ASSET PURCHASE AGREEMENT
This AGREEMENT is made on the 11th day of August, 1995 by and among
MEDIQ Imaging Services, Inc. and its wholly-owned subsidiaries American
Cardiovascular Imaging Labs, Inc. and Southeastern Diagnostics, Inc., with
offices located at Xxx Xxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter
referred to collectively as "Sellers") and NMC Diagnostics Services Inc., a
Delaware corporation (hereinafter referred to as "Buyer").
W I T N E S S E T H:
WHEREAS, Sellers own and operate a diagnostic testing business
throughout the United States (the "Business"); and
WHEREAS, Sellers desire to sell to Buyer and Buyer desires to purchase
from Sellers certain assets of the Business.
NOW, THEREFORE, the parties agree as follows:
I. Terms of Purchase and Sale
A. Subject to the terms and conditions hereinafter set forth,
Sellers hereby agree to sell, convey, transfer and deliver to
Buyer, and Buyer agrees to purchase and accept from Sellers,
all of Sellers' right, title and interest in and to the
following assets of the Business (the "Assets") to the extent
such Assets do not constitute Excluded Assets (hereinafter
defined):
1. all inventory, wherever located, used or held for
sale in connection with the conduct of the
Business, including, without limitation, supplies,
raw materials, scrap, containers, packaging materials
and spares;
2. all machinery, equipment, parts, tooling, motor
vehicles, furniture, furnishings, fixtures,
supplies, plant and office equipment and all other
tangible personal property of the Business, wherever
located;
3. all files and operating data and records primarily
relating to the Business and the conduct of
the Business, including, without limitation, all
books, manuals, fixed assets records, documents,
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computer software, operating procedures, customer
lists, sales records, credit information,
correspondence, literature, sales and advertising
materials, designs and drawings, models, patterns,
slogans and books of account;
4. all customer and supplier lists primarily relating
to, or otherwise material to the conduct of,
the Business;
5. the leases for real property for space solely
occupied by Sellers set forth on Exhibit
II.I (the "Leases");
6. leases, subleases and assignments (whether as
lessee, sublessee, or assignee) of machinery,
equipment and other personal property used
primarily by the Business (the "Equipment Leases");
7. all of the Business' accounts and notes receivable
reflected on the books of the Sellers on the
Closing Date;
8. all of the Sellers' cash, cash in banks, cash
equivalents, deposits, investments, securities,
advance payments, prepaid items and expenses,
deferred charges, rights of offset and credits and
claims for refund;
9. all contracts and agreements of the Sellers relating
to the operations of the Business (except as excluded
herein); all purchase and sale orders (and orders
evidenced solely by order acknowledgements),
contracts and agreements of the Sellers relating to
the purchase of products, materials or services used
in connection with the conduct of the Business; all
agreements of the Sellers with medical providers; the
Leases; the Equipment Leases; and all other contracts
and agreements entered into by Sellers in the conduct
of the Business including, without limitation, all
agreements set forth on Exhibit II.J, (except those
contracts required to be included on Exhibit II.J,
but which are not included if such contracts are not
in compliance with laws in effect on the Closing
Date) (collectively, the
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"Assigned Contracts");
10. all intellectual property which is or has been used
to conduct the Business, including, without
limitation, all patents, patent applications,
copyrights and copyright applications; registered and
unregistered trademarks and service marks, trademark
and service xxxx registrations, trademark and service
xxxx applications for registration; all patent,
trademark, service xxxx, trade name and know-how
rights granted to the Business under licensing or
other agreements; and all know-how, proprietary
information, production methods, trade and business
secrets and computer software;
11. all rights, claims or causes of action against third
parties primarily relating to the Assets, Business or
operation of the Business;
12. all assignable third party warranties and guarantees
with respect to any of the Assets; and
13. all franchises, approvals, permits, licenses, orders,
registrations, certificates, variances, tax
abatements and other similar permits or rights and
all pending applications therefor related to the
Business ("Permits"), other than Medicare provider
numbers but including such provider numbers for South
Carolina and Colorado.
B. Excluded Assets. Notwithstanding anything contained in
Section I.A. hereof to the contrary, Sellers are not selling,
assigning, transferring or conveying to Buyer any asset or
item not described in Section I.A. Without limiting the
foregoing, the following assets, rights and properties are
excluded from the transactions contemplated in this Agreement
(the "Excluded Assets"):
1. any equipment and other personal property, wherever
located, owned by third parties who are not
affiliated with Sellers, and any equipment and other
personal property not presently used or being stored,
prepared or repaired for use by Sellers primarily in
the
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operation of the Business as it is currently being
conducted.
2. the name "MEDIQ" and any derivation thereof:
3. to the extent not reflected as assets on the Closing
Balance Sheet, refunds for taxes paid and any claim
that Sellers or any of their affiliates may have,
have had or will have against a third party with
respect to any events or acts occurring prior to the
Closing;
4. to the extent not reflected on the Closing Balance
Sheet, accounts receivable from Sellers' affiliates,
Sellers' pension, profit-sharing or other funded
employee benefit plan assets or liabilities;
5. the capital stock of or owned or held by Sellers;
6. all corporate minute books and stock books and
records of Sellers;
7. the assets, properties and rights not primarily used
in the Business owned or held by any affiliate of any
Seller (other than any other Seller);
8. Sellers' Medicare and Medicaid provider numbers
other than the provider numbers for South Carolina
and Colorado;
9. banking or financial institution accounts or any
deposit or concentration accounts or safety deposit
boxes (but not the cash or cash equivalents in such
accounts or boxes);
10. all bonds and letters of credit including, but not
limited to, those posted to support Sellers' and the
Business' workers' compensation obligations and
general liability and other insurance obligations,
policies and premiums;
11. books and records that Sellers are required to
retain pursuant to any statute, rule, regulation or
ordinance; and
12. assets, properties and rights of any nature that are
not reflected on the Closing Balance Sheet and either
(i) are used by Sellers or their affiliates
(including, without limitation, Mediq or any
subsidiary or division thereof) in providing general
corporate, insurance and
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administrative services to divisions, subsidiaries or
operating units of Sellers or their affiliates as
well as to the Business or (ii) used by Sellers or
their affiliates (including, without limitation,
Mediq or any subsidiary or division thereof) in any
business or businesses other than the Business.
C. Obligations Under Assigned Contracts; Assumed Liabilities.
1. Subject to the terms and conditions of this
Agreement, at the Closing, Sellers will assign and
transfer to Buyer the Assigned Contracts, and Buyer
will assume and in a timely fashion will pay, perform
and/or discharge: (1) all of Sellers' obligations and
liabilities under the Assigned Contracts (other than
any such obligations and liabilities which were to be
performed on or prior to the Closing Date
("Pre-Closing Performance") unless (x) if such
Pre-Closing Performance involved the payment of
money, such monetary obligation is reflected as a
liability on the Closing Balance Sheet or (y) if such
Pre-Closing Performance did not involve the payment
of money, such obligation is of a nature arising in
the ordinary course of the Business and does not
constitute a violation of laws in effect on the
Closing Date) and the assigned Permits in accordance
with the respective terms thereof; (2) liabilities
and expenses of the Sellers of a nature required to
be set forth, and that are set forth on the Proposed
Balance Sheet; (3) the Liens (as hereinafter
defined); (4) the obligations and liabilities of the
Business arising from events occurring after Closing;
(5) accounts payable and accrued expenses to the
extent set forth on the Closing Balance Sheet (6) to
the extent of any Unused Basket Amount (as
hereinafter defined), any other liabilities of the
Sellers; (7) taxes to be paid by Buyer pursuant to
Section I.D below and (8) the obligations and
liabilities set forth on Exhibit I.C (collectively
the liabilities and obligations described in
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clauses (1) through (8) are referred to as the
"Assumed Liabilities"). Buyer assumes no other
liabilities of the Sellers unless specifically
assumed by Buyer in this Agreement. Without limiting
the foregoing, Buyer is not assuming any tax
liability accruing prior to the Effective Date, and
is not assuming any litigation based solely on events
occurring prior to the Effective Date, is not
assuming any liability of any nature under any of
Sellers' pension plans (other than the obligation, if
any, to pay the amount of any payable or expense
expressly accrued on the Closing Balance Sheet).
2. Except as herein provided, to the extent that any
lease, contract, license, permit, agreement, sales or
purchase order, commitment, property interest,
qualification or other Asset described in Section
I.A, and not otherwise excluded in Section I.B, to be
sold, assigned or conveyed to Buyer, cannot be sold,
assigned or conveyed, without the approval, consent
or waiver ("Consent") of any third person (including
any landlord or any government or governmental unit),
or if such sale, assignment or conveyance or
attempted sale, assignment or conveyance would
constitute a breach thereof or a violation of any
law, decree, order, regulation or other governmental
edict, this Agreement shall not (unless and until
such Consent is obtained) constitute or require a
sale, assignment or conveyance thereof, or an
attempted sale, assignment or conveyance thereof.
Buyer and Seller shall each use good faith efforts,
and shall cooperate with each other, to obtain all
Consents necessary to sell, assign or convey the
Assets to Buyer as soon as practicable at no cost or
liability to Sellers. If any of the Consents have not
been obtained by Buyer or Sellers as of the Closing,
(i) the Purchase Price set forth in Section I.E shall
not be affected thereby and Buyer shall purchase all
remaining Assets and (ii) the liabilities
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and obligations assumed by Buyer pursuant to Section
I.C shall not be affected thereby and Buyer shall
assume, pay, perform and discharge the Assumed
Liabilities in respect of all Assigned Contracts and
Permits as if all consents had been obtained and all
Assigned Contracts and Permits were sold, assigned
and conveyed to Buyer.
