Exhibit 10.1
Execution Copy
ASSET PURCHASE AGREEMENT
among
PROXYMED, INC.
and
XXXXXXXXX.XXX, INC.
September __, 2002
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into as of
September __, 2002 (the "Effective Date") by and between PROXYMED, INC., a
Florida corporation ("Buyer"), and XXXXXXXXX.XXX, INC., a Delaware corporation (
"Seller").
RECITALS
Seller desires to sell, and Buyer desires to purchase, certain of
Seller's contracts and the associated customers and revenue stream on the terms
and subject to the conditions set forth in this Agreement.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used herein, the following terms shall have the
following meanings:
"Acquisition" means the acquisition by Buyer from Seller of the
Purchased Assets.
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the
General Rules and Regulations promulgated under the Securities Exchange Act of
1934, as amended and in effect on the Effective Date.
"Assigned Contracts" means all of the Contracts defined in Section 4.6
and specifically described on Schedule 4.6.
"Breach" means any material breach of, or any inaccuracy in, any
representation or warranty or any material breach of, or material failure to
perform or comply with, any covenant or obligation, in or of this Agreement, any
Assigned Contract or any other material Contract, or any event which with the
passing of time or the giving of notice, or both, would constitute such a
breach, inaccuracy or failure.
"Buyer Assignee" means one or more subsidiaries or affiliates of Buyer
to which Buyer assigns all or any portion of its rights to acquire the Purchased
Assets and delegates all or any portion of its obligations to fulfill the
Assumed Liabilities pursuant to Section 10.5 of this Agreement.
"Contract" means any agreement, contract, lease, covenant, license,
purchase and sales order, commitment, undertaking or obligation, in each case,
as it relates only to the Purchased Assets, whether written or oral, express or
implied.
"Governmental Authority" means any nation or government, any state,
regional, local or other political subdivision thereof, and any entity or
official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Legal Requirement" means any governing (or which purports to govern)
federal, state, local, municipal, foreign, international, multinational or other
constitution, law, ordinance, principle of common law, statute, code,
regulation, order, injunction, decree, or treaty, as amended, or any judicial or
administrative interpretation thereof.
"Liability" means with respect to any party, any liability,
indebtedness or obligation of such party of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or unaccrued, disputed
or undisputed, liquidated or unliquidated, secured or unsecured, joint or
several, due or to become due, vested or unvested, executory, determined,
determinable or otherwise, and whether or not the same is required to be accrued
on the financial statements of such party.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, but not limited to, any conditional sale or
other title retention agreement, any lease in the nature thereof, and the filing
of or agreement to give any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction in connection with such mortgage,
pledge, security interest, encumbrance, lien or charge).
"Proceeding" means any legal, administrative, governmental, arbitration
or other action or proceeding.
"Purchased Assets" shall have the meaning given in Section 2.1.
"SEC" means the Securities and Exchange Commission.
1.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.
(c) All matters of an accounting nature in connection with this
Agreement and the transactions contemplated hereby shall be determined in
accordance with generally accepted accounting principles applied on a basis
consistent with prior periods, where applicable.
(d) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the neuter
and feminine, where the context so permits. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase of the Purchased Assets. (a) Subject to the terms and
conditions of this Agreement, Seller shall at Closing sell, convey, transfer,
assign and deliver to Buyer, and Buyer shall at Closing purchase, acquire and
accept from Seller, free and clear of any Liens, all of Seller's right, title
and interest in and to all of the following assets (the "Purchased Assets"):
(a) all Assigned Contracts and all outstanding offers or
solicitations made by or to Seller to enter into any Contract for the
"xxxxxxxxx.xxx" application, as set forth in Schedule 4.6;
(b) all claims arising on or after the Closing against third
parties relating to the Purchased Assets, whether xxxxxx or inchoate, known or
unknown, contingent or noncontingent;
(c) all customers of Seller associated with the Assigned Contracts
(the "Transferred Customers"); and
(d) the monthly subscription revenue stream associated with the
Assigned Contracts arising after October 1, 2002 and the transaction and any
other revenue stream (other than the monthly subscription revenue stream
associated with the Assigned Contracts arising prior to October 1, 2002)
associated with the Assigned Contracts arising after September 1, 2002. To the
extent that either party receives payment under any Assigned Contract that is
due hereunder to the other party, such party shall promptly upon receipt thereof
forward such fees to the other party, without offset.
2.2 Assumption of Assumed Liabilities. Subject to the terms and
conditions of this Agreement, Buyer shall at Closing assume and agree to pay,
discharge and perform when lawfully due only the following Liabilities of Seller
(the "Assumed Liabilities"):
(a) any Liability arising after the Closing Date under the Assigned
Contracts (other than any Liability arising out of or relating to a Breach of
the Assigned Contracts that occurred prior to the Closing Date, but that is
alleged after the Closing Date); and
(b) any Liability of Seller arising after the Closing Date under
any Assigned Contract that is entered into by Seller after the Effective Date in
accordance with the provisions of this Agreement (other than any Liability
arising out of or relating to a Breach that occurred prior to the Closing Date).
(c) any Liability of Company described in Schedule 2.2(c).
2.4 Excluded Liabilities. The Excluded Liabilities shall remain the
sole responsibility of and shall be retained, paid, performed and discharged
solely by Seller. "Excluded Liabilities" shall mean every Liability of Seller
other than the Assumed Liabilities.
