EXHIBIT 10.15
ASSET PURCHASE AGREEMENT
DATED AS OF
SEPTEMBER 29, 1998
AMONG
PATIENT INFOSYSTEMS ACQUISITION CORP.,
PATIENT INFOSYSTEMS, INC.
AND
HEALTHDESK CORPORATION
TABLE OF CONTENTS
ARTICLE 1. TRANSFER OF ASSETS..................................................1
1.1 Intellectual Property........................................1
1.2 Inventories..................................................1
1.3 Equipment and Packaged Software..............................1
1.4 Books and Records............................................2
1.5 Prepaid Expenses.............. ..............................2
1.6 Permits, etc.................................................2
1.7 All Property Not Elsewhere Described.........................2
1.8 Excluded Assets..............................................2
ARTICLE 2. PURCHASE PRICE......................................................2
2.1 Payment of Purchase Price....................................2
2.2 Allocation of Purchase Price.................................3
ARTICLE 3. THE CLOSING............................................ ............3
ARTICLE 4. ASSUMPTION OF LIABILITIES...........................................3
ARTICLE 5. EXCISE AND PROPERTY TAXES...........................................3
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF SELLER............................3
6.1 Organization, Good Standing and Qualification................4
6.2 Financial Statements............................. ...........4
6.3 Absence of Specified Changes.................................4
6.4 Taxes...................................... ................5
6.5 Real Property................................................6
6.6 Inventories..................................................6
6.7 Intellectual Property.......................... .............6
6.8 Trade Secrets................................................6
6.9 Title to Assets................................. ............6
6.10 Customers and Sales..........................................7
6.11 Existing Employment Contracts................................7
6.12 Insurance Policies...........................................7
6.13 Other Contracts..............................................7
6.14 Compliance with Laws............................. ...........7
6.15 Litigation...................................................7
6.16 Assets Sufficient for Conduct of Business....................8
6.17 Agreement Will Not Cause Breach or Violation.................8
6.18 Authority and Consents.......................................8
6.19 Interest in Customers, Suppliers and Competitors.............8
6.20 Employee Identification and Compensation.....................8
6.21 No Subsidiaries..............................................8
6.22 Environmental Matters........................................8
6.23 Employee Benefit Plans......................................10
6.24 Product Warranties..........................................10
6.25 Software....................................................10
6.26 Documents Delivered.........................................10
6.27 Full Disclosure.............................................11
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT.................11
7.1 Organization................................................11
7.2 Authority and Consents......... ...........................11
7.3 Agreement Will Not Cause Breach Or Violation................11
ARTICLE 8. OBLIGATIONS OF THE PARTIES BEFORE CLOSING..........................12
8.1 Buyer's Access to Premises and Information........ .........12
8.2 Conduct of Business in Normal Course.................... ..12
8.3 Preservation of Business and Relationships..................12
8.4 Maintenance of Insurance....................................12
8.5 Employees and Compensation..................................12
8.6 New Transactions............................................12
8.7 Payment of Liabilities and Waiver of Claims.................13
8.8 Existing Agreements............................... .........13
8.9 Consent of Others...........................................13
8.10 Representations and Warranties True at Closing..............13
8.11 Sales and Use Tax on Prior Sales.............. .............13
8.12 Statutory Filings........................ ..................13
8.13 Negotiations with Certain Customers.........................13
8.14 License Agreement...........................................13
8.15 Sublease....................................................14
ARTICLE 9. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE........................14
9.1 Accuracies of Seller's Representations and Warranties.... .14
9.2 Absence of Liens............................................14
9.3 Seller's Performance........................................14
9.4 Certification by Seller......................... ...........14
9.5 Assignment and Assumption Agreements........................14
9.6 Xxxx of Sale................................................14
9.7 Opinion of Seller's Counsel.................................14
9.8 Absence of Litigation.......................................14
9.9 Corporate Approval..........................................15
9.10 Good Standing Certificate................... ...............15
9.11 Consents....................................................15
9.12 Approval of Documentation...................................15
9.13 Employment Arrangements.....................................15
9.14 Bulk Transfer Notice........................................15
9.15 Change of Corporate Name....................................15
9.16 Condition of Assets.........................................15
9.17 MIIX Agreement..............................................15
9.18 HBOC Agreement.................................... .........15
ARTICLE 10. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE......................15
10.1 Accuracy of Buyer's Representations and Warranties..........15
10.2 Buyer's and Parent's Performance......... .................16
10.3 Payment of Purchase Price...................................16
ARTICLE 11. OBLIGATIONS OF THE PARTIES AFTER THE CLOSING......................16
11.1 Preservation of Goodwill....................................16
11.2 Change of Name..............................................16
11.3 Access to Records...........................................16
11.4 Nonsolicitation of Employees................................17
11.5 Further Assurances..........................................17
11.6 Termination of IAC Contract.................................17
ARTICLE 12. INDEMNIFICATION...............................................17
12.1. Indemnification by Seller...................................17
12.2. Indemnification by Buyer....................................17
12.3. Notice and Defense of Third Party Claims....................17
ARTICLE 13. COSTS............................................................18
13.1 Finder's or Broker's Fees................. .................18
13.2 Expenses....................................................18
ARTICLE 14. FORM OF AGREEMENT...............................................18
14.1 Headings....................................................18
14.2 Entire Agreement; Modification; Waiver......................18
14.3 Counterparts................................................18
ARTICLE 15. PARTIES.........................................................19
15.1 Parties in Interest.........................................19
15.2 Assignment..................................................19
ARTICLE 16. TERMINATION.....................................................19
16.1. Termination by Mutual Consent...............................19
16.2. Termination by Buyer or Seller..............................19
16.3. Effect of Termination..................... .................19
ARTICLE 17. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.............19
ARTICLE 18. NOTICES.........................................................20
ARTICLE 19. GOVERNING LAW...................................................20
ARTICLE 20. MISCELLANEOUS...................................................20
20.1 Recovery of Litigation Costs..................... ........20
20.2 Announcements...............................................20
20.3 References..................................................21
This Asset Purchase Agreement (the "Agreement"), dated as of September
29, 1998 among PATIENT INFOSYSTEMS ACQUISITION CORP., a Delaware corporation
("Buyer"), PATIENT INFOSYSTEMS, INC., a Delaware corporation ("Parent"), and
HEALTHDESK CORPORATION, a California corporation ("Seller").
WITNESSETH:
WHEREAS, Seller owns certain assets which it uses in the operation of
its business being generally the design, development and marketing of the
HealthDesk Online software, the CareTeam Connect software and software related
products for use in the healthcare, wellness and disease management industries
(such business currently operated by Seller being referred to herein as the
"Business").
WHEREAS, Buyer desires to purchase from Seller and Seller desires to
sell to Buyer, on the terms and subject to the conditions of this Agreement,
substantially all of the assets and properties used in the Business, other than
certain excluded assets described below.
THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties agree as
follows:
ARTICLE 1.........TRANSFER OF ASSETS
Subject to the terms and conditions set forth in this Agreement, Seller
agrees to sell, convey, transfer, assign and deliver to Buyer, and Buyer agrees
to purchase from Seller at the Closing described in Article 3 hereof, all the
assets, properties and business of Seller of every kind, character and
description, whether tangible, intangible, real, personal or mixed, and wherever
located (but excluding any assets specifically excluded in the following
Sections of this Article 1), all of which are sometimes collectively referred to
in this Agreement as the "Assets," including, but not limited to, the following:
1.1......Intellectual Property. All trade names (including, but not
limited to, the name "HealthDesk"), trademarks, service marks, copyrights,
patents, patent rights, inventions, licenses, computer programs (regardless of
state of completion and including all work product), brand names, trade secrets,
technical know-how, goodwill and other intangibles (including without limitation
(i) tort or insurance proceeds arising out of any damage or destruction of any
of the Assets between the date of this Agreement and the Closing Date (as
hereinafter defined), (ii) all right, title and interest of Seller in the
license and service agreements identified on Schedule 1.1(the "License
Agreements"), (iii) the intellectual property identified on Schedule 6.7, and
(iv) the software identified on Schedule 6.25 and all programs, designs and
documentation for such software used by Seller in (or owned by Seller and useful
in) the operation of the Business) (the assets described in this Section 1.1,
collectively, the "Intellectual Property");
1.2......Inventories. All of Seller's finished goods and raw materials
(whether expensed or not), including work in process, shrink wraps, CD roms,
spare parts and repair materials that are actually on hand with Seller as of the
Closing Date, an approximate summary of which items currently on hand is
attached hereto as Schedule 1.2 (hereinafter referred to collectively as the
"Inventories");
1.3......Equipment and Packaged Software. Seller's office equipment and
computer hardware specifically set forth on Schedule 1.3 (the "Equipment") and
the Packaged Software listed on Schedule 1.3a (the "Packaged Software");
1.4......Books and Records. All papers, computerized databases, files
and records in Seller's care, custody or control relating to any or all of the
above described Assets and the operation thereof, including, but not limited to,
all blueprints and specifications, product designs, marketing materials,
demonstration packages and product materials, environmental control records,
sales records, marketing materials, maintenance and production records, and
plans and designs of buildings, structures, fixtures and equipment, but
excluding personnel and labor relations records and accounting and financial
records;
1.5......Prepaid Expenses. All prepaid expenses and other prepaid
items relating to any of the Assets and the operation of the Business;
1.6......Permits, etc. All permits, licenses, franchises, consents or
authorizations issued by, and all registrations and filings with, any
governmental agency in connection with the Business, whenever issued or filed,
excepting only those which by law or by their terms are non-transferable and
those which have expired; and
1.7......All Property Not Elsewhere Described. All other properties of
Seller of every kind, character or description owned, used or held for use
(whether or not exclusively) in connection with the Business, wherever located
and whether or not similar to the things set forth elsewhere in this Article 1,
but excluding any assets specifically excluded in this Article 1.
1.8......Excluded Assets. The following assets are specifically
excluded from the assets being purchased by Buyer pursuant to this Agreement
(collectively, the "Excluded Assets"):
(a)......all furniture, PCs, laptops and office equipment not
specifically set forth on Schedule 1.3;
(b)......all cash, bank balances, money in possession of banks and
other depositories, including security deposits with landlords and equipment
lessors, and similar cash items held by or for the account of Seller;
(c)......all of Seller's accounts receivable;
(d)......Seller's franchise as a corporation, its articles of
incorporation, corporate seal, minute books and stock books, stock transfer
records and similar records relating to Seller's organization, existence or
capitalization, and the capital stock of Seller and all other records which
Seller is required by law to keep in its possession;
(e)......Seller's federal, state and local tax returns and rights to
refunds, if any; and
(f)......Seller's rights relating to its proposed acquisition of
MCInformatics ("MCI") and any assets acquired in connection with such
acquisition. The term "Business" as used herein expressly excludes any matter
relating to MCI.
ARTICLE 2.........PURCHASE PRICE
2.1......Payment of Purchase Price. In consideration for the transfer
and assignment by Seller of the Assets and in consideration of the
representations, warranties and covenants of Seller set forth herein, Buyer
shall, subject to the conditions set forth herein,
(a) deliver to Seller at the Closing (as hereinafter
defined) the sum of (i) $500,000, representing
payment for the Assets other than the Equipment; (ii)
$115,040, representing payment for the Equipment
(such sums collectively referred to as the "Purchase
Price"); and (iii) $11,238, representing payment for
the Packaged Software, payable in cash as more fully
described in Section 10.3 hereof; and
(b) assume and discharge, and shall indemnify Seller
against, liabilities and obligations of Seller under
the leases, contracts or other agreements, if any,
specified on Schedule 1.1. and Schedule 4 but only to
the extent that such liabilities or obligations
accrue on or after the Closing Date.
2.2......Allocation of Purchase Price. The parties shall determine and
agree upon the allocation of the Purchase Price at, or prior to, the Closing and
such allocation will be used by the parties in reporting the transaction
contemplated by this Agreement for federal and state tax purposes.
ARTICLE 3.........THE CLOSING.
The closing of the purchase and sale of the Assets by Seller to Buyer
(the "Closing") shall take place at the offices of Xxxxxxx, Del Deo, Dolan,
Griffinger & Xxxxxxxxx, Xxx Xxxxxxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000-0000, at
10:00 a.m. local time, within five days of satisfying the conditions to closing
set forth herein, or at such other place and/or time as the parties may agree in
writing (the "Closing Date"). If on the original or any postponed Closing Date
Seller shall have been unable to obtain all waivers and consents of private
parties and governmental agencies required by this Agreement, then Buyer, on
written notice, may postpone the Closing to a time not later than November 30,
1998.
ARTICLE 4.........ASSUMPTION OF LIABILITIES
Buyer is not assuming any debt, liability or obligation of Seller,
whether known or unknown, fixed or contingent (including without limitation the
litigation set forth on Schedule 6.15), except as herein specifically otherwise
provided. Seller agrees to indemnify and hold Buyer harmless against all debts,
claims, liabilities and obligations of Seller not expressly assumed by Buyer
hereunder, and to pay any and all attorneys' fees and legal costs reasonably
incurred by Buyer, its successors and assigns in connection therewith. Buyer
shall have the benefit of and shall perform and assume the License Agreements
and all leases, contracts and agreements, if any, specifically listed on
Schedule 4, in accordance with the terms and conditions thereof, except to the
extent modifications are specifically set forth on such Schedule 4 and except to
the extent set forth in the assignments or assignment and assumption agreements
for such leases, contracts and agreements.
ARTICLE 5.........EXCISE AND PROPERTY TAXES
Buyer shall pay all sales, use and transfer taxes arising out of the
transfer of the Assets and shall pay its portion, prorated as of the Closing
Date, of state and local real and personal property taxes of the Business. Buyer
shall not be responsible for any business, occupation, withholding or similar
tax, or for any taxes of any kind related to any period before the Closing Date.
ARTICLE 6.........REPRESENTATIONS AND WARRANTIES OF SELLER.
Except as set forth in the Schedules delivered by Seller concurrently
with the execution of this Agreement and incorporated herein, Seller hereby
represents and warrants to Buyer and Parent that the following facts and
circumstances are and, except as contemplated hereby, at all times up to the
Closing Date, will be true and correct, and hereby acknowledge that such facts
and circumstances constitute the basis upon which Buyer and Parent are induced
to enter into and perform this Agreement. Each warranty set forth in this
Article 6 shall survive the Closing and any investigation made by or on behalf
of Buyer and Parent.
6.1......Organization, Good Standing and Qualification. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of California, has all necessary corporate powers to own its properties and
to carry on its business as now owned and operated by it, and is duly qualified
to transact intrastate business and is in good standing in all jurisdictions in
which the nature of its business or of its properties makes such qualification
necessary.
6.2......Financial Statements.