3. In order, however, to provide Buyer the full
realization and value of every Assigned Contract on
and after the Closing Date the Sellers shall, by
themselves or by their agents, at the request and
expense of Buyer, and in such manner as Buyer shall
reasonably specify and as shall be permitted by law
and shall not be in violation of the Assigned
Contracts, take all such reasonable action (including
without limitation the appointment of the Buyer as
attorney-in-fact for the Sellers or, upon receipt of
indemnity from Buyer reasonably satisfactory to the
Sellers, the subcontracting with Buyer to effect a
"pass-through" of the rights and obligations that
will remain with the Seller that is a primary party
to such Assigned Contract) and do or cause to be done
all such things as shall be necessary or proper (i)
to assure that the rights and obligations of Sellers
under such Assigned Contracts shall be preserved for
the benefit of Buyer and (ii) to facilitate receipt
of the consideration to be received by the Sellers in
and under any such Assigned Contract, which
consideration the Sellers shall hold for the benefit
of, and upon request of Buyer shall deliver to, Buyer
to the extent herein provided
D. Payment of Taxes and Other Charges; Prorations.
1. At the Closing or thereafter at the request of
Sellers, Buyer shall pay all real property transfer
taxes, sales and use taxes, documentary stamp taxes,
recording charges and other fees and taxes imposed
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by any governmental entity in connection with the
transfer of the Assets (the "Transactional Taxes").
Buyer shall (a) pay the cost of obtaining title
insurance, if any, including, without limitation, all
premiums and title closing costs required to be paid
in connection therewith, and (b) pay the cost of all
real property surveys and investigation, if any,
obtained by Buyer in connection with the transactions
contemplated hereunder and any costs associated with
obtaining landlord or other consents to the
transaction contemplated hereby; however, Sellers
will be responsible for their internal costs of
obtaining such consents. Buyer shall prepare and
file, and Sellers shall fully cooperate with Buyer
with respect to such preparation and filing of, any
returns and other filings relating to any such taxes,
fees, charges or transfers, as may be required.
2. Any and all taxes (other than sales and use, excise,
payroll, income, franchise, corporate or similar
taxes, including any taxes payable to local franchise
authorities, which are imposed or assessed against
either party based upon or measured by revenues of
such party), rents, utilities, payments and receipts,
rentals, costs, charges, fees or expenses connected
with or used in the operations of the Business, and
any and all revenues in connection with the Assumed
Contracts shall be prorated between the parties as of
the close of business on the date immediately
preceding the Effective Date and Sellers shall bear
their proportion of the costs and shall be entitled
to their proportion of the revenues through the date
immediately preceding the Effective Date and Buyer
shall bear its proportion of the costs and shall be
entitled to its proportion of the revenues from the
Effective Date. Taxes (other than sales and use,
excise, payroll, income, franchise, corporate or
similar taxes, including any taxes payable to local
franchise authorities, which are imposed or
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assessed against either party based upon or measured
by revenues of such party) shall be prorated on the
basis of the taxable year of the authority levying
such taxes as of the close of business on the date
immediately preceding the Effective Date and all
other amounts shall be prorated as of the close of
business on the date immediately preceding the
Effective Date based on a thirty (30) day month and a
360-day year. Each party agrees to promptly make
payments to the other party in respect of amounts due
and owing such other party for adjustments required
by this Section as soon as such amounts are
determined or determinable. Notwithstanding anything
to the contrary herein, in no event shall Sellers
have any liability to Buyer for prorations pursuant
to this Section to the extent such prorations are
reflected on the Closing Balance Sheet.
E. The aggregate purchase price for the Assets and covenants not
to compete hereunder (the "Purchase Price") shall be the sum
of $19,400,000.00. The Purchase Price will be allocated as set
forth in Exhibit I.E. The parties hereto agree to file all
income, franchise and other tax returns in a manner consistent
with such allocation. No party shall take any position with
any taxing authority inconsistent with such allocation unless
otherwise required by applicable law.
F. No sooner than five business days nor later than one business
day prior to the Closing Date, Sellers will provide to Buyer a
proposed Closing Balance Sheet (as hereinafter defined), and a
good faith estimate (the "Estimated Adjustment") of the
"Purchase Price Adjustment" (as hereinafter defined) based on
the Sellers' consolidated records at such date. Such proposed
Closing Balance Sheet ("Proposed Balance Sheet") will be
prepared by Sellers based upon Sellers' financial condition at
May 31, 1995 updated to reflect an estimate of the results of
operations for June 1995 (but without estimate of the results
of operations for July 1995 even
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though such results will be reflected in the Closing Balance
Sheet). The Proposed Balance Sheet and Estimated Adjustment
are attached hereto as Exhibit I.F(1). The "Purchase Price
Adjustment" shall be the amount by which the Adjusted Book
Value of the Sellers differs from $5,812,000 (the "Beginning
Balance") (e.g. if the Adjusted Book Value exceeds the
Beginning Balance, the Purchase Price will be increased by the
amount of the excess, or if the Adjusted Book Value is less
than the Beginning Balance, the Purchase Price will be
decreased by the amount of such difference). As used herein,
the "Adjusted Book Value" of the Sellers shall mean the amount
by which (a) the aggregate amount of the assets reflected on
the Closing Balance Sheet exceeds (b) the aggregate amount of
the liabilities reflected on the Closing Balance Sheet,
exclusive of goodwill, Sellers' inter-company payables and
receivables, federal and state taxes and deferred taxes, all
as reflected on the Closing Balance Sheet. The parties agree
that the reserve for uncollectible accounts receivable to be
used on the Proposed Balance Sheet and Closing Balance Sheet
shall be calculated as set forth on Exhibit I.F(2). In the
event Buyer collects more than the amount reflected on the
Closing Balance Sheet net of such reserve in respect of
accounts receivable of the Sellers outstanding on the Closing
Date, Buyer shall promptly from time to time remit such excess
to Sellers and in any event within twenty (20) days of receipt
by Buyer of any applicable payment.
G. As soon as practicable, but in any event within 60 days
following the Closing Date, Sellers shall prepare and deliver
to Buyer (x) a consolidated balance sheet of the Sellers
prepared as of a point in time immediately prior to the close
of business on the Effective Date (the "Closing Balance
Sheet") prepared in accordance with generally accepted
accounting principles ("GAAP") and reflecting accounting
principles consistent with those used in the preparation of
the Proposed Balance Sheet and the
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consolidated balance sheet of Sellers attached hereto as
Exhibit I.G (all such principles not in accordance with GAAP
are detailed in notes to Exhibit I.G) (the "Accounting
Principles") and (y) a calculation of the proposed final
Purchase Price Adjustment (the "Purchase Price Adjustment
Calculation"). Buyer acknowledges that the Proposed Balance
Sheet was prepared assuming Closing occurred on June 30, 1995
and that the Closing Balance Sheet will be prepared as
aforesaid as of the close of business on the actual Effective
Date and accordingly will reflect the results of operations
and change in financial condition arising between such dates
in addition to any other adjustments that would have otherwise
been made in preparing the Closing Balance Sheet. If Sellers
have not obtained reactivation of existing provider numbers
for Florida or New Jersey before the delivery of the Closing
Balance Sheet, the receivables with respect to those states
which Sellers are unable to collect without such reactivated
provider numbers will not be included on the Closing Balance
Sheet; provided, however, that at such time as Sellers obtain
such reactivated provider numbers, Buyer will collect those
receivables pursuant to Section IV.K for Sellers' account and
shall promptly pay any such amounts collected to Sellers.
Buyer shall give Sellers such access to the employees and
books and records of the Business as may be necessary to allow
Sellers to prepare the Closing Balance Sheet and the Purchase
Price Adjustment Calculation. The Closing Balance Sheet and
the Purchase Price Adjustment Calculation (and the resulting
Purchase Price Adjustment), when delivered to Buyer, shall be
deemed conclusive and binding on the parties, unless Buyer
notifies Sellers, within 30 days after receipt of the Closing
Balance Sheet, of its disagreement therewith (which notice
shall state with reasonable specificity the reasons for any
disagreement and the amounts in dispute). If there is a
disagreement regarding the Purchase Price Adjustment
Calculation (and the resulting
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Purchase Price Adjustment) and Closing Balance Sheet, and such
disagreement cannot be resolved by the parties within 30 days
following receipt by Buyer of the Closing Balance Sheet and
the Purchase Price Adjustment Calculation, the dispute shall
be submitted to a nationally recognized firm of independent
auditors acceptable to both Buyer and Sellers, and the
determination by such independent auditing firm shall be
binding and conclusive upon the parties. Buyer and Sellers
shall each pay one-half of the cost of the fees and expenses
of such independent auditing firm. Delivery and acceptance of
the Closing Balance Sheet will not diminish Buyer's rights
under Article V of this Agreement; provided, however, that the
amounts accrued for an item on the Closing Balance Sheet will
be taken into account in assessing the amount of any damages
to which Buyer may be entitled pursuant to Article V.
H. To the extent the Purchase Price Adjustment as finally
determined pursuant to subsection G exceeds the Estimated
Adjustment by a positive amount, Buyer shall pay the
difference to Sellers. To the extent the Purchase Price
Adjustment is less than the Estimated Adjustment or exceeds
the Estimated Adjustment by a negative amount, Sellers shall
pay the difference to Buyer. Any amount due pursuant to this
Section shall be paid by Buyer to Sellers or by Sellers to
Buyer, as the case may be, within 10 days after any disputes
have been resolved and the final determination of the Purchase
Price Adjustment is made.
I. On the Closing Date, Buyer shall pay to Sellers by wire
transfer the Purchase Price adjusted by the amount calculated
in Section I.F.
II. Representations and Warranties of Sellers
Sellers represent, warrant, and agree as follows:
A. Sellers are corporations duly incorporated, validly existing
and in good standing under the laws of their respective states
of incorporation, have
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filed and paid all applicable annual reports and fees with the
applicable Secretaries of State, and have the corporate power
to own their respective properties and assets and carry on
their respective business as is presently being conducted.
