EXHIBIT 99.2
EXECUTION COPY
ASSET PURCHASE AGREEMENT
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AGREEMENT, dated as of January __, 1997, between Melbourne Neurologic,
P.A., a Florida professional association with a mailing address at 0000 Xxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx ("Seller"), the Principals (as defined below),
Melbourne Resources, Inc., a Delaware corporation with a mailing address at 000
Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (the "Buyer") and, solely with
respect to Section 1.8, Article 3 and Article 9, Medical Resources, Inc., a
Delaware corporation ("Medical Resources").
W I T N E S S E T H :
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WHEREAS, Seller owns and operates a magnetic resonance imaging center
located at 0000 Xxx Xxxxxx, Xxxxxxxxx, Xxxxxxx (the "Center"), and owns or
leases the assets and properties, relating thereto, which Center provides
diagnostic imaging services to licensed physicians and other purchasers of
diagnostic imaging services (the "Business"); and
WHEREAS, Xxxxxx X. Xxxxxxx, Xxxxx X. Gold and Xxxxxx X. Xxxxxxxx are
the principals of the Seller (the "Principals"); and
WHEREAS, Buyer desires to acquire the Business and Seller desires to
sell the Business to Buyer upon the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein contained, Seller and Buyer agree as follows:
ARTICLE 1
SALE OF ASSETS AND PURCHASE PRICE
1.1 Sale and Purchase of Assets. On the basis of the representations,
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warranties, covenants and agreements contained in this Agreement, and subject to
the terms and conditions set forth in this Agreement, on the Closing Date (as
defined in Section 1.2 hereof), Seller shall sell, assign, transfer and deliver
to Buyer, and Buyer shall purchase and acquire from Seller, free and clear of
all Liens (as defined in Section 2.5(b) hereof), except for Permitted Liens (as
defined in Section 2.5(b) hereof), all of the assets (or leases for leased
assets) of the Business owned or leased by Seller and used or held for use
exclusively in the Business as of the Closing Date (as defined below) other than
the assets listed on Schedule 1.1 (the "Excluded Assets"), including, without
limitation, the machinery, equipment, supplies and furnishings owned or leased
by Seller and used or held for use in the Business as set forth on Schedule
2.5(A) hereto (all of the foregoing, excepting only the Excluded Assets, being
hereinafter referred to as the "Purchased Assets"), including without limitation
(other than to the extent that such assets are specifically listed as Excluded
Assets) of the foregoing:
(a) all of Seller's accounts receivable and work-in-progress arising
from services rendered by the Center prior to the
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Closing Date (including any related claims in respect of the collection thereof
and all previously written-off accounts receivable, collectively, the "Accounts
Receivable");
(b) all leasehold improvements and tangible assets and properties of
the Seller, including machinery and equipment, tooling, tools, furniture, office
equipment, furnishings and fixtures used or held for use exclusively in the
Business, as of the Closing Date;
(c) all inventories, including finished products, work-in-process,
materials, parts, accessories and supplies of the Seller used or held for use
exclusively in the Business, as of the Closing Date;
(d) all rights of Seller arising from, in and to all Contracts (as
defined in Section 2.7) listed in Schedule 2.7 as Contracts to be assumed by
Buyer;
(e) all other assets reflected in the Financials (as defined in
Section 2.3) and all assets acquired by Seller since the latest date of the
Financials and which are owned or leased as of the Closing Date, to the extent
used or held for use exclusively in the Business;
(f) all security deposits and prepaid expenses;
(g) all warranties and claims or potential claims against Seller's
suppliers or lessors with respect to any assets included in the Purchased Assets
to the extent said warranties and claims may be assignable; and
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(h) all names, trademarks, contractual rights, telephone numbers,
Licenses (as defined in Section 2.6) to the extent assignable and other
intangible assets to the extent assignable, books and records, market
information, operational procedures, business and goodwill of Seller relating
solely to or used exclusively in the Business and the Purchased Assets.
Notwithstanding anything in this Agreement to the contrary, nothing in
this Agreement shall be construed as an attempt to assign or a requirement for
Seller to assign any Contract, license, certification, approval, consent,
Account Receivable or similar property or property right which are not
assignable, directly or indirectly, by matter of law (the "Non-Assignable
Property Rights"), or assign any Contract which is not assignable by agreement
without the consent of the other party or parties thereto, unless such consent
shall be received. In this regard, Seller shall use and, if so requested by
Buyer, shall continue to use after the Closing, its reasonable best efforts to
obtain all such necessary consents of the applicable parties to any such
Contracts otherwise to be assigned to Buyer hereunder; provided, however, that
the failure to obtain any such consents and the inability to assign any Non-
Assignable Property Rights shall not constitute a breach of this Agreement or of
any representation or warranty made by Seller hereunder.
Seller hereby agrees that in order for Buyer to obtain the full value
and benefits and obligations of any Accounts Receivable which are not otherwise
assignable by law, Seller
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agrees that, at the request and direction of Buyer, in the name of Seller, and
at Seller's expense, Seller shall take all reasonable actions and do or cause to
be done all such reasonable things as shall be necessary or proper in order that
the rights (and obligations) of Seller under such Accounts Receivable shall be
preserved for the benefit or account of Buyer and to facilitate the collection
of the monies due and payable and to become due and payable pursuant to such
Accounts Receivable on or after the Closing Date. Seller shall, on and after the
Closing Date, hold such Accounts Receivable for the benefit of Buyer and shall
pay Buyer any monies paid pursuant thereto promptly upon, but in any event, no
more than one business day after, receipt thereof.
In addition to the foregoing, with respect to any Contract of Seller
to be assumed by Buyer and which is not assignable without the consent of the
other party or parties thereto and with respect to which such consents are not
received as of the Closing Date, to the extent not in violation of law, Seller
agrees that in order for Buyer to obtain the full value and benefits of such
Contracts (subject to Buyer's performance of all obligations otherwise imposed
thereunder) Seller, at the request and direction of Buyer, in the name of Seller
(or otherwise as Buyer may specify and as shall be permitted by law), shall take
all reasonable actions and do or cause to be done all such reasonable
things as shall be necessary or proper in order that the rights (subject to
Buyer's performance of all obligations otherwise imposed thereunder) of Seller
under such Contracts shall
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be preserved or conveyed for the full benefit or account of Buyer and to
facilitate the collection of monies due and payable and to become due and
payable thereunder, subject to Buyer's performance of all obligations otherwise
imposed thereunder, to the extent such obligations accrue or are attributable to
the period on or after the Closing Date.
1.2 Closing Date. The purchase and sale of the Business and the Purchased
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Assets (the "Closing") shall take place on the date hereof at the offices of
Xxxxxx & Carnelutti, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m.,
New York City time or as soon thereafter as all of the conditions specified in
Articles 5 and 6 of this Agreement shall be satisfied or waived or at such other
place or time or on such other date as Seller and Buyer may agree upon in
writing (such date and time being hereinafter called the "Closing Date").
1.3 (a) Purchase Price. As consideration for the Purchased Assets, on
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the Closing Date, Buyer shall pay to Seller the sum of $1,125,000 (the "Purchase
Price") by wire transfer in immediately available funds.
(b) Allocation of Purchase Price. The Seller and the Buyer agree to
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allocate the Purchase Price in accordance with IRC Section 1060. Buyer and
Seller shall use reasonably diligent efforts to agree to such allocation by the
Closing and, in any event, such allocation shall be agreed to by the Seller and
the Buyer within 30 days of the Closing Date. In addition, the Seller and the
Buyer hereby agree to file timely any information that may
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be required to be filed pursuant to Treasury Regulations promulgated under IRC
Section 1060.
1.4 Liabilities. Buyer shall not assume or be bound by any duties,
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responsibilities, obligations or liabilities of Seller, the Business or the
Center of any kind or nature, known, unknown, contingent or otherwise, except as
specifically set forth on Schedule 1.4 annexed hereto (the "Assumed
Liabilities"). Buyer, at Closing, shall assume the Assumed Liabilities;
provided that, with respect to the liability described in paragraph 1 of
Schedule 1.4, Buyer shall cause Seller and all Affiliates of Seller, along with
all of the assets of Seller and Seller's Affiliates not included within the
Purchased Assets, to be released from all liability thereunder, including any
liability imposed on Affiliates of Seller pursuant to any guarantees previously
executed and delivered in connection with such indebtedness. All liabilities
and obligations of Seller not set forth on Schedule 1.4 are referred to herein
as "Retained Liabilities." Buyer hereby expressly agrees to assume, pay and/or
perform each of the Assumed Liabilities, in accordance with the terms thereof,
and Seller hereby expressly agrees to assume, pay and/or perform each of the
Retained Liabilities, in accordance with the terms thereof, except, in each
case, as otherwise expressly provided herein to the contrary.
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1.5 Closing Date Deliveries and Actions.