(a) Seller has timely filed with the Securities and Exchange
Commission (i) the balance sheet of Seller as of December 31,
1997, and the related statement of income and retained
earnings for the year then ending, certified by Coopers &
Xxxxxxx L.L.P. (now known as PricewaterhouseCoopers LLP),
Seller's independent certified public accountants, and (ii)
the unaudited balance sheet of Seller as of June 30, 1998,
together with related unaudited statement of income and
retained earnings for the three month period then ending,
[certified by the chief financial officer of Seller.] Such
financial statements are referred to as the "Financial
Statements."
(b) The Financial Statements have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently
followed by Seller throughout the periods indicated, and
fairly present the financial position of Seller as of the
respective dates of the balance sheets included in the
Financial Statements, and the results of its operations for
the respective periods indicated. Seller has no liabilities or
obligations of any nature (known or unknown, absolute,
accrued, contingent or otherwise) of the type required to be
reflected or disclosed in a balance sheet (or the notes
thereto) prepared in accordance with GAAP that were not fully
reflected or reserved against in the Financial Statements.
6.3......Absence of Specified Changes. Since June 30, 1998, except as
set forth on Schedule 6.3, there has not been any:
(a) Transaction by Seller except in the ordinary course
of business as conducted on that date;
(b) Capital expenditure by Seller exceeding $25,000;
(c) Adverse change in the financial condition,
liabilities, assets, business or prospects of Seller;
(d) Destruction, damage to, or loss of any assets of
Seller (whether or not covered by insurance) that
adversely affects the financial condition, business
or prospects of Seller;
(e) Labor trouble or other event or condition of any
character adversely affecting the financial
condition, business, assets or prospects of Seller;
(f) Change in accounting methods or practices (including,
without limitation, any change in depreciation or
amortization policies or rates) by Seller;
(g) Revaluation by Seller of any of its assets;
(h) Increase in the salary or other compensation payable
or to become payable by Seller to any of its
officers, directors or employees, or the declaration,
payment or commitment or obligation of any kind for
the payment by Seller of a bonus or other additional
salary or compensation to any such person;
(i) Sale or transfer of any asset of Seller, except in
the ordinary course of business;
(j) Execution, creation, amendment or termination of any
contract, agreement or license to which Seller is a
party and which is proposed to be assigned hereunder,
except in the ordinary course of business;
(k) Loan by Seller to any person or entity, or guaranty
by Seller of any loan;
(l) Waiver or release of any right or claim of Seller,
except in the ordinary course of business;
(m) Mortgage, pledge or other encumbrance of any asset of
Seller;
(n) Other event or condition of any character that has or
might reasonably have an adverse effect on the
financial condition, business, assets or prospects of
Seller; or
(o) Agreement by Seller to do any of the things described
in the preceding clauses (a) through (n).
6.4......Taxes. Seller has filed or caused to be filed all federal,
state and local tax returns and reports that are or were required to be filed by
or with respect to Seller, pursuant to applicable law. All such returns were
correct and complete in all respects. Seller has paid, or has provided 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 Seller, except
such taxes, if any, as are listed in Schedule 6.4 and are being contested in
good faith and as to which adequate reserves (determined in accordance with
GAAP) have been provided in the Financial Statements. Except as set forth in
Schedule 6.4, no audit of any tax return of Seller is in progress or, to
Seller's knowledge, threatened; no director, officer or employee of Seller
responsible for tax matters expects any governmental authority to assess any
additional taxes for any period for which tax returns have been filed; and no
waiver or agreement by Seller is in force for the extension of time for the
assessment or payment of any tax. To Seller's knowledge, no claim has ever been
made by any governmental authority in a jurisdiction where Seller does not file
tax returns that it is or may be subject to taxation by that jurisdiction.
.........Seller has withheld and paid or collected and remitted all taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, supplier, vendor, creditor, stockholder
or other third party. There is no dispute or claim concerning any tax liability
of Seller, (i) claimed or raised by any governmental authority in writing or
(ii) as to which Seller or the directors and officers of Seller has knowledge.
As of the date hereof, there have been no, and Seller has no knowledge of any,
threatened or intended reappraisals by any governmental authority with respect
to the value of the Assets.
6.5......Real Property. Seller does not own any real property.
6.6......Inventories. The Inventories consist of items of a quality and
quantity useable, salable or rentable in the ordinary course of business by
Seller, except for obsolete and slow-moving items and items below standard
quality, all of which have been written down on the books of Seller to net
realizable market value or have been provided for by adequate reserves. All
items included in the Inventories are the property of Seller, except for sales
made in the ordinary course of business; for each of these sales either the
purchaser has made full payment or the purchaser's liability to make payment is
reflected in the books of Seller. No items included in the Inventories have been
pledged as collateral or are held by Seller on consignment from the others. All
the Inventories are free of defects and, to the extent that they consist of
finished or semi-finished goods, also comply with the specifications submitted
by the purchasers thereof.
6.7......Intellectual Property. Schedule 6.7 lists all of the
Intellectual Property owned or used by Seller in connection with the Business
(other than shrink wrap software generally available to the public). No person
(other than Seller) owns any Intellectual Property, the use of which is
necessary or contemplated in connection with the performance of any contract to
which Seller is a party, except manufacturer's trademarks and trade names on
goods sold in Seller's Business. Except as set forth in Schedule 6.7 or 6.15,
there have not been any administrative, judicial arbitration, or other adversary
proceedings concerning the Intellectual Property. Seller does not violate or
infringe on any intellectual property or personal right of any person, firm or
corporation, and Seller has not infringed and is not now infringing on any
intellectual property or other right belonging to any person, firm or
corporation. Except as set forth in Schedule 6.7 or Schedule 1.1, Seller is not
a party to any license, agreement or arrangement, whether as licensee, licensor
or otherwise, with respect to any Intellectual Property.
6.8......Trade Secrets. Seller has taken all reasonable security
measures to protect the secrecy, confidentiality and value of all trade secrets
used by Seller (or owned by Seller and useful in) the operation of the Business.
Any of its employees and any other persons who, either alone or in concert with
others, developed, invented, discovered, derived, programmed or designed these
secrets, or who have knowledge of or access to information relating to them,
have been put on notice and have entered into appropriate agreements that these
secrets are proprietary to Seller and are not to be divulged or misused. All
these trade secrets are presently valid and protectible, and are not part of the
public knowledge or literature, nor to Seller's knowledge have they been used,
divulged or appropriated for the benefit of any past or present employees or
other persons, or to the detriment of Seller.
6.9......Title to Assets. Seller has good and marketable title to all
the Assets and its interests in the Assets, whether real, personal, mixed,
tangible or intangible, which constitute all the Assets and interests in Assets
that are used in the Business. All the Assets are free and clear of mortgages,
liens, pledges, charges, encumbrances, equities, claims, easements, rights of
way, covenants, conditions or restrictions, except for (i) those disclosed in
Schedule 6.9; (ii) the lien of current taxes not yet due and payable; and (iii)
possible minor matters that, in the aggregate, are not substantial in amount and
do not materially detract from or interfere with the present or intended use of
any of these assets, nor materially impair business operations. All the Assets
are in good operating condition and repair, ordinary wear and tear excepted.
Seller is in possession of all premises leased to it from others. Neither any
officer, director or employee of Seller, nor any spouse, child or other relative
of any of these persons, owns, or has any interest, directly or indirectly, in
any of the real or personal property owned by or leased to Seller or any
Intellectual Property or trade secrets licensed by Seller.
6.10.....Customers and Sales. Schedule 6.10 to this Agreement is a
correct and current list of all customers of Seller. Except as indicated in
Schedule 6.10, Seller has no information and is not aware of any facts
indicating that any of these customers intend to cease doing business with
Seller or materially alter the amount of the business that they are presently
doing with Seller.
