STOCK PURCHASE AGREEMENT
BY AND BETWEEN
BANYAN HEALTHCARE SERVICES, INC.
AND
MEDIX RESOURCES, INC.
TABLE OF CONTENTS
ARTICLE 1 SALE AND PURCHASE OF SUBSIDIARY SHARES
1.1 Purchase of Subsidiary Shares
1.2 Purchase Price for Subsidiary Shares.
1.3 Option to Acquire in Asset Purchase.
ARTICLE 2 REPRESENTATIONS AND WARRANTIES REGARDING THE SUBSIDIARIES
2.1 Organization and Good Standing.
2.2 Power and Authorization.
2.3 Investment Representations of Shareholder.
2.4 No Conflicts.
2.5 The Subsidiaries' Capitalization.
2.6 Subsidiary Consents.
2.7 Investments and Subsidiaries.
2.8 Compliance with Laws.
2.9 Licenses and Authorizations.
2.10 Litigation.
2.11 Financial Statements.
2.12 Property.
2.13 Contracts.
2.14 Third Party Payors.
2.15 Referral Relationships.
2.16 Taxes.
2.17 Employee Benefits.
2.18 Employment and Labor Matters.
2.19 Environmental Matters.
2.20 Absence of Certain Changes and Events.
2.21 Related Party Transactions.
2.22 Brokers.
2.23 Subsidiary Information.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES REGARDING BANYAN
3.1 Organization and Good Standing.
3.2 Power and Authorization.
3.3 No Conflicts.
3.4 Banyan Consents.
3.5 Brokers.
ARTICLE 4 OBLIGATIONS OF THE PARTIES UNTIL CLOSING
4.1 Conduct of Activities Pending Closing.
4.2 Access to and Use of Information; Confidentiality.
4.3 Reasonable Efforts.
4.4 Consents.
4.5 No Negotiation
4.6 Registration of Shares.
4.7 Comprehensive Management Agreement.
4.8 Transfer and Collection of Accounts Receivable.
4.9 Covenant Not-to-Compete.
ARTICLE 5 CERTAIN CONDITIONS PRECEDENT TO BANYAN'S OBLIGATIONS
5.1 Representations and Warranties.
5.2 Performance of Covenants.
5.3 Financing Contingency.
5.4 Approvals.
5.5 Legal Matters.
5.6 Due Diligence.
5.7 Board Approvals.
5.8 No Material Adverse Changes.
ARTICLE 6 CERTAIN CONDITIONS PRECEDENT TO MEDIX'S OBLIGATIONS
6.1 Representations and Warranties.
6.2 Performance of Covenants.
6.3 Approvals.
6.4 Legal Matters.
6.5 Banyan Financing Contingency.
ARTICLE 7 CLOSING
7.1 Time and Place of Closing.
7.2 Deliveries at the Closing.
ARTICLE 8 TERMINATION AND ABANDONMENT
8.1 Termination.
8.2 Procedure for Termination.
ARTICLE 9 INDEMNIFICATION
9.1 Survival; Right to Indemnification Not Affected by Investigation
9.2 Indemnification and Payment of Damages by Medix.
9.3 Indemnification and Payment of Damages by Banyan.
9.4 No Indemnification Rights Against the Subsidiaries.
9.5 Pledge of Preferred Shares and Escrow.
ARTICLE 10 MISCELLANEOUS
10.1 Further Assurances.
10.2 Public Announcements.
10.3 Notices.
10.4 Assignment and Benefit.
10.5 Amendment, Modification and Waiver.
10.6 Governing Law.
10.7 Severability.
10.8 Counterparts.
10.9 Entire Agreement.
10.10 Schedules.
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of April __,
1998 by and between BANYAN HEALTHCARE SERVICES, INC., a Delaware corporation
("Banyan"), and MEDIX RESOURCES, INC., a Colorado corporation ("Medix").
BACKGROUND
Banyan is a healthcare services company seeking to acquire a diversified
portfolio of healthcare businesses. Banyan and NuMed Home Health Care, Inc.,
a Nevada corporation ("NuMed"), have entered into an Agreement and Plan of
Merger dated as of February 17, 1998 (the "NuMed Agreement") whereby, among
other things, Banyan Acquisition Corp., a Nevada corporation that is
wholly-owned by NuMed (the "NuMed Sub"), will be merged into Banyan, the
issued and outstanding shares of Banyan will be converted into the right to
receive shares of NuMed, the corporate name of NuMed will be changed to that
of Banyan, and the NuMed board of directors will be comprised of two designees
of the current NuMed Board of Directors and five designees of the current
Banyan Board of Directors. (All such transactions under the NuMed Agreement
are referred to herein as the "NuMed Merger.")
In connection with the NuMed Merger, NuMed and Banyan are preparing a
Joint Proxy Statement/Prospectus (the "Joint Proxy Statement/Prospectus") to
be included within a Registration Statement on Form S-4 (the "Registration
Statement") to be filed by NuMed with the U.S. Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933 (the "Securities
Act"). Under the NuMed Agreement, following the effectiveness of the
Registration Statement and the solicitation and receipt of the requisite
approval of the shareholders of Banyan and NuMed, the NuMed Merger will be
consummated.
Banyan and Medix (or its appropriate subsidiaries) are parties to an
Asset Purchase Agreement whereby Banyan will acquire the assets and business
of Medix's STAT and Xxxxx home health agencies in New York State. The
consummation of the STAT and Xxxxx transaction is subject to the receipt of
the required approval of regulatory authorities in New York State. Pending
the receipt of such approval to sell, Medix and Banyan intend to seek the
approval of regulatory authorities in New York State to Banyan's management of
the STAT and Xxxxx home health agencies. Upon receipt of such approval to
manage, Banyan and Medix will enter into a management agreement whereby Banyan
will manage the activities of the STAT and Xxxxx home health agencies pending
consummation of their sale to Banyan. Banyan and Medix are entering into an
agreement (the "Side Agreement") concerning these matters.
Medix also provides home health care, nursing services and related goods
and services through the following wholly-owned subsidiaries: National Care
Resources - Texas, Inc., a Colorado corporation ("NCR - Texas"); National Care
Resources - Colorado, Inc., a Colorado corporation ("NCR - Colorado"); and
TherAmerica, Inc., a Colorado corporation ("TherAmerica"). NCR - Texas, NCR -
Colorado and TherAmerica are collectively referred to herein as the
"Subsidiaries," and the issued and outstanding shares of stock of the
Subsidiaries are collectively referred to as the "Subsidiary Shares."
Medix desires to sell, and Banyan desires to purchase, the Subsidiary
Shares on the terms and conditions provided herein. The closing of the
purchase of the Subsidiary Shares is expected to take place upon to the
consummation of the NuMed Merger. Accordingly, the preferred shares
comprising part of the consideration to be paid to Medix for the Subsidiary
Shares will be preferred shares of NuMed.
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE 1
SALE AND PURCHASE OF SUBSIDIARY SHARES
1.1 Purchase of Subsidiary Shares.
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Subject to the terms and conditions of this Agreement, at the Closing (as
hereafter defined), Medix will sell and transfer the Subsidiary Shares to
Banyan, and Banyan will purchase the Subsidiary Shares from Medix, for the
consideration set forth in Section 1.2.
1.2 Purchase Price for Subsidiary Shares.
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The consideration for the purchase of the Subsidiary shall be:
(a) On each of April 23, 1998, May 15, 1998 and May 30, 1998, Banyan shall
deposit $250,000 with Medix (collectively, the "Deposits"). The Deposit
shall be paid in cash by wire transfer to an account designated by Medix or by
certified or bank cashier's check.