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(a) At Closing Seller shall:
(i) deliver, or execute and deliver, to Buyer (v) a Xxxx of Sale,
Assignment and Assumption Agreement in substantially the form
annexed hereto as Exhibit B (the "Xxxx of Sale") with respect to
the Purchased Assets, including the Contracts, (w) all evidences
of consents, waivers or approvals, if any, obtained by Seller in
respect of the Purchased Assets or the consummation of the
transactions contemplated by this Agreement, (x) the Medical
Director Agreement (as defined in Section 1.9 hereof), (y) all of
the documents, instruments and opinions contemplated to be
delivered by Seller to Buyer on the Closing Date pursuant to
Article 5 hereof and (z) all such other bills of sale,
assignments and other instruments of transfer or conveyances as
Buyer may reasonably request or as may otherwise be necessary to
evidence and effect the sale, assignment, transfer, conveyance
and delivery of the Purchased Assets to Buyer; and
(ii) take all steps and actions as Buyer may reasonably request or as
may otherwise be necessary to put Buyer in actual possession and
control of the Purchased Assets at the locations where such
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Purchased Assets are held or maintained prior to Closing. All of
the documents described in (v) through (z) hereof are hereinafter
referred to as "Seller's Closing Documents".
(b) At Closing, Buyer shall:
(i) deliver, or execute and deliver, to Seller or to the trustee of
the CNS Trust, (u) a Xxxx of Sale, Assignment and Assumption
Agreement in substantially the form annexed hereto as Exhibit B
with respect to the Purchased Assets, including the Contracts and
the Assumed Liabilities (v) the Purchase Price, (w) the Medical
Director Agreement, (x) the Lease (as defined below), and Buyer
shall cause Medical Resources to execute and deliver the Guaranty
to Lease in the form attached to the Lease, (y) evidence that the
liability described in paragraph 1 of Schedule 1.4 payable to
Prime Bank of Central Florida has been paid in full and (z) all
of the documents, instruments and opinions contemplated to be
delivered by Buyer to Seller or the trustee of the CNS Trust on
the Closing Date pursuant to Article 6 hereof; and
(ii) take all steps and actions as may be reasonably necessary to
effectuate the transactions contemplated hereby. All of the
documents described in (u) through (z) hereof are
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hereinafter referred to as "Buyer's Closing Documents" and
collectively with Seller's Closing Documents, the "Closing
Documents".
At Closing, Seller shall cause Xxxxxx X. Xxxxxxxx as trustee of the CNS
Trust, to execute and deliver the lease for the Center, substantially in the
form attached hereto as Exhibit A-1.5 (the "Lease").
1.6 Consents, Waivers and Further Assurances. From time to time following
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the Closing, Seller shall, at Seller's expense, execute and deliver, or cause to
be executed and delivered to Buyer, such other instruments of assignment,
conveyance and transfer as Buyer may reasonably request or as may be otherwise
necessary more effectively to convey and transfer to, and vest in, Buyer and put
Buyer in possession of any part of the Purchased Assets. From time to time,
following the Closing, Buyer shall, at Buyer's expense, execute and deliver, or
cause to be executed and delivered to Seller, such other instruments of
assumption or assignment, as Seller may reasonably request, or as may be
otherwise necessary more effectively to evidence Buyer's assumption and
agreement to pay and perform the Assumed Liabilities.
1.7 Termination. Anything contained in this Agreement to the contrary
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notwithstanding, this Agreement may be terminated and the transactions
contemplated herein abandoned at any time prior to the Closing Date: (a) by the
mutual written agreement of Buyer and Seller; or (b) by Buyer or Seller in the
event of any material
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breach by the other party of any of its agreements, representations or
warranties contained herein, which breach is not curable or, if curable, is not
cured to the reasonable satisfaction of the non-breaching party within five days
after written notice of such breach; or (c) subject to the provisions of Section
4.3 hereof by either Buyer or Seller, if the Closing has not occurred on or
before January 31, 1997 (provided, however, that if the party seeking to
terminate this Agreement pursuant to this clause has failed to use good faith
and best efforts to bring about the Closing or is in breach of any agreement,
representation or warranty herein, that party shall not have the right to
terminate the Agreement pursuant to this clause), or such later date as may be
agreed upon in writing by Seller and Buyer or may result from the operation of
the provisions of Section 4.3 (the "Termination Date"). No such termination
shall be deemed to constitute a release or waiver by either party of any claim
against the other party hereto based on any breach by such party of its
agreements or its representations and warranties contained herein.
1.8 Guarantee of Buyer's Obligations. To induce Seller (and/or its
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Affiliates) to execute and deliver this Agreement and the other agreements
contemplated hereby, by execution hereof, Medical Resources, the indirect owner
of all of the outstanding stock of Buyer, hereby absolutely and unconditionally
guarantees the full, prompt and faithful performance by Buyer of all covenants
and obligations to be performed by Buyer under this
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Agreement, including, but not limited to, the payment and performance of all
Assumed Liabilities and the payment of all sums to be paid to Seller pursuant to
this Agreement. If Buyer fails to fully perform any of such covenants and
obligations in accordance with their terms or to pay all or any part of any sums
due Seller hereunder when due, Medical Resources shall perform all such
covenants and obligations in accordance with their terms or immediately pay to
Seller the amounts due and unpaid by Buyer, it being understood that each such
covenant or obligation and each obligation to pay any such amount constitutes
the direct and primary obligation of Medical Resources. Medical Resources hereby
waives presentment, demand of payment, protest, dishonor, notice of protest or
dishonor, and notice of acceptance of this guarantee and all rights to require
Seller to proceed against Buyer, or pursue any other remedy it may have against
Buyer in the event of a breach by Buyer of any obligation or covenant contained
in this Agreement. If Buyer is not liable to perform any such obligation and
covenant because the act creating such obligation or covenant is ultra xxxxx or
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unauthorized, and for such reason or any other reason such obligation
or covenant cannot be enforced against Buyer, such fact shall not effect Medical
Resource's liability under this Section 1.8. In the event of the termination,
liquidation or dissolution of Buyer, this unconditional guarantee of Medical
Resources shall continue in full force and effect.
1.9 Medical Director Agreement. As a material inducement to the parties
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entering into this Agreement, at Closing, Buyer,
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Seller and Principals shall enter into a Medical Director Agreement,
substantially in the form attached hereto as Exhibit 1.9 (the "Medical Director
Agreement"), on the terms and for the consideration set forth therein.
1.10 Lease. As a material inducement to the parties entering into this
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Agreement, at Closing, Seller shall cause Xxxxxx X. Xxxxxxxx, as trustee of CNS
Trust to execute and deliver, and Buyer shall execute and deliver the Lease.
1.11 Phone System. For such period of time as Seller, in its sole
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discretion, shall maintain its present phone system, Seller shall make available
to Buyer that portion of the phone system owned by Seller and which is
physically located at the Center on the Closing Date. As consideration
therefor, Buyer shall, from time to time, within ten (10) days written notice
from Seller, pay Seller a prorata portion of Seller's costs and expenses to
operate and maintain such phone system; provided, that Buyer may, at any time,
install a new phone system, at Buyer's sole cost, in which event Buyer shall
return to Seller all of Seller's phone equipment and Buyer shall no longer be
responsible for any prorata payments to Seller; and provided further that Seller
shall have no obligation to Buyer to maintain or repair all or any portion of
its phone system and Seller, in its sole discretion, may modify or replace its
phone system as Seller shall determine.
1.12 Billing System. Seller agrees to lease to Buyer, for such period of
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time following Closing as Seller shall maintain its
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current computers and billing system, that portion of Seller's computer
terminals physically located at the Center and a portion of Seller's hard drive
for the purpose of permitting Buyer to xxxx for services rendered by Buyer at
the Center on or after Closing; provided that Buyer shall be obligated to
modify, at Buyer's sole cost, as of the Closing Date, Seller's computer system
to allow Buyer to xxxx for services rendered by Buyer at the Center using
Buyer's personnel physically present at the Center; and provided further that
Seller shall have no obligation to maintain, retain or repair its current
computers or computer billing system, including the portion thereof leased to
Buyer hereunder. In return for the lease of Seller's terminals and hard drive to
Buyer as specified in this Section 1.12, Buyer shall, from time to time, within
ten (10) days of written notice from Seller, pay Seller a prorata portion of
Seller's costs and expenses to operate and maintain Seller's computer billing
system. Notwithstanding the foregoing, Buyer may at any time, at Buyer's sole
cost, install Buyer's own computer billing system, in which event Buyer shall
return to Seller all computer terminals and hard drives of Seller otherwise
leased to Buyer and Buyer shall no longer be responsible to reimburse Seller for
Buyer's prorata share of Seller's costs and expenses of maintaining its computer
billing system.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER AND PRINCIPALS
As an inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, Seller and Principals, jointly and
severally, represent and warrant to Buyer and agree as follows:
2.1 Organization and Qualification. Seller is a professional association
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duly organized, validly existing and in good standing under the laws of the
State of Florida. Seller has all requisite corporate power and authority to own
or lease its properties and assets and to conduct its business as presently
conducted.