6.11.....Existing Employment Contracts. Schedule 6.11 to this Agreement
is a list of all employment contracts and collective bargaining agreements, and
all pension, bonus, profit-sharing, stock option or other agreements or
arrangements providing for employee remuneration or benefits to which Seller is
a party or by which Seller is bound. All of these contracts and arrangements are
in full force and effect, and neither Seller nor any other party is in default
under them. There have been no claims of defaults and, to Seller's knowledge,
there are no facts or conditions which if continued, or on notice, will result
in a default under these contracts or arrangements. There is no pending or, to
Seller's knowledge, threatened labor dispute, strike or work stoppage affecting
the Business.
6.12.....Insurance Policies. Seller has maintained and now maintains
(i) insurance on all the Assets of a type customarily insured, covering property
damage and loss of income by fire or other casualty, and (ii) adequate insurance
protection against all liabilities, claims and risks against which it is
customary to insure, including without limitation earthquakes as to properties
located in California.
6.13.....Other Contracts. Except as set forth in Schedule 1.1 or
Schedule 4, Seller is not a party to, nor are the Assets bound by, any license
or service agreement, any output or requirements agreement, any agreement not
entered into in the ordinary course of business, any indenture, mortgage, deed
of trust, lease or any other agreement that is unusual in nature, duration or
amount (including without limitation any agreement requiring the performance by
Seller of any obligation for a period of time extending beyond one year from the
Closing Date or calling for consideration of more than $25,000 or requiring
purchases at prices in excess of, or sales at prices lower than, prevailing
market prices). All contracts which will be assigned to or assumed by Buyer
under this Agreement are valid and binding upon the parties thereto. There is no
default or event that, with notice or lapse of time or both, would constitute a
default by any party to any of the agreements listed in Schedule 1.1 or Schedule
4. Seller has not received notice that any party to any of the agreements listed
in Schedule 1.1 or Schedule 4 intends to cancel or terminate any of these
agreements or to exercise or not exercise any options under any of these
agreements.
6.14.....Compliance with Laws. Seller has complied with, and is not in
violation of, applicable federal, state or local statutes, laws and regulations
(including without limitation any applicable environmental, health, building,
zoning or other law, ordinance or regulation) affecting its properties or the
operation of the Business. Seller is in possession of all permits, licenses,
franchises, consents or authorizations issued by and in compliance with all
registrations and filings required by any governmental authority in connection
with the Business or the Assets. All of such permits, licenses, franchises and
authorizations are valid and in full force and effect.
6.15.....Litigation. Except as set forth in Schedule 6.15, there is no
suit, action, arbitration or legal, administrative or other proceeding, or
governmental investigation, pending or, to Seller's knowledge, threatened
against or affecting Seller, or any of its business, assets or financial
condition. The matters set forth in Schedule 6.15, if decided adversely to
Seller, will not result in a material adverse change in the business, assets or
financial condition of Seller. Seller has furnished or made available to Buyer
copies of all relevant court papers and other documents relating to the matters
set forth in Schedule 6.15. Seller is not in default with respect to any order,
writ, injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality. Except as set forth in Schedule 6.15,
Seller is not presently engaged in any legal action to recover moneys due to it
or damages sustained by it.
6.16.....Assets Sufficient for Conduct of Business. The Assets,
together with the Excluded Assets, constitute all of the assets required for
Buyer to conduct the Business as it is presently conducted.
6.17.....Agreement Will Not Cause Breach or Violation. Neither the
entry into this Agreement nor the consummation of the transactions contemplated
hereby will result in or constitute any of the following: (i) a breach of any
term or provision of this Agreement; (ii) a default or an event that, with
notice or lapse of time or both, would be a default, breach or violation of the
certificate of incorporation or bylaws of Seller or of any lease, license,
promissory note, conditional sales contract, commitment, indenture, mortgage,
deed of trust or other agreement, instrument or arrangement to which Seller is a
party or by which Seller or the Assets are bound; (iii) an event that would
permit any party to terminate any agreement or to accelerate the maturity of any
indebtedness or other obligation; (iv) the creation or imposition of any lien,
charge or encumbrance on any of the Assets; or (v) the violation of any law,
regulation, ordinance, judgment, order or decree applicable to or affecting
Seller or the Assets.
6.18.....Authority and Consents. Seller has the right, power, legal
capacity and authority to enter into, and perform its obligations under, this
Agreement, and, except as set forth on Schedule 6.18, no approvals or consents
of any persons other than the stockholders of Seller are necessary in connection
with it. The execution and delivery of this Agreement and the consummation of
this transaction by Seller have been, or prior to the Closing will have been,
duly authorized by all necessary corporate action of Seller (including any
necessary action by Seller's stockholders). This Agreement constitutes a legal,
valid and binding obligation of Seller enforceable in accordance with its terms
except as limited by bankruptcy and insolvency laws and by other laws affecting
the rights of creditors generally.
6.19.....Interest in Customers, Suppliers and Competitors. Except as
set forth in Schedule 6.19, neither Seller nor any officer or director of
Seller, nor, to Seller's knowledge, any spouse or child of any of them, has any
direct or indirect interest in any competitor, supplier or customer of Seller or
in any person with whom Seller is doing business (excluding ownership of less
than 10% of any corporation or other entity traded publicly).
6.20.....Employee Identification and Compensation. Schedule 6.20
contains a list of the names of all current officers, directors, employees and
manufacturer's representatives of Seller, stating the rates of compensation
payable to each and setting forth all vacation time, sick leave and other paid
time off accrued for each of them through the Closing Date. No other person,
except accountants, auditors and attorneys, regularly performs compensable
services for Seller.
6.21.....No Subsidiaries. Seller has no subsidiaries.
6.22.....Environmental Matters.
.........(a) Except as set forth in Schedule 6.22, to Seller's
knowledge, there have not been any activities on or at the real property leased
by the Seller at 0000 0xx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx or any other
real property by Seller (the "Real Property") or at any time during which such
property was owned or leased by Seller or at any time prior thereto involving
the use, generation, treatment, storage, or Disposal of any Hazardous Substances
or Petroleum Products in violation of applicable Environmental Laws (as defined
below).
.........(b) Except as set forth in Schedule 6.22, to Seller's
knowledge, there have not been any Releases or threatened Releases of any
Hazardous Substances or Petroleum Products at or from the Real Property at any
time during which such property was occupied by Seller or at any time prior
thereto that (i) would be in violation of applicable Environmental Laws; or (ii)
could give rise to an action to compel an investigation and/or cleanup or to pay
material civil administrative fines, penalties or other damages.
.........(c) Except as set forth in Schedule 6.22, to Seller's
knowledge, there have not been any Hazardous Substances or Petroleum Products
located in or on the Real Property at any time during which such property was
leased by Seller or at any time prior thereto that (i) would be in violation of
applicable Environmental Laws; or (ii) could reasonably be expected to give rise
to an action to compel a investigation and/or cleanup or to pay civil
administrative fines, penalties or other damages;
.........(d) Except as set forth in Schedule 6.22, (i) Seller is now
and has been at all times in compliance with all Environmental Laws; (ii) there
are no pending environmental litigation, enforcement actions, administrative
orders or notices of violation brought under any Environmental Law and Seller
does not know of any threats of such litigation, enforcement actions,
administrative orders or notices of violation; (iii) Seller has not received any
request for information, notice of claim, demand or other notification that it
may be potentially responsible for any threatened or actual Release of Hazardous
Substance or Petroleum Products; and (iv) Seller has all material permits,
licenses, orders, approvals, authorizations, concessions or franchises or every
governmental authority having jurisdiction under an Environmental Law required
to conduct the Business substantially as it is currently being conducted. All
such permits, licenses, orders, approvals, authorizations, concessions and
franchises are listed on Schedule 6.22 and are in full force and effect, and, to
Seller's knowledge, there is no state of facts or event which could reasonably
be expected to form the basis for any revocation, non-renewal or any such permit
or authorization.