2.4 No Expansion of Third Party Rights. The transfer by Seller of the
Assumed Liabilities and the assumption thereof by Buyer shall in no way expand
the rights or remedies of any third party against Seller or Buyer, as compared
to the rights and remedies which such third parties would have had against
Seller had Buyer not assumed such Liabilities. Without limiting the generality
of the preceding sentence, the assumption by Buyer of the Assumed Liabilities
shall not create any third party beneficiary rights.
2.5 Payment of the Asset Purchase Price. The aggregate purchase price
to be paid by Buyer to Seller on account of and as consideration for the
Purchased Assets (the "Purchase Price") shall be an amount equal to SEVEN
HUNDRED THOUSAND DOLLARS (US$700,000), which shall be paid by Buyer to Seller on
the Closing Date by wire transfer of immediately available funds to an account
designated by Seller to Buyer in writing plus the assumption by Buyer of the
Assumed Liabilities.
2.6 The Closing. Subject to the terms and conditions of this Agreement,
the consummation of the Acquisition (the "Closing") shall take place on
September __, 2002 (and in any event within five (5) business days) after
satisfaction or waiver of the conditions set forth in Articles 6 and 7, at the
offices of Buyer, 0000 Xxxxx Xxxx, Xxxxx 000X, Xxxx Xxxxxxxxxx, Xxxxxxx 00000,
or such other time and place, or in such manner, as the parties may otherwise
agree (the "Closing Date").
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
As a material inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer makes the following
representations and warranties to Seller:
3.1 Status. Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida and has the requisite
corporate power and authority to own or lease its respective properties and to
carry on its respective businesses as now being conducted. There is no pending
or threatened Proceeding for the dissolution, liquidation, insolvency or
rehabilitation of Buyer.
3.2 Corporate Power and Authority. Buyer has the corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. Subject to
approval by the Board of Directors of Buyer in the form of a corporate
resolution, a copy which shall be provided to Seller on or before Closing, Buyer
has taken all actions necessary to authorize the execution and delivery of this
Agreement, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby.
3.3 Enforceability. Subject to approval by the Board of Directors of
Buyer, this Agreement has been duly executed and delivered by Buyer and
constitutes a legal, valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
Proceeding at law or in equity.
3.4 No Violation. The execution and delivery of this Agreement by
Buyer, the performance by Buyer of its obligations hereunder and the
consummation by Buyer of the transactions contemplated by this Agreement will
not (i) contravene any provision of the Restated Articles of Incorporation, as
amended, or By-Laws of Buyer, (ii) violate or conflict with the Legal
Requirements of any Governmental Authority or of any arbitration award which is
either applicable to, binding upon or enforceable against Buyer, (iii) conflict
with, result in any Breach of, or constitute a default (or an event which would,
with the passage of time or the giving of notice or both, constitute a default)
under, or give rise to a right to terminate, amend, modify, abandon or
accelerate, any material Contract which is applicable to, binding upon or
enforceable against Buyer, (iv) result in or require the creation or imposition
of any Lien upon or with respect to any of the property or assets of Buyer, or
(v) require the consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, any court or tribunal or any other
person, except any SEC and other filings required to be made by Buyer.
3.5 No Commissions. Buyer has not incurred any obligation for any
finder's or broker's or agent's fees or commissions or similar compensation in
connection with the transactions contemplated hereby, other than fees which will
be paid by, and are the sole obligation of, Buyer.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF SELLER
As a material inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller makes the following
representations and warranties to Buyer:
4.1 Corporate Status. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power and authority to own or lease its respective
properties and to carry on its respective businesses as now being conducted.
There is no pending or, to Seller's knowledge, contemplated or threatened
Proceeding for the dissolution, liquidation, insolvency or rehabilitation of
Seller.
4.2 Power and Authority. Seller has the corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. Subject to approval by the
Board of Directors of Seller in the form of a corporate resolution, a copy which
shall be provided to Buyer on or before Closing, Seller has taken all actions
necessary to authorize the execution and delivery of this Agreement, the
performance of its obligations hereunder and the consummation of the
transactions contemplated hereby.
4.3 Enforceability. Subject to approval by the Board of Directors of
Seller, this Agreement has been duly executed and delivered by Seller and
constitutes a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
Proceeding at law or in equity.
4.4 No Violation. The execution or delivery of this Agreement by
Seller, the performance by Seller of its obligations hereunder and the
consummation by Seller of the transactions contemplated by this Agreement will
not (i) contravene any provision of the Articles of Incorporation or Bylaws of
Seller, (ii) violate or conflict with the Legal Requirements of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon or enforceable against Seller, (iii) conflict with, result in any Breach
of, or constitute a default (or an event which would, with the passage of time
or the giving of notice or both, constitute a default) under, or give rise to a
right to terminate, amend, modify, abandon or accelerate, any Assigned Contract
or any other material Contract which is applicable to, binding upon or
enforceable against Seller, (iv) result in or require the creation or imposition
of any Lien upon or with respect to any of the property or assets of Seller, or
any of the Purchased Assets or (v) require the consent, approval, authorization
or permit of, or filing with or notification to, any Governmental Authority, any
court or tribunal or any other person, except any SEC and other filings required
to be made by Seller.