Sellers have furnished to Buyer certified copies of Articles
of Organization and By-Laws and a certificate of good standing
certified by the applicable Secretary of State of their
respective states of incorporation. These documents are
contained in Exhibit II.X.
X. Xxxxxxx are owned as shown on Exhibit II.B which exhibit sets
forth the state of incorporation of each Seller.
C. The execution and delivery of this Agreement do not, and the
consummation of the purchase and sale will not, violate any
provision of, or result in the acceleration of any obligation
under any mortgage, lien, lease, agree- ment, instrument,
order, license, arbitration award, judgment, or decree to
which the Sellers are a party or by which each is bound (other
than agreements, if any, wherein the consent of the other
party thereto is required and the loan agreement with Congress
Financial Corporation) in such a way as to have a material
adverse effect on the Business taken as a whole (a "Material
Adverse Effect").
D. Except as set forth on Exhibit II.F, Sellers have, or will
have prior to the Closing Date, all permits and licenses
necessary for the operation of Business as conducted at
Closing, including valid Medicare provider numbers, and to
receive private, state and federal government payment for
furnishing diagnostic testing and related products and
services other than any permits or licenses the failure of
which to have would not have a Material Adverse Effect. A
listing of all such licenses and permits and current license
numbers has been provided to Buyer.
E. There are now no pending or to Sellers' knowledge, threatened
claims, suits, actions, assessments, arbitration awards or
proceedings at law or in equity or before any governmental
instrumentality or other agency which,
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if adversely determined, would have a Material Adverse Effect
to which Sellers are a party or which the Business is or may
be subject except as described in Exhibit II.E attached
hereto. No suits or actions by any referring physician of
Sellers has been settled in the past year. Sellers are not in
violation of or in default with respect to any judgment,
order, award, writ, injunction or decree of any court,
governmental department, commission, agency, instrumentality,
arbitrator, administrative agency or governmental authority,
where such violation or default, severally or in the
aggregate, would have a Material Adverse Effect or will
prevent the consummation of the transactions contemplated
hereby.
F. Except as disclosed on Exhibit II.F, to Sellers' knowledge,
Sellers are not now nor have they ever been at any time during
which a majority of their capital stock was owned directly or
indirectly by Mediq Incorporated, a Delaware corporation
("Mediq"), investigated, charged or implicated in any
violation of any state or federal statute or regulation
involving fraudulent and abusive practices with respect to
participation in state and/or federally sponsored
reimbursement programs, including but not limited to
fraudulent billing practices. The Business has properly billed
all intermediaries and third party payors for all products
supplied and services rendered by the Business and has
maintained its records to reflect such billing practices
except where any failure to do so would not have a Material
Adverse Effect. No funds are now or will be withheld by any
Medicare intermediary or other insurance carrier except those
disclosed to Buyer on Exhibit II.F. All Medicare or third
party overpayments have been properly reported and returned to
the applicable party as required by law or contract except
where any failure to do so would not have a Material Adverse
Effect.
G. The consolidated balance sheets of the Sellers as of January
31, 1995, and the related income statements for the period
then ended, all attached hereto as Exhibit I.G, (the "Balance
Sheet"), fairly present in all material
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respects the financial position of the Sellers as of January
31, 1995 in accordance with GAAP (except that Buyer
acknowledges that such financial statements do not reflect any
effect that may result from the matters described in Exhibits
II.E, II.F, or II.K). Except as set forth on Exhibit II.K,
since January 31, 1995, the Business has been operated in the
normal course of business in all material respects.
X. Xxxxxxx have good and marketable title to and own free and
clear of any liens or encumbrances, except for Liens, all the
Assets. As used herein, "Liens" shall mean (a) minor
imperfections of title, none of which, individually or in the
aggregate, materially detracts from the value of or impairs
the use of the affected item, affects Buyer's ability to sell
the item (other than liens resulting from liabilities
reflected on the Proposed Balance Sheet) or impairs the
operations of the Business, (b) liens for current taxes not
yet due and payable, (c) encumbrances for debts which will be
released on or before the Closing Date, and (d) as disclosed
on Exhibit II.H. No other warranties, express or implied, are
made by Sellers, and Buyer waives all such warranties, other
than as set forth expressly in this Agreement, regarding the
title, value, condition and use of the Assets, including, but
not limited to, warranties, of habitability, merchantability
or fitness for a particular purpose. Buyer hereby affirms that
Sellers, their agents, employees and/or attorneys have not
made nor has Buyer relied upon any representation, warranty or
promise with respect to the Assets or any other subject matter
of this Agreement except as expressly set forth in this
Agreement. The Assets include all of the assets and interests
in assets of Sellers and their affiliates that are used in the
operation of the Business as presently conducted, other than
the Excluded Assets.
I. The Leases and the copies of leases annexed to Exhibit II.I
are true and complete copies of all real and all material
personal property leases of the
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Sellers. No other warranties, express or implied, are made by
Sellers, and Buyer waives all such warranties, other than as
set forth expressly in this Agreement regarding the title,
value, condition and use of the real properties together with
the leasehold improvements, fixtures, and equipment therein
which are the subject of such Leases, including, but not
limited to, warranties of habitability, merchantability or
fitness for a particular purpose. Buyer hereby affirms that
Sellers, their agents, employees and/or attorneys have not
made nor has Buyer relied upon any representation, warranty or
promise with respect to such real property or any other
subject matter of this Agreement except as expressly set forth
in this Agreement. No party to any Lease has sent written
notice to the other claiming that such party is in default
thereunder, which default remains uncured. There has not
occurred any event which would constitute a breach of or
default in the performance of any material covenant, agreement
or condition contained in any Lease by Sellers and, to the
best of Sellers' knowledge, any other party thereto which
would have a Material Adverse Effect. Sellers are not
obligated to pay any leasing or brokerage commission relating
to any Lease which has not been paid prior to the date hereof,
and does not have any enforceable obligation to pay any
leasing or brokerage commission upon the renewal or extension
of any Lease. Except as expressly set forth in the Leases,
none of the Leases imposes any restrictions that would
materially interfere with the continued operation of the
Business as currently conducted. No renewal option under any
Lease has been exercised unless the renewal notice is attached
as Exhibit II.I.
J. The contracts listed on Exhibit II.J and the copies of such
contracts annexed to Exhibit II.J are true and complete copies
of all contracts of Sellers relating to the operations of the
Business of (i) all employment agreements, consulting
agreements in amounts with payments exceeding
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$40,000.00 per year (unless with a referring physician, all of
which are attached), joint venture, and agency agreements to
which the Sellers are a party and which would continue to bind
the Sellers one year beyond the date hereof; (ii) with
principal suppliers of the Business with payments exceeding
$40,000.00 per year, $200,000 over the term of the contract or
for a term in excess of two years; (iii) bonus, incentive
compensation, profit-sharing, deferred compensation and
post-termination obligations and trust agreements of the
Sellers in effect or under which any amounts which exceed
$40,000.00 remain unpaid on the date hereof or are to become
effective after the date hereof; (iv) any contract limiting
the freedom of the Business to compete in any line of business
or with any entity; and (v) all other contracts, the loss of
which would have a Material Adverse Effect, not otherwise set
forth in other Exhibits hereto. To the best of Sellers'
knowledge, except as set forth in Exhibit II.K, there is no
existing breach or default by any other party to any Contract,
and to the best of Sellers' knowledge, except as set forth in
Exhibit II.K, no event has occurred which with the passage of
time or giving of notice would constitute a breach or default
by any party under an Assigned Contract, result in a loss of
rights or result in the creation of any encumbrance under an
Assigned Contract, except any of the foregoing which would not
have a Material Adverse Effect.
K. Except as set forth on Exhibit II.K, since January 31, 1995:
1. There has been no material adverse change in the
financial condition, results of operations, assets,
liabilities, licenses, permits, material agreements,
method of accounting or manner of conducting the
Business taken as a whole other than, in each case,
changes in the ordinary course of business and other
than changes relating to the economy in general or
industry conditions.
2. There has been no damage, destruction or other
casualty loss
18
materially and adversely affecting the business,
properties, financial condition or results of
operations of the Business taken as a whole except
any such loss which is covered by insurance.
3. There has been no increase in compensation payable or
to become payable by the Sellers to any of its
officers, employees or agents other than increases in
the ordinary course of business.
4. The Sellers have not entered into any material
contracts, agreements or licenses which would be
required to be forth in Exhibit II.I or II.J other
than those set forth in Exhibit II.I or II.J and
previously delivered to Buyer.
5. The Sellers have not incurred any indebtedness for
borrowed money or purchase money indebtedness other
than in the ordinary course of business.
L. There are no outstanding options or rights to purchase the
stock of the Sellers that would affect this transaction.
M. To Sellers' knowledge, as of January 31, 1995, all
liabilities of Sellers required by GAAP to be set forth on a
balance sheet that was prepared on and as of January 31, 1995,
are reflected on the Balance Sheet (except that Buyer
acknowledges that such Balance Sheet does not reflect any
effect that may result from the matters described in Exhibits
II.E, II.F, or II.K). Any and all attorneys' and accountants'
fees and disbursements and other costs incurred on behalf of
Sellers in connection with this Agreement and related
agreements shall not become Assumed Liabilities.