(b) On the Closing Date, Banyan shall pay Medix $4,250,000 (the "Closing
Date Cash Consideration"), which shall be attributed to the purchase of the
Subsidiary Shares as provided in Section 1.1. The Closing Date Cash
Consideration shall be paid in cash by wire transfer to an account designated
by Medix or by certified or bank cashier's check payable to the order of
Medix.
(c) On the Closing Date, Banyan shall cause NuMed to issue to Medix 50,000
shares of a new class of non-voting convertible preferred stock of NuMed,
par value $0.01 per share, with a face amount of $40 per share ($2,000,000 in
the aggregate), bearing an annual cumulative dividend of $3.20 per share
($160,000 in the aggregate)(the "Preferred Shares"), which will be issued to
Medix at the Closing. The Preferred Shares will be convertible into shares of
NuMed common stock at a conversion price of $5.00 per share of common stock to
yield, in the aggregate, 400,000 shares of NuMed common stock if all Preferred
Shares are converted. The Preferred Shares shall be subject to mandatory
conversion by NuMed if the closing price of the common stock of NuMed exceeds
$6.00 per share for seven consecutive trading days on the principal registered
stock exchange or recognized electronic inter-dealer quotation medium on which
shares of common stock of NuMed are traded.
1.3 Option to Acquire in Asset Purchase.
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Medix and Banyan hereby agree that, if Banyan so requests, Medix
and Banyan shall, in lieu of the purchase and sale of the Subsidiary Shares of
any one or more of the Subsidiaries as contemplated by this Agreement,
cause any such Subsidiaries to sell, and Banyan or a subsidiary of Banyan to
purchase, all of the assets of such Subsidiaries, subject to the disclosed
liabilities of such Subsidiaries. The consummation of the acquisition of the
assets of one or more Subsidiaries as contemplated hereby shall not affect any
of the other covenants, conditions, representations and warranties of the
parties under this Agreement, including the obligation of Banyan to pay the
consideration contemplated by Section 1.3 hereof, except to the extent that
any such covenants, conditions, representations and warranties are necessarily
not applicable to an asset purchase transaction.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES REGARDING THE
SUBSIDIARIES
Subject to Section 10.10 hereof, Medix hereby represents and warrants to
Banyan as of the date of this Agreement and as of the Closing Date as follows:
2.1 Organization and Good Standing.
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Each of Medix and each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado and has
all necessary corporate power and authority to carry on its business as
presently conducted. Each Subsidiary has the necessary corporate power and
authority to own and lease the assets which it owns and leases and to perform
all its obligations under each agreement and instrument by which it is bound.
Each Subsidiary is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction identified in
Schedule 2.1, which includes each jurisdiction in which its ownership or
leasing of assets or properties or the nature of its activities requires such
qualification.
2.2 Power and Authorization.
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(a) Medix has full legal right, power and authority to enter into and
perform its obligations under this Agreement and under the other agreements
and documents (the "Medix Transaction Documents") required to be delivered by
it prior to or at the Closing. The execution, delivery and performance by
Medix of this Agreement and the Medix Transaction Documents have been duly
authorized by all necessary corporate action.
(b) This Agreement has been duly and validly executed and delivered by
Medix and constitutes the legal, valid and binding obligation of Medix,
enforceable against it in accordance with its terms. When executed and
delivered as contemplated herein, each of the Medix Transaction Documents
shall constitute the legal, valid and binding obligation of Medix, enforceable
against it in accordance with its terms.
2.3 Investment Representation of Shareholder.
(a) Medix understands that the Preferred Shares to be issued to it
hereunder will not be registered under the federal Securities Act. Medix
represents and warrants that the Preferred Shares to be acquired by it will be
acquired by it for its own account, not as a nominee or agent, and
without a view to a distribution within the meaning of the Securities Act and
the rules and regulations thereunder, and Medix will not distribute any of the
Preferred Shares in violation of the Securities Act. Medix acknowledges that
because the Preferred Shares are not registered under the Securities Act, the
Preferred Shares must be held indefinitely by it unless they are subsequently
registered under the Securities Act, or unless an exemption from registration
is available and Medix delivers to Banyan an opinion from experienced
securities counsel, in form and substance acceptable to Banyan, that an
exemption is available.
(b) Medix confirms that Banyan has made and will make available to it the
opportunity to ask questions of and receive answers from Banyan's and NuMed's
officers and directors concerning the terms and conditions of the investment
in, and the business and financial condition of, Banyan and NuMed, and Medix
has received to its satisfaction such additional information, in addition to
that set forth herein, about the business and financial condition and plans
and prospects of Banyan and NuMed and the terms and conditions of the
Preferred Shares as it has thus far requested.
(c) The certificate representing the Preferred Shares to be issued to
Medix hereunder may contain the following restrictive legend noting the
restrictions on transfer herein described:
The shares of stock represented by this Certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), and may
not be sold, transferred or otherwise disposed of by the holder hereof unless
registered under the Act or an exemption from registration is available.
2.4 No Conflicts. The execution, delivery and
-------------
performance of this Agreement and the Medix Transaction Documents do not and
will not (with or without the passage of time or the giving of notice): (i)
violate or conflict with the Articles of Incorporation or Bylaws of Medix or
any Subsidiary, or any law, including, without limitation, principles of
common law, statute, regulation, permit, license, certificate, judgment,
order, award or other decision, interpretation or requirement of any
arbitrator, court, government or governmental agency or instrumentality
(domestic or foreign) (collectively, "Laws") binding upon Medix or any
Subsidiary, except for violations and conflicts with Laws that, individually
or in the aggregate, could not have a material adverse effect on the business,
assets, earnings or financial condition of any Subsidiary; (ii) violate
or conflict with, result in a breach of, or constitute a default under any
agreement or other obligation to which Medix or any Subsidiary is a party or
by which they or their respective assets are bound, except for violations,
conflicts, breaches and defaults that, individually or in the aggregate, could
not have a material adverse effect on the business, assets, earnings or
financial condition of any Subsidiary, or give to others any rights (including
rights of termination, foreclosure, cancellation or acceleration) in or with
respect to Medix or any Subsidiary or any of their respective assets; or (iii)
result in the creation or imposition of any material restriction, mortgage,
deed of trust, pledge, lien, security interest or other charge, claim or
encumbrance upon or with respect to Medix or any Subsidiary or any of their
respective assets, including the Subsidiary Shares.
2.5 The Subsidiaries' Capitalization.
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Schedule 2.5 sets
forth the name and number of all authorized equity securities of the
Subsidiaries, the par value thereof, and the number of issued and outstanding
shares thereof. The securities set forth on Schedule 2.5 constitute the
Subsidiary Shares. Medix is and on the Closing Date will be the record and
beneficial owner and holder of all of the Subsidiary Shares, and owns such
Subsidiary Shares free and clear of any restriction, mortgage, deed of trust,
pledge, lien, security interest or other charge, claim, lien or encumbrance.
All of the Subsidiary Shares have been duly authorized and validly issued, are
fully paid and nonassessable, and have been issued in compliance with
applicable securities and other Laws. No person has any preemptive or other
similar rights with respect to the Subsidiary Shares or other securities of
the Subsidiaries, and there are no offers, options, warrants, rights,
agreements or commitments of any kind (contingent or otherwise) relating to
the issuance, conversion, registration, voting, sale or transfer of any equity
interests or other securities of the Subsidiaries (including, without
limitation, the Subsidiary Shares) or obligating the Subsidiaries or any other
person to purchase or redeem any such Subsidiary Shares or other securities.