4.5 Good Title to and Condition of Assets. Seller has good and
marketable title to all of the Purchased Assets, free and clear of any Liens or
restrictions on use.
4.6 Contracts. Schedule 4.6 sets forth, with respect to Seller, a list
of each Contract to be transferred to Buyer under this Agreement to which Seller
is a party, in each case in connection with the "xxxxxxxxx.xxx" application (the
"Assigned Contracts"). True and correct copies of each written Assigned Contract
have been provided to Buyer and materially true and correct summaries of each
oral Assigned Contract are set forth on Schedule 4.6. The copy of each written
Assigned Contract and the summary of each oral Assigned Contract furnished to
Buyer is a true and complete copy or summary, as the case may be, of the
document it purports to represent and reflects all amendments thereto made
through the date of this Agreement. Schedule 4.6 also specifically identifies
Assigned Contracts that require any approval, consent, ratification, waiver or
other authorization (hereinafter, "Consent") of third parties to the
transactions contemplated hereby. Seller has not violated any of the material
terms or conditions of any Assigned Contract or any term or condition which
would permit termination or material modification of any Assigned Contract, and
all of the covenants to be performed by any other party thereto have been fully
performed and there are no claims, real or, to Seller's knowledge, threatened,
for Breach or indemnification or notice of default, termination, or cancellation
under any Assigned Contract. No event has occurred which constitutes, or after
notice or the passage of time, or both, would constitute, a default by Seller
under any Assigned Contract, and no such event has occurred which constitutes or
would constitute a default by any other party. Seller is not subject to any
Liability or payment resulting from renegotiation of amounts paid to it or
required to be paid to it under any Assigned Contract, nor are any of the second
parties to the Assigned Contract withholding any payments due or offsetting
against any alleged Seller Liability.
4.7 No Commissions. Seller has not incurred any obligation for any
finder's or broker's or agent's fees or commissions or similar compensation in
connection with the transactions contemplated hereby other than fees which may
be paid by, and are the sole responsibility of, Seller.
4.8 Solvency, Fair Value, Bankruptcy, etc.
4.8.1 Seller is solvent and able to pay and discharge each of its
obligations. The asset conveyance contemplated in this Agreement shall not
result in Seller becoming insolvent. Seller's Board of Directors has determined
that the Purchase Price constitutes fair and equivalent value for the Purchased
Assets.
4.8.2 Seller acknowledges that (i) Seller has had the opportunity
to review the "fair market valuation" report regarding the Purchased Assets
issued by Xxxxxxxx & Xxxxxxx, Inc., including its quantitative and qualitative
assumptions, methodology, and conclusion; (ii) the information provided by the
Seller to Xxxxxxxx & Xxxxxxx, Inc. is true and correct in all material respects
as of the date to which such information related; and (iii) Buyer is relying
upon the "fair market valuation" report of the Purchased Assets to close
hereunder.
4.8.3 By executing and delivering this Agreement or any other
document contemplated by this Agreement, Seller does not intend to hinder, delay
or defraud any person or entity to which Seller is indebted or shall become
indebted.
4.8.4 Seller agrees that to the extent buyer has received, by
virtue of this Agreement, "transfers" within the meaning of the United states
Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"), that
Buyer has given reasonably equivalent value in exchange for such transfers and
such transfers have not rendered Seller insolvent.
4.8.5 Upon information and belief, by entering into this agreement,
Seller believes that Buyer is not receiving voidable preferences as defined in
Sections 547 and 549 of the Bankruptcy Code. Instead, this transaction has the
effect of improving Seller's ability to meet its financial obligations to all
creditors.
4.8.6 Seller agrees that to the extent Buyer has received, or will
receive, by virtue of this Agreement, "transfers" or "preferences" as such terms
are defined in the Bankruptcy Code, Buyer has given new value and reasonably
equivalent value contemporaneous with the exchange for such transfers. In
addition, to the extent Buyer has received or will receive, by virtue of this
Agreement, "transfers" or "preferences", it is hereby agreed that Buyer will not
have received more than it would have if Seller had commenced proceedings under
Chapter 7 of the Bankruptcy Code.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 Non-Solicitation and Nondisparagement. (a) In order to assure that
Buyer realizes the benefits of the Acquisition, Seller agrees that for the
period commencing on the Closing Date and ending on the fifth anniversary of the
Closing Date, except for general advertising and promotional efforts not
specifically targeting the Transferred Customers, Seller shall not, directly or
indirectly, solicit, cause, induce or attempt to cause or induce any Transferred
Customer to cease doing business with Buyer, to deal with any competitor of
Buyer or in any way interfere with its relationship with Buyer. Should Seller
Breach the foregoing non-solicitation of the Transferred Customers, Buyer shall,
as its exclusive remedy for monetary damages as a result of a breach by Seller
of this Section 5.1, be entitled to assert as liquidated damages (and not as a
penalty) against Seller, and Seller shall pay upon demand, an amount equal to
125% of the profits expected during the term of that Transferred Customer's
Contract with Buyer.
(b) After the Closing Date, neither party will disparage the other
party or any of its products, services, shareholders, directors, officers,
employees or agents.