N. During each of the past ten calendar years, or such shorter
period as such entity has been directly or indirectly majority
owned by Mediq, the Sellers have been and presently are
insured against the normal risks of their business on a
claims-made basis, including, without limitation, professional
liability, and general liability insurance in aggregate annual
amounts of not
19
less than $5,000,000.00, and with a deductible not exceeding
$250,000.00. Sellers will, at Sellers' option, either maintain
such claims-made coverage or purchase "tail" coverage
affording professional liability and general liability
insurance for a period of three years following the Effective
Date. Certificates evidencing such policies that are currently
in place (the "Insurance Policies") are attached as Exhibit
II.N. All premiums due on the Insurance Policies or renewals
thereof have been paid and to Sellers' knowledge, Sellers are
not in default under any of the Insurance Policies. Sellers
have not received any notice or other communication from any
issuer of the Insurance Policies canceling or materially
amending any of the Insurance Policies, materially increasing
any deductibles or retained amounts thereunder, or materially
increasing the annual or other premiums payable thereunder,
and, to the best of Sellers' knowledge, no such cancellation,
amendment or increase of deductibles, retainages or premiums
is threatened.
O. The present conduct of the Business by Sellers complies in all
respects with the applicable provisions of federal, state, and
local laws (including the Federal False Claims Act, the XXXX
Xxxxxxx, 00 X.X.X. 0000x-0x, 42 U.S.C. 1395 nn, or any related
state self-referral statutes) and all government licenses,
permits, and other authorizations applicable thereto, except
where failure to comply would not have a Material Adverse
Effect.
P. No work stoppages or other labor disputes involving the
Business are pending or, to the best of Sellers' knowledge,
threatened during the last 3 years. Sellers have no knowledge
that any individual (other than Xxxxxxx Xxxxxxx) having an
annual salary in excess of $40,000.00 currently has an
intention to terminate his/her employment except as set forth
in Exhibit II.X. Xxxxxxx have no collective bargaining
agreements currently in effect. Seller has no material
arrearages in the payment of wages, taxes or worker's
compensation assessments or penalties.
20
1. Exhibit II.P contains a complete list of Sellers'
(i) current pension, profit sharing, stock bonus,
deferred compensation, retirement or other "employee
pension benefit plans," as that term is defined in
Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") (the
"Pension Plans"); (ii) current "employee welfare
benefit plans" as that term is defined in Section
3(1) of ERISA, whether insured or otherwise (the
"Welfare Benefit Plans"); and (iii) other material
employee benefit plans, policies and practices
including deferred compensation arrangements or other
similar programs (the "Non-ERISA Plans"), maintained
or contributed to with respect to any employee of the
Business (all of such plans shall hereinafter be
referred to collectively as "Employee Plans"). A copy
of each Employee Plan has been furnished to Buyer.
None of the Employee Plans are "voluntary employees'
beneficiary associations" ("VEBAs") as described in
Section 501(c)(9) of the Internal Revenue Code of
1986, as amended (the "Code").
2. Sellers do not contribute, are not required to
contribute, and have never been required to
contribute to any multiemployer plan within the
meaning of Section 3(37) of ERISA.
3. Except for medical insurance coverage required by law
to be provided to former employees, no Employee Plan
provides health or life insurance benefits for
retirees.
4. No Employee Plan, any trust created thereunder, or,
to the best of Sellers' knowledge, any trustee or
fiduciary (as defined in Section 3(21) of ERISA)
thereof, has engaged in a "prohibited transaction" as
such term is defined in Section 4975 of the Code or
Section 406 of ERISA which would have a Material
Adverse Effect.
5. Sellers have made all contributions, paid all
premiums and satisfied
21
all liabilities with respect to the Employee Plans
which are payable as of the date hereof except any of
the foregoing which would not have a Material Adverse
Effect.
Q. Sellers have filed all tax returns required to be filed by
them commencing with the taxable period the Sellers were first
majority-owned by Mediq through the fiscal year ended
September 30, 1993, and has timely filed all extensions of
time for the period ending September 30, 1994, and has paid,
or has set up adequate reserves for or will have set up
adequate reserves for the payment of all taxes (other than the
Transactional Taxes) required to be paid in respect of the
periods covered by such returns and extensions and, except as
aforesaid, has set up adequate reserves for the payment of all
income, franchise, property, sales, use, employment, Social
Security, or other taxes anticipated to be payable in respect
of the period subsequent to September 30, 1993 (including any
federal, state or local income, sales or franchise tax or
other taxes measured by income or profits arising out of, or
attributable to, the transactions contemplated hereby) and,
except as aforesaid, for the payment of all other taxes
(including, without limitation, all employment taxes, sales or
use taxes, or stamp taxes). Sellers are not delinquent in the
payment of any tax, assessment or governmental charge nor,
except as set forth on Exhibit II.Q, have the Sellers during
the time directly or indirectly majority owned by Mediq
requested any extensions of time within which to file any tax
returns which have not since been filed other than the period
ended September 30, 1994 except for those taxes whose
nonpayment would not have a Material Adverse Effect. Except as
set forth on Exhibit II.Q, no deficiencies for any tax,
assessment or governmental charge have been proposed
(tentatively or definitively), asserted or assessed against
the Sellers during the time directly or indirectly
majority-owned by Mediq, and no requests for waivers of the
time to assess any such tax are pending.
22
Except as set forth on Exhibit II.Q, the federal, state, local
or foreign income tax returns of the Sellers have never been
audited by the Internal Revenue Service (or comparable state
or foreign agency). Except as set forth on Exhibit II.Q,
Sellers are not currently subject to any outstanding federal,
state or local tax audit. For the purpose of this agreement,
the term "tax" shall include all federal, state, local, and
foreign taxes. Copies of all state and federal income tax
returns of the Sellers for the preceding three years have been
delivered to Buyer prior to Effective Date.
R. Exhibit II.R hereto is a complete and accurate list as of the
date hereof of the name, position and compensation of each
current employee, including any individual on disability or
leave of absence (whether paid or unpaid) of the Sellers. All
individuals included on Exhibit II.R are herein referred to as
the "Employees".
S. The Sellers have no patents, trademarks, or applications for
the same. To Sellers' knowledge, the Business is not
infringing upon the valid patents, trademarks or copyrights of
others.
T. "Hazardous Substances" means (i) a pollutant or contaminant
as defined in 42 U.S.C.ss.9601(33); (ii) any hazardous waste
as defined in 40 C.F.R. Part 260 (iii) any "hazardous
substance" as defined in 42 X.X.X.xx. 9601(14); (iv) any
petroleum, crude oil, natural gas, synthetic gas, or fraction
or compound thereof; (v) any radioactive substance; (vi) any
radioactive material; or (vii) any other hazardous substance
subject to any other law, regulation, or ordinance regulating
or establishing standards of conduct concerning the protection
of the environment each in effect as of the date hereof.
"Environmental Law" means the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended;
the Resource Conservation and Recovery Act; the Toxic
Substances Control Act; statutes and regulations regulating
radioactive material, and the state counterparts
23
of these laws and any regulations promulgated pursuant to such
laws each in effect as of the date hereof.
"Routine Business Activities" means the use of lubrication,
cleaning, and other substances used in building maintenance;
the use of office supplies in retail quantities; consumer
products; the use of gardening supplies commonly used for
normal landscaping and the use, handling, generation,
transportation, treatment or disposal of Hazardous Substances
in the ordinary course of the diagnostic testing business.
The operations of the Company and Subsidiaries are in
compliance with the terms of all applicable Environmental Laws
and with all permits or orders issued to the Sellers pursuant
to any Environmental Law except for such non-compliance which
would not reasonably be expected to have a Material Adverse
Effect.
To the best of Sellers' knowledge, there has been no leak,
spill, discharge or release in a reportable quantity of any
Hazardous Substance which requires remediation at or from the
real property owned or leased by Sellers while a direct or
indirect majority-owned subsidiary of Mediq except as set
forth on Exhibit II.T.
To the best of Sellers' knowledge (other than those used in
Routine Business Activities), there are not Hazardous
Substances located on or at any of Sellers' business locations
in material violation by Sellers of any applicable
Environmental Law, nor, to the best of Sellers' knowledge,
have there been any underground storage tanks located at any
of any such business locations, except as set forth in Exhibit
II.T.
To the best of Sellers' knowledge, the Business'
operating locations have not been used as a regulated
hazardous waste site.
U. The responses of Sellers contained in the correspondence from
Sellers to Sellers' counsel attached hereto as Exhibit II.U
are true in all material respects.
24
III. Representation of Buyer
Buyer represents and warrants as follows:
A. Buyer is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of
Delaware, and has the corporate power to own the properties
and assets to be conveyed herein to Buyer and carry on its
business and the Business of Sellers as it is presently being
conducted. Buyer has furnished to Sellers a copy of its
Articles of Organization and a copy of a Certificate of Good
Standing certified by the Secretary of State of Delaware.
These documents are contained in Exhibit III.A.
B. Buyer has the corporate power to enter into and to perform
all of its obligations under this Agreement and all
appropriate corporate action has been taken by Buyer to
approve the execution, delivery, and performance by Buyer of
this Agreement. The execution, delivery, and performance by
Buyer of this Agreement have been approved by the Board of
Directors of Buyer's parent company. The execution and
delivery of this Agreement do not, and the consummation of
this purchase and sale will not, violate any provision or
result in the acceleration of any obligation under any
mortgage, lien, lease, agreement, instrument, order, license,
arbitration award, judgment or decree to which Buyer is a
party or by which it is bound (other than agreements, if any,
wherein the consent of the other party thereto is required) in
such a way as to materially affect the Buyer and will not
violate and conflict with any other material restriction of
any kind or character to which the Buyer is subject.
C. Buyer has available to it sufficient resources to pay in full
the Purchase Price. The Guaranty by National Medical Care,
Inc. ("NMC") set forth on the signature page hereto has been
duly executed by NMC and is a legal and valid binding
obligation of NMC enforceable against NMC in accordance with
its terms.
25
D. There are no pending or to Buyer's knowledge threatened
claims, suits, actions, assessments, arbitration awards or
proceedings at law or in equity or before any governmental
instrumentality or other agency to which Buyer is a party or
to which it is subject which would reasonably be expected to
restrain or prohibit the consummation of the transactions
contemplated hereby.