2.2 Authority to Effect Transactions.
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(a) Seller has all requisite corporate power and authority to execute,
deliver and perform this Agreement and all of Seller's Closing Documents. All
necessary corporate action on the part of Seller has been duly taken to
authorize the execution, delivery and performance by Seller of this Agreement
and all of Seller's Closing Documents. This Agreement has been duly authorized,
executed and delivered by Seller and is the legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms. Each of
Seller's Closing Documents has been duly authorized by Seller and, upon
execution and delivery by Seller and the other parties thereto, as contemplated
hereby, will be the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms.
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(b) Except as set forth in Schedule 2.2(B) hereto, to the best of Seller's
knowledge after due inquiry by Seller:
(i) no consent, authorization, approval, order, license, certificate,
permit or act of or from, or declaration or filing with, any
foreign, federal, state, local or other governmental authority or
regulatory body or any court or other tribunal or any party to
any contract, agreement, instrument, lease or License (as defined
in Section 2.6) to which Seller is a party or by which it is
bound or to which any of the Purchased Assets is subject, is
required for the execution, delivery or performance by Seller of
this Agreement or any of Seller's Closing Documents or the
consummation of the transactions contemplated to be taken by
Seller hereby or thereby and
(ii) neither the execution, delivery or performance of this Agreement
or any of Seller's Closing Documents nor the consummation of the
transactions contemplated to be taken by Seller hereby or thereby
(v) conflicts with or will conflict with, or (with or without the
giving of notice or the passage of time or both) results or will
result in a breach of the terms, conditions or provisions of, (w)
constitutes or will constitute a default under, (x) results or
will result in the creation
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of any Lien upon the Purchased Assets pursuant to, (y)
constitutes or will constitute an event creating rights of
acceleration, termination or cancellation, or loss of rights
under, or (z) results or will result in a violation of, (A)
Seller's certificate of incorporation or bylaws, each as amended
to date, (B) any law, statute, rule, regulation, order, award,
judgment or decree to which Seller or any of the Purchased Assets
is subject or (C) any contract, agreement, instrument, loan
agreement, lease or License to which Seller is a party or by
which it is bound.
2.3 Financial Statements. Seller has delivered to Buyer true and correct
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copies of the following: an internally prepared, unaudited balance sheet of the
Business as of September 30, 1996; and an internally prepared, unaudited
statement of income, statement of retained earnings and statement of cash flows
of the Business for the two years ended December 31, 1995; and an internally
prepared unaudited statement of income, statement of retained earnings and
statement of cash flows for the Business for the nine months ended September 30,
1996, all of which have been prepared in accordance with the cash method of
accounting (collectively, the "Financials"). The balance sheets included in the
Financials fairly represent the financial position of the Business, on a cash
basis, as of the respective dates thereof, and the statements of revenues and
expenses included in the Financials
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(i) fairly presents the results of operations of the Business for the period
therein referred to, on a cash basis, except as stated therein or as noted in
any schedules thereto, applied on a consistent basis; (ii) fairly present the
financial condition of the Business, on a cash basis, at the respective date of
and for the period covered by such Financials; and (iii) are in accordance
with the books and records of Seller maintained with respect to the Business.
2.4 Absence of Certain Developments. Except as contemplated by this
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Agreement or as otherwise set forth on Schedule 2.4 hereto, since December 31,
1995 (the "Balance Sheet Date"), the Business has been conducted in all material
respects only in the ordinary course of business of the Center consistent with
past practice. Except as set forth on Schedule 2.4 hereto, since the Balance
Sheet Date, there has been (a) no material adverse change in the Purchased
Assets or in the business, liabilities, operations, profits or condition
(financial or otherwise) of the Center, and, to the knowledge of Seller, no fact
or condition exists or is contemplated or threatened affecting or relating to
the Business or the Purchased Assets (except for market and industry conditions
affecting providers of health care services generally) which might reasonably be
expected to cause such a change in the future, and (b) no damage, destruction,
loss or claim or condemnation or other taking materially and adversely affecting
the Purchased Assets.
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2.5 Tangible Personal Property: Title and Liens: Real Property Leases.
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(a) Set forth on Schedule 2.5(A) hereto is a list of all of the tangible
personal property included in the Purchased Assets owned or leased by Seller as
of the date of this Agreement.
(b) Seller has good title to all of the Purchased Assets, except as to
those assets leased, all of which leases are in good standing, which are owned
by Seller as of Closing free and clear of all mortgages, liens, security
interests, easements, encumbrances, equities, claims and obligations to other
Persons (as such term and all other defined terms used herein and not otherwise
defined are defined in Section 10.14 of every kind and character (any of the
foregoing, a "Lien"), other than: (i) statutory Liens for personal property
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taxes not yet delinquent; (ii) such imperfections or irregularities of title,
liens, easements, charges or encumbrances as do not detract from or interfere
with the present use of such Purchased Assets subject thereto or affected
thereby and which do not otherwise impair the use of the Purchased Assets in the
Business or detract from the value of such Purchased Assets; or (iii) as set
forth on Schedule 2.5(B)(1) hereto. The Liens described in parts (i), (ii) and
(iii) above, along with Liens, if any, created by Buyer with respect to the
Purchased Assets, are referred to herein collectively as the "Permitted Liens".
Upon delivery to Buyer on the Closing Date of the instruments of assignment and
transfer contemplated by this Agreement, Seller will thereby transfer to
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and vest in Buyer good title to the Purchased Assets owned by Seller, free and
clear of all Liens other than the Permitted Liens, Seller shall discharge any
and all claims, suits, actions, proceedings (formal and informal),
investigations, judgments, deficiencies, damages, settlements, liabilities,
losses, costs and legal and other expenses resulting or arising from any Lien on
the Purchased Assets owned by Seller and existing on the Closing Date (whether
inchoate, or not, and whether perfected, or not) other than any Permitted Lien.
Except for the assets set forth on Schedule 1.1 hereto, the Purchased Assets
constitute all assets and properties presently used by Seller in the operation
of the Business as it is currently being operated.
(c) The real property leased by Seller and which is used in the conduct of
the Business is set forth on Schedule 2.5(B). No default or event of default
on the part of Seller, and no event which with the giving of notice or the
passage of time would constitute a default with respect to such leases, has
occurred and is continuing unremedied or unwaived.
2.6 Licenses and Authorizations. To the best of Seller's knowledge after
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due inquiry by Seller, Seller has all foreign, federal, state or local
governmental licenses, franchises, permits, privileges, approvals and other
authorizations and licenses which are necessary to entitle it to own or lease
the Purchased Assets and to operate and use the Purchased Assets to conduct and
carry on the Business as presently conducted at the Center (the "Licenses"),
except for such Licenses which if not
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maintained, would not have a material adverse effect on the continuing operation
of the Business at the Center. Set forth on Schedule 2.6 hereto is a list and
brief description of each of the Licenses. Each of the Licenses is valid and in
full force and effect. No notice of cancellation, default or breach of or any
dispute concerning any of the Licenses owned, possessed or held by Seller or of
any event or condition or state of facts described in the next following
sentence has been received by Seller with respect to any of such Licenses. To
the best of Seller's knowledge after due inquiry, there is not now pending, or
to the knowledge of Seller threatened, any action to revoke, cancel, rescind,
modify or refuse to renew in the ordinary course any of the Licenses. Seller
and, to the best of its knowledge, its predecessors in interest have performed
and fulfilled in all material respects all of their respective obligations under
each of the Licenses, and Seller is not aware of any event or condition or state
of facts which constitutes or, after notice or lapse of time or both, would
constitute a breach or default under any of such Licenses, or which permits or,
after notice or lapse of time or both, would permit revocation or termination of
any of such Licenses, or which would materially adversely affect any of the
rights of Seller thereunder. Notwithstanding the foregoing, nothing in this
Agreement, including the foregoing representation, shall be construed as a
representation by Seller that any Licenses which are not assignable, directly or
indirectly, by matter of law, will be assigned or assignable to or will
otherwise inure to
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the benefit of Buyer as a result of the consummation of the transactions
contemplated by this Agreement, nor as an attempt to assign any such Licenses.
2.7 Contracts and Other Instruments.
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(a) Schedule 2.7(A) hereto sets forth a list of all contracts, agreements,
instruments and leases to which Seller is a party or by which it is bound as of
the date of this Agreement (to which Seller will promptly update by written
notice to Buyer) relating to the Business or the Purchased Assets or to which
any of the Purchased Assets is subject and which Buyer is to assume
(collectively, together with any contracts, agreements, instruments and leases
entered into by Seller with respect to the Business or the Purchased Assets
between the date hereof and the Closing Date consistent with the terms of this
Agreement, being herein called the "Contracts"). The Seller has delivered to the
Buyer true, correct and complete copies of all Contracts.