5.2 Certain Acknowledgments. Seller agrees and acknowledges that the
restrictions contained in Section 5.1 are reasonable in scope and duration and
are necessary to protect Buyer after the Closing Date. If any provision of
Section 5.1 as applied to any party or to any circumstance is adjudged by a
court to be invalid or unenforceable, the same will in no way affect any other
circumstance or the validity or enforceability of this Agreement. If any such
provision, or any part thereof, is held to be unenforceable because of the
duration of such provision or the area covered thereby, the parties agree that
the court making such determination shall have the power to reduce the duration
and/or area of such provision, and/or to delete specific words or phrases, and
in its reduced form, such provision shall then be enforceable and shall be
enforced. The parties agree and acknowledge that the Breach of Section 5.1 will
cause irreparable damage to Buyer and upon Breach of any provision of Section
5.1, Buyer shall be entitled to injunctive relief, specific performance or other
equitable relief; provided, however, that Buyer shall be limited to the extent
set forth in Section 5.1 in its ability to seek monetary damages. Seller hereby
agrees that Buyer may assign, without limitation, the covenants set forth in
Section 5.1 to any successor to of Buyer, or Buyer Assignee.
5.3 Confidentiality; Publicity. Subject to applicable legal
requirements, no press release or other public announcement (other than as
required to be filed on Form 8-K) related to this Agreement or the transactions
contemplated hereby shall be issued by any party hereto without the prior
approval of Buyer, which shall not be unreasonably withheld. In the case of the
Form 8-K, Seller agrees to review with Buyer the portions of the draft 8-K
relating to this transaction, and shall incorporate Buyer's reasonable comments
thereto. In any event, Seller agrees not to disclose the identity of Buyer in
any document, except as may be required by applicable law, without the prior
written consent of Buyer. Buyer understands that the transaction contemplated
hereby is a material event to Seller, as that term is defined by the SEC.
5.4 No Other Discussions. From the Effective Date until the Closing
Date, subject to the fiduciary duty of the Board of Directors of Seller or
otherwise as required by law, Seller and its Affiliates, employees, agents and
representatives will not (a) solicit, encourage, consider or accept any offers
to acquire all or any portion of the Purchased Assets from any third party, (b)
participate in any negotiations or discussions with any other third party
concerning the sale of all or any portion of the Purchased Assets, (c) provide
any non-public information about any of the Purchased Assets (other than to
Buyer and its agents and consultants as provided herein), (d) enter into any
agreement or commitment (whether or not binding) with respect to any of the
foregoing, or (e) otherwise cooperate in any way with, or assist, facilitate or
encourage any effort by any other third party seeking to acquire all or any
portion of the Purchased Assets. Seller shall immediately notify Buyer in
writing of any such inquiry or proposal which Seller may receive with respect to
the Purchased Assets, including the terms and identity of the inquiror or
offeror.
5.5 Due Diligence Review. Buyer shall be entitled to have conducted
prior to Closing a due diligence review of the Assigned Contracts, Transferred
Customers (including reference checking with selected Transferred Customers and
receiving positive responses from the Transferred Customers representing at
least 50% of the purchased revenue stream) and operating procedures of Seller;
validating Buyer's cost assumptions of the Purchased Assets with Seller;
achieving agreement on an acceptable cut over plan; and completing any other
reasonable items of due diligence requested by Buyer.
5.6 Independent Appraisal. Seller agrees at Closing, to pay to the
order of Buyer or such third party as may be designated in writing by Buyer, by
certified check or wire transfer the reasonable fees (to be evidenced by a
detailed written invoice) charged in connection with an independent appraisal or
valuation of the Purchased Assets, which amount shall not exceed $15,000.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer to effect the Acquisition shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions, any
or all of which may be waived in whole or in part in writing by Buyer:
6.1 Accuracy of Representations and Warranties and Compliance with
Obligations. The representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date with the same force and effect as though made at and as of that
time except (i) for changes specifically permitted by or disclosed on any
schedule to this Agreement, and (ii) that those representations and warranties
which address matters only as of a particular date shall remain true and correct
in all material respects as of such date. Seller shall have performed and
complied in all material respects with all of its obligations required by this
Agreement to be performed by or complied with by Seller at or prior to the
Closing Date. Seller shall have delivered to Buyer a certificate, dated as of
the Closing Date, duly signed by its President, certifying that such
representations and warranties are true and correct and that all such
obligations have been complied with and performed in all material respects.
6.2 Consents. Each of the Consents for the Assigned Contracts
identified on Schedule 6.2 shall have been obtained and shall be in full force
and effect. If there are any Consents that have not yet been obtained (or
otherwise are not in full force and effect) as of the Closing, in the case of
each Assigned Contract as to which such Consent was not obtained (or otherwise
is not in full force and effect) (the "Restricted Assigned Contracts"), Buyer
may waive the closing conditions as to any such Consent and either:
(i) Elect to have Seller continue its efforts to obtain the Consents;
or
(ii) Elect to have Seller retain that Restricted Assigned Contract and
all Liabilities arising therefrom or relating thereto. If Buyer elects this
subsection (ii), then the Purchase Price shall be adjusted according to a
formula to be mutually agreed between the parties.
