subparagraph, (K) any Laws or Orders adopted pursuant to or implementing
the Laws listed in parts (A)-(J) of this subparagraph; and (L) any other Law or
Order in effect relating to environmental protection.
(rr) "ENVIRONMENTAL PERMITS" means any federal, state and local
permits, licenses, approvals, Consents, Orders, registration, certificate and
authorizations which are required under Environmental Laws in connection with
the conduct of the Business as currently conducted or the ownership, use, or
lease of the Acquired Assets.
(ss) "EQUIPMENT" means all machinery, equipment, furniture, tools,
computers, terminals, computer equipment, office equipment, business machines,
telephones and telephone systems, parts, accessories, and the like, wherever
located, and any and all assignable warranties of Third Parties with respect
thereto.
(tt) "EQUIPMENT CHARGES" means rental charges payable or receivable and
other payments or receipts applicable to the Equipment.
(uu) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
(vv) "ERISA AFFILIATE" means any entity which together with another
entity would be treated as a single employer under Section 414 of the Internal
Revenue Code.
(ww) "ESTIMATED PURCHASE PRICE" shall have the meaning set forth in
Section 3.1(a).
(xx) "EXCESS LIABILITY CONTRACT" means any Assigned Contract that, on
its face or upon judicial determination, is subject to unlimited Liability with
respect to Product Claims (other than for fraud or bodily injury or death).
(yy) "EXCLUDED ASSETS" has the meaning set forth in Section 1.2.
(zz) "EXCLUDED LIABILITIES" has the meaning set forth in Section 2.2.
(aaa) "EXPIRATION DATE" shall have the meaning set forth in Section
12.7.
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(bbb) "FINAL ALLOCATION" shall have the meaning set forth in Section
3.5.
(ccc) "FINAL PURCHASE PRICE" shall have the meaning set forth in
Section 3.1(b).
(ddd) "FINANCIAL STATEMENTS" means the unaudited balance sheets and
related statement of profits and losses of the Business as at December 31, 2002
and for the fiscal year then ended, the March 31 Balance Sheet and related
statement of profits and losses of the Business prepared by Seller as at and for
the period ended March 31, 2003.
(eee) "FRCP" shall have the meaning set forth in Section 15.4(d).
(fff) "FTC" shall have the meaning set forth in Section 8.1.
(ggg) "GAAP" means generally accepted accounting principles as employed
in the United States of America, applied consistently with prior periods and
with Seller's historical practices and methods, provided that standards of
materiality applicable to the Business shall be employed without regard to
standards of materiality used by Seller in prior periods, and provided further,
that Seller's historical practices and methods shall not be consistently applied
to the extent they are not in accordance with GAAP.
(hhh) "GOODS CONTRACT" means any Contract or commitment to sell or
supply products.
(iii) "HAZARDOUS MATERIALS" means (A) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic substance (as
those terms are defined by any applicable Environmental Laws) and (B) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil,
asbestos-containing materials and any polychlorinated biphenyls.
(jjj) "HIRED EMPLOYEES" means all Offered Employees who accept
Purchaser's offer of employment as contemplated in Section 11.1.
(kkk) "HSR ACT" means Section 7A of the Xxxxxxx Act, as added by Title
II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
(lll) "HUMANITARIAN CITY SIICA" means that certain System Installation,
Implementation, and Consulting Services Agreement between Seller and Sultan Bin
Abdulaziz Medical & Educational Telecommunications Program dated December 29,
2001.
(mmm) "IIPI" shall have the meaning set forth in Section 5.20.
(nnn) "IMMIGRATION LAWS" means the Immigration Reform and Control Act
of 1986, and the rules and regulations promulgated thereunder.
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(ooo) "IMPROVEMENTS" means all buildings, structures, fixtures and
other improvements included in the Real Property.
(ppp) "INDEBTEDNESS" means, for any Person without double counting, (A)
all indebtedness or other obligations of such Person for borrowed money or for
the deferred purchase price of property or services, (B) all indebtedness
created or arising under any Lien with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (C) all obligations under leases that are or should be, in accordance
with GAAP, recorded as capital leases in respect of which such Person is liable
as lessee, (D) liabilities in respect of unfunded vested benefits under any
Employee Benefit Plan and (E) all obligations owed pursuant to any interest rate
hedging arrangement.
(qqq) "INFORMATION" means information or documentation owned by Seller
or any Subsidiary thereof which information may include, but is not necessarily
limited to, financial data, business plans, personnel information, drawings,
samples, devices, trade secrets, technical information, results of research and
other data in either oral or written form.
(rrr) "INDEMNIFIED PARTY" shall have the meaning set forth in Section
12.6(a).
(sss) "INDEMNIFYING PARTY" shall have the meaning set forth in Section
12.6(a).
(ttt) "INTELLECTUAL PROPERTY" means all foreign and domestic (a)
patents (including design patents, industrial designs and utility models) and
patent applications (including docketed patent disclosures awaiting filing,
provisionals, reissues, divisions, continuations, continuations-in-part and
extensions), patent disclosures awaiting filing determination, inventions and
improvements thereto; (b) designs, art work, labels, specifications,
designs-in-progress, research and development, formulations, know-how,
technology, algorithms, processes, prototypes, inventions, industrial models,
and trade secrets; (c) trademarks, trade names, trade styles, service marks,
product names, slogans, domain names, and registrations and applications
thereof; (d) Internet web sites and the content thereof, copyrights and
registrations thereof; (e) Computer Software; (f) Databases; (g) confidential or
proprietary information; (h) intellectual property rights similar to any of the
foregoing; (i) copies and tangible embodiments thereof (in whatever form or
medium, including electronic media); (j) licenses of any of the foregoing; and
(k) all goodwill associated therewith.