2.6 Subsidiary Consents. Except as set forth on
-------------------
Schedule 2.6, neither Medix nor any Subsidiary is or will be required to give
any notice to or obtain any consent or approval of, or registration,
notification, filing and/or declaration with, any court, government or
governmental agency or instrumentality, creditor, lessor or other person in
connection with the execution, delivery and performance of this Agreement or
any of the transactions contemplated hereby, where the failure to obtain such
consents, individually or in the aggregate, could have a material adverse
effect on the business, assets, earnings or financial condition of any
Subsidiary.
2.7 Investments and Subsidiaries.
-----------------------------
Except for the STAT and Xxxxx agencies and Paxxon, Medix conducts and has
conducted its home health care, nursing and related businesses solely by and
through the Subsidiaries and no other person, and no Subsidiary directly or
indirectly owns, controls or has any investment or other interest in any
corporation, partnership, joint venture, business trust or other entity.
2.8 Compliance with Laws. Each Subsidiary is
--------------------
and has been in compliance with all applicable Laws, and no Subsidiary has
received any notice, order or other written communication from any
governmental agency or instrumentality of any alleged, actual, or potential
violation of or failure to comply with any Law and has no knowledge of any
basis to expect any such communication, except for failures to comply that,
individually or in the aggregate, could not have a material adverse effect on
the business, assets, earnings or financial condition of any Subsidiary.
2.9 Licenses and Authorizations. Set forth
---------------------------
on Schedule 2.9 is a true and complete list of all federal, foreign,
state, local and other governmental consents, licenses, permits, franchises,
grants and authorizations (collectively, "Authorizations") owned or held by or
issued to each Subsidiary. Such Authorizations constitute all the
Authorizations necessary for each Subsidiary to conduct its business. All
such Authorizations are in full force and effect. No proceeding is pending
or, to the knowledge of Medix, threatened by any person to revoke or deny the
renewal of any Authorization of any Subsidiary, and Medix has not been
notified that any such Authorization may not in the ordinary course be renewed
upon its expiration or that by virtue of the transactions contemplated hereby
any such Authorization may not be granted or renewed.
2.10 Litigation. Except as set forth on Schedule
----------
2.10, there are no, and during the last five years there have not been any,
claims, actions, suits, proceedings (arbitration or otherwise) or
investigations involving or affecting the business, activities or assets of
any Subsidiary or that questions any of the transactions contemplated by, or
the validity of, this Agreement, or involving or affecting the directors or
officers of Medix or any Subsidiary in their capacities as such, before or by
any court or governmental agency or instrumentality, or before an arbitrator
of any kind; and no pending claim, action, suit, proceeding or investigation,
if determined adversely, would have a material adverse effect on the earnings,
activities, operations or financial condition of any Subsidiary. To the
knowledge of Medix, no such claim, action, suit, proceeding or investigation
is presently threatened or contemplated and there are no facts which could
reasonably serve as a basis for any such claim, action, suit, proceeding or
investigation.
2.11 Financial Statements. Medix has
---------------------
previously provided to Banyan the following financial statements (the
"Financial Statements"): (a) the consolidated balance sheet of Medix and its
subsidiaries as of December 28, 1997 and the related consolidated statements
of operations, and changes in stockholders' equity and cash flows for the year
then ended, and (b) the balance sheet of Medix and its subsidiaries as of
December 29, 1996 and the related statements of operations, and cash flows for
the year then ended, together with the report thereon of Xxxxxxxx Xxxxx
Xxxxxxx & Xxxxxxx PC certified public accountants. Such Financial Statements
accurately and fairly present in all material respects the consolidated
financial condition, results of operations and cash flows of Medix and its
subsidiaries as of the respective dates thereof and for the periods therein
referred to, all in accordance with generally accepted accounting principles
("GAAP") consistently applied. Neither Medix nor any of its subsidiaries
(including the Subsidiaries) have any liabilities or obligations of any nature
that are not reflected on the balance sheet included in the 1997 Financial
Statements, other than current liabilities (within the meaning of GAAP)
incurred since the date thereof in the ordinary course of business consistent
in nature and amount with past practice.
2.12 Property.
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(a) No Subsidiary owns any real property. Schedule 2.12 contains a
complete and accurate list of all leaseholds or other interests in real
property leased by each Subsidiary. Each Subsidiary owns all right, title and
interest in all leasehold estates and other rights purported to be
granted to it by the leases and other agreements listed in Schedule 2.12, free
and clear of any restriction, assignment, pledge, lien, security interest or
other charge, claim, lien or encumbrance, except for encumbrances that,
individually or in the aggregate, could not have a material adverse effect on
the business, assets, earnings or financial condition of any Subsidiary. All
governmental permits, approvals and licenses required in connection with the
operation of such real property and the conduct of each Subsidiary's business
thereon have been duly obtained and are in full force and effect, and no
proceedings are pending or, to the knowledge of Medix, threatened which could
lead to a revocation or other impairment of any thereof, except for failures
with respect to such permits that, individually or in the aggregate, could not
have a material adverse effect on the business, assets, earnings or financial
condition of any Subsidiary. No condemnation proceeding is pending or, to the
knowledge of Medix, threatened with respect to any such real property.
(b) Except as set forth on Schedule 2.12, (i) each Subsidiary has good and
marketable title to all of its properties and assets, free and clear of
any restriction, mortgage, deed of trust, pledge, lien, security interest or
other charge, claim or encumbrance, other than liens for current taxes which
may be paid without penalty except for encumbrances that, individually or in
the aggregate, could not have a material adverse effect on the business,
assets, earnings or financial condition of any Subsidiary; and (ii) all
properties and assets owned or leased by each Subsidiary are in the possession
or under the control of such Subsidiary and are in good condition and repair,
ordinary wear and tear excepted, are suitable for the purposes for which they
are being used, and are of a condition, nature and quantity sufficient for the
conduct of the activities of such Subsidiary.
2.13 Contracts. Medix has furnished or will make
---------
available to Banyan true and complete copies of each contract, agreement and
commitment (including all real property leases and insurance policies) to
which each Subsidiary is a party or by which it or its assets are bound. Each
such contract, agreement and commitment was made in the ordinary course
of business, is in full force and effect and is valid, binding and enforceable
against such Subsidiary and, to the knowledge of Medix, each other party
thereto in accordance with its terms, except where the inability by the
Subsidiary to enforce any such contract, individually or in the aggregate,
could not have a material adverse effect on the business, assets, earnings or
financial condition of any Subsidiary. Each Subsidiary has performed in all
material respects all obligations required to be performed by it under each
such contract, agreement and commitment, and no condition exists or event has
occurred which with notice or lapse of time would constitute a material
default or a basis for delay or nonperformance by such Subsidiary or, to the
best knowledge of Medix, by any other party thereto, except where such failure
to perform or existence of such a condition, individually or in the
aggregate, could not have a material adverse effect on the business, assets,
earnings or financial condition of any Subsidiary.
2.14 Third Party Payors. Except as set forth on
------------------
Schedule 2.14, no Subsidiary is or ever has been a provider or supplier under
the federal Medicare program, any state Medicaid program, or any other
governmental or non-governmental health insurance program.