.........(e) Capitalized terms used in this Section 6.22 shall have the
following meanings:
"Environmental Laws" means any federal, state or local law, regulation,
ordinance or order pertaining to the protection of natural resources, the
environment and the health and safety of the public, including, but not limited
to, the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. ss.ss.9601 et seq., the Resource Conservation and Recovery
Act ("RCRA"), as amended, 42 U.S.C. ss.ss.6901 et seq., the Hazardous Material
Transportation Act, as amended, 49 U.S.C. ss.ss.1801 et seq., the Occupational
Safety and Health Act, as amended, 29 U.S.C. xx.xx. 651 et seq., California
Health & Safety Code ss.ss.19015 and ss.ss.25300 et seq., California Civil Code
ss.ss.1102 et seq., and ss.2079, California Civil Procedure Code ss.726 and
California Business and Professional Code ss.7180 et seq.
"Hazardous Substances" means any oil, flammable substances, explosives,
hazardous wastes or substances (including polychlorinated biphenyls), toxic
wastes or substances or any other wastes.
"Hazardous Wastes" means hazardous wastes as defined by RCRA and the
regulations thereunder.
"Disposal" means disposal as defined by RCRA and the regulations
thereunder.
"Petroleum Products" means petroleum, gasoline, oil, fuel oil, diesel
fuel and petroleum solvents.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, placing, discharging, injecting, escaping, dumping or disposing into
the environment, whether intentional or unintentional.
6.23.....Employee Benefit Plans
.........(a) Schedule 6.23 sets forth a true and complete list of all
written and oral Employee Benefit Plans (as defined below) and other programs,
commitments or funding arrangements maintained by Seller or to which Seller is a
party, in respect of, or which otherwise cover or benefit, any Subject Employees
(as defined below) or their beneficiaries.
.........(b) Except for the Employee Benefit Plans identified in
Schedule 6.23, there is no "employee pension benefit plan", "employee welfare
benefit plan" or "employee benefit plan" within the meaning of Sections 3(1),
3(2) and 3(3) of the ERISA. No Employee Benefit Plan to which Seller or any
ERISA Affiliate (as hereinafter defined) has maintained or contributed to is
subject to Title IV of ERISA or Section 412 of the Internal Revenue Code of
1986, as amended (the "Code").
..................(c) Capitalized terms used in this Section 6.23 shall
have the following meanings:
.................. "Employee Plan" includes all pension, retirement,
disability, medical, dental or other health insurance plans, life insurance or
other death benefit plans, profit sharing, deferred compensation, stock option,
bonus or other incentive plans, vacation benefit plans, severance plans or other
employee benefit plans or arrangements, including, without limitation, any
pension plan as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and any welfare plan as defined in
Section 3(1) of ERISA, whether or not funded, covering any Subject Employee or
to which Seller is a party or bound or makes or has made any contribution or by
which Seller may have any liability to any Subject Employee (including any such
plan formerly maintained by or in connection with which Seller may have any
liability to any Subject Employee, and any such plan which is a multiemployer
plan as defined in Section 3(37) (A) of ERISA).
.................."ERISA Affiliate" means a trade or business (whether or
not incorporated) which is under common control with Seller within the meaning
of Sections 414(b) and 414(c) of the Code or the regulations promulgated
thereunder.
.................."Subject Employee" includes all current or former
officers, directors, employees or consultants who are or were employed or
otherwise compensated in connection with activities involving the Assets being
purchased.
6.24.....Product Warranties. To Seller's knowledge, no person has
asserted any claim or has any reasonable basis for any claim relating to
warranties or guaranties with respect to any product, service or contract for
Software (as defined in Section 6.25) sold or provided by Seller.
6.25.....Software. Seller owns or is licensed to use all computer
software (including databases and related documentation ("Software")) which is
material to the conduct of the Business, a list of which is included on Schedule
6.25. Except for non-customized software readily available from multiple
sources, Seller is not subject to any commitment to pay royalties or other fees
for the use of the Software. To Seller's knowledge, no person or entity is
materially interfering with or infringing upon, and no person or entity has
misappropriated any of, the Software or source-code owned by Seller ("Owned
Software"). To Seller's knowledge, none of such Owned Software infringes upon,
is a misappropriation of, or otherwise conflicts with, any patent, copyright,
trade secret or other proprietary right of any person.
6.26.....Documents Delivered. Each copy or original of any agreement,
contract or other instrument which is identified in any exhibit delivered by
Seller or its counsel to Buyer (or its counsel or representatives), whether
before or after the execution of this Agreement, is in fact what it is purported
to be by Seller and has not been amended, canceled or otherwise modified.
6.27.....Full Disclosure. None of the representations and warranties
made by Seller or made in any letter, certificate or memorandum furnished or to
be furnished by Seller, or on its behalf, contains or will contain any untrue
statement of a material fact, or omits any material fact the omission of which
would make the statements made misleading. There is no fact known to Seller
which materially adversely affects, or in the future may (so far as Seller can
now reasonably foresee) materially adversely affect, the condition, Assets,
liabilities, business, operations or prospects of Seller that has not been set
forth herein or heretofore communicated to Buyer in writing pursuant hereto.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
Buyer and Parent hereby represent and warrant to Seller that the
following facts and circumstances are true and correct, and hereby acknowledge
that such facts and circumstances constitute the basis upon which Seller is
induced to enter into and perform this Agreement. Each warranty set forth in
this Article 7 shall survive the Closing, as set forth in Article 17.
7.1......Organization. Each of Buyer and Parent is a corporation duly
organized, existing and in good standing under the laws of Delaware.
7.2......Authority and Consents. Each of Buyer and Parent has the
right, power, legal capacity and authority to enter into, and perform its
obligations under, this Agreement, and no approvals or consents of any persons
other than Buyer and Parent, as applicable, are necessary in connection with it.
The execution and delivery of this Agreement and the consummation of this
transaction by Buyer or Parent, as the case may be, has been duly authorized by
all necessary corporate action of Buyer or Parent, as the case may be. The
execution and delivery of this Agreement and the consummation of this
transaction by Buyer and Parent have been duly authorized by all necessary
corporate action of Buyer or Parent, as the case may be. This Agreement
constitutes a legal, valid and binding obligation of each of Buyer and Parent
enforceable in accordance with its terms, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of creditors generally.
7.3......Agreement Will Not Cause Breach Or Violation. Neither the
execution of this Agreement, nor the consummation of the transactions
contemplated hereby, will result in or constitute any of the following: (i) a
default or an event that, with notice or lapse of time or both, would be a
default, breach or violation of the articles of incorporation or bylaws of Buyer
or Parent or of any lease, license, promissory note, conditional sales contract,
commitment, indenture, mortgage, deed of trust or other agreement, instrument or
arrangement to which Buyer or Parent is a party or by which Buyer or Parent is
bound; (ii) an event that would permit any party to terminate any agreement or
to accelerate the maturity of any indebtedness or other obligation; or (iii) the
violation of any law, regulation, ordinance, judgment, order or decree
applicable to or affecting Buyer or Parent, other than violations, conflicts,
breaches, terminations, accelerations and defaults which could not reasonably be
expected to have a material adverse effect on Buyer's or Parent's ability to
perform their respective obligations under this Agreement.