(uuu) "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
(vvv) "IRS" means the Internal Revenue Service of the United States of
America.
(www) "JAPANESE DISTRIBUTOR AGREEMENTS" means the following agreements:
(1) Purchase and Distribution Agreement between Sumitomo Electric Systems Co.,
Ltd.
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and Health Data Sciences Corporation, dated January 12, 1998; (2) Agreement
Amendment, dated February 21, 2003; (3) Maintenance Agreement Addendum dated
October 24, 2001; (4) Per-Se Services Agreement between Sumitomo Electric
Systems Co., Ltd. and Health Data Sciences Corporation, dated October 24, 2001;
and (5) Agreement Addendum for UltiData Toolset, dated March 31, 1999.
(xxx) "KNOWLEDGE" and the phrases "to the knowledge of Seller," "Seller
has not received notice," "to Seller's knowledge," "Seller is not aware" and any
other similar phrases as used with respect to Seller (including references to
Seller being aware of a particular matter) means the personal knowledge of Xxxx
Xxxx, Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx, J. Xxxxx Xxxxxxxx, Xxxxx X. Xxxxxx III
and Xxxx X. Xxxxxx, in each case after due inquiry, which shall include
reasonable inquiry of Xxxx Xxxxx.
(yyy) "LABOR CLAIMS" means claims, investigations, charges, citations,
hearings, consent decrees, or litigation concerning: wages, compensation,
bonuses, commissions, awards, or payroll deductions; equal employment or human
rights violations regarding race, color, religion, sex, national origin, age,
handicap, veteran's status, marital status, disability, or any other recognized
class, status, or attribute under any federal, state, local or foreign equal
employment Law prohibiting discrimination; representation petitions or unfair
labor practices; grievances or arbitrations pursuant to current or expired
collective bargaining agreements; occupational safety and health; workers'
compensation; wrongful termination, negligent hiring, invasion of privacy or
defamation; immigration, wrongful dismissal or any other claim based on the
employment relationship or termination of the employment relationship.
(zzz) "LANCASHIRE GUARANTY" shall have the meaning set forth in Section
7.8.
(aaaa) "LAW" means any code, directive, law (including common law),
ordinance, regulation, reporting or licensing requirement, rule, or statute
applicable to a Person or its assets, Liabilities, or business, including those
promulgated, interpreted or enforced by any Regulatory Authority.
(bbbb) "LEASED REAL PROPERTY" means all real property, together with
all improvements thereon (including construction in progress) and appurtenances
thereto located on such real property), leased by Seller under the Assigned Real
Property Leases.
(cccc) "LIABILITY" means any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including costs
of investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the Ordinary Course of
Business) of any type, secured or unsecured whether accrued, absolute or
contingent, direct or indirect, liquidated or unliquidated, matured or
unmatured, known or unknown or otherwise.
(dddd) "LICENSE" means any license, franchise, notice, permit,
easement, right, certificate, authorization, approval or filing to which any
Person is a party or that is or may be binding on any Person or its securities,
property or business.
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(eeee) "LIEN" means any conditional sale agreement, covenant, default
of title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, right of way, security
interest, title retention or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with respect to
any property or property interest.
(ffff) "LITIGATION" means any suit, action, administrative or other
audit (other than regular audits of financial statements by outside auditors)
proceeding, arbitration, cause of action, charge, claim, complaint, compliance
review, criminal prosecution, grievance inquiry, hearing, inspection,
investigation (governmental or otherwise), notice (written or oral) by any
Person alleging potential Liability or requesting information.
(gggg) "LOSS" means any and all direct or indirect Litigation,
payments, obligations, recoveries, deficiencies, fines, penalties, interest,
assessments, losses, Liabilities, costs, expenses (including (A) interest,
penalties and reasonable attorneys' fees and expenses, (B) reasonable attorneys'
fees and expenses necessary to enforce rights to indemnification hereunder, and
(C)consultant's fees and other costs of defense or investigation), and interest
on any amount payable to a Third Party as a result of the foregoing, whether
accrued, absolute, contingent, known, unknown, or otherwise as of the Effective
Time or thereafter.
(hhhh) "MARCH 31 BALANCE SHEET" means the unaudited balance sheet of
the Business as of March 31, 2003 furnished to Purchaser.
(iiii) "MATERIAL" or "MATERIAL" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement shall
determine materiality in that instance.
(jjjj) "MATERIAL ADVERSE EFFECT" or "Material Adverse Change" when used
in connection with a Person means any change, event, violation, inaccuracy or
circumstance the effect of which is both material and adverse to (A) the
business, results of operations or financial condition of such Person and its
parent or subsidiaries, taken as a whole or (B) the ability of such Person to
perform any of its material obligations under this Agreement or the Acquisition
Documents to which it is a party; provided, however, none of the following shall
be deemed, in and of itself, to be a Material Adverse Effect with respect to a
Person: (w) a change that primarily results from changes in the regulatory
environment affecting or other events affecting the healthcare information
technology industry as a whole (which changes do not disproportionately affect
the Person relative to other participants in such industry in any material
respect), (x) a change that primarily results from economic or political
conditions or events affecting the United States economy or world economy, (y) a
change that results from the announcement or pendency of this Agreement and the
transactions contemplated hereby, except if such change is the result of the
failure of Seller to obtain Consents that (1) are required as the result of the
transactions contemplate hereby and (2) Seller did not disclose to Purchaser in
the Schedules hereto or (z) a change that results directly from action taken by
such Person that is required in order to fulfill its obligations hereunder.
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(kkkk) "OFFERED EMPLOYEES" has the meaning set forth in Section 11.1.