If Buyer elects to have Seller continue its efforts to obtain any
Consents and the Closing occurs, notwithstanding Sections 2.1 and 2.2, neither
this Agreement nor the Assignment and Assumption Agreement nor any other
document related to the consummation of the Acquisition shall constitute a sale,
assignment, assumption, transfer, conveyance or delivery or an attempted sale,
assignment, assumption, transfer, conveyance or delivery of the Restricted
Assigned Contracts, and following the Closing, the parties shall use best
efforts, and cooperate with each other, to obtain the Consent relating to each
Restricted Assigned Contract as quickly as practicable. Pending the obtaining of
such Consent relating to any Restricted Assigned Contract, the parties shall
cooperate with each other in any reasonable and lawful arrangements designed to
provide to Buyer the benefits of use of the Restricted Assigned Contract for its
term (or any right or benefit arising thereunder, including the enforcement for
the benefit of Buyer of any and all rights of Seller against a third party
thereunder). Once a Consent for the sale, assignment, assumption, transfer,
conveyance and delivery of a Restricted Assigned Contract is obtained, Seller
shall promptly assign, transfer, convey and deliver such Restricted Assigned
Contract to Buyer, and Buyer shall assume the obligations under such Restricted
Assigned Contract assigned to Buyer from and after the date of assignment to
Buyer pursuant to a special-purpose assignment and assumption agreement
substantially similar in terms to those of the Assignment and Assumption
Agreement (which special-purpose agreement the parties shall prepare, execute
and deliver in good faith at the time of such transfer, all at no additional
cost to Buyer).
6.3 Approval. The Board of Directors of Buyer shall have authorized and
approved this Agreement, the Acquisition and the transactions contemplated
hereby.
6.4 Due Diligence Review. Buyer shall be satisfied, in its sole and
absolute discretion, with the results of its due diligence review regarding the
Purchased Assets as more fully set forth in Section 5.5 hereof. Due Diligence
shall be completed by September 6, 2002, unless otherwise extended by the
parties in writing.
6.5 Delivery of Purchased Assets. At the Closing, Seller shall duly
execute and deliver to Buyer an Assignment and Assumption Agreement by and
between Buyer and Seller, substantially in the form attached hereto as Exhibit A
(the "Assignment and Assumption Agreement") and such other instruments of
transfer of title as are necessary in the opinion of Buyer to transfer to Buyer
good and marketable title to the Purchased Assets (in each case, in form and
substance satisfactory to Buyer), and shall deliver to Buyer immediate
possession of the Purchased Assets.
6.6 Affiliate and Partner Services and License Agreement. At the
Closing, Seller and Buyer shall duly execute an Affiliate and Partner Services
and License Agreement (the "Services Agreement II") to supersede a similar prior
agreement dated September 11, 2000 by and between Buyer and Seller, which
Services Agreement II shall grant Buyer the Software License (as defined in
Section 7.3 below).
6.7 Source Code Escrow Agreement. At the Closing, Seller and Buyer
shall duly execute a Source Code Escrow Agreement in the form of Schedule 6.7
(the "Escrow Agreement") by which Seller grants Buyer the right to receive the
source code for the "xxxxxxxxx.xxx" application (the "Source Code") in the event
Seller (a) voluntarily files a Chapter 7 bankruptcy case under Title 11, United
States Code, or (b) has an involuntary petition for a Chapter 7 case under Title
11, United States Code filed, which is not either dismissed or converted to a
Chapter 11 case within sixty (60) days after the involuntary case was filed, or
(c) announces publicly or in writing to one or more customers that it will
permanently cease to support the "xxxxxxxxx.xxx" application or (d) has an
involuntary petition for a Chapter 11 case under Title 11, United States Code
filed, which is not dismissed within sixty (60) days after the involuntary case
was filed (each, an "Escrow Release Event") Upon the occurrence of an Escrow
Release Event, the Software License shall be automatically amended and broadened
to permit Buyer to use, modify, maintain and update the Source Code in such
manner as may be necessary or appropriate to enable Buyer to use the
"xxxxxxxxx.xxx" application for its intended purposes; provided it is used only
in connection with the Transferred Customers and Buyer's current "xxxxxxxxx.xxx"
customer sites.
6.8 Fairness Opinion. On or before the Closing, Buyer shall have
received a "fairness opinion" (the "Fairness Opinion") from an independent third
party regarding the value of the Purchased Assets, which Fairness Opinion must
be acceptable to Buyer as determined by Buyer in its sole discretion.
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF
SELLER
The obligation of Seller to effect the Acquisition shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions, any
or all of which may be waived in whole or in part in writing by Seller:
7.1 Accuracy of Representations and Warranties and Compliance with
Obligations. The representations and warranties of Buyer contained in this
Agreement shall be true and correct at and as of the Closing Date with the same
force and effect as though made at and as of that time except (i) for changes
specifically permitted by or disclosed pursuant to this Agreement, and (ii) that
those representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date. Buyer shall have
performed and complied with all of its obligations required by this Agreement to
be performed or complied with by Buyer at or prior to the Closing Date. Buyer
shall have delivered to Seller a certificate, dated as of the Closing Date, and
signed by an executive officer, certifying that such representations and
warranties are true and correct and that all such obligations have been complied
with and performed.
7.2 Assumption of Liabilities. At the Closing, Buyer shall duly execute
and deliver to Seller the Assignment and Assumption Agreement and such other
instruments of transfer as are necessary in the opinion of Seller to effect the
assumption by Buyer of the Assumed Liabilities (in each case, in form and
substance satisfactory to Seller).