(b) Each of the Contracts constitutes the valid and binding obligation of
Seller and, to the best of Seller's knowledge, the other party or parties
thereto, and is in full force and effect. Seller has performed and fulfilled
all of its material obligations under each of such Contracts required to be
performed as of the date hereof, is not in default or breach thereunder, and, to
the knowledge of Seller, no other party is in default or breach thereunder.
- 22 -
2.8 Employees. (a) Schedule 2.8(A) hereto contains:
---------
(i) a list of the names of all employees (the "Employees") of the
Seller utilized solely with respect to the Business as of the date hereof;
(ii) a description of all agreements (oral or written) between Seller
and the Employees which are not terminable at will by Seller;
(iii) the compensation of such Employees (including paid or promised
bonuses); and
(iv) any increase in such Employee's compensation since January 1,
1996 in excess of 5%.
Seller is not a party to any collective bargaining agreement, (employment
agreement), retirement plans (whether qualified or non-qualified), deferred
compensation or severance agreement, consulting or advisory agreement,
confidentiality agreement or covenant not to compete (except as set forth in
this Agreement) relating to the Employees or otherwise relating to the Business
which would be binding on or inure to the benefit of Buyer on or after the
Closing Date.
(b) In connection with the operations or activities of the Business,
Seller has complied in all material respects with all applicable laws, rules and
regulations affecting the employment of labor, including, but not limited to,
those relating to wages, benefit plans, hours, discrimination and the payment of
social security, withholding and similar taxes, and is not liable for any
arrears of wages or any penalties for failure to comply
- 23 -
with any of the foregoing. There are no controversies pending or threatened
between Seller and any of its employees, or any labor unions or collective
bargaining unit representing or purporting to represent any of its employees.
2.9 Compliance With Laws; Litigation. The Purchased Assets and their uses
--------------------------------
comply with, and Seller with respect to the Purchased Assets is in compliance
with, all applicable laws, regulations, rules, or ordinances of, and all
applicable judgments, writs, decrees, injunctions and orders of, any foreign,
federal, state, local or other governments or court or governmental departments,
commissions, bureaus, agencies or instrumentalities where such non-compliance
would have a material adverse effect on the Business or the Purchase Assets.
Seller is not, with respect to the Business, the Center or the Purchased Assets,
subject to any judgments, writs, decrees, injunctions or orders of any foreign,
federal, state or local government or court or governmental department,
commission, bureau, agency or instrumentality. Except as set forth on Schedule
2.9 hereto, there is no suit, action, administrative proceeding, arbitration or
other proceeding or governmental investigation pending, or to the best of
Seller's knowledge after due inquiry threatened against the Seller with respect
to the Business, the Center or the Purchased Assets (including, without
limitation, any claim for malpractice with respect to services rendered by the
Center) and to the best knowledge of Seller, there is no basis for any of the
same, and there are no suits, actions, administrative proceedings,
- 24 -
arbitrations or other proceedings or investigations pending in which Seller is
the plaintiff or claimant and which relate to the Purchased Assets or the
Business. There is no suit, action, administrative proceeding, arbitration or
governmental investigation involving the Seller or the Business pending or, to
the best knowledge of Seller after due inquiry threatened, which questions the
legality, validity or propriety of the transactions contemplated by this
Agreement.
2.10 Machinery Equipment and Supplies. All machinery, equipment and
--------------------------------
supplies of Seller included in the Purchased Assets are in a reasonable state of
repair (ordinary wear and tear excepted) and operating condition; provided that
no warranty or other representation is made by Seller or the Principals
regarding the tangible personal property comprising the Purchased Assets. All
such tangible personal property is conveyed hereunder AS IS, WHERE IS, WITH ALL
FAULTS AND DEFECTS.
2.11 Environmental Matters. To the best of Seller's knowledge after due
---------------------
inquiry by Seller, there has been:
(a) no release or threatened release of any hazardous substance,
pollutant or contaminant as each such term presently is defined by the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, resulting from any activity by or on behalf of Seller or any
predecessor in interest with respect to the Business, including but not limited
to, the generation, handling, storage, treatment, transportation or disposal of
any hazardous substance, pollutant or contaminant at the premises on
- 25 -
which the Center is located (the "Premises");
(b) no past or future action taken or to be taken by any federal,
state or local entity or by any private party under any federal, state or local
statute, rule, regulation or guideline concerning the release of any hazardous
substance, pollutant or contaminant into the soil, air, surface or subsurface
waters or the environment in general from the Center; and
(c) no claims or actions brought or which may be brought by any third
party for damages occurring at or outside of the Center resulting from the
alleged release or threatened release of any hazardous substance, pollutant or
contaminant by Seller or any predecessor in interest in connection with the
Business, including but not limited to, claims for health effects to persons,
property damage and/or damage to natural resources; nor does Seller have any
knowledge of any basis for any of the foregoing.
2.12 Accounts Receivable. As of the Closing Date, Seller shall have good
-------------------
title, free and clear of all Liens except Permitted Liens, to the Accounts
Receivable. The Accounts Receivable shall have arisen from bona fide
transactions entered into in the ordinary course of business and, to the best
knowledge of Seller, are collectible in the ordinary course consistent with past
practice.
2.13 Taxes. There are no pending questions, nor claims asserted for, ad
----- --
valorem taxes or assessments upon the Purchased Assets nor are there any tax
-------
Liens outstanding against any of the
- 26 -
Purchased Assets, except for statutory liens not yet due and payable. The Seller
has paid or caused to be paid to federal, state and local authorities all
amounts required to be paid by federal, state and local law or regulations with
respect to withholding from the wages of Seller's employees.
2.14 Brokers. Neither Seller nor any Affiliate of Seller has incurred any
-------
liability or obligation to any broker, finder or agent for any brokerage fees,
finder's fees or commissions with respect to the transactions contemplated by
this Agreement.
2.15 Disclosure. No representation or warranty by Seller made herein or
----------
in any documents, instruments or agreements contemplated hereby contains, or on
the Closing Date will contain, any untrue statement of material fact or omits,
or on the Closing Date will omit to state, a material fact necessary to make
such statements not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and to consummate
the transactions contemplated hereby, Buyer and Medical Resources hereby jointly
and severally represent and warrant to Seller and agree as follows:
3.1 Organization. Buyer is a corporation duly organized, validly existing
------------
and in good standing under the laws of the State of Delaware, and is qualified
to transact business in Florida as a foreign corporation under the laws of the
State of Florida. Buyer
- 27 -
has all requisite corporate power and authority to own or lease its properties
and assets and conduct its business as presently conducted and as contemplated
to be conducted hereby and under the Medical Director Agreement. Medical
Resources is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Medical Resources has all requisite
corporate power and authority to own or lease its properties and assets and
conduct its business as presently conducted.
3.2 Authority to Effect Transactions. (a) Each of Buyer and Medical
--------------------------------
Resources, to the extent applicable, has all requisite corporate power and
authority to execute, deliver and perform this Agreement and Buyer's Closing
Documents. All necessary corporate actions on the part of Buyer and Medical
Resources have been duly taken to authorize the execution, delivery and
performance of this Agreement and Buyer's Closing Documents. This Agreement has
been duly authorized, executed and delivered by Buyer and Medical Resources and
is the legal, valid and binding obligation each of Buyer and Medical Resources
enforceable against Buyer and Medical Resources in accordance with its terms.
Buyer's Closing Documents have been duly authorized by Buyer and, upon execution
and delivery by Buyer and the other parties thereto, as contemplated hereby,
will be the legal, valid and binding obligations of Buyer, enforceable against
Buyer in accordance with their terms.
(b) Except as set forth in Schedule 3.2 hereto, to the best of
Buyer's and Medical Resources' knowledge after due inquiry
- 28 -
by Buyer and Medical Resources:
(i) no consent, authorization, approval, order, license, certificate
or permit of or from, or declaration or filing with, any foreign,
federal, state, local or other governmental authority or
regulating body or any court or other tribunal or any party to
any contract, agreement, instrument, lease or license to which
Buyer is a party or by which Buyer is bound, is required for the
execution, delivery or performance by Buyer or Medical Resources
of this Agreement or any of Buyer's Closing Documents or in
connection therewith or for consummation of the transactions
contemplated hereby or thereby; and
(ii) neither the execution, delivery or performance by Buyer or
Medical Resources of this Agreement or any of Buyer's Closing
Documents, nor the consummation of the transactions contemplated
hereby or thereby (w) conflicts with or will conflict with or
(with or without the giving of notice or the passage of time or
both) results or will result in a breach of the terms, conditions
or provisions of, (x) constitutes or will constitute a default
under, (y) constitutes or will constitute an event creating
rights of acceleration, termination or cancellation, or loss
- 29 -
of rights under, or (z) results or will result in a violation of,
(A) the certificate of incorporation or by-laws, each as amended
to date, of Buyer and Medical Resources, (B) any law, statute,
rule, regulation, order, award, judgment or decree to which Buyer
or Medical Resources is subject, or (c) any contract, agreement,
instrument, loan agreement, lease or license to which Buyer or
Medical Resources is a party or by which Buyer or Medical
Resources is bound.