E. The balance sheet attached as Exhibit III.E fairly presents
the financial condition of NMC. Buyer is an indirect
wholly-owned subsidiary of NMC.
IV. Covenants and Agreements of the Parties
A. Sellers and Buyer represent and warrant that all negotiations
relative to this Agreement have been carried out directly with
each other, without the intervention of any person, other than
each party's respective counsel, and other than KBL
Healthcare, Inc. and Woodbury Associates, Inc. Sellers agree
to indemnify and hold Buyer harmless against and in respect of
any claim for brokerage or other commissions relative to this
Agreement or to the purchase and sale contemplated hereby
incurred by Sellers (including amounts owed to KBL Healthcare,
Inc.) and also in respect of all expenses of any character
incurred by the Sellers in connection with this Agreement or
such purchase and sale other than any expenses accrued on the
Closing Balance Sheet, to the extent accrued on the Closing
Balance Sheet. Buyer agrees to indemnify and hold Sellers
harmless against and in respect of any claim for brokerage or
other commissions relative to this Agreement or to the
purchase and sale contemplated hereby incurred by Buyer
(including amounts owed to Woodbury Associates, Inc.) and also
in respect of all expenses of any character incurred by the
Buyer in connection with this Agreement or such purchase and
sale.
X. Xxxxxxx and Buyer shall cooperate to comply with any and all
public health, health planning and licensure statutes and
regulations and will, if required, notify the appropriate
governmental agencies, either state or federal, of the
26
transactions contemplated by this Agreement, to the extent so
required, in order to preserve and/or transfer to Buyer the
state and federal approvals and any other permits and licenses
of the Business included in the Assets. Sellers shall not be
required to pay any third-party expenses or incur any
liability in connection with their undertaking under this
Section. Buyer will reimburse Sellers for reasonable
third-party out-of-pocket expenses.
C. Covenant Not to Disclose Trade Secrets
Sellers acknowledge that in the course of owning the Assets
and operating the Business, Sellers have become privy to
various trade secrets of the Business.
Sellers agree not to disclose to any person, firm or
corporation any information known by Sellers to be trade
secrets of the Business included in the Assets, including, but
not limited to, information of the Business regarding: the
identity and relationships of patients, employees, customers
or vendors affiliated with the Business, compensation of
employees or independent contractors, financial data, pricing
information, regulatory approval and reimbursement strategies,
marketing and sales programs, data, operations and clinical
manuals and expansion of the Business' market, provided,
however, Sellers shall not be prohibited from disclosing any
such information to the extent Sellers are required to
disclose such information by law, to the extent such
information is publicly-known or becomes publicly-known
through no unauthorized act or fault of Sellers or in
connection with any lawsuit or other judicial or
administrative proceeding.
Covenant Not to Solicit Employees
Sellers agree that the Business has invested substantial time
and effort in assembling and training its present staff of
personnel. In addition, as a result of employment by the
Business such personnel have gained knowledge of the business
affairs, marketing, patients and methods of operation of the
Business. Accordingly, for a period of two years after the
27
Effective Date, Sellers will not directly or indirectly induce
or solicit any of the Employees to leave their employment with
the Buyer, provided, however, that Sellers may offer
employment at any time to any of such Employees who approach
any Seller seeking employment or who are no longer employed by
Buyer at the time Sellers approach any such Employee. Nothing
contained herein shall affect any right Buyer may have against
any Employee pursuant to any agreement between Buyer and such
Employee or otherwise.
Covenant Not to Compete
For a period of 7 years after the Effective Date,
Sellers will not engage, directly or indirectly, through a
parent, subsidiary or otherwise, either as principal, agent,
proprietor, shareholder of more than 5% of the voting rights,
owner or partner, or participate in the ownership, management,
operation or control of any facility or business providing
diagnostic testing of the types set forth on Exhibit IV.C
within the United States. Notwithstanding anything to the
contrary contained herein, the restrictions contained herein
shall not restrict Sellers or any of their affiliates
(including, without limitation, Mediq or any subsidiary or
division thereof) from operating or owning any of their
existing businesses or investments, provided that they do not
expand into the foregoing prohibited activities. The
restrictions contained in this paragraph shall not be binding
upon any third party purchaser of any assets, stock, division
or business unit of Mediq or any affiliate thereof or of
Mediq; provided such purchaser is not more than 5% owned by
Mediq.
Sellers acknowledge that the foregoing restrictions are
necessary for the protection of the Buyer and that any breach
thereof may cause the Buyer irreparable damage. The Buyer
shall be entitled to the issuance by a court of competent
jurisdiction of an injunction in favor of the Buyer enjoining
the breach or threatened breach of said restrictions. The
foregoing provision
28
shall not constitute a waiver of any other remedies the Buyer
may have in law or in equity.
In the event a court of competent jurisdiction determines
that the foregoing restrictions are unreasonable,
then the restrictions shall be reduced by the court to the
extent necessary to be enforced by the court.
D. Buyer and Sellers will cooperate in securing all consents,
approvals, waivers or permits relating to the sale and
transfer of the Assets from each person or governmental
authority whose consent, approval, waiver or permit is
necessary to or for the operation and conduct of the Business
after the Effective Date at no cost or liability to Sellers,
including approvals required by the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 ("HSR Act"). Sellers shall
not be required to pay any third-party expenses or incur any
liability in connection with their undertaking under this
Section. Buyer will reimburse Sellers for reasonable
third-party out-of-pocket expenses.
E. Subject to the provisions of Sections I.F and IV.K, Sellers
and Buyer will cooperate to ensure the orderly transition of
collection responsibility to Buyer for any Accounts Receivable
outstanding as of the Closing Date at no cost or liability to
Sellers.
F. For the period of 3 years after the date hereof, Sellers and
Buyer agree to keep the terms of this Agreement confidential
and will not disclose the terms to any third persons or entity
except in connection with claims asserted under this
Agreement, as required by law (including, without limitation,
any filing with any governmental agency or instrumentality) or
for the operation of the Business and except that Sellers or
their affiliates may issue press releases regarding this
Agreement and the transactions contemplated hereby with
Buyer's consent, which consent shall not be unreasonably
withheld.
G. Buyer and Sellers shall each, from time to time after the
date hereof, at the
29
request of the other and without further consideration,
execute and deliver such further instruments of assignment,
transfer or assumption and take such further action as the
other may reasonably request in order more effectively to
transfer, reduce to possession and record title to any of the
Assets or to implement the assumption of Assumed Liabilities.
Any and all out-of-pocket expenses involved in compliance with
this Section shall be promptly reimbursed by the requesting
party to the other.
H. After the Closing Date, Buyer will make available to Sellers
and their affiliates, accountants, attorneys and
representatives upon reasonable request during normal business
hours reasonable access to all records, data and personnel of
the Business necessary in connection with Sellers' conduct of
litigation and tax matters or as otherwise reasonably
requested by Sellers, at no cost to Buyer other than Buyer's
internal costs (e.g., Sellers will reimburse Buyer for
reasonable third-party out-of-pocket expenses). Sellers will
make available to Buyer upon reasonable request during normal
business hours reasonable access to all records and data
relating to the Business not transferred to Buyer as
reasonably necessary to continue operations of the Business at
no cost to Sellers other than Sellers' internal costs (e.g.,
Buyer will reimburse Sellers for reasonable third-party
out-of-pocket expenses).
I. Buyer shall use commercially reasonable efforts, and shall
cooperate with Sellers, to (1) cause Buyer to be substituted
in all respects for Sellers or any of their affiliates,
effective as of the Effective Date, in respect of all
obligations of Sellers and any such affiliate under any
contract or agreement included in the Assumed Liabilities and
under each of the guaranties, letters of credit, bonds and
letters of comfort obtained by Sellers or any of such
affiliates relating to the Assets (collectively, the
"Guaranties") listed on Exhibit IV.I and (2) cause Sellers and
their affiliates to be released from all Assumed Liabilities
under the contracts,
30
agreements and Guaranties described in the preceding clause
(1).
J. Effective as of the Closing Date, Sellers' employment of the
Employees shall cease. Effective as of the Closing Date, Buyer
shall offer "at-will" employment to all of the Employees
except Xxxxxxx Xxxxxxx who shall be offered a consulting
arrangement on the terms and conditions set forth on Exhibit
IV.J. All Employees who accept Buyer's offer of employment are
herein referred to as the "Transferred Employees". Buyer's
offer of employment to the Transferred Employees shall be at
the substantially similar salary or wage level as applicable
to such Transferred Employees immediately before the Closing
and on terms and conditions that are substantially similar to
those provided by Buyer to its current employees of like rank
and job title.
Effective as of the Closing Date, Buyer shall designate a
pre-existing group health insurance plan ("Buyer's Health
Plan") that will provide coverage to all Transferred Employees
and their dependents. Buyer's Health Plan shall not contain
any exclusion or limitation with respect to any pre-existing
condition of any Transferred Employees or their dependents.
If any Transferred Employee becomes covered by any employee
benefit plan, program or policy of the Buyer, such Transferred
Employee shall be given credit under such plan, program or
policy for all service with Sellers prior to the Closing Date
for all purposes; provided, however, that such service shall
not be credited for purposes of benefit accruals under any
defined benefit pension plan.
K. Commencing one month after the Effective Date, Buyer shall
provide reports, monthly for the first three months following
Closing and quarterly thereafter, to Sellers regarding the
amounts collected on the accounts receivable of the Business
outstanding as of the Effective Date (the "Accounts
Receivable") and Buyer's efforts to collect such accounts.