(llll) "OFFSITE MIGRATION" means the migration of Hazardous Materials
onto or under such parcel discharged, dumped, released, spilled, leaked, buried
or disposed of on or from land neighboring such parcel.
(mmmm) "ORDER" means any decree, injunction, judgment, order, ruling,
writ, quasi-judicial decision or award or administrative decision or award of
any federal, state, local, foreign or other court, arbitrator, mediator,
tribunal, administrative agency or Regulatory Authority to which any Person is a
party or that is or may be binding on any Person or its securities, assets or
business.
(nnnn) "ORDINARY COURSE OF BUSINESS" an action taken by a Person will
be deemed to have been taken in the Ordinary Course of Business only if that
action: (A) is consistent in nature, scope and magnitude with the past practices
of such Person and is taken in the ordinary course of the normal, day-to-day
operations of such Person; (B) does not require authorization by the board of
directors or shareholders of such Person (or by any Person or group of Persons
exercising similar authority) and does not require any other separate or special
authorization of any nature; and (C) is similar in nature, scope and magnitude
to actions customarily taken, without any separate or special authorization, in
the ordinary course of the normal, day-to-day operations of other Persons that
are in the same line of business as such Person.
(oooo) "PANEL" shall have the meaning set forth in Section 15.4(c).
(pppp) "PARTY" means any party hereto and "PARTIES" means all parties
hereto.
(qqqq) "PAYEE" shall have the meaning set forth in Section 8.3(b).
(rrrr) "PAYOR" shall have the meaning set forth in Section 8.3(b).
(ssss) "PERMIT" means any Regulatory Authority approval, authorization,
certificate, easement, filing, franchise, license, notice, permit, or right to
which any Person is a party or that is or may be binding upon or inure to the
benefit of any Person or its securities, assets, or business.
(tttt) "PERMITTED ENCUMBRANCES" means (A) Liens for Taxes not yet due
and payable (other than Taxes arising out of the transactions contemplated by
this Agreement and with respect to which adequate reserve has been made); (B)
statutory mechanics', materialmen's, contractor's, warehousemen's, repairmen's
and other similar statutory Liens arising in the ordinary course and which are
not delinquent; and (C) in respect of Intellectual Property, Liens that do not
materially interfere with the current use of the Acquired Assets subject to such
Lien or the operation of the Business.
(uuuu) "PERSON" means a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
limited liability partnership, trust,
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business association, group acting in concert, or any person acting in a
representative capacity.
(vvvv) "PERSONAL PROPERTY TAXES" means ad valorem taxes imposed upon
the Acquired Assets other than the Leased Real Property.
(wwww) "PRE-CLOSING TAX PERIOD" means any taxable period (or a portion
thereof) ending on or prior to the Effective Time.
(xxxx) "PRODUCT CLAIMS" shall have the meaning set forth in Section
12.2.
(yyyy) "PRORATION ITEMS" means Utility Charges, Rental Charges,
Equipment Charges, Real Property Taxes, Personal Property Taxes, and Service
Contracts (including amounts owed pursuant to transferable Permits applicable to
the Acquired Assets and transferred to Purchaser hereunder) and including
accruals or prepayments thereof.
(zzzz) "PURCHASER" shall have the meaning set forth in the introductory
paragraph of this Agreement.
(aaaaa) "PURCHASER INDEMNITEES" shall have the meaning set forth in
Section 12.1.
(bbbbb) "PURCHASER'S PARENT" shall have the meaning set forth in the
introductory paragraph of this Agreement.
(ccccc) "REAL PROPERTY LEASES" means any and all real property leases,
subleases, licenses and occupancy agreements pursuant to which Seller is the
lessee, sublessee, licensee or occupant of real property used in the Business,
and any and all assignable warranties of Third Parties with respect thereto, and
any amendments, extensions and renewals of such real estate leases.
(ddddd) "REAL PROPERTY TAXES" means all ad valorem taxes imposed upon
any portion of the Leased Real Property, general assessments imposed with
respect to the Leased Real Property and special assessments upon the Leased Real
Property.
(eeeee) "RECIPIENT" shall have the meaning set forth in Section 8.3(b).
(fffff) "REGULATORY AUTHORITY" means any federal, state, county, local,
foreign or other governmental, public or regulatory courts, agencies,
authorities (including self-regulatory authorities), instrumentalities,
commissions, boards or bodies.
(ggggg) "RELATED PERSON" with respect to a particular individual: (A)
each other member of such individual's Family; (B) any Person that is directly
or indirectly controlled by any one or more members of such individual's Family;
(C) any Person in which members of such individual's Family hold (individually
or in the aggregate) a Material Interest; and (D) any Person with respect to
which one or more members of such individual's Family serves as a director,
officer, partner, executor or trustee (or in a similar capacity). With respect
to a specified Person other than an individual: (aa) any
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Person that directly or indirectly controls, is directly or indirectly
controlled by or is directly or indirectly under common control with such
specified Person; (bb) any Person that holds a Material Interest in such
specified Person; (cc) each Person that serves as a director, officer, partner,
executor or trustee of such specified Person (or in a similar capacity); (dd)
any Person in which such specified Person holds a Material Interest; and (ee)
any Person with respect to which such specified Person serves as a general
partner or a trustee (or in a similar capacity). For purposes of this
definition, (I) "control" (including "controlling," "controlled by," and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and shall be construed as such term is used in the rules promulgated under the
Securities Act; (II) the "Family" of an individual includes (1) the individual,
(2) the individual's spouse, (3) any other natural person who is the parent,
child, grandparent, grandchild or sibling of the individual or the individual's
spouse and (4) any other natural person who resides with such individual; and
(III) "Material Interest" means direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of voting securities or other
voting interests representing at least ten percent (10%) of the outstanding
voting power of a Person or equity securities or other equity interests
representing at least ten percent (10%) of the outstanding equity securities or
equity interests in a Person.