3.3 Litigation. Except as set forth on Schedule 3.3 hereto, to the best
----------
of Buyer's knowledge, after due inquiry by Buyer and Medical Resources, there is
no suit, action, administrative proceeding, arbitration or other proceeding or
governmental investigation pending or, to the best knowledge of Buyer and
Medical Resources, threatened against Buyer or Medical Resources, which
questions the legality, validity or propriety of the transactions contemplated
by this Agreement or which would reasonably be expected to have a material
adverse effect on the business or financial condition of Buyer and Medical
Resources and its or their subsidiaries taken as whole.
3.4 Brokers. Neither Buyer, Medical Resources, nor any Affiliate of Buyer
-------
or Medical Resources has incurred any liability or obligation to any broker,
finder or agent for any brokerage fees, finders fees or commissions with respect
to the transactions contemplated by this Agreement.
- 30 -
3.5 Licenses. Buyer has all foreign, federal, state or local governmental
--------
licenses, franchises, permits, privileges, approvals and other authorizations
and licenses which are necessary to entitle it to own the Purchased Assets and
to operate and use the Purchased Assets to conduct and carry on the Business, on
and after the Closing Date, as conducted immediately prior to the Closing Date,
except for such licenses which if not maintained would not have a material
adverse effect on the continuing operations of the Business after Closing.
3.6 Disclosure. No representation or warranty by Buyer made herein or in
----------
any documents, instruments or agreements contemplated hereby contains, or on the
Closing Date will contain, any untrue statement of material fact or omits, or on
the Closing Date will omit to state, a material fact necessary to make such
statements not misleading.
ARTICLE 4
CONDUCT OF BUSINESS AND TRANSACTIONS PRIOR TO CLOSING
Between the date hereof and the Closing Date:
4.1 Access. Seller shall, following receipt of reasonable notice from
------
Buyer:
(a) afford to the officers, stockholders, employees, consultants,
attorneys, agents, engineers, accountants and other representatives ("Agents")
of Buyer and of any prospective lenders to or investors in Buyer or its
Affiliates (the "Buyer's Lenders and Investors") reasonable access, at all
reasonable times and
- 31 -
during normal business hours, to the properties, assets, books and records of
Seller relating exclusively or primarily to the Purchased Assets subject to
appropriate confidentiality restrictions relating to the medical records of
patients who have received medical services at the Center;
(b) permit them to make reasonable extracts from and copies of such
books and records; and
(c) from time to time furnish to Buyer, Buyer's Agents or Buyer's
Lenders and Investors such financial and operating data and other information
concerning the results of operations of the Center as Buyer may reasonably
request including all interim financial statements with respect to the Center.
No investigation by or on behalf of Buyer shall affect the representations and
warranties of Seller hereunder.
4.2 Conduct of Business. Seller and Buyer shall refrain from taking any
-------------------
action which would render any of their respective representations and warranties
inaccurate in any material respect as of the Closing Date, except for changes
therein permitted by this Agreement or resulting from transactions carried out
pursuant to this Agreement. Each party shall promptly notify the other of any
action, suit, proceeding or investigation that may be threatened, brought,
asserted or commenced of which it becomes aware that would have been listed, in
the case of Seller, on Schedule 2.9 hereto or, in the case of Buyer, on Schedule
3.3 hereof, if such action, suit, proceeding or investigation had arisen or were
in existence on or prior to the date hereof.
- 32 -
Seller shall act diligently and reasonably (a) to preserve the Purchased Assets
intact, (b) to keep available, if so requested by Buyer, the services of the
present personnel of the Center and (c) to preserve the goodwill of suppliers
and customers of the Center and others having business relations therewith.
Except as otherwise contemplated by this Agreement or consented to in writing by
Buyer, Seller shall conduct the business and operations of the Center in all
respects only in the ordinary course and substantially as presently operated.
Notwithstanding the foregoing, except as otherwise contemplated by this
Agreement or consented to in writing by Buyer, Seller shall not (i) incur any
obligation or liability (absolute, accrued, contingent or otherwise) or make any
capital expenditure which exceeds $2,500, (ii) grant any increase in the rate of
pay of any employee or an increase in salary payable or to become payable to any
officer, director, employee, consultant or agent of the Seller or increase the
compensation payable to any officer, director, employee, consultant or agent of
the Seller for any period before or after the Balance Sheet Date, or by means of
any bonus or pension plan, contract or other arrangement increase the
compensation of any officer, director, employee, consultant or agent, (iii)
assign, transfer, sell or factor any accounts receivable, (iv) enter into any
material equipment or service contract, (v) except in the ordinary course of
business, sell, lease, transfer or otherwise dispose of (including transfers to
any Affiliates of Seller), or mortgage or pledge, or impose or suffer to be
imposed any Lien on,
- 33 -
any Purchased Assets, or (vi) enter into any arrangement to do any of the
foregoing. The obligations of Seller set forth in subsection (v) of the
immediately preceding sentence shall survive any termination of this Agreement
until April 1, 1997.
4.3 Maintenance. Seller shall act reasonably and in accordance with its
-----------
prior practice with respect to the Business to preserve, maintain in good and
usable condition and insure and repair the Purchased Assets and the Center in
the ordinary course. In the event of any material loss of, or material damage
to, tangible Purchased Assets or the Center prior to the Closing, Seller shall
either pay the lesser of the repair or replacement cost thereof to Buyer at the
Closing or, at the option of Buyer, promptly repair or replace the lost or
damaged Purchased Assets in order to minimize the interruption to the Business.
If, despite the best efforts of Seller to repair or replace such lost or damaged
Purchased Assets prior to the Closing Date, such repair or replacement is not
completed prior to the Closing Date, then, at the option of Buyer, (a) this
Agreement shall terminate, (b) the Closing Date shall be extended for one
additional period not to exceed ten days in order to allow Seller to repair or
replace such damaged Purchased Assets or (c) Seller shall pay to the Buyer on
the Closing Date the lesser of the repair or replacement cost of the lost or
damaged Purchased Assets.
4.4 Consents and Approvals. Prior to Closing, Seller shall act diligently
----------------------
and reasonably to secure the consents and approvals of any governmental agencies
and authorities and any other
- 34 -
Persons, as set forth on Schedule 2.2(B) annexed hereto, required to be obtained
in order to assign or transfer to Buyer, any contract or License included within
the Purchased Assets or to otherwise satisfy the conditions set forth in
Sections 5.4 and 5.6 hereof, provided that Seller shall not make any agreement
or understanding affecting the Purchased Assets, the Center or the Business as a
condition for obtaining any such consent or waiver except with the prior written
consent of Buyer and except that Seller shall not be required to pay any
consideration, assume any additional obligations not otherwise required to be
assumed by Seller under this Agreement or remain liable under any Licenses,
Assumed Contracts or Assumed Liabilities in order to obtain a consent or a
waiver. Buyer shall act diligently and reasonably to cooperate with Seller to
obtain the consents or approvals contemplated by this Section 4.4, including
satisfying the requirement of Section 3.4 hereof.
4.5 Renewal of Assumed Contracts. Seller shall keep Buyer fully informed
----------------------------
of all significant developments with respect to the renewal of any Assumed
Contracts that are scheduled to expire between the date hereof and the Closing
Date and Seller shall act upon Buyer's instructions with respect to the renewal
of any such Contracts.
- 35 -
ARTICLE 5
-----------
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement shall be subject, at the
option of Buyer, to the fulfillment of each of the following conditions as of
the Closing Date:
5.1 Accuracy of Representations and Compliance with Conditions. All
----------------------------------------------------------
representations and warranties of Seller contained in this Agreement shall be
true and accurate when made and, except (a) as a result of the taking of any
action contemplated hereby or (b) insofar as any representation or warranty
relates to any specified earlier date, shall be true and accurate as of the
Closing Date, as though such representations and warranties were then made by
Seller; and Seller shall have performed and complied with all of its covenants
and agreements set forth in this Agreement to be performed or complied with at
or before the Closing.
5.2 No Changes or Destruction of Property. Between the date hereof and
-------------------------------------
the Closing Date, there shall have been (a) no material adverse change in the
Business or any of the Purchased Assets; (b) no federal, state or local
legislative or regulatory change materially adversely affecting the Business or
the Purchased Assets; (c) no damage, destruction, loss or claim or condemnation
or other taking materially adversely affecting the Business or the Purchased
Assets that has not been repaired or replaced in accordance with Section 4.3
hereof; and (d) no lawsuit, proceeding or claim filed or asserted against Seller
that, if adversely
- 36 -
determined, may have a material adverse effect on the Business or the Purchased
Assets.
