ASSET PURCHASE
AND
LIABILITIES ASSUMPTION AGREEMENT
BY AND BETWEEN
XXXXXXX X. XXXXXXX, M.D.
AND
INSIGHT HEALTH CORP.
TABLE OF CONTENTS
ARTICLE 1.PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES . . . . . . . . . 1
SECTION 1.1. Incorporation of Recitals. . . . . . . . . . . . . . . . . 1
SECTION 1.2. Sale and Purchase of Assets. . . . . . . . . . . . . . . . 1
SECTION 1.3. Assumption of Liabilities. . . . . . . . . . . . . . . . . 2
SECTION 1.4. Purchase Price . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.5. Tax Allocation . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.6. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.7. Abandonment Date. . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 2.OTHER AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.1. Financial Statements . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2. Professional Services Agreement. . . . . . . . . . . . . . 4
SECTION 2.3. Noncompetition Agreement . . . . . . . . . . . . . . . . . 4
SECTION 2.4. Further Assurances . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5. Lease Agreement. . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.6. Collection of Pre-Closing Accounts Receivable. . . . . . . 5
ARTICLE 3.REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . 5
SECTION 3.1. Power of Seller. . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.2. Validity . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.3. Title to Assets. . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.4. Contracts, Leasehold Interests . . . . . . . . . . . . . . 6
SECTION 3.5. Condition of Property. . . . . . . . . . . . . . . . . . . 6
SECTION 3.6. Trademarks, Patents, and Other Rights. . . . . . . . . . . 6
SECTION 3.7. Proprietary Information of Third Parties.. . . . . . . . . 7
SECTION 3.8. Litigation and Investigations. . . . . . . . . . . . . . . 7
SECTION 3.9. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.10. Insurance Coverage . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.11. Fees and Commissions . . . . . . . . . . . . . . . . . . . 8
SECTION 3.12. Insider Interests. . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.13. Other Approvals. . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.14. Environmental Liabilities. . . . . . . . . . . . . . . . . 9
SECTION 3.15. Fraud and Abuse. . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.16. Employees. . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.17. Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.18. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 4.REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . . . 11
SECTION 4.1. Organization, Qualification, and Corporate Power of Buyer. 11
SECTION 4.2. Validity . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.3. Fees and Commissions . . . . . . . . . . . . . . . . . . . 12
SECTION 4.4. Other Approvals. . . . . . . . . . . . . . . . . . . . . . 12
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SECTION 4.5. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 5.COVENANTS OF SELLER. . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.1. Operation of Business. . . . . . . . . . . . . . . . . . . 12
SECTION 5.2. Liens on Assets. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.3. Litigation . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.4. Non-Contravention. . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.5. Standstill . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.6. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.7. Third-Party Consents . . . . . . . . . . . . . . . . . . . 13
SECTION 5.8. Cooperation with Buyer . . . . . . . . . . . . . . . . . . 13
SECTION 5.9. Regulatory Approvals . . . . . . . . . . . . . . . . . . . 13
SECTION 5.10. Non-Solicitation . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.11. General Cooperation. . . . . . . . . . . . . . . . . . . . 14
SECTION 5.12. Notification . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 6.COVENANTS OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.1. Third-Party Consents . . . . . . . . . . . . . . . . . . . 14
SECTION 6.2. General Cooperation. . . . . . . . . . . . . . . . . . . . 14
SECTION 6.3. Employment . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.4. Non-Contravention. . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.5. Regulatory Approvals . . . . . . . . . . . . . . . . . . . 14
SECTION 6.6. Notification . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 7.CONDITIONS TO THE OBLIGATIONS OF BUYER . . . . . . . . . . . . . . 15
SECTION 7.1. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 15
SECTION 7.2. Representations and Warranties . . . . . . . . . . . . . . 15
SECTION 7.3. Compliance with Covenants. . . . . . . . . . . . . . . . . 15
SECTION 7.4. Board and Other Approvals. . . . . . . . . . . . . . . . . 15
SECTION 7.5. Corporate Proceedings. . . . . . . . . . . . . . . . . . . 15
SECTION 7.6. No Adverse Change. . . . . . . . . . . . . . . . . . . . . 16
SECTION 7.7. Regulatory Approvals . . . . . . . . . . . . . . . . . . . 16
SECTION 7.8. Supporting Documents . . . . . . . . . . . . . . . . . . . 16
SECTION 7.9. Manufacturer's Specifications. . . . . . . . . . . . . . . 16
SECTION 7.10. Amendment of Physician Contracts . . . . . . . . . . . . . 16
ARTICLE 8.CONDITIONS TO THE OBLIGATIONS OF SELLER. . . . . . . . . . . . . . 16
SECTION 8.1. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.2. Representations and Warranties . . . . . . . . . . . . . . 16
SECTION 8.3. Compliance with Covenants. . . . . . . . . . . . . . . . . 16
SECTION 8.4. Supporting Documents . . . . . . . . . . . . . . . . . . . 17
ARTICLE 9.JOINT COVENANTS OF THE PARTIES . . . . . . . . . . . . . . . . . . 17
SECTION 9.1. Confidentiality of Business Information. . . . . . . . . . 17