2.15 Referral Relationships. Other than in
----------------------
the ordinary and lawful course of business, neither any Subsidiary nor any
agent acting on behalf or for the benefit of any Subsidiary (i) has offered or
paid any remuneration, in cash or in kind, to, or made any financial
arrangements with, any past or present customers, past or present suppliers,
contractors or third party payors in order to obtain business or payments from
such persons, (ii) has given or agreed to give, or has knowledge that there
has been made or that there is any agreement to make, any gift or gratuitous
payment of any kind (whether in money, property or services) to any
then-existing or potential customer or patient, supplier, contractor, third
party payor or any other person, (iii) has made or agreed to make, or has
knowledge that there has been made or that there is any agreement to make, any
contribution, payment or gift of funds or property to, or for the private use
of, any governmental official, employee or agent, (iv) has established or
maintained any unrecorded fund or asset for any purpose or made any false or
artificial entries on any of its books for any reason, or (v) has made or
agreed to make or has knowledge that there has been made or that there is an
agreement to make and payment to any person with the intention or
understanding that any part of such payment would be used for any purpose
other than that described in the documents supporting such payment. Each
Subsidiary has furnished to Banyan true and complete copies of any contract,
lease agreement or other written arrangement and has advised Banyan of any
oral arrangements, including any joint venture or consulting agreement, with
any physician, hospital, nursing facility, home health agency or other person
or entity who is in a position to make or influence referrals to or otherwise
generate business for the Subsidiaries.
2.16 Taxes.
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(a) Each Subsidiary has filed or caused to be filed all returns (including
any information returns), reports, statements, schedules, notices, forms,
or other documents or information filed with or submitted to, or required to
be filed with or submitted to, any government or governmental agency or
instrumentality in connection with the determination, assessment, collection,
or payment of any tax or in connection with the administration,
implementation, or enforcement of or compliance with any law relating to any
tax ("Tax Returns") that are or were required to be filed by or with respect
to it, either separately or as a member of a group of corporations, pursuant
to applicable Laws. Each Subsidiary has delivered to Banyan copies of all
such Tax Returns filed. Each Subsidiary has paid, or made provision for the
payment of, all taxes that have or may have become due pursuant to those Tax
Returns or otherwise, or pursuant to any assessment received by Medix or the
Subsidiaries.
(b) No audit or other proceeding by any government or governmental agency
or instrumentality has been conducted, or is pending or threatened with
respect to any taxes due from or with respect to the Subsidiaries or any Tax
Return filed by or with respect to any Subsidiary.
(c) The charges, accruals, and reserves with respect to taxes on the
respective books of each Subsidiary are adequate (determined in accordance
with GAAP) and are at least equal to that Subsidiary's liability for taxes.
There exists no proposed tax assessment against any Subsidiary except as
disclosed in the balance sheets included in the Financial Statements. No
consent to the application of Section 341(f)(2) of Internal Revenue Code of
1986, as amended (the "Code"), has been filed with respect to any property or
assets held, acquired, or to be acquired by any Subsidiary. All taxes that
any Subsidiary is or was required by Law to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid to the
proper government or governmental agency or instrumentality or other person.
No Subsidiary is currently subject to an agreement or requirement to make any
adjustment pursuant to Section 481 of the Code by reason of any change in any
accounting method and there is no application pending with any government or
governmental agency or instrumentality requesting permission for any changes
in any accounting period. No Subsidiary is a "foreign person" within the
meaning of Section 1445(b)(12) of the Code.
(d) All Tax Returns filed by (or that include on a consolidated basis)
each Subsidiary are true, correct, and complete. There is no tax sharing
agreement that will require any payment by any Subsidiary after the date of
this Agreement.
2.17 Employee Benefits. Except as set forth on
-----------------
Schedule 2.17, the Subsidiaries have no pension, profit sharing, deferred
compensation or other employee pension or health or welfare plan or
arrangement (as such terms are defined in the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (the "Benefit Plans"). All such
Benefit Plans have been administered in all respects in accordance with ERISA
and the applicable provisions of the Code. There are no "accumulated fund
deficiencies" within the meaning of ERISA or the Code or any federal excise
tax or liability on account of any deficient funding in respect of the Benefit
Plans. To Medix's knowledge, no reportable event (within the meaning of
ERISA) has occurred in respect of the Benefit Plans. There are no pending or,
to Medix's knowledge threatened, claims by or on behalf of the Benefit Plans
or by any employee of any Subsidiary alleging breach of fiduciary duty or
violation of other applicable state or federal law which could result in
material liability of any Subsidiary or the Benefit Plans under ERISA or any
other law, nor, to Medix' knowledge, is there a basis for any such claim. The
Benefit Plans do not discriminate in favor of employees who are officers or
highly compensated employees. All returns, reports, disclosure statements and
premium payments required to be made under ERISA and the Code with respect to
the Benefit Plans have been timely filed or delivered. The Benefit Plans have
not been audited or investigated by the Internal Revenue Service, the U.S.
Department of Labor or the Pension Benefit Guaranty Corporation within the
last five years, and to Medix' knowledge there are no outstanding issues with
reference to the Benefit Plans pending before such governmental agencies.
2.18 Employment and Labor Matters.
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Medix has furnished or will make available to Banyan a true and complete list
of each employee of each Subsidiary as of a recent date and each such
employee's annual rate of compensation; vacation, personal and sick time
accrued and years of service credited. Except as disclosed on Schedule 2.18:
(i) there is no application or petition for certification of a collective
bargaining agent pending and none of the employees of any Subsidiaries are, or
during the last five years have been, represented by any union or other
bargaining representative; (ii) during the last five years, no union has
attempted to organize any group of the Subsidiaries' employees, and no group
of the Subsidiaries' employees has sought to organize themselves into a union
or similar organization for the purpose of collective bargaining; (iii) there
are no pending grievances, arbitration proceedings, unfair labor practice
charges, employment discrimination charges or other similar controversies
between the Subsidiaries and any of its employees; (iv) there are no pending
or contemplated claims regarding any employee's terms, conditions, or
privileges of employment or termination thereof; and (v) to the knowledge of
Medix, no such agreement, action, proceeding or occurrence is threatened or
contemplated by any person.
2.19 Environmental Matters. Except as
----------------------
disclosed on Schedule 2.19, and except for violations and failures to comply
that, individually or in the aggregate, could not have a material adverse
effect on the business, assets, earnings or financial condition of any
Subsidiary: (i) each Subsidiary is currently in compliance with all
applicable environmental laws, and has obtained all permits and other
authorizations from, and submitted all forms, fees, registrations, reports and
similar filings to, the appropriate person or government agency as
required under applicable environmental laws; (ii) no Subsidiary has violated
any environmental law; (iii) to Medix' knowledge, there is no present
requirement of any applicable environmental law which is due to be imposed on
any Subsidiary which will increase the cost of complying with environmental
laws; (iv) all past on-site generation, treatment, processing, storage and
disposal of waste, including hazardous waste and medical waste, by each
Subsidiary and its predecessors have been done in compliance with the
applicable environmental laws; (v) all past off-site transportation,
treatment, processing, storage and disposal of waste, including hazardous
waste and medical waste, generated by each Subsidiary and its predecessors
have been done in compliance with the applicable environmental laws; (vi) no
Subsidiary or any of its predecessors have released, spilled, leaked or
otherwise discharged into the environment any regulated substance such as to
constitute a violation of applicable environmental laws; and (vii) no
Subsidiary or any of its predecessors have used or otherwise managed any
regulated substance except in compliance with applicable environmental laws.
2.20 Absence of Certain Changes and Events.
---------------------------------------
Since December 31, 1997, each Subsidiary has conducted
its activities only in the usual and ordinary course consistent with past
practice. Since December 31, 1997, there has not been any material adverse
change in the activities, operations, properties, assets, prospects, working
capital, or condition (financial or otherwise) of any Subsidiary or any event,
condition or contingency that is likely to result in such a material
adverse change.