5.3 Opinion of Counsel for Seller. Buyer shall have received from Xxxx,
-----------------------------
Xxxx, Egerton, Bloodworth, Capouano & Xxxxxxx, P.A., counsel to Seller, an
opinion dated the Closing Date in the form set forth in Exhibit C hereto.
5.4 Necessary Government Approvals. The parties shall have received all
------------------------------
governmental and regulatory approvals, actions and consents, if any, necessary
to consummate the transactions contemplated hereby.
5.5 Assumption of Contracts. The Contracts are assigned to Buyer on terms
-----------------------
satisfactory to Buyer in its own discretion.
5.6 Necessary Consents. The parties shall have received written consents,
------------------
in form and substance reasonably satisfactory to Buyer, to the transactions
contemplated hereby from all Persons whose consent is required therefor, as set
forth on Schedule 2.2(B) or otherwise under any Contract.
5.7 Review of Proceedings. All actions, proceedings, instruments and
---------------------
documents required to carry out the transactions contemplated by this Agreement
or any other agreement to be executed and delivered by any of the parties
hereunder or in connection herewith shall be subject to the reasonable approval
of Buyer's counsel, and Seller shall have furnished to such counsel such
documents as such counsel may have reasonably requested for the purpose of
enabling such counsel to pass upon legal matters incidental thereto.
- 37 -
5.8 Threatened or Pending Proceedings. No proceedings shall have been
---------------------------------
initiated or threatened by any governmental department, commission, bureau,
board, agency or instrumentality seeking to enjoin or otherwise restrain the
consummation of the transactions contemplated hereby.
5.9 Radiology Contract. Buyer shall have entered into a radiology
------------------
agreement with a radiologist or radiologist group on terms satisfactory to
Buyer, which agreement shall contain provisions authorizing Buyer to endorse
certain checks made payable to such radiologist or radiologist group.
5.10 Deliveries Complete. All other documents reasonably required by
-------------------
Buyer shall have been delivered by Seller to Buyer.
5.11 Accounts Payable. All trade and lender accounts payable relating to
----------------
the Business shall, as of the Closing Date, be current in accordance with their
terms.
5.12 Closing Certificate. On the Closing Date, Seller shall deliver to
-------------------
Buyer a certificate signed by the Secretary of Seller dated as of the Closing
Date to the effect that:
(a) all representations and warranties of Seller contained in this
Agreement are true and correct as if made on and as of such date, except:
(i) as a result of the taking of any action contemplated hereby,
(ii) insofar as any such representation or warranty relates to a
specified earlier date.
- 38 -
(b) Seller has performed and complied with all of its covenants and
agreements set forth in this Agreement to be performed or complied with at or
before the Closing; and
(c) Each of the other conditions to Buyer's obligation to close under
this Agreement has been fulfilled.
5.13 Employees. Buyer agrees to use its best efforts to hire all of the
---------
Employees of Seller, subject to applicable policies and procedures of Buyer, on
terms comparable to those applicable to Seller's employment of the Employees,
including two weeks paid vacation and three one-day floating holidays. Buyer
shall credit each of such Employees with the period of time that such Employees
were employed by Seller for purposes of inclusion in Buyer's 401(k) Plan, and
shall cause the health insurance benefits of such employees not to be
interrupted. Seller shall remain liable and Buyer shall not be liable for
severance and related payments, relating to Employees, including but not limited
to payments for accrued vacation and accrued sick days, if any, for the period
up to and including the Closing Date unless any such obligation, or portion
thereof, is an Assumed Liability set forth on Schedule 1.4(B).
ARTICLE 6
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement shall be subject, at the
option of Seller, to the fulfillment of each of the following conditions as of
the Closing
- 39 -
6.1 Accuracy of Representations and Compliance with Conditions. All
----------------------------------------------------------
representations and warranties of Buyer contained in this Agreement shall be
true and accurate when made and, except (a) as a result of the taking of any
action contemplated hereby or (b) insofar as any representation or warranty
relates to any specified earlier date, shall be true and accurate as of the
Closing Date, as though such representations and warranties were then made by
Buyer; and Buyer shall have performed and complied with all of their covenants
and agreements set forth in this Agreement to be performed or complied with at
or before the Closing.
6.2 Review of Proceedings. All actions, proceedings, instruments and
---------------------
documents required to carry out the transactions contemplated by this Agreement
or any other agreement to be executed and delivered by any of the parties
hereunder or in connection herewith shall be subject to the reasonable approval
of Seller's counsel, and Buyer shall have furnished to such counsel such
documents as such counsel may have reasonably requested for the purpose of
enabling such counsel to pass upon legal matters incidental thereto.
6.3 Threatened or Pending Proceedings. No proceedings shall have been
---------------------------------
initiated or threatened by any governmental department, commission, bureau,
board, agency or instrumentality seeking to enjoin or otherwise restrain the
consummation of the transactions contemplated hereby.
- 40 -
6.4 Opinion of Counsel to Buyer. Seller shall have received an opinion
---------------------------
from Xxxxxx & Carnelutti, counsel for Buyer, dated the Closing Date in the form
set forth in Exhibit E hereto.
6.5 Deliveries Complete. All other documents reasonably required by the
-------------------
Seller shall have been delivered by Buyer to Seller or to Xxxxxx X. Xxxxxxxx, as
trustee of the Trust.
6.6 Necessary Government Approvals. The parties shall have received all
------------------------------
governmental and regulatory approvals, actions and consents necessary to
consummate the transactions contemplated hereby.
6.7 Closing Certificate. On the Closing Date, Buyer shall deliver to
-------------------
Seller a certificate signed by the President (or a Vice President) of Buyer and
Medical Resources dated as of the Closing Date, to the effect that:
(a) all representations and warranties of Buyer contained in this
Agreement are true and correct as if made on and as of such date, except:
(i) as a result of the taking of any action contemplated hereby; and
(ii) insofar as any such representation or warranty relates to a
specified earlier date; and
(b) Buyer or Medical Resources, as the case may be, has performed and
complied with all of its covenants and agreements set forth in this Agreement to
be performed or complied with at or before the Closing; and
- 41 -
(c) each of the other conditions precedent to Seller's obligation to
close under this Agreement has been fulfilled.
ARTICLE 7
TRANSACTIONS SUBSEQUENT TO CLOSING
7.1 Record Retention; Access. Buyer shall retain the books and records of
------------------------
the Business and the Purchased Assets transferred to Buyer hereunder for a
period of not less than four (4) years; provided, however, that Buyer shall have
the right to dispose of or destroy any such books and records at any earlier
time upon giving Seller reasonable notice of such intent and the right to obtain
from Buyer those books and records which it intends to dispose of or destroy.
Seller shall have the right, at the expense of Seller:
(i) of reasonable access to and examination of such records and books
for a period of four (4) years from and after the Closing Date
upon reasonable notice to Buyer and during normal business hours;
and
(ii) to make copies of such of the books, contracts and records
included in the Purchased Assets as are in Buyer's or Affiliate's
possession or control which relate to any period prior to the
Closing. With the approval of Buyer, which approval shall not be
unreasonably withheld or delayed, Seller may remove from Buyer's
possession the originals of
- 42 -
such of the books and records included in the Purchased Assets as
Seller may require, for use in litigation, provided that Seller
shall indemnify Buyer against losses, expenses, or damages
resulting from the loss, destruction or nonreturn of such books
and records.
7.2 Power of Attorney. Effective upon Closing, the Seller constitutes and
-----------------
appoints the Buyer and its successors and assigns, the true and lawful attorneys
for the Seller, with full power of substitution, in the name of the Seller, but
on behalf of and for the benefit of and at the expense of the Buyer, to
institute and prosecute, in the name of the Seller or otherwise, all proceedings
which the Buyer may deem proper in order to collect, assert or enforce any
claim, right or title of any kind in or to the Purchased Assets, to defend and
compromise any and all actions, suits or proceedings in respect of any of such
Purchased Assets, and to do all such acts and things in relation thereto as the
Buyer shall deem advisable; provided that, if the breach, claim or other matter
at issue will give rise to a claim of indemnification by any of the Buyer
Indemnitees (as defined below), then, the provisions of Article 9 shall control
the defense, compromise or settlement thereof. Buyer shall use reasonably
diligent efforts to give Seller written notice of Buyer's exercise of the
foregoing power. The foregoing powers are and shall be coupled with an interest
and shall be irrevocable by the Seller or by the Seller's dissolution or in any
manner or for any reason. The Buyer shall
- 43 -
retain for its own account any amounts collected pursuant to the foregoing
powers, including any sums payable in respect thereof, and the Seller shall
promptly pay to the Buyer, when received, any amounts which shall be received by
the Seller on or after Closing in respect of the Purchased Assets as provided
herein.