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SECTION 9.2. Confidentiality of this Agreement . . . . . . . . . . . . 17
ARTICLE 10.INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 10.1 Indemnification and Payment of Damages by Seller. . . . . 18
SECTION 10.2 Indemnification and Payment of Damages by Buyer . . . . . 18
SECTION 10.3. Liability and Risk of Loss. . . . . . . . . . . . . . . . 19
SECTION 10.4. Procedure for Seller Indemnification - Third Party Claims 19
SECTION 10.5. Procedure for Buyer Indemnification - Third Party Claims. 20
SECTION 10.6. Procedure for Indemnification - Other Claims. . . . . . . 21
SECTION 10.7. Time Limitations. . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 11.MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 11.1. Termination Events. . . . . . . . . . . . . . . . . . . . 22
SECTION 11.2. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 11.3. Survival of Covenants, Representations, and Warranties. . 24
SECTION 11.4. Amendment . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.5. Assignment. . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.6. Severability. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.7. Choice of Law . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.8. Binding Benefit . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.9. Headings; Use of Terms. . . . . . . . . . . . . . . . . . 24
SECTION 11.10. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.11. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.12. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.13. Construction. . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.14. Cumulative Remedies . . . . . . . . . . . . . . . . . . . 25
SECTION 11.15. Attorneys Fees. . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.16. Arbitration . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.17. Entire Agreement. . . . . . . . . . . . . . . . . . . . . 25
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ASSET PURCHASE
AND
LIABILITIES ASSUMPTION AGREEMENT
BY AND BETWEEN
XXXXXXX X. XXXXXXX, M.D.
AND
INSIGHT HEALTH CORP.
THIS ASSET PURCHASE AND LIABILITIES ASSUMPTION AGREEMENT (the
"AGREEMENT"), dated as of this 20th day of June, 1997, is made by and between
Xxxxxxx X. Xxxxxxx, M.D. (d/b/a the Chattanooga Outpatient Center), an
individual residing in the State of Tennessee ("SELLER"), and InSight Health
Corp., a corporation duly organized and validly existing under the laws of
the State of Delaware ("BUYER").
WHEREAS, Seller is engaged in providing diagnostic imaging services to
his customers and owns certain tangible and intangible assets, including, but
not limited to, diagnostic imaging equipment at 0000 XxXxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx (the "CENTER") (the imaging business operated at the
Center as the Chattanooga Outpatient Center and for which the assets which
are the subject of this Agreement are used shall be referred to as the
"BUSINESS");
WHEREAS, Seller desires to sell certain of his assets to Buyer, all as
set forth herein;
WHEREAS, Buyer desires to purchase certain assets and assume certain
liabilities (and only such specified assets and liabilities) of Seller, all
as set forth herein;
NOW THEREFORE, in consideration of the premises and covenants as set
forth herein, and subject to the representations, warranties, and conditions
contained herein, the parties agree as follows:
ARTICLE 1.
PURCHASE OF ASSETS
AND ASSUMPTION OF LIABILITIES
SECTION 1.1. INCORPORATION OF RECITALS. The recitals set forth above
are incorporated herein by reference.
SECTION 1.2. SALE AND PURCHASE OF ASSETS. Subject to the terms and
conditions of this Agreement, and in reliance on the representations,
warranties, and covenants contained herein, on the Closing Date (as defined
below), Seller shall sell, convey, assign, transfer, and deliver, or cause to be
sold, conveyed, assigned, transferred, and delivered, to Buyer, and Buyer shall
purchase and acquire from Seller, the Assets (as defined below), free and
clear of any title defect, mortgage, assignment, pledge, hypothecation,
security interest, title or retention agreement, levy, execution, seizure,
attachment, garnishment, deemed trust, lien, easement, option, right or claim
of others, or charge or encumbrance of any kind whatsoever, except as set
forth on the Disclosure Schedule, in exchange for Buyer paying the Purchase
Price (as defined below) and Buyer assuming the Assumed Liabilities (as
defined below). The term "ASSETS" shall mean all of the following described
properties, assets, contracts, and rights used or useful in connection with
the Business: (i) all contracts relating to the Business, including contracts
to provide diagnostic imaging services to Seller's customer base; (ii) all
fixed equipment, including MRI equipment, coils, cameras, film-processing
equipment, mammography equipment, nuclear gamma camera system, ECT imaging
couches, whole body couches, accusync gating, and other ancillary diagnostic
equipment, computers, software, furniture, and fixtures; (iii) customer and
prospect lists; (iv) all rights under leases; (vi) all other assets used in
the Business, including prepaid expenses, inventory, and supplies; (v) the
name "Chattanooga Outpatient Center" and all variations thereof, and all of
Seller's telephone numbers relating to the Business. A definitive listing of
the Assets is set forth on SCHEDULE A, attached hereto and incorporated
herein by reference. Specifically excluded from this Agreement and the
purchase obligations herein are any tax refunds due to Seller, accounts
receivable of Seller as of the Closing Date (as defined below), and cash on
hand as of the Closing Date (as defined below), and all assets of Seller not
related to the Business.