ARTICLE 8.........OBLIGATIONS OF THE PARTIES BEFORE CLOSING.
The parties covenant and agree that, except as otherwise agreed in
writing by the parties, from the date of this Agreement until the Closing:
8.1......Buyer's Access to Premises and Information. Buyer, Parent and
their counsel, accountants and other representatives shall be entitled to have
full access during normal business hours to all of Seller's properties, books,
accounts, records, contracts and documents of or relating to the Assets. Seller
shall furnish or cause to be furnished to Buyer, Parent and their
representatives all data and information concerning the Business, and the
finances and properties of Seller that may reasonably be requested.
8.2......Conduct of Business in Normal Course. Seller shall carry on
its business and activities diligently and in substantially the same manner as
they previously have been carried on, and shall not make or institute any
unusual or novel methods of manufacture, purchase, sale, lease, management,
accounting or operation that will vary materially from the methods used by
Seller as of the date of this Agreement.
8.3......Preservation of Business and Relationships. Seller shall use
its best efforts, without making any commitments on behalf of Buyer, to preserve
its business organization intact, to keep available to Seller its present
officers and employees, and to preserve its present relationships with
suppliers, customers and others having business relationships with it.
8.4......Maintenance of Insurance. Seller shall continue to carry its
existing insurance, subject to variations in amounts required by the ordinary
operations of the Business. At the request of Buyer and at Buyer's sole expense,
the amount of insurance against fire and other casualties which, at the date of
this Agreement, Seller carries on any of the Assets or in respect of its
operations shall be increased by such amount or amounts as Buyer shall specify.
8.5......Employees and Compensation. The parties acknowledge and agree
that certain employees of Seller listed in Section 9.11 shall be terminated by
Seller and offered employment by Buyer prior to the Closing. Seller shall permit
Buyer to contact Seller's employees at all reasonable times for the purpose of
discussing with such employees prospective employment by Buyer on or after the
Closing Date, and Seller shall use its best efforts to encourage all employees
of Seller to accept any employment offered by Buyer.
8.6......New Transactions. Except for transactions contemplated by
Seller's proposed acquisition of MCI, Seller shall not do or agree to do any of
the following acts:
(a) Enter into any contract, commitment or transaction
not in the usual and ordinary course of the Business;
or
(b) Enter into any contract, commitment or transaction in
the usual and ordinary course of business involving
an amount exceeding $25,000, individually, or $50,000
in the aggregate; or
(c) Make any capital expenditures in excess of $25,000
for any single item or $50,000 in the aggregate, or
enter into any leases of capital equipment or
property under which the annual lease charge is in
excess of $25,000; or
(d) Sell or dispose of any capital assets with a net book
value in excess of $25,000 individually, or $50,000
in the aggregate.
8.7......Payment of Liabilities and Waiver of Claims. Seller shall not
do, or agree to do, any of the following acts: (i) pay any obligation or
liability, fixed or contingent, other than current liabilities; (ii) waive or
compromise any right or claim; or (iii) cancel, without full payment, any note,
loan or other obligation owing to Seller.
8.8...... Existing Agreements. Seller shall not modify, amend, cancel
or terminate any of the contracts or agreements to be assigned to Buyer pursuant
to this Agreement, or agree to do any of those acts.
8.9......Consent of Others. As soon as reasonably practical after the
execution and delivery of this Agreement, and in any event on or before the
Closing Date, Seller shall obtain the written consent of the persons described
in Schedule 6.18 to this Agreement in form and substance satisfactory to Buyer
and shall furnish to Buyer executed copies of those consents.
8.10.....Representations and Warranties True at Closing. Seller shall
use its best efforts to assure that all representations and warranties of Seller
set forth in this Agreement and in any written statements delivered to Buyer by
Seller under this Agreement will also be true and correct as of the Closing Date
as if made on that date and that all conditions precedent to Closing shall have
been met. Seller shall promptly disclose to Buyer any information contained in
the Schedules to this Agreement which, because of an event occurring after the
date hereof, is incomplete or is no longer correct as of all times after the
date hereof until the Closing Date; provided, however, that none of such
disclosures shall be deemed to modify, amend or supplement the representations
and warranties of Seller or the Schedules hereto for the purposes of Article 12
hereof, unless Buyer shall have consented thereto in writing.
8.11.....Sales and Use Tax on Prior Sales. Seller agrees to use its
best efforts to furnish to Buyer a clearance certificate from the appropriate
governmental agency and any related certificates that Buyer may reasonably
request as evidence that all sales and use and other tax liabilities of Seller
(other than income tax liabilities) accruing before the Closing Date have been
fully satisfied or provided for.
8.12.....Statutory Filings. Seller shall file, and shall cooperate
fully with Buyer in preparing and filing, all information and documents
necessary or desirable under any statutes or governmental rules or regulations
pertaining to the transactions contemplated by this Agreement.
8.13.....Negotiations with Certain Customers. Seller agrees to
negotiate with HBO & Company of Georgia ("HBOC") and Intel to evaluate the
current state of their respective agreements, contracts and relationships.
8.14.....License Agreement. Seller and Buyer shall enter into a license
agreement in substantially the form of Exhibit A attached hereto (the "Interim
License Agreement"), pursuant to which Seller grants to Buyer an exclusive
license to use the Software from the date of this Agreement until the Closing
Date.
8.15.....Sublease. Seller and Buyer shall enter into a Sublease in
substantially the form of Exhibit B attached hereto (the "Sublease"), pursuant
to which Buyer shall sublease from Seller the premises located at 0000 Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx from the date of this Agreement until
the Closing Date.
ARTICLE 9.........CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligations of Buyer to purchase the Assets under this Agreement
are subject to the satisfaction, at or before the Closing, of all the conditions
set forth in this Article 9. Buyer may waive any or all of these conditions in
accordance with Section 15.2 hereof; provided, however, that no such waiver of a
condition shall constitute a waiver by Buyer of any of its other rights or
remedies, at law or in equity, if Seller shall be in default of any of its
representations, warranties or covenants under this Agreement.
9.1......Accuracies of Seller's Representations and Warranties. All
representations and warranties by Seller in this Agreement or in any written
statement that shall be delivered to Buyer by Seller under this Agreement shall
be true in all material respects on and as of the Closing Date as though made at
that time.
9.2......Absence of Liens. At or prior to the Closing, Buyer shall have
received a UCC search report dated as soon as practicable prior to the Closing
Date issued by the appropriate governmental authorities indicating that there
are no filings under the Uniform Commercial Code on file with such governmental
authority which name Seller as debtor or otherwise indicating any lien on the
Assets, except for the liens otherwise disclosed in the Schedules hereto.
9.3......Seller's Performance. Seller shall have performed, satisfied
and complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by Seller on or before the Closing
Date.
9.4......Certification by Seller. Buyer shall have received a
certificate, dated the Closing Date, signed by Seller's president or vice
president or its chief financial officer, certifying, in such detail as Buyer
and its counsel may reasonably request, that all representations and warranties
of Seller made in Article 6 are true and correct as of the Closing Date and that
the conditions specified in Sections 9.1 and 9.3 have been fulfilled.
9.5......Assignment and Assumption Agreements. Seller and Buyer shall
have entered into assignment and assumption agreements for the License
Agreements and any other agreements of Seller to be assumed pursuant to Article
4, in form and substance reasonably satisfactory to Buyer's counsel.