Buyer shall, at Buyer's election, either (i) apply at least
the same efforts in the
31
collection of the Accounts Receivable as Buyer applies in the
collection of its own accounts receivable or (ii) use the same
personnel and procedures to collect the Accounts Receivable as
were used by the Business immediately prior to the Effective
Date, in the same positions, with the same responsibilities
and at the same salaries and hours. The collection of all
accounts receivable received from an account debtor of the
Business as of the Effective Date shall be applied to the
oldest outstanding invoice with such account debtor which is
not then in dispute consistent with Buyer's general
overpayment policies; provided, however, notwithstanding the
foregoing, any payments made by an account debtor in respect
of a designated account shall be applied to the account so
designated. For purposes of the preceding sentence, a disputed
invoice is an invoice that is the subject of a written dispute
from the account debtor which is reasonably recognized by
Buyer as disputed in accordance with its general policies;
upon the resolution of any such dispute, such invoice shall no
longer be considered disputed and collections from the account
debtor shall be applied in accordance with the previous
sentence as if such dispute had not arisen. Provided that
Buyer has collected in respect of Accounts Receivable at least
the amount set forth on the Closing Balance Sheet in respect
of such Accounts Receivable net of the reserve calculated as
herein set forth, promptly after the first anniversary of the
Effective Date, Buyer shall transfer to Sellers, at no cost to
Sellers, all Accounts Receivable that remain uncollected at
such time. Following a transfer of any Accounts Receivable to
Sellers, Buyer acknowledges that Sellers may collect such
Accounts Receivable for Sellers' benefit in any manner Sellers
deem appropriate, provided such efforts do not materially
jeopardize Buyer's business relationship with the account
debtor. Except as expressly provided in Section IV.K, Buyer
makes no representation regarding its ability to collect the
Accounts Receivable.
32
L. Provided that the failure to pay does not cause Buyer to
breach any Assigned Contract, Buyer shall not pay any amounts
in respect of bonuses accrued on the Proposed Balance Sheet or
Closing Balance Sheet to any Employees until the earlier of
(i) 90 days after Closing or (ii) such time as the parties
have resolved the Closing Balance Sheet in accordance with
Section I.G and any adjustment to the Purchase Price has been
paid.
M. Buyer acknowledges and agrees that the name and service xxxx
"MEDIQ" and all derivations thereof (the "Name") is owned by
Sellers and that by the sale of the Assets, or otherwise,
Sellers are not relinquishing any interest in or rights to the
Name, nor permitting Buyer (after the Effective Date) to use,
license or otherwise have any rights in or to the Name, except
on such terms as are expressly set forth in this Section.
Sellers will permit use of the name by Buyer for transition
purposes during a period not to exceed eight months subsequent
to the Effective Date (the "Transition Period"), on the
following terms and conditions:
a. By the end of the Transition Period, Buyer shall
have caused the removal of the Name from all of the
Assets including any motor vehicles, stationery,
business cards, and other documents. During the
Transition Period Buyer shall not affix, or cause to
be affixed, the Name to any of the Assets or its
assets, vehicles, machinery or equipment.
b. Within a reasonable period of time after the
Effective Date, Buyer and the Business shall notify
its customers, suppliers and others with whom the
Buyer and the Business does business of the Business'
change of name.
c. Buyer may use the name solely in connection with the
Business in accordance with this Section IV.M and
shall have no right to license, assign or otherwise
transfer any rights in or to the Name.
V. Survival of Representations and Warranties; Indemnification
33
A. The representations and warranties made by any party hereto
in this Agreement or in any Schedule, Exhibit, certificate or
other document delivered by or on behalf of any party hereto
pursuant to this Agreement shall be deemed to be continuing
and shall survive the Effective Date, but shall expire on
December 31, 1996, except matters with respect to Section II.Q
(taxes) and Section II.P (employee benefits), which shall
expire on the expiration of the applicable statute of
limitations (the "Representation Expiration Date"), unless a
specific claim in writing with respect to any such
representation or warranty shall have been made, or any action
at law or in equity shall have been commenced or filed in
respect thereof, prior to such Representation Expiration Date.
Nothing in this section shall terminate or affect the
obligations and indemnities of the parties with respect to
covenants and agreements contained or referenced in this
Agreement that are to be performed by their specific terms, in
whole or in part, after the Closing Date or the
above-referenced Representation Expiration Date.
X. Xxxxxxx shall indemnify, defend, save and hold harmless Buyer
and its successors and assigns, and their employees,
representatives, officers, directors and agents (collectively,
the "Buyer Indemnified Parties") from and against any and all
debts, losses, claims, damages, costs, demands, fines,
judgments, penalties, obligations, payments and liabilities,
including, without limitation, those arising out of any breach
of warranty, representation or covenant, lawsuit, action or
proceeding, together with any reasonable costs and expenses
(including, without limitation, reasonable attorneys' fees and
out-of-pocket expenses) incurred in connection with any of the
foregoing whether by a third party or a party to this
Agreement (collectively, "Claims") resulting from (a) any
breach of or inaccuracy in any representation or warranty made
by Sellers in this Agreement, (b) any breach of any covenant
of Sellers contained in this Agreement, (c) any
34
liability of the Business other than the Assumed Liabilities;
(d) any amounts Buyer reasonably determines it is required to
pay pursuant only to the express terms of, and actually does
pay to Employees pursuant only to the express terms of, the
agreements set forth on Exhibit V.A ("Key Employee
Agreements") solely as a result of Buyer's termination of the
employment of such Employee within 60 days of the Effective
Date, or (e) enforcing any rights to indemnification under
this section. For indemnification purposes, in determining
whether a breach of any warranty, representation, or covenant
has occurred; any language referring to a Material Adverse
Effect or any materiality limits will not be considered.
Notwithstanding the foregoing, Sellers shall not be liable for
any Claims pursuant to section V.A or V.B until the aggregate
amount of such Claims exceeds the Basket Amount and then only
to the extent of such excess. The "Basket Amount" shall mean
$50,000 less any amounts actually paid by Buyer in respect of
liabilities of Sellers pursuant to Section I.C(6) and "Unused
Basket Amount" shall mean the positive difference (if any)
between $50,000 and the amount of any Claims for which Buyer
would be entitled to indemnification pursuant to section V.A
or V.B but for the preceding sentence. The Sellers indemnity
obligation in respect of Section V.B(d) shall only arise to
the extent Buyer reasonably determines an obligation to pay
exists and actually does pay under any Key Employee Agreement,
there is no modification of the Key Employee Agreements by
Buyer and shall exist only to the extent that amounts payable
to an Employee covered thereby are in excess of amounts such
Employee would be entitled to under Buyer's severance policies
as applicable to such Employee in accordance with the terms of
this Agreement (and then only for the amount of such excess).
The Sellers shall be liable for all other Claims, and the
aggregate liability of all Sellers hereunder with respect to
any and all Claims shall be limited to the Purchase Price;
provided, however, that Buyer's right to
35
indemnification under clause (a) of this Section V.B shall
expire on the Representation Expiration Date applicable to
such claim unless Sellers shall have received written notice
of a specific Claim prior to such expiration date, in which
case such indemnification shall not expire with respect to
such Claim until it is resolved.
C. In addition to the indemnification set forth in Section V.B,
Sellers shall indemnify, defend, save and hold harmless the
Buyer Indemnified Parties from and against all Claims arising
solely from or settlements of, and shall assume the defense
and all expenses related thereto of the potential
investigation and/or inquiry of the Department of Health and
Human Services pending in the United States Attorney's Office
in the Northern District of New Jersey. Buyer's right to
indemnification under this Section V.C is conditioned upon
Sellers' unconditional right, notwithstanding anything to the
contrary contained in Section V.E, to assume the defense of
the proceedings described in this Section V.C using counsel of
Sellers' choice and to control the defense of and settlement
of such proceedings without complying with the requirements
set forth in Section V.E. unless Buyer becomes a party in the
suit (in which case the provisions of Section V.E shall
apply). Provided that such Employees are at the time employed
by Buyer, Buyer will make available to Sellers such Employees
and access to books and records as Sellers may reasonably
request in connection with such proceedings, at no expense to
Buyer.
D. Buyer shall indemnify, defend, save and hold harmless Sellers
and their successors and assigns, and their employees,
representatives, officers, directors and agents (collectively
the "Seller Indemnified Parties") from and against any and all
Claims resulting from (a) any breach of or inaccuracy in any
representation or warranty made by Buyer in this Agreement, or
(b) any breach of any covenant of Buyer contained in this
Agreement, or (c) the Assumed Liabilities, or any liabilities
or obligations of the Business
36
accruing for acts or omissions taking place after the
Effective Date, or (d) any guarantee or obligation to assure
performance given or made by Sellers or any of their
affiliates with respect to any obligation or liability of
Sellers disclosed on Exhibit IV.I. Sellers' right to
indemnification under clause (a) shall expire on the
Representation Expiration Date unless Buyer shall have
received written notice of a specific Claim prior to such
expiration date, in which case such indemnification shall not
expire with respect to such Claim.