2.21 Related Party Transactions. Except
--------------------------
as described on Schedule 2.21, there are no, and during the last five years
there have not been any, agreements, arrangements or understandings between
any Subsidiary, on the one hand, and any present or former director,
shareholder or officer of Medix or any Subsidiary or any member of the
immediate family of or any person or entity controlling or controlled by any
of such persons (a "Related Party"), on the other hand. Except as described
on Schedule 2.21, no such Related Party has, or during the last five years has
had, any interest in any material property (real or personal, tangible or
intangible) sold to, purchased by or otherwise used in or pertaining to the
business of any Subsidiary; or any direct or indirect interest in any person
or entity which has had business dealings or a financial interest in any
transaction with any Subsidiary or which is in competition with the business
of any Subsidiary. Medix has any claim or right against any Subsidiary except
as described on Schedule 2.21.
2.22 Brokers. No person acting on behalf of Medix, any
-------
related party or any of their affiliates or under the authority of any of the
foregoing is or will be entitled to any brokers' or finders' fee or any other
commission or similar fee, directly or indirectly, from any of such parties in
connection with any of the transactions contemplated by this Agreement.
2.23 Subsidiary Information. None of the
----------------------
information supplied or to be supplied by Medix or the Subsidiaries in writing
for the explicit purpose of inclusion or incorporation by reference in
the Joint Proxy Statement/Prospectus will, at the time the Joint Proxy
Statement/Prospectus is filed with the SEC, and at any time it is amended or
supplemented or at the time it becomes effective under the Securities Act,
contain or will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading. The information supplied by Medix or the
Subsidiaries in writing to Banyan or NuMed for the explicit purpose of being
included in the Joint Proxy Statement/Prospectus will not, at the date the
Joint Proxy Statement/Prospectus is first mailed to the shareholders of Banyan
and NuMed and at the time of he shareholders' meeting of Banyan and NuMed,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES REGARDING BANYAN
Banyan hereby represents and warrants to Medix as of the date of this
Agreement and as of the Closing Date as follows:
3.1 Organization and Good Standing.
-------------------------------
Banyan is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all necessary corporate power
and authority to carry on its activities as presently conducted, to own and
lease the assets which it owns and leases and to perform all its obligations
under each agreement and instrument by which it is bound.
3.2 Power and Authorization. Banyan has full
-----------------------
legal right, power and authority to enter into and perform its obligations
under this Agreement and under the other agreements and documents (the "Banyan
Transaction Documents") required to be delivered by it prior to or at the
Closing. The execution, delivery and performance by Banyan of this Agreement
and the Banyan Transaction Documents have been duly authorized by all
necessary corporate action. This Agreement has been duly and validly executed
and delivered by Banyan and constitutes the legal, valid and binding
obligation of Banyan, enforceable against it in accordance with its terms.
When executed and delivered as contemplated herein, each of the Banyan
Transaction Documents shall constitute the legal, valid and binding obligation
of Banyan, enforceable against it in accordance with its terms.
3.3 No Conflicts. The execution, delivery and
-------------
performance of this Agreement and the Banyan Transaction Documents do not and
will not (with or without the passage of time or the giving of notice): (i)
violate or conflict with the Articles of Incorporation or Bylaws of Banyan, or
any Law binding upon Banyan; or (ii) violate or conflict with, result in
a breach of, or constitute a default or otherwise cause any loss of benefit
under any material agreement or other material obligation to which Banyan is a
party.
3.4 Banyan Consents. Banyan is not and will not be
---------------
required to give any notice to or obtain any consent or approval of, or
registration, notification, filing and/or declaration with, any court,
government or governmental agency or instrumentality, creditor, lessor or
other person in connection with the execution, delivery and performance of
this Agreement or any of the transactions contemplated hereby, except as
contemplated by this Agreement.
3.5 Brokers. No person acting on behalf of Banyan, any
-------
related party or any of their affiliates or under the authority of any of the
foregoing is or will be entitled to any brokers' or finders' fee or any other
commission or similar fee, directly or indirectly, from any of such parties in
connection with any of the transactions contemplated by this Agreement.
ARTICLE 4
OBLIGATIONS OF THE PARTIES UNTIL CLOSING
4.1 Conduct of Activities Pending
--------------------------------
Closing. Except as expressly provided
elsewhere herein, between the date hereof and the Closing, without the prior
written consent of Banyan, Medix shall cause each Subsidiary to maintain its
corporate existence, pay and discharge all debts, liabilities and obligations
as they become due (except such debts and liabilities as are being contested
in good faith by appropriate proceedings), and operate solely in the ordinary
course of business in a manner consistent with past practice and the
provisions of this Agreement and in compliance in all material respects with
all applicable Laws, Authorizations, contracts and agreements, and use
reasonable efforts to preserve intact its present organization and maintain
its relations and goodwill with the suppliers, patients, customers, employees
and others having a relationship with it.
4.2 Access to and Use of Information;
--------------------------------------
Confidentiality.
(a) Prior to the Closing, each of Banyan, on the one hand, and Medix, on
the other hand, shall, during ordinary business hours and on reasonable
notice, give the other party and its authorized representatives reasonable
access to all of its personnel, books, records, offices and other facilities
and properties, and permit such other party to make such inspections thereof
as such other party may reasonably request, and cause its officers and
advisors to furnish such other party with such financial, operating and other
information regarding such its (and its subsidiaries') activities, agreements,
commitments, liabilities, personnel and properties as such other party
may reasonably request. Medix acknowledges and agrees that some such
information that will be provided to Banyan may be disclosed to other parties
in connection with the preparation and filing of the Registration Statement,
and will be included in the Joint Proxy Statement/Prospectus included in the
Registration Statement, and, accordingly, may become publicly available.
Prior to filing of the Joint Proxy Statement/Prospectus, Banyan shall give
Medix an opportunity to review and comment on the disclosures therein that
relate to the Subsidiaries. Medix agrees to furnish to Banyan and NuMed such
information and to execute such documents as Banyan or NuMed shall reasonably
request and as shall be requested by others in connection with the
Registration Statement and the NuMed Merger.
(b) Medix shall use its best efforts to provide to Banyan such financial
statements and other information concerning the Subsidiaries as Banyan shall
reasonably request in order to comply with the requirements for the
Registration Statement under the Securities Act and the rules promulgated
thereunder.
(c) Each of Banyan, on the one hand, and Medix, on the other hand, shall
use Confidential Information (as defined below) and all notes, documents and
materials prepared by or for it which reflect, interpret, evaluate, include or
are derived from Confidential Information ("Evaluation Material") solely
to evaluate and consider the proposed transaction, and, in the case of
information provided to Banyan, to prepare the Joint Proxy
Statement/Prospectus. Each party shall not use any such information or
material to compete with or adversely affect the business or operations of the
other party. Except to the extent that some such information is included in
the Joint Proxy Statement/Prospectus, each party shall keep the Confidential
Information and Evaluation Material strictly confidential and, except as
authorized in this paragraph, shall not disclose or distribute Confidential
Information or Evaluation Material to any person or entity without the prior
written consent of the other party. Each party may disclose Confidential
Information or Evaluation Material to such of its Representatives who need to
have the Confidential Information and Evaluation Material to participate in or
contribute to the proposed transaction, so long as those Representatives agree
to be bound by this paragraph, and then only to the extent necessary to their
participation or contribution. Each party shall be responsible for any breach
of this Agreement by its Representatives. For the purposes of this paragraph
"Confidential Information" means all information in whatever form furnished by
or on behalf of either party to the other party together with any other
information concerning such party which has already been furnished by such
party to the other party; provided that it does not include information which
such party can demonstrate (i) is generally available to or known by the
public other than as a result of disclosure by such party or (ii) was obtained
by such party from a source other than the other party, provided that such
source was not bound by a duty of confidentiality to the other party with
respect to such information.