(hhhhh) "RENTAL CHARGES" means common area maintenance charges,
merchant association dues, insurance reimbursement and rental charges payable or
receivable and other payments or receipts (other than Real Property Taxes)
applicable to the Leased Real Property.
(iiiii) "RETAINED SERVICES" shall have the meaning set forth in Section
11.13(c)(i).
(jjjjj) "SELLER" shall have the meaning set forth in the introductory
paragraph of this Agreement.
(kkkkk) "SELLER INDEMNITEES" shall have the meaning set forth in
Section 12.3.
(lllll) "SELLER'S PARENT" shall have the meaning set forth in the
introductory paragraph of this Agreement.
(mmmmm) "SENIOR EXECUTIVES" shall have the meaning set forth in Section
15.4(a).
(nnnnn) "SERVICES CONTRACT" means any Contract to perform maintenance,
services or similar duties.
(ooooo) "STRADDLE CONTRACTS" shall have the meaning ascribed to such
term in Section 11.13(a).
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(ppppp) "SUBJECT EMPLOYEES" means the Offered Employees listed on
Exhibit B.
(qqqqq) "SUBSIDIARY" of a Person means any business entity of which the
Person either (A) owns or controls 50% or more of the outstanding equity
securities, either directly or indirectly, included any such entity the equity
securities of which are owned or controlled in a, (B) in the case of
partnerships, serves as a general partner, (C) in the case of a limited
liability company, serves as a managing member, or (D) otherwise has the ability
to elect a majority of the directors, trustees, managing members or others
thereof.
(rrrrr) "SUCCESSOR LIABILITY TAXES" shall have the meaning set forth in
Section 5.17.
(sssss) "TAX" means any federal, state, county, local, or foreign tax,
charge, fee, levy, impost, duty, or other assessment, including income, gross
receipts, excise, employment, sales, use, transfer, recording, license, payroll,
franchise, severance, documentary, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duty, capital
stock, paid-up capital, profits, withholding, Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum, estimated, or other tax or
governmental fee of any kind whatsoever, imposed or required to be withheld by
any Regulatory Authority, including any interest, penalties, and additions
imposed thereon or with respect thereto.
(ttttt) "TAX ALLOCATION OBJECTION" shall have the meaning set forth in
Section 3.5.
(uuuuu) "TAX ARBITRATOR" means mutually acceptable accounting firm
which is not the past or then current principal auditor of the Purchaser or the
Seller
(vvvvv) "TAX RETURN" means any return (including any informational
return) report, statement, schedule, notice, form or other document or
information filed with or submitted to, or required to be filed with or
submitted to any Regulatory Authority in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of compliance with any legal
requirement relating to any Tax.
(wwwww) "THIRD PARTY" means any Person other than a Party or a Related
Person of a Party.
(xxxxx) "THIRD PARTY CLAIM" shall have the meaning set forth in Section
12.6(a).
(yyyyy) "TRANSFER TAXES" means all sales, use, value-added, transfer
and all other similar non-income taxes imposed on or arising out of the
purchase, sale and transfer of the Acquired Assets from Seller and its
Subsidiaries to Purchaser and its Affiliates hereunder.
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(zzzzz) "UK LEASE" means the capital lease entered into by and between
Per-Se Technologies (UK) Limited and GE Capital Equipment Finance, Ltd. trading
as Sun Microsystems Finance, dated August 29, 2002.
(aaaaaa) "UNDISCLOSED LIABILITIES" means any Liability of the Business
that is not fully reflected or provided for in the March 31 Balance Sheet.
(bbbbbb) "UTILITY CHARGES" means all water, sewer, electricity, gas and
other utility charges, if any, applicable to the Leased Real Property or the
operation of the Business.
(cccccc) "WARN" shall have the meaning set forth in Section 5.15(c).
(dddddd) "WORKING CAPITAL" means, as of the Effective Time, the amount
calculated by subtracting the current liabilities the Business included in the
Assumed Liabilities as of that date from the current assets of the Business
(excluding cash) included in the Acquired Assets as of that date, in each case
determined from the Closing Balance Sheet and within the principles set forth in
SCHEDULE 15.1.
(eeeeee) "WORKING CAPITAL OBJECTION" shall have the meaning set forth
in Section 3.3(c).
(ffffff) "WORKING CAPITAL RECONCILIATION" means a statement reconciling
the Working Capital included in the Closing Balance Sheet with the working
capital of the Business as of March 31, 2003.
15.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties contained in this Agreement
(including the Schedules) or in any document, certificate or other instrument
delivered pursuant to this Agreement shall survive the consummation of the
transactions contemplated hereby and shall terminate on January 31, 2005, except
for the representations and warranties set forth in (i) Section 5.22, which
shall survive until the third anniversary of the Effective Time, (ii) Section
5.9, which shall survive until the fifth anniversary of the Effective Time,
(iii) Sections 5.16 and 5.17, each of which shall survive until the expiration
of the applicable statute of limitations (giving effect to any waiver,
mitigation or extension thereof) and (iv) Sections 5.1 and 5.2, which shall
survive without limitation.
15.3 OBLIGATIONS OF SELLER AND PURCHASER.
Seller's Parent agrees to take all actions necessary to cause Seller to
perform its obligations under this Agreement and to guarantee the obligations of
Seller hereunder. Purchaser's Parent agrees to take all actions necessary to
cause each of Purchaser and UK Purchaser to perform its obligations under this
Agreement and to guarantee the obligations of Purchaser and UK Purchaser
hereunder.
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15.4 ARBITRATION.