7.3 Affiliate and Partner Services and License Agreement. At the
Closing, Seller and Buyer shall duly execute the Services Agreement II, which
shall, inter alia, grant Buyer a limited, non-transferrable (other than to a
Buyer Assignee), non-exclusive license to use a private label version of the
"xxxxxxxxx.xxx" application for the Transferred Customers and Buyer's current
"xxxxxxxxx.xxx" customer sites (the "Software License").
7.4 Source Code Escrow Agreement. At the Closing, Seller and Buyer
shall duly execute the Escrow Agreement.
7.5 Purchase Price. Buyer shall have paid the Purchase Price to Seller.
ARTICLE 8
INDEMNIFICATION
8.1 Agreement by Seller to Indemnify. Seller agrees to indemnify and
hold Buyer, Buyer Assignee and each of their respective officers, directors,
employees, attorneys and Affiliates (each a "Buyer Indemnified Party" and
together the "Buyer Indemnified Parties") harmless from and against the
aggregate of all expenses, losses, costs, deficiencies, Liabilities and damages
(including reasonable counsel and paralegal fees and expenses related thereto)
incurred or suffered by any of Buyer Indemnified Parties arising out of or
resulting from (i) any Breach of a representation or warranty made by Seller in
or pursuant to this Agreement, (ii) any Breach of a covenant or agreement made
by Seller in or pursuant to this Agreement, (iii) any inaccuracy in any Contract
delivered by Seller pursuant to or in connection with this Agreement, (iv)
Seller's ownership of the Purchased Assets prior to Closing, or (v) any claims
of any third parties arising from or relating to any facts, circumstances or
events occurring on or prior to the Closing Date with respect to the Purchased
Assets or any of the foregoing, whether or not disclosed to Buyer herein or in
any schedule hereto (collectively, "Buyer Indemnifiable Damages"). Without
limiting the generality of the foregoing, with respect to the measurement of
Indemnifiable Damages, Buyer shall have the right to be put in the same pre-tax
consolidated financial position as it would have been in had each of the
representations and warranties of Seller hereunder been true and correct and had
the covenants and agreements of each of Seller hereunder been performed in full.
Notwithstanding anything to the contrary set forth herein, the total Buyer
Indemnifiable Damages for which Seller shall be collectively liable hereunder
shall not exceed an amount equal to the Purchase Price (the "Buyer
Indemnification Cap"). Notwithstanding anything to the contrary set forth
herein, Buyer Indemnification Cap shall not apply to and there shall be no
limitation or restriction whatsoever on the Liability of Seller under this
Article 8 for Buyer Indemnifiable Damages with respect to or arising from any
one or more of the following and no Buyer Indemnifiable Damages arising from any
of the following shall be included in determining whether Buyer Indemnification
Cap has been met: (a) a Breach of any one or more of the representations and
warranties set forth in the first or last sentence of Section 4.1, or in Section
4.2, and Section 4.3; (b) any willful or intentional Breach of any
representation, warranty, covenant or agreement made in or pursuant to this
Agreement (including in the Schedules and Exhibits attached hereto) or in any
Assigned Contract delivered by Seller pursuant to this Agreement; and (c) any
act of fraud or act in the nature of fraud in connection with the execution,
delivery or performance of this Agreement, including any fraudulent
representation or warranty made in or pursuant to this Agreement (including in
the Schedules and Exhibits attached hereto) or in any Assigned Contract
delivered by Seller pursuant to or in connection with this Agreement.
8.2 Agreement by Buyer to Indemnify. Buyer agrees to indemnify and hold
Seller and its officers, directors, employees, attorneys and Affiliates (each a
"Seller Indemnified Party" and together the "Seller Indemnified Parties")
harmless from and against the aggregate of all expenses, losses, costs,
deficiencies, Liabilities and damages (including reasonable counsel and
paralegal fees and expenses related thereto) incurred or suffered by Seller
Indemnified Parties arising out of or resulting from (i) any Breach of a
representation or warranty made by Buyer in or pursuant to this Agreement, (ii)
any Breach of a covenant or agreement made by Buyer in or pursuant to this
Agreement, (iii) any inaccuracy in any certificate, instrument or other document
delivered by Buyer pursuant to or in connection with this Agreement, or (iv) a
Breach by Buyer under any of the Transferred Contracts on or after the Closing
Date (collectively, "Seller Indemnifiable Damages"). Notwithstanding anything to
the contrary set forth herein, the total Seller Indemnifiable Damages for which
Buyer shall be liable hereunder shall not exceed an amount equal to the Purchase
Price (the "Seller Indemnification Cap"). Notwithstanding anything else to the
contrary set forth herein, Seller Indemnification Cap shall not apply to and
there shall be no limitation or restriction whatsoever on the Liability of Buyer
under this Article 8 for Seller Indemnifiable Damages with respect to any claim
relating to or arising from any one or more of the following and no Seller
Indemnifiable Damages arising from any of the following shall be included in
determining whether Seller Indemnification Cap has been met: (a) a Breach of any
one or more of the representations and warranties set forth in Section 3.1,
Section 3.2 and Section 3.3; (b) any willful or intentional Breach of any
representation, warranty, covenant or agreement made in or pursuant to this
Agreement (including in the Schedules and Exhibits attached hereto) or in any
Contract delivered by Buyer pursuant to this Agreement; and (c) any act of fraud
or act in the nature of fraud in connection with the execution, delivery and
performance of this Agreement, including any fraudulent representation or
warranty made in or pursuant to this Agreement (including in the Schedules and
Exhibits attached hereto) or in any Contract delivered by Buyer pursuant to or
in connection with this Agreement.