4.3 Reasonable Efforts. Prior to the Closing, each
------------------
party hereto shall use reasonable efforts to cause to occur the
transactions contemplated hereby and by the Transaction Documents, and to
cause all conditions to the performance of the parties hereto that are within
its control to be satisfied. No party shall take any action to cause any such
covenant, agreement, transaction or condition not to occur, be satisfied or be
performed, as the case may be.
4.4 Consents. Prior to the Closing, Medix shall use, and
--------
shall cause the Subsidiaries to use, reasonable efforts to obtain all
consents, permits, Authorizations, approvals of, and exemptions by, any
regulatory authority or third party necessary for the consummation of the
transactions contemplated by this Agreement and the Transaction Documents.
4.5 No Negotiation. Until such time, if any, as this
---------------
Agreement is terminated pursuant to Article 8, Medix will not, and will
cause the Subsidiaries not to, directly or indirectly solicit, initiate, or
encourage any inquiries or proposals from, discuss or negotiate with, provide
any non-public information to, or consider the merits of any unsolicited
inquiries or proposals from, any person (other than Banyan) relating to any
transaction involving the sale of the business or assets (other than in the
ordinary course of business) of the Subsidiaries, or any of the capital stock
of the Subsidiaries, or any merger, consolidation, business combination, or
similar transaction involving the Subsidiaries.
4.6 Registration of Shares. Banyan shall use
----------------------
its best efforts to cause the shares of common stock of NuMed into which the
Preferred Shares will be convertible to be included in the Registration
Statement. If such shares are not included in the Registration Statement, at
the Closing, Banyan and Medix shall enter into a registration rights agreement
(the "Registration Rights Agreement") granting Medix demand and
"piggyback" registration rights with respect to such shares. The demand
registration rights shall enable Medix to require Banyan to use its best
efforts to register such shares upon notice form Medix given after the
conversion of the Preferred Shares and before the 180th day following such
conversion. The Registration Rights Agreement shall also contain such other
terms and conditions as are reasonable and customary under the circumstances.
Neither the Subsidiaries not Medix shall be obligated to pay any Registration
Expenses (as defined below) in connection with any registration pursuant to
this Section 4.6. The term "Registration Expenses" means all expenses
incurred by Banyan or NuMed in connection with the registration of its
securities and the shares of common stock of NuMed into which the Preferred
Shares will be convertible, including, without limitation, all registration
and filing fees (including all expenses incident to filing with the National
Association of Securities Dealers, Inc.), fees and expenses of complying with
securities and blue sky laws, printing expenses, fees and disbursements of
Banyan's and NuMed's counsel, and of the independent public accountants of
Banyan and NuMed.
4.7 Comprehensive Management Agreement.
-----------------------------------
Medix and Banyan will use their respective best efforts to enter
into a management agreement effective May 31, 1998 (the "Comprehensive
Management Agreement") whereby Banyan will provide comprehensive management
services for the businesses operated by the Subsidiaries. The Comprehensive
Management Agreement shall be in form and substance satisfactory to the
parties, and shall provide for compensation to Banyan in an amount equal to
four percent (4%) of the gross revenues of the businesses or the Subsidiaries.
4.8 Transfer and Collection of Accounts Receivable.
-------------------------------------------------
On or prior to the Closing Date, Medix may
cause the Subsidiaries to transfer to Medix or any designee of Medix all
accounts receivable relating to services provided by the Subsidiaries prior to
the Closing Date. Medix or such designee shall have the right to xxxx and
collect for all such services using reasonable collection practices that do
not disturb the Subsidiaries' relationships with their customers. If a
payment is received from a customer to which services were provided both
before and after the Closing, such payment shall be applied to the accounts
receivable designated by the customer, or, in the absence of a designation of
the accounts receivable to which such payment should be applied, such payment
shall be presumed to have been intended to be applied to the oldest accounts
receivable of such customer not more than sixty (60) days old. To the extent
that, after the Closing, the Subsidiaries receive payment to be applied to any
Medix Accounts Receivable, Banyan shall cause the Subsidiaries to turn such
payment over to Medix or its designee. To the extent that, after the Closing,
Medix, its designee or any affiliate thereof receives payment to be applies
for the services provided by the Subsidiaries from and after the Closing Date,
Medix shall, or shall cause its designee or affiliates to, turn such payment
over to the Subsidiaries.
4.9 Covenant Not-to-Compete.
------------------------
a) For a period of five (5) years from and after the Closing Date, neither
Medix, nor any corporation, partnership or other business entity or
person controlling, controlled by or under common control with Medix (a
"Restricted Party") shall, directly or indirectly, operate, manage, own,
control finance or provide financing for or be a consultant for any person or
entity that provides supplemental staffing of nurses, therapists or other
medical personnel or home health care services anywhere in the United States.
The foregoing restriction shall not prevent any Restricted Party from
continuing to own and operate the STAT and Xxxxx agencies as long as the
general scope and character of the business of those agencies does not
increase, nor shall it prevent any Restricted Party from supplying information
management software and associated consulting services to any segment of the
health care industry.
b) For a period of five (5) years from and after the Closing Date, no
Restricted Party shall, directly or indirectly, seek to induce any customer,
supplier, employee or independent contractor of any Subsidiary or of Banyan or
its affiliates to take any action or refrain from taking any action that
might be disadvantageous to the Subsidiaries or Banyan or its affiliates,
including without limitation the solicitation of their respective customers,
suppliers, employees or independent contractors to cease doing business with,
or to terminate their association with, the Subsidiaries or Banyan or its
affiliates.
c) Medix acknowledges that the restrictions contained in this Section 4.9
are reasonable and necessary to protect the legitimate business interests of
Banyan, including its investment in the businesses of the Subsidiaries, and
that any violation thereof by any of the Restricted Parties would result in
irreparable harm to Banyan. Accordingly, Medix agrees that, upon the
violation by any of the Restricted Parties of any of the restrictions
contained in this Section 4.9, Banyan shall be entitled to obtain from any
court of competent jurisdiction a preliminary and permanent injunction as well
as any other relief provided at law, in equity, under this Agreement or
otherwise. In the event that any of the foregoing restrictions are adjudged
unreasonable in any proceeding, then the parties agree that the period of time
or the scope of such restrictions (or both) shall be adjusted to such manner
or for such time (or both ) as is adjudged to be reasonable.
ARTICLE 5
CERTAIN CONDITIONS PRECEDENT TO BANYAN'S OBLIGATIONS
The obligation of Banyan to consummate the transactions contemplated
hereby is subject to the fulfillment by or at the Closing of each of the
following conditions:
5.1 Representations and Warranties.
------------------------------
The representations and warranties of Medix contained in this Agreement shall
be deemed to have been made again at and as of the Closing and shall then be
true and correct in all material respects.
5.2 Performance of Covenants.Medix shall
------------------------
have performed or complied in all material respects with all of the
agreements, covenants and conditions required by this Agreement to be
performed or complied with by him or it prior to or at the Closing.
5.3 Financing Contingency. Banyan shall have
---------------------
obtained a financing commitment adequate to enable it to fulfill its
obligations under this Agreement.
5.4 Approvals. The consent or approval of all persons,
---------
including governmental bodies, judicial authorities, lenders, lessors and
other third parties, necessary for the consummation of the transactions
contemplated hereby, including those set forth on Schedule 2.6 hereto, shall
have been obtained, and no such consent or approval: (a) shall have been
conditioned upon the modification in any material respect, cancellation or
termination of any material lease, commitment, agreement, easement, right or
Authorization of the Subsidiaries; or (b) shall impose on any material
condition, provision or requirement not presently imposed upon the
Subsidiaries and which is described in the Schedules attached hereto, or any
condition that would be more restrictive after the Closing on the Subsidiaries
than the conditions presently imposed on the Subsidiaries.