(a) The Parties shall attempt to resolve any dispute, controversy or
claim arising out of or relating to this Agreement, any other Acquisition
Document (except for the Transition Services Agreement) or the performance by
the Parties of its or their terms (other than the resolution of an Working
Capital Objection, which shall be resolved as provided in Section 3.3(c), or the
resolution of a Tax Allocation Objection, which shall be resolved as provided in
Section 3.5) promptly by negotiation between executives who have authority to
settle the controversy and who are at a higher level of management than the
persons with direct responsibility for administration of this contract
(collectively the "Senior Executives"). Either Party may give the other Party
written notice of any dispute not resolved in the Ordinary Course of Business
(the "Dispute Notice"). The Dispute Notice shall include (i) a statement of that
Party's position and a summary of arguments supporting that position, and (ii)
the name and title of the executive who will be representing that Party and of
any other person who will accompany the executive. Within fifteen (15) days
after delivery of the Dispute Notice, the receiving Party shall respond with (i)
a statement of that Party's position and a summary of arguments supporting that
position, and (ii) the name and title of the executive who will represent that
Party and of any other person who will accompany the executive. Within thirty
(30) days after delivery of the Dispute Notice, the Senior Executives shall meet
at a mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary, to attempt to resolve the dispute. The Senior
Executives shall discuss the dispute and attempt to resolve it without the
necessity of any formal proceeding. All negotiations pursuant to this clause are
confidential and shall be treated as compromise and settlement negotiations for
purposes of applicable rules of evidence.
(b) If the matter is not resolved by the Senior Executives within sixty
(60) days of the Dispute Notice or if the Senior Executives failed to meet
within thirty (30) days after delivery of the Dispute Notice, the matter shall
be settled by binding arbitration held in New York, New York. The Commercial
Arbitration Rules of the American Arbitration Association are hereby
incorporated by reference; provided, however, that the Parties do not intend any
arbitration hereunder to be administered by the American Arbitration
Association. The interpretation and enforceability of this Section 15.4 shall be
governed exclusively by the Federal Arbitration Act, 9 U.S.C. Section 1-16.
(c) The panel to be appointed shall consist of three neutral
arbitrators (the "Panel"). One arbitrator shall be appointed by a Party to the
dispute and one arbitrator shall be appointed by the other Party to the dispute
within thirty (30) days after the commencement of the arbitration proceeding.
The third arbitrator shall be appointed by mutual agreement of the two selected
arbitrators and shall be experienced in corporate contractual matters relating
to transactions of the nature contemplated by this Agreement.
(d) The Panel shall allow such discovery as the Panel determines
appropriate under the circumstances and shall resolve the dispute as
expeditiously as practicable. The Federal Rules of Civil Procedure (the "FRCP")
are hereby incorporated by reference for purposes of the discovery process;
provided that the FRCP may be waived by the Parties by written agreement, or by
the Panel. The Panel shall give the Parties written notice of
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the decision, with the reasons therefor set out. The decision of the Panel shall
be final, binding, and conclusive with respect to all Persons (including the
Parties), including Persons (including Parties) who have failed or refused to
participate in the arbitration process.
(e) The Panel shall have authority to award relief under legal or
equitable principles, including interim or preliminary relief, and to allocate
responsibility for the costs of the arbitration and to award recovery of
attorneys' fees and expenses in such manner as is determined to be appropriate
by the Panel.
(f) Judgment upon the award rendered by the Panel may be entered in any
court having appropriate jurisdiction.
(g) All proceedings under this Section 15.4, and all evidence given or
discovered pursuant hereto, shall be maintained in confidence by all Parties.
(h) The fact that the dispute resolution procedures specified in this
Section 15.4 shall have been or may be invoked shall not excuse any Party from
performing its obligations under this Agreement or any other Acquisition
Document and during the pendency of any such procedure all Parties shall
continue to perform their respective obligations in good faith, subject to any
rights to terminate this Agreement or any Acquisition Document that may be
available to any Party.
(i) All applicable statutes of limitation shall be tolled while the
procedures specified in this Section 15.4 are pending. The Parties will take
such action, if any, required to effectuate such tolling.
15.5 FEES AND EXPENSES.
(a) Except as otherwise specifically provided below or elsewhere in
this Agreement, regardless of whether the transactions contemplated by this
Agreement are consummated, Seller and Purchaser each shall pay their respective
fees and expenses in connection with the transactions contemplated by this
Agreement. Notwithstanding anything to the contrary set forth herein, Seller
shall not pay any Excluded Liabilities or any fees or expenses incurred by
Seller in connection with the transactions contemplated by this Agreement by
using the Acquired Assets or any portion thereof, and if prior to the Effective
Time a portion of the Acquired Assets is used to pay any Excluded Liabilities,
or any of such fees and expenses, Seller shall reimburse Purchaser by the amount
of Acquired Assets so used.
(b) Purchaser shall pay for any and all owner's title insurance
policies, surveys and fees related to the title insurance company's
participation in the Closing in connection with the Acquired Assets.
(c) Each of Purchaser and Seller shall pay fifty percent (50%) of all
Transfer Taxes. Purchaser and Seller shall each file the Tax Returns and other
documents related to the Transfer Taxes required to be filed by each under
applicable Law. The Parties will
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cooperate to the extent reasonably necessary to make such Tax Returns or filings
as may be required and to minimize such Transfer Taxes.
(d) Seller shall pay any fees and expenses in connection with the
prepayment, release, satisfaction or removal of any Liens affecting the Acquired
Assets.
15.6 BULK SALES LAWS.
Notwithstanding anything herein to the contrary, Purchaser and Seller
hereby waive compliance with the bulk-transfer provisions of the Uniform
Commercial Code (or any similar Law) ("Bulk Sales Laws") in connection with the
transactions contemplated by the Acquisition Documents.