8.3 Survival of Representations and Warranties. Each of the
representations and warranties made by Seller and Buyer in this Agreement or
pursuant hereto shall survive the closing of the transactions contemplated
hereby for a period of two (2) years following the Closing Date; provided,
however, that (i) the representations and warranties set forth in Section 3.1,
Section 3.2, Section 3.3, the first or last sentence of Section 4.1, or in
Section 4.2, Section 4.3, Section 4.4, and Section 4.5 shall survive
indefinitely. No claim for the recovery of any Buyer Indemnifiable Damages or
Seller Indemnifiable Damages with respect to the representations and warranties
in this Agreement may be asserted by any of the parties after such
representations and warranties have expired in accordance with the terms of this
Agreement; provided, however, that claims for Buyer Indemnifiable Damages or
Seller Indemnifiable Damages first asserted within the applicable period shall
not thereafter be barred. Notwithstanding any knowledge of facts, each party
shall have the right to fully rely on the representations, warranties, covenants
and agreements of the other parties contained in this Agreement or in any other
documents or papers delivered in connection herewith. Each representation,
warranty, covenant and agreement of the parties contained in this Agreement is
independent of each other representation, warranty, covenant and agreement.
8.4 Second and Third Party Actions.
(a) For the purpose of this Section 8.4, the term "Indemnifiable
Damages" means Buyer Indemnifiable Damages or Seller Indemnifiable Damages, as
the context requires, the term "Indemnified Party" means Buyer Indemnified
Parties or Seller Indemnified Parties, as the context requires, and the term
"Indemnifying Party" means the party (Buyer, on the one hand, or Seller, on the
other hand) against whom a claim for Indemnifiable Damages is to be made.
(b) The party entitled to indemnification hereunder will (i) give
prompt written notice to the Indemnifying Party of any claim with respect to
which it seeks indemnification and (ii) unless in such Indemnified Party's
reasonable judgment a conflict of interest between such Indemnified and
Indemnifying Parties may exist with respect to such claim, permit such
Indemnifying Party to assume the defense of such claim with counsel reasonably
satisfactory to the Indemnified Party; provided, however, that the failure of
any person entitled to indemnification hereunder to give such notice to the
Indemnifying Party shall not constitute a waiver of, or a defense of the
Indemnifying Party to, such person's right to indemnification hereunder unless
such failure has a material adverse effect upon the Indemnifying Party's ability
to defend said action. If such defense is assumed, the Indemnifying Party will
not be subject to any liability for any settlement made by the Indemnified Party
without its consent (which consent will not be unreasonably withheld). An
Indemnifying Party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the reasonable fees and expenses of more
than one counsel for all parties indemnified by such Indemnifying Party with
respect to such claim, unless in the reasonable judgment of any Indemnified
Party a conflict of interest may exist between such Indemnified Party and any
other of such Indemnified Parties with respect to such claim.Notwithstanding
anything to the contrary in this Section 8.4(b), the Indemnifying Party shall
have no right to settle or compromise any action for which it has assumed the
defense to the extent the settlement or compromise provides for any injunctive
or other equitable relief against the Indemnified Party or otherwise provides
for any continuing obligations of any nature against the Indemnified Party or
loss of rights of the Indemnified Party. With respect to any such third party
action assumed by the Indemnifying Party, the parties agree to provide each
other with all material information that they request relating to the handling
of such matter.
(c) In the event any Indemnified Party should have a claim for
Indemnifiable Damages against any Indemnifying Party hereunder that does not
involve a third party claim (for example, but without limitation, a claim for
Indemnifiable Damages resulting from a breach of a representation, warranty or
covenant), the Indemnified Party shall with reasonable promptness notify the
Indemnifying Party of the Indemnifiable Damages, specifying the nature and
specific basis for such Indemnifiable Damages and the indemnity claim and the
amount or the estimated amount thereof to the extent then feasible and enclosing
a copy of all papers (if any) served with respect to the claim (the "Claim
Notice"). If the Indemnifying Party does not notify the Indemnified Party within
45 days from the date the Claim Notice is given that it disputes such Claim, the
amount of such Claim shall be conclusively deemed a liability of the
Indemnifying Party hereunder.
ARTICLE 9
TERMINATION
9.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date: (a) by mutual written consent of all of the parties hereto at
any time prior to the Closing; or (b) by Buyer in the event of a Breach by
Seller of any provision of this Agreement which Breach is not cured within
fifteen (15) days of Seller's receipt of written notice thereof from Buyer or
which Breach by its nature cannot be cured prior to Closing; or (c) by Seller in
the event of a Breach by Buyer of any provision of this Agreement, which Breach
is not cured within fifteen (15) days of Buyer's receipt of written notice
thereof from Seller or which Breach, by its nature cannot be cured prior to
Closing; or (d) if the Closing shall not have occurred by 5:30 p.m. EST on
September 11, 2002.
9.2 Effect of Termination. Subject to the remainder of this Section 9.2
below, except for the provisions of Article 8 hereof, which shall survive any
termination of this Agreement, in the event of termination of this Agreement
pursuant to Section 9.1 (or pursuant to any other provision hereof expressly
permitting termination), this Agreement shall forthwith become void and of no
further force and effect and the parties shall be released from any and all
Liabilities hereunder; provided, however, that nothing herein shall relieve any
party from Liability for fraud or any act in the nature of fraud committed in
connection with any of its representations, warranties, covenants or agreements
set forth in this Agreement.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall designate
in writing to the other party):
if to Buyer:
ProxyMed, Inc.