7.3 Further Actions. At any time and from time to time after the Closing,
---------------
each party hereto agrees, at its own expense (except as otherwise provided
herein), to take such actions and to execute and deliver such documents as may
be reasonably necessary to effectuate the purposes of this Agreement.
ARTICLE 8
CONFIDENTIALITY AND NON-COMPETE
8.1 Confidentiality. (a) No party to this Agreement shall directly or
---------------
indirectly make or cause to be made any public announcement or disclosure, or
issue any notice with respect to this Agreement or the transactions contemplated
hereby without the prior consent of the other party hereto, except for any
disclosure or notice required by law to be made by Buyer or Seller which
disclosure or notice of the disclosing party shall make available to the other
party for such party's review and comment before releasing and with respect to
which such other party shall respond to in a timely manner. In the event this
Agreement terminates without the purchase and sale of the Purchased Assets
having taken place, the parties and their respective Affiliates and Agents will:
- 44 -
(i) hold in confidence and refrain from using all non-public
information received in connection with the transactions
contemplated in this Agreement, and
(ii) promptly return all such nonpublic information and any and all
copies thereof to the party to which such information relates.
(b) During the period commencing on the date hereof and ending ten
years from the date hereof, neither the Seller nor any Affiliate of Seller shall
disclose intentionally to anyone, or use or otherwise exploit for the Seller's
or any Affiliate of Seller's benefit, or for the benefit of anyone other than
the Buyer or Medical Resources Group Entities,
(i) any confidential information of the Buyer or Medical Resources
Group Entities relating to the Business of the Center, including,
without limitation, any trade secrets, customer lists, details of
client or consultant contracts, marketing plans, product or
service development plans, business acquisition plans of the
Buyer or Medical Resources Group Entities related to the
Business, or
(ii) any portion or phase of any technical information, ideas, "know-
how", discoveries, product designs, computer programs (including
source or object codes), processes, procedures, formulae or
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improvements relating to the Center that is valuable, and whether
or not in written or tangible form, and including all memoranda,
notes, plans, reports, records, documents and other evidence
thereof (all such information, documents and materials being
hereinafter called "Confidential Information").
(c) The foregoing notwithstanding, the term "Confidential
Information" does not include, and there shall be no obligation hereunder with
respect to, (i) information that becomes generally available to the public other
than as a result of a disclosure by the Seller or any Affiliate of Seller or any
Agent or other representative thereof, and (ii) business and technical methods
applicable to diagnostic imaging businesses generally. Neither the Seller nor
any Affiliate of Seller shall have any obligation hereunder to keep confidential
any Confidential Information if and to the extent disclosure of any thereof is
required by law, and Seller or any Affiliate of Seller shall provide the Buyer
with prompt notice of such requirement, prior to making any disclosure, so that
the Buyer may decide whether to seek an appropriate protective or restrictive
order.
(d) At the request of the Buyer, the Seller agrees to deliver to the
Buyer, at any time during the term of this Agreement, all Confidential
Information which it may possess or control.
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8.2 Non-Competition/Noninterference. During the period commencing on the
-------------------------------
date hereof and ending five years from the date hereof, neither the Seller, any
Principal nor any Affiliate of the Seller shall, directly or indirectly:
(a) anywhere within the State of Florida or any other state in which
an Medical Resources Group entity operates a diagnostic imaging center, directly
or indirectly, own, manage, operate, advise (whether or not for compensation),
control, or invest or acquire an interest in any business, or otherwise engage
or participate in, whether as a proprietor, partner, stockholder, director,
officer, Key Employee, joint venturer, lender, advisor, consultant, investor or
other participant, in any business in the diagnostic imaging field, industry or
business (a "Competitive Business"); provided that, subject to the terms of the
Medical Director Agreement, the foregoing shall not preclude Seller, any
Principal or any Affiliate of Seller from providing professional medical
services, including professional reading services, directly or indirectly, or
otherwise from owning, managing, operating, advising, controlling, investing in
or acquiring an interest in any business or otherwise engaging or participating
in, whether as a proprietor, partner, stockholder, director, officer or key
employee, joint venturer, lender, advisor, consultant, investor or other
participant in any business providing professional medical services, including
professional reading services.
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(b) solicit, induce or influence any customer, supplier, or any other
person or entity which has a business relationship with the Buyer or any Medical
Resources Group Entity to discontinue or reduce the extent of such relationship
with the Buyer or any Medical Resources Group Entity; or
(c) (i) recruit, solicit, or otherwise induce or influence any
employee of the Buyer or any Medical Resources Group Entity to discontinue such
employment with the Buyer or any Medical Resources Group Entity or any
radiologist who, at the time has a business relationship with the Buyer or any
Medical Resources Group Entity, from discontinuing such relationship with the
Buyer or Medical Resources Group Entity, or (ii) employ or seek to employ, or
cause any Competitive Business or permit any Competitive Business to employ or
seek to employ any person who is then (or was at any time within six months
prior to the date the Seller or the Competitive Business employs or seeks to
employ such person) employed by the Buyer or any Medical Resources Group Entity.
(d) Notwithstanding the foregoing, the provisions of this Section 8
will not be deemed breached merely because the Seller or any Affiliate of Seller
owns not more than 5% of the outstanding common stock or securities of a
corporation or other legal entity, if, at the time of its acquisition by the
Seller or an Affiliate of Seller, such stock or security is listed on a national
securities exchange, is reported on The Nasdaq Stock Market (National Market or
Small Cap Market), or is regularly
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traded in the over-the-counter market by a member of a national securities
exchange.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnity by Seller. Subject to the provision of Section 9.1(c),
-------------------
Seller and each Principal, jointly and severally, agrees to indemnify and hold
harmless Buyer and its successors and assigns and its and their respective
officers, directors, controlling Persons, employees, attorneys, agents,
Affiliates, partners and stockholders, in each case past, present, or as they
may exist at any time after the date of this Agreement (including the Buyer, the
"Buyer Indemnitees") against and in respect of any and all:
-----------------
(a) claims, suits, actions, proceedings (formal and informal),
investigations, judgments, deficiencies, damages, settlements, liabilities,
losses, costs (including reasonable legal fees and other expenses) arising out
of or based upon:
(i) any breach of any representation, warranty, covenant or agreement
of Seller or each Principal contained in this Agreement or the
Xxxx of Sale; or
(ii) all Retained Liabilities and any other obligation or liability of
Seller of any nature, accrued or contingent, not included as part
of the Assumed Liabilities, including, but not limited to, any
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trade and lender payable obligations incurred prior to the
Closing Date and not listed on Schedule 1.4.
(b) claims, suits, actions and proceedings, including, but not
limited to, medical malpractice or professional liability claims (formal and
informal) of Persons not a party to this Agreement and related investigations,
judgments, deficiencies, damages, settlements, liabilities, losses, costs and
legal and other expenses arising from events occurring prior to the Closing Date
relating to the Purchased Assets or the operation or conduct of the Business
other than the Assumed Liabilities.
(c) It is expressly agreed that Principals shall only be subject to
this Article 9 with respect to the claims, suits, actions, proceedings,
investigations, judgments, deficiencies, damages, settlements, liabilities,
losses and costs arising out of a breach of the representations or warranties
set forth in Article 2 and/or a breach of Article 8 of this Agreement.
9.2 Indemnity by Buyer. Buyer and Medical Resources, jointly and
------------------
severally, agree to indemnify and hold harmless Seller and its successors and
assigns and their respective partners, controlling Persons (if any), employees,
attorneys, agents, Affiliates, partners and stockholders (including the Seller,
the "Seller Indemnitees") against and in respect of any and all:
(a) claims, suits, actions, proceedings (formal and informal),
investigations, judgments, deficiencies, damages, settlements, liabilities,
losses, costs (including reasonable
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legal fees and other expenses) arising out of or based upon (i) any breach of
any representation, warranty, covenant or agreement (whether joint or several)
of Buyer or Medical Resources contained in this Agreement or the Xxxx of Sale,
or (ii) any of the Assumed Liabilities; and
(b) claims, suits, actions and proceedings (formal and informal) of
Persons not a party to this Agreement and related investigations, judgments,
deficiencies, damages, settlements, liabilities, losses, costs and legal and
other expenses arising from events occurring on or after the Closing Date
relating to the Purchased Assets or the operation or conduct of the Business by
Buyer except to the extent that the same results from the breach of any
representation or warranty of Seller hereunder.