15.7 NOTICES.
All notices, requests, demands, and other communications hereunder
shall be in writing (which shall include communications by facsimile) and shall
be delivered (a) in person or by courier or overnight service, (b) mailed by
first class registered or certified mail, postage prepaid, return receipt
requested, or (c) by facsimile transmission, as follows:
(a) If to Seller or Seller's Parent:
Per-Se Technologies, Inc.
0000 Xx.Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Suite 400
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: J. Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to Purchaser, UK Purchaser or Purchaser's Parent:
Misys Hospital Systems, Inc.
0000 Xxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Legal Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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or
Misys plc
Burleigh House
Chapel Oak, Salford Priors
Xxxxxxxx XX00 00X
Xxxxxx Xxxxxxx
Attention: Company Secretary
Facsimile: x00-0000 000000
with a copy (which shall not constitute notice) to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Bab
Telephone (000) 000-0000
Facsimile: (000) 000-0000
or to such other address as the Parties hereto may designate in writing to the
other in accordance with this Section 15.7. Any Party may change the address to
which notices are to be sent by giving written notice of such change of address
to the other Parties in the manner above provided for giving notice. If
delivered personally or by courier, the date on which the notice, request,
instruction or document is delivered shall be the date on which such delivery is
made and if delivered by facsimile transmission or mail as aforesaid, the date
on which such notice, request, instruction or document is received shall be the
date of delivery.
15.8 ASSIGNMENT
Prior to the Closing, this Agreement shall not be assignable by any of
the Parties hereto without the written consent of the other; provided, however,
that (a) prior to or at the Closing, Seller may transfer the Business and the
Acquired Assets to any of its Related Persons and may assign any or all of its
rights and obligations under this Agreement to such Related Person without the
consent of Purchaser but no such assignment shall relieve Seller of any of its
obligations under this Agreement; (b) prior to or at the Closing, Purchaser may
assign any or all of its rights and obligations under this Agreement to any of
its Related Persons without the consent of Sellers but no such assignment shall
relieve Purchaser of any of its obligations under this Agreement; and (c) after
the Closing, Purchaser may assign its interest in this Agreement to any Person
(subject to all rights, remedies and defenses that Seller could assert against
Purchaser) without the consent of Seller. From and after any such assignment,
the word "Purchaser" shall mean such assignee.
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15.9 NO BENEFIT TO OTHERS.
The representations, warranties, covenants, and agreements contained in
this Agreement are for the sole benefit of the Parties hereto and they shall not
be construed as conferring any Third Party beneficiary or any other rights on
any other Persons.
15.10 HEADINGS AND GENDER; CONSTRUCTION; INTERPRETATION.
(a) The table of contents and the captions and section headings
contained in this Agreement are for convenience of reference only, do not form a
part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement. All references in this Agreement to "Section"
or "Article" shall be deemed to be references to a Section or Article of this
Agreement.
(b) Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine, or neuter, as the context
requires. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed followed by the words "without limitation."
(c) Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed or resolved against Purchaser or Seller, whether under any
rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. On the contrary, this Agreement has been reviewed,
negotiated and accepted by all Parties and their attorneys and shall be
construed and interpreted according to the ordinary meaning of the words so as
fairly to accomplish the purposes and intentions of all the Parties.
15.11 COUNTERPARTS.
This Agreement may be executed in two (2) or more counterparts, all of
which shall be considered one and the same Agreement, and shall become effective
when one counterpart has been signed by each Party and delivered to the other
Party hereto.
15.12 INTEGRATION OF AGREEMENT.
(a) This Agreement, the Schedules, the Exhibits and the other
Acquisition Documents constitute the entire agreement between the Parties
relating to the subject matter hereof and supersede all prior agreements, oral
and written, between the Parties with respect to the subject matter hereof,
including that certain letter of intent between Purchaser and Seller dated May
8, 2003.
(b) Neither this Agreement, nor any provision hereof, may be changed,
waived, discharged, supplemented, or terminated orally, but only by an agreement
in writing signed by the Party against which the enforcement of such change,
waiver, discharge or termination is sought. The failure or delay of any Party at
any time or times to require performance of any provision of this Agreement
shall in no manner affect its right to enforce that provision. No single or
partial waiver by any Party of any condition of this Agreement, or the breach of
any term of this Agreement or the inaccuracy or warranty of
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this Agreement, whether by conduct or otherwise, in any one or more instances
shall be construed or deemed to be a further or continuing waiver of any such
condition, breach or inaccuracy or a waiver of any other condition, breach or
inaccuracy.
15.13 GOVERNING LAW.
Regardless of any conflict of law or choice of law principles that
might otherwise apply, the Parties agree that this Agreement shall be governed
by and construed in all respects in accordance with the laws of the State of New
York.
15.14 PARTIAL INVALIDITY.
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable Law,
but in case any one or more of the provisions contained in this Agreement shall,
for any reason, be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as if such
invalid, illegal, or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable. To the extent the deemed deletion of the
invalid, illegal or unenforceable provision or provisions is reasonably likely
to have a Material Adverse Effect, the Parties shall endeavor in good faith to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as practicable to that of the
invalid, illegal or unenforceable provisions.
15.15 INVESTIGATION.
Purchaser acknowledges that its officers, directors, employees and
authorized representatives and agents have been given an opportunity to examine
the agreements, instruments, documents and other information, including the
Acquired Assets, relating to the Business that they have requested to examine.
The Purchaser will not be entitled to claim that any fact or combination of
facts constitutes a breach of a representation or warranty contained in this
Agreement or any other Acquisition Document if and to the extent that such fact
or combination of facts has been fairly disclosed in any section of the
Schedules in each case in sufficient detail that it is reasonably apparent on
its face that the facts or circumstances so disclosed qualify such
representation or warranty.