0000 XxxxxXxx Xxxx, Xxxxx 000X
Xxxx Xxxxxxxxxx, XX 00000
Attn:Xxxxx Xxx, President (or successor)
Facsimile: 000-000-0000
if to Seller:
Xxxxxxxxx.xxx, Inc.
00000 X. Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn.: Xxxx X. Xxxxxx, Chief Executive Officer
(or successor)
Facsimile: 000-000-0000
With a copy to:
Reitler Xxxxx LLC
000 0xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Notice shall be deemed given on the date sent if sent by facsimile transmission
and on the date delivered (or the date of refusal of delivery) if sent by
overnight delivery, or certified or registered mail.
10.2 Entire Agreement. This Agreement (including the Exhibits and
Schedules attached hereto), the other documents signed by the parties which are
delivered contemporaneously herewith, and other documents delivered at the
Closing or after Closing pursuant hereto, contain the entire understanding of
the parties in respect of its subject matter and supersede all prior agreements
and understandings (oral or written) between or among the parties with respect
to such subject matter. The Exhibits and Schedules constitute a part hereof as
though set forth in full above.
10.3 Expenses. Except as otherwise provided herein, (i) Seller shall
pay its own fees and expenses, including accounting and counsel fees, incurred
in connection with this Agreement or any transaction contemplated hereby, and
(ii) Buyer shall pay its own fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
10.4 Amendment; Waiver. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
both parties. No failure to exercise, and no delay in exercising, any right,
power or privilege under this Agreement shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
the exercise of any other right, power or privilege. No waiver of any Breach of
any provision shall be deemed to be a waiver of any preceding or succeeding
Breach of the same or any other provision, nor shall any waiver be implied from
any course of dealing between the parties. No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations
or any other acts. Except as set forth in the last sentence of Section 8.1, the
rights and remedies of the parties under this Agreement are in addition to all
other rights and remedies, at law or equity, that they may have against each
other.
10.5 Binding Effect; Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective heirs, executors, personal representatives, trustees, guardians,
attorneys-in-fact, successors and assigns. Nothing expressed or implied herein
shall be construed to give any other person any legal or equitable rights
hereunder. Except as expressly provided herein, the rights and obligations of
this Agreement may not be assigned or delegated by any of the parties hereto
without the prior written consent of the non-assigning or non-delegating
parties. The parties acknowledge that Buyer may assign its rights under this
Agreement to purchase the Purchased Assets and delegate its obligations under
this Agreement to pay or discharge the Assumed Liabilities to one or more Buyer
Assignees, and upon such assignment, Buyer Assignees shall have full rights
under this Agreement as if they were parties hereto and shall be deemed third
party beneficiaries with respect to all rights and remedies provided to Buyer
hereunder or otherwise provided by law or in equity provided that in such event
Buyer agrees to guarantee the performance of all of Buyer Assignee's obligations
to Seller under this Agreement.
10.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
10.7 Interpretation. When a reference is made in this Agreement to an
article, section, paragraph, clause, schedule or exhibit, such reference shall
be deemed to be to this Agreement unless otherwise indicated. The headings
contained herein and on the schedules are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement or the
schedules. Time shall be of the essence in this Agreement.
10.8 Severability. If any word, phrase, sentence, clause, section,
subsection or provision of this Agreement as applied to any party or to any
circumstance is adjudged by a court to be invalid or unenforceable, the same
will in no way affect any other circumstance or the validity or enforceability
of any other word, phrase, sentence, clause, section, subsection or provision of
this Agreement. If any provision of this Agreement, or any part thereof, is held
to be unenforceable because of the duration of such provision or the area
covered thereby or otherwise, the parties agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision, and/or to delete specific words or phrases, and in its reduced form,
such provision shall then be enforceable and shall be enforced.
10.9 Governing Law. This Agreement shall be construed in accordance
with and governed for all purposes by the laws of the State of Texas, without
giving effect to principles of conflicts of laws.
10.10 Arm's Length Negotiations. Each party herein expressly agrees
that (a) before executing this Agreement, said party has fully informed itself
of the terms, contents, conditions and effects of this Agreement; (b) said party
has relied solely and completely upon its own judgment in executing this
Agreement; (c) said party has had the opportunity to seek and has obtained the
advice of counsel before executing this Agreement; (d) said party has acted
voluntarily and of its own free will in executing this Agreement; (e) said party
is not acting under duress, whether economic or physical, in executing this
Agreement; and (f) this Agreement is the result of arm's length negotiations
conducted by and among the parties and their respective counsel.
NOW THEREFORE, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
PROXYMED, INC. XXXXXXXXX.XXX, INC.
By: /s/ Xxxxx X. Xxx By: /s/ Xxxx X. Xxxxxx
------------------------------------ -----------------------------------
Name: Xxxxx X. Xxx Name: Xxxx X. Xxxxxx
------------------------------------ -----------------------------------
Title: President and COO Title: President and CEO
------------------------------------ -----------------------------------
Schedule 4.6
Assigned Contracts
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Schedule 6.2
Consents
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