9.3 Defense of Claims. Any Buyer Indemnitee or Seller Indemnitee (the
-----------------
"Indemnified Party") seeking indemnification under this Agreement shall give to
the party obligated to provide indemnification to such Indemnified Party (the
"Indemnitor") a notice (a "Claim Notice") describing in reasonable detail the
facts giving rise to any claim for indemnification hereunder promptly upon
learning of the existence of such claim and shall give the Indemnitor a copy of
any such claim, process and legal proceedings. Upon receipt by the Indemnitor of
a Claim Notice from an Indemnified Party with respect to any claim of a third
party, such Indemnitor may assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party and, in such event, shall agree to pay and
otherwise discharge with the
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Indemnitor's own assets all judgments, deficiencies, damages, settlements,
liabilities, losses, costs and legal and other expenses related thereto; and the
Indemnified Party shall cooperate in the defense or prosecution thereof and
shall furnish such records, information and testimony, attend all such
conferences, discovery proceedings, hearings, trials and appeals and take such
other action and assign such other documents as may be reasonably requested in
connection therewith and as may be necessary to defend such claim or other
proceeding in a timely manner. If the Indemnitor does not assume the defense
thereof, the Indemnitor shall similarly cooperate with the Indemnified Party in
such defense or prosecution. The Indemnified Party shall have the right to
participate in the defense or prosecution of any lawsuit with respect to which
the Indemnitor has assumed the defense and to employ its own counsel therein,
but the fees and expenses of such counsel shall be at the expense of the
Indemnified Party unless:
(i) the Indemnitor shall not have promptly employed counsel to take
charge of the defense of such action; or
(ii) such Indemnified Party, upon the reasonable advice of its
counsel, shall have reasonably concluded that there exists a
significant conflict of interest with respect to the conduct of
such Indemnified Party's defense by the Indemnitor, in any of
which events, such fees and expenses of not
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more than one additional counsel for all of the Indemnified
Parties shall be borne by the Indemnitor, in any of which events,
such reasonable fees and expenses of not more than one additional
counsel for all of the Indemnified Parties shall be borne by the
Indemnitor, and the Indemnitor shall not have the right to direct
the defense of any such action on behalf of the Indemnified
Party.
Prior to paying or settling any claim against which an Indemnitor is, or may be,
obligated under this Agreement to indemnify the Indemnified Party, the
Indemnified Party must first supply the Indemnitor with a copy of a final court
judgment or decree holding the Indemnified Party liable on such claim, or
failing such judgment or decree, must first receive the written approval of the
terms and conditions of such settlement from the Indemnitor. The Indemnitor
shall have the right to settle any claim against it, subject to the prior
written approval of the Indemnified Party, which approval shall not be
unreasonably withheld.
9.4 Limitations on Indemnification. Notwithstanding anything in this
------------------------------
Article 9 to the contrary, Seller shall not be obligated to indemnify Buyer or
any other Person for any items otherwise subject to indemnification pursuant to
this Article 9 unless the aggregate indemnification obligation of Seller with
respect to all claims which Buyer and other Persons may have against it pursuant
to this Article 9 shall exceed $20,000
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("Indemnification Threshold"). Notwithstanding the foregoing sentence, no claim
or claims which result from or are based on the Retained Liabilities, or
Seller's failure to pay the Retained Liabilities, shall at any time be subject
to Indemnification Threshold. Notwithstanding anything in this Article 9 to the
contrary, neither Buyer nor Medical Resources shall be obligated to indemnify
Seller or any other Person for any items otherwise subject to indemnification
pursuant to this Section 9, unless the aggregate indemnification obligation of
Buyer and Medical Resources with respect to all claims which Seller and other
Persons may have against Buyer and Medical Resources pursuant to this Section 9
shall exceed the Indemnification Threshold. To the extent that the
Indemnification Threshold is exceeded, the Indemnitor shall bear all Losses
(i.e., the Indemnification Threshold is not to be deemed a deductible
----
amount). Notwithstanding the foregoing, no claim or claims which result from or
are based on the Assumed Liabilities, or any breach by Buyer of its obligation
to pay or perform the Assumed Liabilities, shall at any time be subject to the
Indemnification Threshold.
ARTICLE 10
MISCELLANEOUS
10.1 Expenses. Except as otherwise expressly provided herein, each party
--------
hereto shall pay its own expenses incident to the negotiation, preparation and
consummation of this Agreement and all other agreements, instruments and
documents executed and
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delivered by it hereunder or in connection herewith, including all fees and
expenses of its or their respective counsel and accountants; whether or not the
transactions contemplated hereby or thereby are consummated.
10.2 Survival. The representations, warranties, covenants and agreements
--------
contained in or made pursuant to this Agreement shall survive the Closing,
except to the extent that they relate to a specified earlier date.
10.3 Entire Agreement; Modification. This Agreement (including the
------------------------------
Schedules and Exhibits hereto) sets forth the entire understanding of the
parties with respect to the subject matter hereof, supersedes all existing
agreements among them concerning such subject matter and may be modified only by
a written instrument duly executed by each party hereto.
10.4 Notices. Any notice given pursuant to this Agreement to any party
-------
hereto shall be deemed to have been duly given three (3) days following deposit
in the U.S. mail if sent registered or certified mail, return receipt requested,
postage prepaid or when hand delivered as follows:
If to Seller:
Melbourne Neurologic, P.C.
0000 Xxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx
Attention:
with a copy to:
Dean, Mead, Egerton, Bloodworth,
Capouano & Xxxxxxx, P.A.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
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Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
If to Buyer:
Melbourne Resources, Inc.
c/o Medical Resources, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxxx & Carnelutti
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or at such other address as either such party shall from time to time designate
by written notice, in the manner provided herein, to the other party hereto.
All references to days in this Agreement shall be deemed to refer to calendar
days, unless otherwise specified. Notwithstanding the foregoing, any notice of
a change in address shall not be deemed to have been duly given until actual
receipt.
10.5 Waiver. Any waiver must be in writing, and any waiver by any party
------
of a breach of any provision of this Agreement shall not operate as or be
construed to be a waiver of any other breach of that provision or of any breach
of any other provision of this Agreement. The failure of a party to insist upon
strict adherence to any term of this Agreement on one or more occasions will not
be considered a waiver or deprive that party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement.
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10.6 Binding Effect; Assignment. (a) Neither this Agreement nor any of
--------------------------
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other party or parties,,
and any purported assignment without such consent shall be void.
(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and assigns. 10.7 Separability. If
------------
any provision of this Agreement is invalid, illegal or unenforceable, such
provision shall be ineffective to the extent, but only to the extent of, such
invalidity, illegality or unenforceability, without invalidating the remainder
of such provision or the remaining provisions of this Agreement, unless such a
construction would be unreasonable.
10.8 Headings. The headings in this Agreement are solely for convenience
--------
of reference and shall be given no effect in the construction and interpretation
of this Agreement.
10.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.10 Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with the laws of the State of Florida, without giving effect to
conflict of laws.
10.11 Incorporation by Reference. The Schedules and Exhibits attached
--------------------------
hereto and the letters referred to herein as
- 57 -
having been executed or delivered concurrently with the execution of this
Agreement are an integral part of this Agreement and are incorporated herein by
reference.
10.12 Definitions. As used herein, the following terms shall have the
-----------
meanings herein specified unless the context otherwise requires. Defined terms
in this Agreement shall include in the singular number the plural and in the
plural number the singular. "Affiliate" of a Person shall mean any other
---------
Person controlling, controlled by or under common control with such Person.
"Business Day" shall mean any day other than a Saturday, Sunday or any
------------
other day on which commercial banks are authorized by law to be closed in
Hackensack, New Jersey.
"Key Employee" shall mean any person who is employed in a management,
------------
executive, supervisory, marketing or sales capacity for another person.
"Medical Resources Group Entity" any entity in which the Buyer,
-------------------------------
any direct or indirect subsidiary of Buyer, or any such other entity has a
significant direct or indirect equity or financial interest at any time during
the term of this Agreement.
"Person" shall mean and include any individual, partnership, firm,
------
corporation, association, joint venture, trust or other entity, or any
government or political subdivision or agency, department or instrumentality
thereof.
10.13 Attorneys' Fees. If any party to this Agreement seeks to interpret
---------------
rights hereunder or to enforce the terms and
- 58 -
provisions hereof, then the prevailing party in any such action shall be
entitled to recover from the non-prevailing party or parties, all costs incurred
in connection with such action, including, without limitation, reasonable
attorneys' fees, expenses and costs, whether incurred before or at trial and/or
during all appellate levels.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
PRINCIPALS MELBOURNE NEUROLOGIC, P.A.
___________________________ By:__________________________
Name: Xxxxxx X. Xxxxxxx Name:
Title:
___________________________
Name: Xxxxx X. Gold
___________________________ MELBOURNE RESOURCES, INC.
Name: Xxxxxx X. Xxxxxxxx
By:__________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
By execution below, the undersigned hereby agrees to the provisions of
Section 1.8, Article 3 and Article 9 of the foregoing Agreement.
MEDICAL RESOURCES, INC.
By:___________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