9.6......Xxxx of Sale. Seller shall have executed a xxxx of sale in
substantially the form of Exhibit C attached hereto,
with respect to the Assets.
9.7......Opinion of Seller's Counsel. Buyer shall have received from
Xxxx Xxxx Xxxx & Freidenrich, LLP, counsel for Seller, an opinion dated the
Closing Date, in form reasonably satisfactory to Buyer's counsel .
9.8......Absence of Litigation. No action, suit or proceeding before
any court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
9.9......Corporate Approval. The execution and delivery of this
Agreement by Seller, and the performance of its covenants and obligations under
it, shall have been duly authorized by all necessary corporate action, and Buyer
shall have received copies of all resolutions of directors and stockholders
pertaining to that authorization, certified by the secretary of Seller.
9.10.....Good Standing Certificate. Buyer shall have received a good
standing certificate for Seller dated as soon as practicable prior to the
Closing Date, issued by the appropriate governmental authorities.
9.11.....Consents. All agreements and consents of any parties to the
consummation of the transaction set forth on Schedule 6.18 shall have been
obtained by Seller and delivered to Buyer.
9.12.....Approval of Documentation. The form and substance of all
certificates, instruments, opinions and other documents delivered to Buyer under
this Agreement shall be satisfactory in all reasonable respects to Buyer and its
counsel.
9.13.....Employment Arrangements.. Buyer shall have entered into
employment arrangements with each of Xxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx,
Xxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxx Xxxxxxx and Xxx Xxxxxxx.
9.14.....Bulk Transfer Notice. Division 6 of the California Uniform
Commercial Code shall have been complied with or waived.
9.15.....Change of Corporate Name. Seller shall have changed its
corporate name to a name not using "HealthDesk" or any similar name.
9.16.....Condition of Assets. The Assets shall not have been materially
or adversely affected in any way as a result of any fire, accident, storm or
other casualty or labor or civil disturbance or act of God or the public enemy.
9.17.....MIIX Agreement.. Buyer shall have entered into a royalty
agreement with MIIX Healthcare Group, Inc.
9.18.....HBOC Agreement. HBOC shall amend its existing agreement with
Seller, which shall be assigned to Buyer pursuant thereto, or Buyer shall have
entered into a revised marketing agreement with HBOC.
ARTICLE 10........CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligations of Seller to sell and transfer the Assets under this
Agreement are subject to the satisfaction, at or before the Closing, of all the
following conditions:
10.1.....Accuracy of Buyer's and Parent's Representations and
Warranties. All representations and warranties by Buyer and Parent contained in
this Agreement or in any written statement delivered by Buyer or Parent under
this Agreement shall be true on and as of the Closing Date as though such
representations and warranties were made on and as of that date.
10.2.....Buyer's and Parent's Performance. Before or at the Closing,
Buyer and Parent shall have performed and complied with all covenants and
agreements, and satisfied all conditions required by this Agreement to be
performed, complied with, or satisfied.
10.3.....Payment of Purchase Price. Buyer shall deliver to Seller
against delivery of the items specified in Article 9 hereof a certified or bank
cashier's check, or a wire transfer of immediately available funds, in the
amount of $626,278, payable to Seller.
ARTICLE 11........OBLIGATIONS OF THE PARTIES AFTER THE CLOSING
11.1.....Preservation of Goodwill. Following the Closing, Seller will
restrict its activities so that Buyer's reasonable expectations with respect to
the goodwill, business reputation, employee relations and prospects connected
with the Assets will not be materially impaired. In furtherance but not in
limitation of this general obligation, Seller agrees that, for a period of three
years following the Closing Date, or as long as Buyer or its heirs, assigns or
successors in interest carry on a like business in the counties or areas
specified, whichever is shorter:
(a) Seller will not engage in any business or activity which is
substantially the same as, or represents an outgrowth of, any
business or activity presently conducted by Seller if such
business or activity extends to any of the geographic areas
set forth in Schedule 11.1 in which Seller has heretofore
engaged in business or otherwise established its goodwill,
business reputation, or any customer relations.
The parties intend that the covenant contained in the
preceding portion of this Section 11.1(a) shall be construed
as a series of separate covenants, one for each geographic
area specified in Schedule 11.1. Except for geographic
coverage, each separate covenant shall be deemed identical in
terms to the covenant contained in the preceding paragraph.
If, in any judicial proceeding, a court shall refuse to
enforce any of the separate covenants deemed included in this
Section, then this unenforceable covenant shall be deemed
eliminated from these provisions for the purpose of those
proceedings to the extent necessary to permit the remaining
separate covenants to be enforced.
(b) Seller will not disclose to any person, or use for its own
benefit, any price lists, pricing data, customer lists or
similar matters possessed by them relating to the Assets or
the Business transferred to Buyer unless it first clearly
demonstrates to Buyer that such matters are, at the time of
the proposed disclosure or use, of common knowledge within the
trade.
11.2.....Change of Name. Seller agrees that after the Closing Date it
shall not use or employ in any manner, directly or indirectly, the name
"HealthDesk", or any variation thereof, and that it will take and cause to be
taken all necessary action by Seller's board of directors, stockholders and any
other persons in order to make this change in Seller's name effective on or
before the Closing Date.
11.3.....Access to Records. From and after the Closing, Seller shall
allow Buyer, and its counsel, accountants and other representatives, such access
to records which after the Closing are in the custody or control of Seller as
Buyer reasonably requires in order to comply with its obligations under the law
or under contracts assumed by Buyer pursuant to this Agreement.
11.4.....Nonsolicitation of Employees. Seller shall not, prior to the
third anniversary of the Closing, solicit any employee of Buyer or Parent or of
any direct or indirect subsidiary of Buyer or Parent to leave such employment if
such employee was at any time between the date hereof and the Closing an
employee of Seller.
11.5.....Further Assurances. At any time after the Closing Date, each
of Seller, Buyer and Parent shall execute, acknowledge and deliver any further
deeds, assignments, conveyances and other assurances, documents and instruments
of transfer, reasonably requested by any other party, and shall take any other
action consistent with the terms of this Agreement that may reasonably be
requested by such other party in furtherance of the transactions contemplated by
this Agreement.
11.6.....Termination of IAC Contract. Buyer agrees to pay to
Information Access Company ("IAC"), on or about November 15, 1998 or the Closing
Date, whichever is later, the sum of $65,000 in connection with the termination
of that certain Online Vendor License Agreement, dated August 12, 1996, between
IAC and Seller, as amended (the "IAC Agreement"); provided, however, that IAC
agrees to continue its obligations under the IAC Agreement, and Buyer shall be
entitled to all of Seller's rights under the IAC Agreement, until February 28,
1999.
ARTICLE 12. INDEMNIFICATION
12.1.....Indemnification by Seller. Seller shall defend, indemnify and
hold harmless each of Buyer, Parent and their respective employees, successors
and assigns (Buyer, Parent and such persons, collectively, "Buyer's Indemnified
Persons"), and shall reimburse Buyer's Indemnified Persons, for, from and
against each and every demand, claim, loss (which shall include any diminution
in value), liability, judgment, damage, cost and expense (including, without
limitation, interest, penalties, costs of preparation and investigation, and the
reasonable fees, disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, "Losses") imposed on or incurred by
Buyer's Indemnified Persons, directly or indirectly, relating to, resulting from
or arising out of: (a) any inaccuracy in any representation or warranty, or any
breach or nonfulfillment of any covenant, agreement or other obligation of the
Seller under this Agreement, the schedules hereto or any certificate or other
document delivered or to be delivered pursuant hereto; and (b) any obligation of
Seller relating to the Assets and any other matter arising out of or related to
the operation of the Business arising prior to or on the Closing Date. The
maximum liability of Seller under this Section 12.1 shall be limited to the
Purchase Price.