E. 1. A party seeking indemnification pursuant to this
Article V (an "Indemnified Party") shall give prompt
notice to the party from whom such indemnification is
sought (the "Indemnifying Party") of the assertion of
any matter reasonably anticipated to bring rise to a
Claim by a third party or by the Indemnified Party in
respect of which indemnity may be sought hereunder (a
"Third Party Claim") and shall give the Indemnifying
Party such information with respect thereto as the
Indemnifying Party may reasonably request, but no
failure to give such notice shall relieve the
Indemnifying Party of any liability hereunder (except
to the extent the Indemnifying Party has suffered
actual prejudice thereby). If the Indemnifying Party
establishes to the reasonable satisfaction of the
Indemnified Party that the Indemnifying Party has
(and will continue to have) adequate financial
resources to satisfy and discharge such Claim, the
Indemnifying Party shall have the right, exercisable
by written notice (the "Notice") to the Indemnified
Party (which notice shall state that the Indemnifying
Party expressly agrees that as between the
Indemnifying Party and the Indemnified Party, the
Indemnifying Party shall be solely obligated to
satisfy and discharge the Third Party Claim) within
fourteen (14) days of receipt of notice from the
Indemnified Party of the commencement of or assertion
of any Third
37
Party Claim, to assume the defense of such Third
Party Claim, using counsel selected by the
Indemnifying Party and reasonably acceptable to the
Indemnified Party; provided that the Indemnifying
Party shall not have the right but has the
obligation, to the extent set forth herein, if
requested by the Indemnified Party to assume the
defense of a Third Party Claim (A) seeking an
injunction, restraining order, declaratory relief or
other non-monetary relief or (B) if the named parties
to any such action (including any impleaded parties)
includes both the Indemnified Party and the
Indemnifying Party, and the Indemnified Party shall
have been advised in writing by counsel that under
applicable standards of professional conduct
(assuming no waiver of conflict is given) the
Indemnified Party and Indemnifying Party may not be
represented by the same counsel, in which case such
Indemnified Party shall have the right to assume
control of the defense of a Third Party Claim of the
type set forth in clause (A) above and to participate
in the defense of a Third Party Claim of the type set
forth in clause (B) above and all Claims in
connection therewith shall be reimbursed by the
Indemnifying Party. In addition, if the Indemnifying
Party fails to give the Indemnified Party the Notice
complying with the provisions stated above within the
stated time period, the Indemnified Party shall have
the right to assume control of the defense of the
Third Party Claim and all Claims in connection
therewith shall be reimbursed by the Indemnifying
Party upon demand of the Indemnified Party.
2. If at any time after the Indemnified Party assumes
the defense of a Third Party Claim pursuant to
Section E.1, the conditions set forth in clauses E.1
(A) or (B) above no longer exist, the Indemnifying
Party shall have the right to assume the defense as
set forth above as if the Indemnified Party never
assumed the defense of such
38
Claim.
3. The Indemnifying Party or the Indemnified Party, as
the case may be, shall in any event have the right to
participate, at its own expense, in the defense of
any Third Party Claim which the other is defending.
4. The Indemnifying Party, if it shall have assumed the
defense of any Third Party Claim in accordance with
the terms hereof, shall have the right, upon thirty
(30) days prior written notice to the Indemnified
Party, to consent to the entry of judgment with
respect to, or otherwise settle such Third Party
Claim unless (i) the Third Party Claim involves
equitable or other non-monetary damages or (ii) in
the reasonable judgment of the Indemnified Party such
settlement would have a Material Adverse Effect on
the Indemnified Party's business (including any
material impairment of its relationships with
customers and suppliers) in which case such
settlement only may be made with the written consent
of the Indemnified Party, which consent shall not be
unreasonably withheld. At the expense of the
Indemnifying Party, the Indemnified Party shall have
the sole and exclusive right to settle any Third
Party Claim, on such terms and conditions as it deems
reasonably appropriate, (x) if the Indemnifying Party
fails to assume the defense in accordance with the
terms hereof or (y) to the extent such Third Party
Claim involves only equitable or other non-monetary
relief or would have a Material Adverse Effect on the
Indemnified Party's business, with the consent of the
Indemnifying Party, which consent shall not be
unreasonably withheld.
5. Whether or not the Indemnifying Party chooses to
defend or prosecute any Claim involving a third
party, all the parties hereto shall cooperate in the
defense or prosecution thereof and shall
39
furnish such records, information and testimony, and
attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably
requested in connection therewith.
F. 1. Buyer and Sellers acknowledge and agree that their
sole and exclusive remedy with respect to any and all
claims relating to the subject matter of this
Agreement shall be pursuant to the indemnification
provisions set forth in this Article V. In
furtherance of the foregoing, Buyer and Sellers
hereby waive, to the fullest extent permitted under
applicable law, any and all rights, claims and causes
of action (including rights of contribution, if any)
it may have against Sellers or any of Sellers'
affiliates (in the case of Buyer), or Buyer or any of
Buyer's affiliates (in the case of Sellers) arising
under or based upon any federal, state or local
statute, law, ordinance, rule, regulation or judicial
decision (including, without limitation, any such
relating to environmental matters or arising under or
based upon any securities law, common law or
otherwise); provided, however, that no party waives
its rights to commence proceedings to enforce its
rights under this Article in accordance with the
provisions of Section VIII.F.
2. The amount of any Claim for which indemnification is
provided under this Article V shall be net of (i) any
amounts recovered (less costs of collecting) by the
Indemnified Party pursuant to any indemnification by
or indemnification agreement with any third party who
was primarily liable for the Claim (a "Collateral
Source") and (ii) any benefit (including any tax
benefit if and when realized) that accrues to Buyer
or Sellers in respect of the matter for which a Claim
is asserted. If the amount to be netted hereunder
from any payment required in Section V.B, V.C or V.D
is determined after payment by the Indemnifying Party
of any amount otherwise
40
required to be paid to an Indemnified Party pursuant
to this Article V, the Indemnified Party shall repay
to the Indemnifying Party, promptly after such
determination, any amount that the Indemnifying Party
would not have had to pay pursuant to this Article V
had such determination been made at the time of such
payment. Indemnification under this Article V shall
not be available to any Indemnified Party unless such
Indemnified Party first seeks recovery from a
Collateral Source for such Claim before making any
claim for indemnification by the Indemnifying Party.
Provided an Indemnifying Party has satisfied all
Indemnification obligations to the Indemnified Party,
any Indemnifying Party may, in its sole discretion,
require any Indemnified Party to grant an assignment
of the right of such Indemnified Party to assert a
Claim against any Collateral Source. In the event of
such assignment, the Indemnifying Party shall pursue
such Claim at its own expense.
G. Notwithstanding anything to the contrary contained herein, no
Buyer Indemnified Party shall be entitled to indemnification
hereunder for any "Claim" that arises in connection with (1)
any cost in respect of a compliance program except with
respect to, and to the extent of, the costs of implementing a
compliance program that Buyer is required to institute solely
as a result of actions of Sellers occurring prior to Closing
and not as a result of any event or occurrence taking place
after Closing or (2) any loss of business or revenues
resulting from a future change in business practice required
to comply with law or resulting from the litigation,
investigation or inquiry referred to in Section V.C, to the
extent the basis and claims of such litigation, investigation
or inquiry have been disclosed to Buyer prior to the date
hereof, or Buyer is otherwise aware of such basis and claims
prior to the date hereof, or (3) any loss of business or
revenues resulting from an amendment to any agreement or
change in manner of
41
doing business entered into or effected (x) prior to the date
hereof that has been disclosed to Buyer by or on behalf of
Sellers (or Buyer is otherwise aware of prior to the date
hereof) or (y) after the date hereof by Buyer. Nothing in this
Section V.G shall be taken to expand Sellers' indemnification
obligations set forth in any other Section of this Agreement.
VI. Conditions Precedent
A. The obligation of Buyer to complete Closing under this
Agreement is subject to the waiver by Buyer or the fulfillment
prior to, or on the Closing Date of each of the following
conditions:
1. Sellers' representations and warranties contained in
this agreement shall be true in all material respects
on the Closing Date as though such representations
and warranties were made at such time except that any
such representation and warranty made as of a
specified date shall have been true in all material
respects on and as of such date.
2. The Sellers shall have performed and complied in all
material respects with all agreements and conditions
required by this Agreement to be performed or
complied with by them prior to or on the Closing
Date.
3. Sellers shall have delivered to Buyer a certificate
of Sellers executed by the President or any Vice
President and the Chief Financial Officer, Treasurer
or any Assistant Treasurer and dated as of the
Closing Date certifying that the conditions specified
in Sections VI.A.1 and VI.A.2 have been satisfied.
4. Sellers shall have delivered to Buyer a favorable
opinion of the attorney for Sellers, dated as of the
Closing Date and in the form attached as Exhibit
VI.A, to the effect that:
a. Sellers are duly incorporated and validly
existing under the laws of the state where
incorporated and are in good
42
standing in that state; that each of the
Sellers has corporate power and authority to
own all its property and assets;
b. The execution and delivery of this Agreement
and the consummation of the purchase and
sale have been duly authorized by all
necessary corporate action on the part of
Sellers.
5. Sellers shall have accrued all benefits arising prior
to Closing to employees of the Business up through
the Effective Date.
6. No claim, action, suit, investigation or other
proceeding shall be pending or threatened before any
court or governmental agency which presents a
substantial risk of the restraint or prohibition of
the transactions contemplated by this Agreement.
7. All governmental filings, approvals and consents
shall have been accomplished or obtained that are
necessary in order that the transactions contemplated
hereby may be accomplished in compliance with law and
all waiting periods, including the waiting period
under the HSR Act shall have expired without
extensions or been earlier terminated, other than any
such filings, approvals, consents or waiting periods
as are not (in the aggregate) material.
B. All obligations of Sellers to complete Closing under this
Agreement are subject to the waiver by Sellers or the
fulfillment prior to, or on, the Closing Date of each of the
following conditions:
1. Buyer's representations and warranties contained in
this Agreement shall be true in all material respects
on the Closing Date as though such representations
and warranties were made at such time except that any
such representation and warranty made as of a
specified date shall have been true in all material
respects on and as of such date.
2. Buyer shall have performed and complied in all
material respects
43
with all agreements and conditions required by this
Agreement to be performed or complied with by them
prior to or on the Closing Date.
3. Buyer shall have paid the Purchase Price as adjusted
pursuant to Section I.F to Sellers on the Closing
Date.
4. Buyer shall have delivered to Sellers a favorable
opinion of the attorney for Buyer dated as of the
Closing Date and in the same form attached hereto as
Exhibit VI.B.
5. Buyer shall have delivered to Sellers a certificate
of Buyer executed by the President or any Vice
President and the Treasurer or Assistant Treasurer of
Buyer and dated as of the Closing Date certifying
that the conditions specified in Sections VI.B.1 and
VI.B.2 have been satisfied.