5.5 Legal Matters. The Closing shall not violate any
-------------
order or decree of any court or governmental body of competent jurisdiction
and no suit, action, proceeding or investigation, shall have been brought or
threatened by any person (other than Banyan) which questions the validity or
legality of this Agreement or the transactions contemplated hereby.
5.6 Due Diligence. Banyan's due diligence
--------------
investigation and review of the prospects, business, assets, contracts,
rights, liabilities and obligations of the Subsidiaries, including, without
limitation, financial, marketing, employee, legal, regulatory and
environmental matters, shall have been completed to Banyan's sole
satisfaction.
5.7 Board Approvals. This Agreement and the
----------------
transactions contemplated hereby shall have been approved by the Board of
Directors of Banyan.
5.8 No Material Adverse Changes.
---------------------------
There shall have been no material adverse change in the Subsidiaries' business,
financial condition, prospects, assets or operations since December 31, 1997.
ARTICLE 6
CERTAIN CONDITIONS PRECEDENT TO MEDIX'S OBLIGATIONS
The obligation of Medix to consummate the transactions contemplated
hereby is subject to the fulfillment by or at the Closing of each of the
following conditions:
6.1 Representations and Warranties.
------------------------------
The representations and warranties of Banyan contained in this Agreement
shall be deemed to have been made again at and as of the Closing and shall
then be true and correct in all material respects.
6.2 Performance of Covenants. Banyan shall
------------------------
have performed or complied in all material respects with all of the
agreements, covenants and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing.
6.3 Approvals. Each consent or approval of third persons
---------
described on Schedule 2.6 shall have been obtained.
6.4 Legal Matters. The Closing shall not violate any
--------------
order or decree of any court or governmental body of competent jurisdiction
and no suit, action, investigation, or legal or administrative proceeding
shall have been brought or threatened by any person (other than Medix) which
questions the validity or legality of this Agreement or the transactions
contemplated hereby.
6.5 Banyan Financing Contingency. Banyan
-----------------------------
shall have obtained a financing commitment adequate to enable it to fulfill
its obligations under this Agreement.
ARTICLE 7
CLOSING
7.1 Time and Place of Closing. The closing of
-------------------------
the purchase and sale of Subsidiary Shares (the "Closing") pursuant to this
Agreement shall take place on the date of or as soon as practicable after the
consummation of the NuMed Merger, but in any event no later than September 30,
1998, at the offices of Xxxx Xxxxx Xxxx & XxXxxx LLP, 2500 One Liberty
Place, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, commencing at 1:00 P.M.,
or at such other date, time or place as may be agreed to by Banyan and Medix
(the "Closing Date"). Subject to Article 8, failure to consummate the Closing
shall not result in the termination of this Agreement or relieve any person of
any obligation hereunder.
7.2 Deliveries at the Closing. At the
----------------------------
Closing, in addition to the other actions contemplated elsewhere herein:
(a) Medix shall deliver to Banyan the following:
(i) certificates representing the Subsidiary Shares, duly endorsed (or
accompanied by duly executed stock powers) for transfer to Banyan; and the
minute books and stock ledgers of the Subsidiaries;
(ii) a certificate, dated the Closing Date and signed by the President of
Medix, to the effect set forth in Sections 5.1 and 5.2;
(iii) a certificate of good standing as of a recent date for the
Subsidiaries, certified by the Secretary of State of the State of Colorado;
(iv) copies of the resolutions of the Board of Directors and shareholders
of Medix authorizing the execution, delivery and performance of this Agreement
and the other agreements and instruments referred to herein, certified as
of the Closing Date by the Secretary of Medix;
(v) the Registration Rights and Agreement, if required under Section 4.6
hereof; and
(vi) such other documents and instruments as Banyan may reasonably request
to effectuate or evidence the transactions contemplated by this Agreement.
(b) Banyan shall deliver to Medix the following:
(i) the Cash Consideration;
(ii) certificates representing the Preferred Shares;
(iii) a certificate, dated the Closing Date signed by an appropriate
officer or agent of Banyan to the effect set forth in Sections 6.1 and 6.2;
(iv) a copy of the resolutions of the Board of Directors of Banyan
authorizing the execution, delivery and performance by Banyan of this
Agreement and the other agreements and instruments referred to herein,
certified as of the Closing Date by an appropriate authorized officer; and
(v) the Registration Rights and Agreement, if required under Section 4.6
hereof.
(c) ARTICLE 8
TERMINATION AND ABANDONMENT
8.1 Termination. This Agreement may be terminated and
-----------
the transactions contemplated herein may be abandoned at any time prior to the
Closing:
(a) by Medix or Banyan if the Closing has not occurred by September 30,
1998;
(b) by mutual consent of Banyan and Medix;
(c) by Banyan, if any representation or warranty of Medix made in or
pursuant to this Agreement is untrue or incorrect in any material respect,
Medix materially breaches the covenants or other terms of this Agreement or
any of the conditions precedent to Closing contained in Article 5 (other than
Section 5.8) are not satisfied;
(d) by Medix, if any representation or warranty of Banyan made in or
pursuant to this Agreement is untrue or incorrect in any material respect,
Banyan materially breaches the covenants or other terms of this Agreement or
any of the conditions precedent to Closing contained in Article 6 are not
satisfied; or
(e) by Medix, if Banyan fails to pay when due any of the Deposits.
8.2 Procedure for Termination."8.2ProcedureforTermination." A party
-------------------------- -----------------------
terminating this Agreement pursuant to Section 8.1 shall give written notice
thereof to each other party hereto, whereupon this Agreement shall terminate
and the transactions contemplated hereby shall be abandoned without further
action by any party; provided, however, that if such termination is by Banyan
pursuant to Section 8.1(c), or if such termination is by Medix pursuant to
Section 8.1(d), nothing herein shall affect the non-breaching party's right to
damages on account of such other party's breach. If either party
terminates this Agreement due to Banyan's inability to obtain financing for
the transactions contemplated hereby, Medix shall be entitled to retain the
Deposits that have been paid to it.
ARTICLE 9
INDEMNIFICATION
9.1 Survival; Right to Indemnification Not Affected by
--------------------------------------------------------
Investigation.
All representations, warranties, covenants, and obligations in
this Agreement, the Schedules hereto, or any document delivered pursuant to
this Agreement will survive the Closing. The right to indemnification,
payment of Damages (as hereafter defined) or other remedy based on such
representations, warranties, covenants, and obligations will not be affected
by any investigation conducted by any party in connection with this Agreement.
The waiver of any condition based on the accuracy of any representation
or warranty, or on the performance of or compliance with any covenant or
obligation, will not affect the right to indemnification, payment of Damages,
or other remedy based on such representations, warranties, covenants, and
obligations.