(signatures appear on the following page)
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IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be
executed on its behalf by its duly authorized officers, all as of the day and
year first above written.
PURCHASER:
Misys Hospital Systems, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
UK PURCHASER:
Misys Healthcare Systems
(International) Limited
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
PURCHASER'S PARENT
(only in respect of Article 12 and
Section 15.3 hereof):
Misys plc
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Corporate Development Director
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SELLER'S PARENT
(only in respect of Article 12 and
Sections 11.12 and 15.3 hereof):
Per-Se Technologies, Inc.
By: /s/ Xxxxxx X. Xxxx
------------------------------
Name: Xxxxxx X. Xxxx
Title: President, CEO & Chairman of
the Board
SELLER:
PST Products, LLC
By: /s/ Xxxxxx X. Xxxx
--------------------------------
Name: Xxxxxx X. Xxxx
Title: Manager
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PURCHASE AGREEMENT SCHEDULES AND ANNEXES
Schedule No. Caption TAB
-------------------------------------------------------------------------------------------
SCHEDULE 1.1(a) Assigned Real Property Leases 1
SCHEDULE 1.1(b) Acquired Equipment 2
SCHEDULE 1.1(c) Assigned Contracts 3
SCHEDULE 1.1(d) Assigned Intellectual Property 4
SCHEDULE 3.5 Allocation of Purchase Price 5
SCHEDULE 5.1 Foreign State Qualifications 6
SCHEDULE 5.2 Consents 7
SCHEDULE 5.4 Financial Statements 8
SCHEDULE 5.5 Assigned Accounts Receivable 9
SCHEDULE 5.6(b) Personal Property Liens 10
SCHEDULE 5.8(b) Commitments for Capital Expenditures 11
SCHEDULE 5.8(c) Defaults 12
SCHEDULE 5.8(d) Terminations 13
SCHEDULE 5.8(f) Twenty (20) Largest Customers 14
SCHEDULE 5.8(g) Contracts with Related Parties 15
SCHEDULE 5.9 Assigned Intellectual Property 16
SCHEDULE 5.11(a) Environmental Matters 17
SCHEDULE 5.11(a)(IV) Environmental Permits 18
SCHEDULE 5.11(b)(II) Release of Hazardous Materials 19
SCHEDULE 5.11(b)(III) Storage Tanks 20
SCHEDULE 5.11(b)(V) Environmental Audits or Investigations 21
SCHEDULE 5.11(b)(VI) Location of Storage for Hazardous Materials 22
SCHEDULE 5.12 Litigation 23
SCHEDULE 5.13 Absence of Changes 24
SCHEDULE 5.14 Insurance 25
SCHEDULE 5.15(a) Employees 26
SCHEDULE 5.15(c) WARN Act Employment Loss 27
SCHEDULE 5.15(d) Notices of Employee Health and Safety Violations 28
SCHEDULE 5.16 Employee Benefit Plans 29
SCHEDULE 5.19 Liabilities of Seller Payable for More Than 1 Year 30
SCHEDULE 5.22 Title Exceptions 31
SCHEDULE 5.23(a) Warranties 32
SCHEDULE 5.23(b) Product Liability 33
SCHEDULE 5.24 Suppliers 34
SCHEDULE 9.4 Required Consents 35
SCHEDULE 11.1 Offered Employees 36
SCHEDULE 11.13 Straddle Contracts 37
SCHEDULE 15.1 Working Capital 38
Annex No.
ANNEX 1.1(b)
ANNEX 5.4
ANNEX 5.5
ANNEX 5.8(f)
ANNEX 5.9
ANNEX 5.14
ANNEX 5.15(a)
ANNEX 5.24
ANNEX 11.1
[The Schedules and Annexes listed above have been omitted from this
filing pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby
agrees to furnish supplementally a copy of any such omitted Schedule or Annex to
the Securities and Exchange Commission upon request.]
FIRST AMENDMENT DATED AS OF JULY 28, 2003 TO
ASSET PURCHASE AGREEMENT
AMONG
MISYS HOSPITAL SYSTEMS, INC.,
MISYS HEALTHCARE SYSTEMS
(INTERNATIONAL) LIMITED,
MISYS PLC,
PST PRODUCTS, LLC
AND
PER-SE TECHNOLOGIES, INC.
DATED AS OF JUNE 18, 2003
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO ASSSET PURCHASE AGREEMENT (this "Amendment") is
made and entered into as of July 28, 2003, by and among Misys Hospital Systems,
Inc., a Pennsylvania corporation ("Purchaser"), Misys Healthcare Systems
(International) Limited, a company organized under the laws of England and Wales
("UK Purchaser"), Misys plc, a company organized under the laws of England and
Wales ("Purchaser's Parent"), Per-Se Technologies, Inc., a Delaware corporation
("Seller's Parent"), and PST Products, LLC, a California limited liability
company ("Seller").
A. The parties hereto are parties to the Asset Purchase Agreement
dated as of June 18, 2003 (the "Asset Purchase Agreement"), pursuant to which
Seller desires to sell and Purchaser and UK Purchaser desire to purchase the
Business, its operations, and certain of the assets of Seller and its
Subsidiaries used therein;
B. The parties have agreed to amend certain terms of the Asset
Purchase Agreement as set forth herein;
Capitalized terms used, but not defined, in this Amendment shall
have the meaning ascribed to such terms in the Asset Purchase Agreement.
NOW, THEREFORE, upon the above premises and in consideration of the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows:
1. Except as expressly amended hereby, the terms and provisions of
the Asset Purchase Agreement will continue in full force and effect. The
representations and warranties contained in Articles 5 and 6 of the Asset
Purchase Agreement shall continue to be deemed to be made as of June 18,
2003 and shall not, by reason of this Amendment or otherwise, be deemed to
have been made or remade at any later date.