6. No claim, action, suit, investigation or other
proceeding shall be pending or threatened before any
court or governmental agency which presents a
substantial risk of the restraint or prohibition of
the transactions contemplated by this Agreement.
7. All governmental filings, approvals and consents
shall have been accomplished or obtained that are
necessary in order that the transactions contemplated
hereby may be accomplished in compliance with law and
all waiting periods, including the waiting period
under the HSR Act shall have expired without
extension or been earlier terminated, other than any
such filings, approvals, consents or waiting periods
as are not (in the aggregate) material.
VII. Right To Proceed; Closing
A. The purchase and sale hereby contemplated shall be consummated
and closed (the "Closing") at the offices of counsel to
Sellers at 10:00 a.m. local time on Friday, August 11, 1995,
or at such time and place as the parties shall agree (the
"Closing Date") and is effective as of the close of business
on July 31, 1995 (the "Effective Date").
44
B. On the Effective Date, Sellers shall deliver to Buyer the
following:
All documents necessary to transfer the Assets to Buyer,
including all documents to be attached as Exhibits hereto.
1. The certificate required by Section VI.A.3.
2. The opinion of counsel required by section VI.A.4.
3. Access to all records, and other instruments and
documents held by Sellers relating to the Business,
or the properties or business of the Business.
4. The Lease Assignments attached as Exhibit VII.B(4)
(a), for the sites attached as Exhibit VII.B(4)(b).
5. The Assignment of Contracts attached as Exhibit VII.
B(5).
C. On the Closing Date, Buyer shall deliver to Sellers the
following:
1. The Purchase Price as adjusted pursuant to Section
I.F by wire transfer of immediately available funds
to an account designated by Seller.
2. The opinion of counsel and certificates referred to
in Section VI.B.
3. An Assumption Agreement in the form of Exhibit VII.C.
VIII. Miscellaneous
A. Any notices or other circumstances required or permitted
hereunder shall be sufficiently given if hand-delivered (by
express delivery service or otherwise), sent by certified
mail, express mail service or overnight delivery service,
postage prepaid, addressed as follows:
To Buyer:
NMC Diagnostics Services, Inc.
c/o National Medical Care, Inc.
Reservoir Place
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: DSD/Law Department
To Sellers:
45
MEDIQ, Inc.
Xxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
and Xxxx X. Xxxxxxx
With Copies To:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Nassau
or such other address as shall be furnished in writing by
either party, and such notice or communication shall be deemed
to have been given when delivered if delivered by hand (by
express delivery or otherwise), or five days after the date of
mailing if mailed prepaid and properly addressed.
B. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors,
heirs, and assigns, provided that this Agreement may not be
assigned by either party without the consent of the other
party. Any attempted assignment of this Agreement in violation
of the provisions of this section is void.
C. This Agreement may be amended with respect to any of the
terms contained herein only by means of a writing signed by
all the parties hereto.
D. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other
party.
E. This Agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts.
F. In the event that any dispute or controversy arises between
the parties out
46
of or relating to this Agreement, a party shall notify the
other party in writing of the existence of the dispute or
controversy, and the parties shall meet and negotiate in good
faith to attempt to resolve the matter. If such efforts do not
resolve the dispute or controversy, each party shall appoint
an arbitrator of choice from a list of arbitrators recognized
by the American Arbitration Association. The appointed
arbitrators will appoint a third arbitrator from the list to
hear the parties and settle the dispute or controversy. The
proceedings shall be governed by the Commercial Rules of the
American Arbitration Association then in effect and shall be
conducted in Philadelphia, Pennsylvania. The arbitrators shall
have no power to award punitive or exemplary damages, to
ignore or vary the terms of the Agreement, and shall be bound
to apply controlling law. Arbitration shall be binding and the
exclusive remedy for the settlement of the dispute or
controversy. The party who prevails on entry of the award of
judgment shall be entitled to its costs and expenses,
including reasonable attorney's fees incurred in connection
therewith.
G. Whether the transactions contemplated by this Agreement are
consummated or fail to be consummated for any reason
whatsoever, each of the parties hereto shall pay its own
expenses and the fees and expenses of its counsel and
accountants and other experts, except as otherwise
specifically provided herein.
H. If any term, provision, covenant or restriction of this
Agreement that is not material to the benefits to be received
or obligations to be performed hereunder by either party
hereto is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be
affected, impaired or invalidated.
I. This Agreement contains the entire agreement between the
parties hereto with respect to the subject matter hereof and,
except for the Confidentiality
47
Agreement, supersedes all prior and contemporaneous agreements
and understandings, oral or written, with respect to such
transactions.
J. As used in this Agreement, all references to "Seller's
knowledge" shall mean the actual knowledge of Xxxxxxx Xxxxxxx,
Xxxxx Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxx Xxxxx,
Xxxxxxx Xxxxxxx, Xxxx Xxxxxxxx, Xxxxxx Xxx, Xxxxx Xxx Xxxxxx
and Xxxxxx Xxxxxx. All representations and warranties in this
Agreement regarding or made by any Seller are made only with
respect to time periods during which such Seller was directly
or indirectly majority owned by Mediq.
K. Any information disclosed in any Exhibit will be considered as
disclosed in each of the Exhibits. The disclosure of any
matter in the Exhibits should not be construed as indicating
that such matter is required to be disclosed in order for any
representation or warranty in this Agreement to be true and
correct.
L. The section and other headings contained in this Agreement are
for reference purposes only and shall not affect the meaning
or interpretation of this Agreement. All references to
Sections or Articles contained herein mean Sections or
Articles of this Agreement unless otherwise stated. All
capitalized terms defined herein are equally applicable to
both the singular and plural forms of such terms.
M. It is understood and agreed that neither the specification of
any dollar amount in the representations and warranties
contained in this Agreement nor the inclusion of any specific
item in the Schedules or Exhibits is intended to imply that
such amounts or any higher or lower amount, or the items so
included or other items, are or are not material, or are
required to be included in the Exhibits, and neither party
shall use the fact of the setting of such amounts or the fact
of the inclusion of any such item in the Exhibits in any
dispute or controversy between the parties as to whether any
obligation, item or matter is or is not material or are
required to be
48
included in the Exhibits, for purposes of this Agreement.
N. Except as expressly contemplated herein, nothing in this
Agreement is intended (i) to confer any right or benefit on
any person other than the parties to this Agreement and their
respective successors and permitted assigns; or (ii) to modify
or discharge the obligation or liability of any third person
to any party to this Agreement, and no provision hereof shall
give any third person any right of subrogation or action
against any party to this Agreement. In no event shall Sellers
be liable to third parties other than Buyer's successor, if
any, in connection with any aspect of the transactions
contemplated by this Agreement, nor shall any third party be
or become a beneficiary of such rights, nor shall Buyer act or
hold itself out as Sellers' agent in any activity including,
but not limited to, dealings with any such third party.
49
IN WITNESS WHEREOF, this Agreement has been signed by the parties and
each of the corporate parties has caused this Agreement to be executed by a duly
authorized person, all as of the day first above written.
MEDIQ IMAGING SERVICES, INC.,
AMERICAN CARDIOVASCULAR
IMAGING LABS, INC., and
SOUTHEASTERN DIAGNOSTICS, INC.
By:/s/ Xxxxxxx Xxxxxxx
-----------------------------
Xxxxxxx Xxxxxxx
President
NMC DIAGNOSTICS SERVICES, INC.
By:/s/ Xxxx Xxxxxxx
----------------------------
Xxxx Xxxxxxx
Vice President
50
GUARANTEE:
The performance of all of the covenants, liabilities and obligations of
NMC Diagnostics Services, Inc. hereunder are unconditionally and irrevocably
guaranteed as surety by National Medical Care, Inc., its parent.
By:/s/ Xxxxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxxxx X. Xxxxxx
Senior Vice President
GUARANTEE:
The performance of all of the covenants, liabilities and obligations of
Mediq Imaging Services, Inc., American Cardiovascular Imaging Labs, Inc. and
Southeastern Diagnostics, Inc. hereunder are unconditionally and irrevocably
guaranteed as surety by Mediq Incorporated, its parent and Mediq Incorporated
agrees to be bound by the provisions of Section IV.C hereof.
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President of Finance
51
EXHIBITS
--------
EXHIBIT I.C Assumed Liabilities
EXHIBIT I.E Purchase Price Allocation
EXHIBIT I.F(1) Proposed Closing Balance Sheet and Estimated Adjustment
EXHIBIT I.F(2) Receivables Reserve
EXHIBIT I.G Balance Sheet
EXHIBIT II.A Articles of Incorporation, By-Laws, Certificate of Good
Standing of Sellers
EXHIBIT II.B Ownership
EXHIBIT II.E Claims
EXHIBIT II.F Medicare and Third Party Investigations/Funds Withheld
EXHIBIT II.H Liens
EXHIBIT II.I Leases
EXHIBIT II.J Contracts
EXHIBIT II.K Financial or Business Changes
EXHIBIT II.N Insurance
EXHIBIT II.P Employee Benefit Plans
EXHIBIT II.Q Taxes
EXHIBIT II.R List of Employees
EXHIBIT II.T Hazardous Material Disclosure
EXHIBIT III.A Corporate Documents of the Buyer
EXHIBIT III.E Balance Sheet of National Medical Care, Inc.
EXHIBIT IV.C Sellers' PRNs
EXHIBIT IV.I Guaranties
EXHIBIT IV.J Doppelt Consulting Agreement
EXHIBIT V.A Key Employee Agreement
EXHIBIT VI.A Legal Opinion Letter of Sellers
EXHIBIT VI.B Legal Opinion Letter of Buyer
EXHIBIT VII.B(4)(a) Lease Assignments
EXHIBIT VII.B(4)(b) List of Business Locations
EXHIBIT VII.B(5) Assignment of Contracts
EXHIBIT VII.C Assumption Agreement