9.2 Indemnification and Payment of Damages by Medix.
-----------------------------------------------
Medix will indemnify and hold harmless
Banyan and its Representatives, stockholders, controlling persons, and
affiliates (collectively, the "Indemnified Persons") for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim, damage
(including incidental and consequential damages), expense (including costs of
investigation and defense and reasonable attorneys' fees) or diminution of
value, whether or not involving a third-party claim (collectively, "Damages"),
arising, directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by Medix in this
Agreement, the Schedules hereto, or any other certificate or document
delivered by Medix pursuant to this Agreement;
(b) any breach by Medix of any covenant or obligation of Medix in this
Agreement;
(c) any liability or other obligation of any Subsidiary arising from or
relating to its operations prior to the Closing Date, including liabilities
and obligations relating to any goods or services provided by any Subsidiary
prior to the Closing Date;
(d) any liability or other obligation of any nature of any Subsidiary
existing on the Closing Date that are not reflected on the balance sheet
included in the 1997 Financial Statements, other than current liabilities
incurred in the ordinary course of business consistent with past practice;
(e) all liability of any Subsidiary for or with respect to any Taxes for
which consolidated or combined returns are filed for taxable periods up to and
including the Closing Date;
(f) any claim by any person for brokerage or finder's fees or commissions
or similar payments based upon any agreement or understanding alleged to have
been made by any such person with either Medix (or any person acting on their
behalf) in connection with the transactions contemplated hereby.
The remedies provided in this Section 9.2 will not be exclusive of or limit
any other remedies that may be available to Buyer or the other Indemnified
Persons.
9.3 Indemnification and Payment of Damages by Banyan.
------------------------------------------------
Banyan will indemnify and hold harmless
Medix, and will pay to Medix the amount of any Damages arising, directly or
indirectly, from or in connection with (a) any breach of any representation or
warranty made by Banyan in this Agreement or in any certificate delivered
by Banyan pursuant to this Agreement, (b) any breach by Banyan of any covenant
or obligation of Banyan in this Agreement, or (c) any claim by any person for
brokerage or finder's fees or commissions or similar payments based upon any
agreement or understanding alleged to have been made by such person with
Banyan (or any person acting on its behalf) in connection with the
transactions contemplated hereby.
9.4 No Indemnification Rights Against the Subsidiaries.
-------------------------------------------------------
Medix shall have no rights
hereunder or otherwise to indemnification or contribution from the
Subsidiaries in respect of any covenant, agreement or obligation to be
performed by Medix or the Subsidiaries, or any representation or warranty of
Medix or the Subsidiaries made herein, in any Transaction Document or in any
certificate delivered pursuant hereto or thereto, and Medix hereby irrevocably
release the Subsidiaries from any liability for any such claim.
9.5 Pledge of Preferred Shares and Escrow.
-------------------------------------
At the Closing, Medix shall pledge one-half of the Preferred
Shares (including all securities, including the shares of NuMed common stock,
into which the Preferred Shares may be converted or that may otherwise be
issued in connection with the Preferred Shares) as security for the
obligations of Medix under Section 9.2 hereof. Such pledge shall be evidenced
by a Pledge Agreement among Medix, Banyan and a mutually acceptable
escrow agent, who shall hold the certificates representing the Preferred
Shares pending the release of the pledge. The Pledge Agreement shall provide
for the release of the pledge of all of the Preferred Shares (other than a
number of such shares needed to collateralize unsatisfied claims for
indemnification previously asserted by Banyan) on the earlier of the first
annual anniversary of the Closing or the date of mandatory conversion of the
Preferred Shares to shares of common stock.
ARTICLE 10
MISCELLANEOUS
10.1 Further Assurances. Each party hereto shall
------------------
use reasonable efforts to comply with all requirements imposed hereby on
such party and to cause the transactions contemplated hereby to be consummated
as contemplated hereby and shall, from time to time and without further
consideration, either before or after the Closing, execute such further
instruments and take such other actions as any other party hereto shall
reasonably request in order to fulfill its obligations under this Agreement
and to effectuate the purposes of this Agreement and to provide for the
transfer of the Subsidiary Shares to Banyan. Each party shall promptly notify
the other parties of any event or circumstance known to such party that could
prevent or delay the consummation of the transactions contemplated hereby or
which would indicate a breach or non-compliance with any of the terms,
conditions, representations, warranties or agreements of any of the parties to
this Agreement.
10.2 Public Announcements. Each party shall
--------------------
consult with and solicit the input of the other party in advance of the
issuance of press releases or any other disclosure that it may make, but,
except as contemplated by Section 4.2, the agreement of such other party shall
not be required.
10.3 Notices. All notices or other communications permitted
-------
or required under this Agreement shall be in writing and shall be
sufficiently given if and when hand delivered to the persons set forth below
or if sent by documented overnight delivery service or registered or certified
mail, postage prepaid, return receipt requested, addressed as set forth below
or to such other person or persons and/or at such other address or addresses
as shall be furnished in writing by any party hereto to the others. Any such
notice or communication shall be deemed to have been given as of the date
received, in the case of personal delivery, or on the date shown on the
receipt therefor in all other cases.
To Banyan:
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BANYAN HEALTHCARE SERVICES, INC.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Mr. Xxxx Xxxxxxxx
With copies to:
OLDE PHILADELPHIA GROUP, LTD.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxxxx
Xxxx X. Xxxxxxxx, Xx., Esquire
XXXX XXXXX XXXX & XxXXXX LLP
2500 One Liberty Place
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
To Medix:
---------
MEDIX RESOURCES, INC.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000-0000
Attention: Xx. Xxxx X. Xxxxx, Chief Executive Officer
10.4 Assignment and Benefit. Neither Medix
----------------------
nor Banyan shall assign this Agreement or any rights hereunder, or delegate
any obligations hereunder, without prior written consent of the other parties.
Notwithstanding the foregoing, Banyan may assign its rights and delegate
its duties hereunder to NuMed upon or after the consummation of the NuMed
Merger. Subject to the foregoing, this Agreement and the rights and
obligations set forth herein shall inure to the benefit of, and be binding
upon, the parties hereto, and each of their respective successors and assigns.
10.5 Amendment, Modification and Waiver.
----------------------------------
Waiver. The parties may amend or modify this Agreement in any respect. Any
such amendment, or modification, extension or waiver shall be in writing. The
waiver by a party of any breach of any provision of this Agreement shall
not constitute or operate as a waiver of any other breach of such provision or
of any other provision hereof, nor shall any failure to enforce any provision
hereof operate as a waiver of such provision or of any other provision hereof.
10.6 Governing Law. This Agreement is made pursuant
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to, and shall be construed and enforced in accordance with, the laws of the
Commonwealth of Pennsylvania without regard to the conflicts of laws
principles thereof.
10.7 Severability. The invalidity or unenforceability
------------
of any particular provision, or part of any provision, of this Agreement shall
not affect the other provisions or parts hereof, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provisions or
parts were omitted.
10.8 Counterparts. This Agreement may be executed in
------------
two or more counterparts, each of which shall be deemed an original, but all
of such counterparts together shall be deemed to be one and the same
instrument. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other
counterparts.
10.9 Entire Agreement. This Agreement, together
----------------
with the Side Agreement and the Exhibits and Schedules attached hereto and the
other agreements, exhibits, schedules and certificates referred to herein
or delivered pursuant hereto, constitute the entire agreement between the
parties hereto with respect to the transactions contemplated hereby and
supersede all prior agreements and understandings.
10.10 Schedules. The parties hereto acknowledge that the
----------
Schedules referred to in Article 2 of this Agreement have not been provided by
Medix as of the date of this Agreement. Accordingly, Medix will provide
drafts of such Schedules as soon as practical, and shall provide complete
Schedules no later than May 31, 1998. Banyan shall have the right to review
such Schedules provided by Medix. If Banyan does not object to the Schedules
provided on or before June 30, 1998, the Schedules so provided by Medix shall
constitute the Schedules to this Agreement. If Banyan does object on or
before June 30, 1998 and the parties cannot thereafter agree on the content of
the Schedules, Banyan shall have the right to terminate this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date first above written.
BANYAN HEALTHCARE SERVICES, INC.
By:/s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
MEDIX RESOURCES, INC.
By:/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Chief Executive Officer