2. Seller hereby represents and warrants to Purchaser that each
of Seller and Seller's Parent has full power and authority to enter into this
Amendment. The execution, delivery and performance by each of Seller and
Seller's Parent of this Amendment has been duly and validly authorized and
approved by all necessary corporate action on its part. This Amendment is the
legal, valid, and binding obligation of Seller and Seller's Parent enforceable
against it in accordance with its terms.
3. Purchaser hereby represents and warrants to Seller that each
of Purchaser, UK Purchaser, and Purchaser's Parent has full power and authority
to enter into this Amendment. The execution, delivery and performance by each of
Purchaser, UK Purchaser, and Purchaser's Parent of this Amendment has been duly
authorized and approved by all necessary action on its part. This Amendment is
the legal, valid, and binding obligation of Purchaser, UK Purchaser, and
Purchaser's Parent enforceable against it in accordance with its terms.
4. Section 1.2(i) of the Asset Purchase Agreement is hereby
deleted and replaced in its entirety by the following:
"(i) the Humanitarian City SIICA, the Japanese Distributor Agreements,
the Brazilian Distributor Agreement and any vehicle leases that are
used in connection with the Business."
5. Schedule 1.1(b) of the Asset Purchase Agreement is hereby
deleted in its entirety and replaced with amended Schedule 1.1(b), attached
hereto as Exhibit A.
6. Schedules 1.1(c), 5.2 and 5.23(a) of the Asset Purchase
Agreement are hereby amended so that each reference to the "Collaboration
Agreement between Sema UK Limited, Per-Se Technologies (UK) Limited and PST
Products, Inc., dated March 28, 2003" in such Schedules is deleted.
7. The following is hereby added to the end of "I. P1 CUSTOMER
CONTRACTS" on Schedule 11.13 of the Asset Purchase Agreement:
"4. NEW YORK CITY HEALTH & HOSPITAL CORP.
Sites
Bellevue Hospital Center
Coney Island Hospital
Elmhurst Hospital Center - New York
Harlem Hospital Center
Xxxxxx Medical Center
Kings County Hospital Center
Metropolitan Hospital Center
Xxxxxxxx Medical & MHC
North Bronx Hospital
Lincoln Medical
Contracts
a) New York City Health & Hospitals Corporation Computer
System Acquisition Agreement, dated December 24,
1991; First Amendment, dated September 28, 1999;
Second Amendment, dated September 28, 1999; Third
Amendment dated July 18, 2002.
b) Agreement between New York City Health and Hospitals
Corporation and Per-Se Technologies, dated December
28, 2000 (includes a Decision1 license).
c) All related Service Agreements.
8. Schedule 11.1 of the Asset Purchase Agreement is hereby
amended: (i) to add Xxx Xxxxxx, Xxxxxxx Xxxxxx, Xx., Xxxxxxx Xxxxxxxx and Xxxxx
XxXxxxxx; and (ii) to delete Xxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxx
Xxxxxxxxx and Xxxxxxxxx Xxxxxx.
9. This Amendment may be executed in two (2) or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one counterpart has been signed by each party and
delivered to the other parties hereto.
10. Prior to the Closing, this Amendment shall not be assignable
by any of the parties hereto without the written consent of the others;
provided, however, that (a) prior to or at the Closing, Seller may transfer the
Business and the Acquired Assets to any of its Related Persons and may assign
any or all of its rights and obligations under this Amendment to such Related
Person without the consent of Purchaser but no such assignment shall relieve
Seller of any of its obligations under this Amendment; (b) prior to or at the
Closing, Purchaser may assign any or all of its rights and obligations under
this Amendment to any of its Related Persons without the consent of Sellers but
no such assignment shall relieve Purchaser of any of its obligations under this
Amendment; and (c) after the Closing, Purchaser may assign its interest in this
Amendment to any Person (subject to all rights, remedies and defenses that
Seller could assert against Purchaser) without the consent of Seller. From and
after any such assignment, the word "Purchaser" shall mean such assignee.
11. Neither this Amendment, nor any provision hereof, may be
changed, waived, discharged, supplemented, or terminated orally, but only by an
agreement in writing signed by the party against which the enforcement of such
change, waiver, discharge or termination is sought.
12. Regardless of any conflict of law or choice of law principles
that might otherwise apply, the parties agree that this Amendment shall be
governed by and construed in all respects in accordance with the laws of the
State of New York.
(SIGNATURES APPEAR ON FOLLOWING PAGE)
IN WITNESS WHEREOF, each party hereto has caused this Amendment to be
executed on its behalf by its duly authorized officers, all as of the day and
year first above written.
PURCHASER:
Misys Hospital Systems, Inc.
By: /s /Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Director
UK PURCHASER:
Misys Healthcare Systems
(International) Limited
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Director
PURCHASER'S PARENT:
Misys plc
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title: Corporate Development Director
SELLER'S PARENT:
Per-Se Technologies, Inc.
By: /s/ Xxxxxx X. Xxxx
---------------------------
Name: Xxxxxx X. Xxxx
Title: Chairman, President and CEO
SELLER:
PST Products, LLC
By: /s/ Xxxxxx X. Xxxx
--------------------------
Name: Xxxxxx X. Xxxx
Title: Manager
EXHIBIT A
SCHEDULE 1.1(b)
See attachment.
[The Schedule listed above has been omitted from this filing pursuant to Item
601(b)(2) of Regulation S-K. The Registrant hereby agrees to furnish
supplementally a copy of the omitted Schedule to the Securities and Exchange
Commission upon request.]