12.2.....Indemnification by Buyer and Parent. Buyer and Parent shall
defend, indemnify and hold harmless the Seller, its successors and assigns
(Seller and such persons, collectively, "Seller's Indemnified Persons"), and
shall reimburse Seller's Indemnified Persons, for, from and against all Losses
imposed on or incurred by Seller's Indemnified Persons, directly or indirectly,
relating to, resulting from or arising out of: (a) any inaccuracy in any
representation or warranty, or any breach or non-fulfillment of any covenant,
agreement or other obligation of Buyer or Parent under this Agreement or any
certificate or other document delivered or to be delivered pursuant hereto; and
(b) any obligation of Buyer relating to the License Agreements or any other
matter arising out of or related to the operation of the Business arising after
the Closing Date.
12.3.....Notice and Defense of Third Party Claims. If any action, claim
or proceeding shall be brought or asserted under this Article 12 against an
indemnified party or any successor thereto (the "Indemnified Person") in respect
of which indemnity may be sought under this Article 12 from an indemnifying
person or any successor thereto (the "Indemnifying Person"), the Indemnified
Person shall give prompt written notice of such action or claim to the
Indemnifying Person who shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Person and the
payment of all expenses; except that any delay or failure to so notify the
Indemnifying Person shall relieve the Indemnifying Person of its obligations
hereunder only to the extent, if at all, that it is prejudiced by reason of such
delay or failure. The Indemnified Person shall have the right to employ separate
counsel in any of the foregoing actions, claims or proceedings and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Indemnified Person unless both the Indemnified
Person and the Indemnifying Person are named as parties and the Indemnified
Person shall in good faith determine that representation by the same counsel is
inappropriate due to material conflicts of interest. In the event that the
Indemnifying Person, within ten days after notice of any such action or claim,
fails to assume the defense thereof, the Indemnified Person shall have the right
to undertake the defense, compromise or settlement of such action, claim or
proceeding for the account of the Indemnifying Person, subject to the right of
the Indemnifying Person to assume to the defense of such action, claim or
proceeding with counsel reasonably satisfactory to the Indemnified Person at any
time prior to the settlement, compromise or final determination thereof.
Anything in this Article 12 to the contrary notwithstanding, the Indemnifying
Person shall not, without the Indemnified Person's prior written consent, settle
or compromise any action or claim or proceeding or consent to entry of any
judgment with respect to any such action or claim that requires solely the
payment of money damages by the Indemnifying Person and that includes as an
unconditional term thereof the release by the claimant or the plaintiff of the
Indemnified Person from all liability in respect of such action, claim or
proceeding.
ARTICLE 13. COSTS.
13.1.....Finder's or Broker's Fees. Each of the parties represents and
warrants that it has not dealt with any broker or finder in connection with any
of the transactions contemplated by this Agreement, and, insofar as it knows, no
broker or other person is entitled to any commission or finder's fee in
connection with any of these transactions.
13.2.....Expenses. Each of the parties shall pay all costs and
expenses, including but not limited to attorneys' fees, incurred or to be
incurred by it in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.
ARTICLE 14. FORM OF AGREEMENT.
14.1.....Headings. The subject headings of the Articles and Sections of
this Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
14.2.....Entire Agreement; Modification; Waiver. This Agreement,
together with the License Agreement and the Voting Agreement, constitutes the
entire agreement between the parties pertaining to the subject matter contained
in it and supersedes all prior and contemporaneous agreements, representations
and understandings of the parties. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by all the parties.
No waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
14.3.....Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
ARTICLE 15. PARTIES
15.1.....Parties in Interest. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties hereto and their
respective successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over against any party hereto.
15.2.....Assignment. This Agreement shall be binding on and shall inure
to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
ARTICLE 16. TERMINATION
16.1.....Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Closing Date by the mutual written consent
of Buyer and Seller.
16.2.....Termination by Buyer or Seller. This Agreement may be
terminated at any time prior to the Closing Date by Buyer or Seller (i) if the
Closing has not occurred on or before November 30, 1998, unless the party
seeking to invoke this subclause (i) is then in material breach of any of its
obligations hereunder; (ii) if a court of competent jurisdiction or any
governmental authority shall have issued an order, decree or ruling or taken any
other action, in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and such order,
decree, ruling or other action shall have become final and nonappealable, or
(iii) if the other party shall have breached or failed to comply in all material
respects with its representations, warranties, covenants and agreements
contained in this Agreement; provided, however, that if such breach or failure
is reasonably capable of being cured on or before November 30, 1998 and such
party commences such cure as soon as practicable and diligently prosecutes
(subject to any other limitations of this Agreement) such cure, such party shall
be entitled to postpone the Closing Date for a period reasonably sufficient to
effect such cure to the reasonable satisfaction of the party asserting such
breach or failure, but in no event beyond November 30, 1998.
16.3.....Effect of Termination. In the event of termination of this
Agreement pursuant to this Article 16, no party hereto (or, in the case of
Buyer, any of its directors or officers) shall have any liability or further
obligation to any other party to this Agreement, provided that, if this
Agreement is so terminated by a party because one or more of the conditions to
such party's obligations hereunder is not satisfied as a result of the other
party's willful failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies for breach of contract or
otherwise, including, without limitation, damages relating thereto, shall also
survive such termination unimpaired.
ARTICLE 17. NATURE AND SURVIVAL OF
REPRESENTATIONS AND WARRANTIES.
All representations, warranties, covenants and agreements of the
parties contained in this Agreement, or in any instrument, certificate, opinion
or other writing provided for hereunder, shall survive the Closing for a period
of one year.
ARTICLE 18. NOTICES.
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service if served personally on the party to whom notice is to be given,
or on the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail registered or certified, postage prepaid, and
properly addressed as follows:
Buyer and Parent: Patient InfoSystems, Inc.
Patient InfoSystems Acquisition Corp.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
with copy to: Xxxxxxx, Del Deo, Dolan,
Griffinger & Xxxxxxxxx
A Professional Corporation
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Seller: HealthDesk Corporation
c/o Equity Dynamics
0000 Xxxxxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attn: Xxxxxx Xxxxxx
with copy to: Xxxx Xxxx Xxxx & Freidenrich, LLP
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxx, Esq.
Any party may change its address for purposes of this Article by giving
the other parties written notice of the new address in the manner set forth
above.
ARTICLE 19. GOVERNING LAW
This Agreement shall be construed in accordance with, and governed by,
the laws of the State of New York, without giving effect to conflicts of laws
principles.
ARTICLE 20. MISCELLANEOUS
20.1.....Recovery of Litigation Costs. If any legal action or any
arbitration or other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
20.2.....Announcements. Seller shall not make any announcements to the
public or to employees of Seller concerning this Agreement or the transactions
contemplated hereby without the prior approval of Buyer, which will not be
unreasonably withheld. Notwithstanding any failure of Buyer to approve it,
Seller may make an announcement of substantially the same information as
theretofore announced to the public by Buyer, or any announcement required by
applicable law, but Seller shall in either case notify Buyer of the contents
thereof reasonably promptly in advance of its issuance.
20.3.....References. Unless otherwise specified, references to
Sections or Articles are to Sections or Articles in this Agreement.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
as of the day and year first above-written.
BUYER: PATIENT INFOSYSTEMS
ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President
PARENT: PATIENT INFOSYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President
SELLER: HEALTHDESK CORPORATION
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Technical Officer