SECTION 1.3. ASSUMPTION OF LIABILITIES. Simultaneous with its purchase
of the Assets, Buyer shall assume the payment and performance of the
obligations of Seller from and after the Closing (as defined below), under
the contracts, leases, and agreements as are specifically described on
SCHEDULE B, attached hereto and incorporated herein by reference. The
foregoing described liabilities shall hereinafter be referred to collectively
as the "ASSUMED LIABILITIES." Buyer shall not assume any liability or
obligation for any liability not specifically referred to or scheduled
herein, including any liabilities with respect to Seller's employees,
employee benefit plans, salaries, any unpaid overtime, accrued vacation time,
back wages, associated tax liabilities, or other benefits or obligations.
SECTION 1.4. PURCHASE PRICE. In addition to its assumption of the
Assumed Liabilities, Buyer shall pay to Seller, in the aggregate, as
consideration for his sale of the Assets the sum of nine million dollars
($9,000,000) (the "PURCHASE PRICE").
SECTION 1.5. TAX ALLOCATION. The parties agree to allocate the Purchase
Price and the Assumed Liabilities among the Assets for all purposes
(including financial accounting and tax purposes) in accordance with the
allocation set forth on SCHEDULE C, attached hereto and incorporated herein
by reference, and shall make all necessary filings (including those required
under Internal Revenue Code Section 1060) in accordance with that allocation.
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SECTION 1.6. CLOSING. The closing of the transactions contemplated by
this Agreement shall take place at the offices of Xxxxxxxxx, Xxxxxx & Xxxxxxx,
P.C., 1000 Tallan Building, Two Union Square, Chattanooga, Tennessee, or at such
other place as the parties may mutually agree, at 9:00 a.m. on the later to
occur of (i) June 25, 1997, or (ii) the date fifteen (15) days after Buyer has
obtained all regulatory approvals necessary (if any are necessary) for
consummation of the transactions contemplated hereby (or, if such date falls on
a weekend or holiday, the first business day thereafter) (such closing being
called the "CLOSING" and such date being called the "CLOSING DATE"). At the
Closing, Seller shall deliver to Buyer the following:
(a) Bills of sale and assignments transferring to Buyer all of the
Assets, together with certificates or other evidence of title to
the Assets, properly endorsed to Buyer;
(b) Assignments and assumptions of Seller's rights and obligations
with respect to Seller's contracts, leases, and agreements among
the Assets to the extent assignable;
(c) Consents to assignment and assumption from each of the other
parties to such contracts, leases, and agreements;
(d) Originals (or, where unavailable, attested copies) of each such
contract, lease, or agreement included among the Assets;
(e) Accurate interim financial statements for the Business for the
month ended most recently prior to the Closing;
(f) Statement of prorations as of the Closing of taxes, rents, lease
payments, and other charges;
(g) An opinion of counsel to Seller regarding the authority of Seller
to conclude the transactions provided for herein and the due
execution of the instruments at the Closing, and other matters
set forth therein; and
(h) Such other items as are set forth elsewhere in this Agreement and
as Buyer and its counsel may reasonably request.
At the Closing, Buyer shall deliver to Seller the following:
(a) A cashiers or certified check, or wire transfer, in the total
amount of nine million dollars ($9,000,000);
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(b) An Assumption Agreement with respect to the Assumed Liabilities;
and
(c) Such other items as are set forth elsewhere in this Agreement and
as Seller and its counsel may reasonably request.
SECTION 1.7. ABANDONMENT DATE. Notwithstanding anything herein to the
contrary, if the Closing does not take place by the close of business on July
15, 1997 (the "ABANDONMENT DATE"), any party hereto shall have the option to
terminate this Agreement on or within five (5) business days after the
Abandonment Date, in which case this Agreement will terminate as to all
parties hereto; provided, however, that (i) if the Closing does not take
place as a result solely of any delay in obtaining any required governmental
or regulatory approval, the Abandonment Date automatically shall be extended
for an additional sixty (60) days and (ii) if the Closing does not take place
as a result solely of any delay in obtaining any third-party consent to a
material contract, the Abandonment Date will be extended for an additional
thirty (30) days; provided further, however, that if such regulatory approval
or third-party consent is not obtained within such respective extended
periods, either party may terminate this Agreement, in which case this
Agreement will terminate both parties hereto. The foregoing shall not be
construed to terminate or otherwise affect any claims either party may have
against the other for breach of any obligation arising out of this Agreement,
or any other agreement entered into in connection herewith, prior to the
Abandonment Date. The parties will seek and use their reasonable efforts to
obtain all governmental and regulatory approvals and third-party consents for
the consummation of the transactions contemplated by this Agreement, and the
parties will cooperate with each other and their respective agents with
respect to obtaining such governmental and regulatory approvals and third
party consents.
ARTICLE 2.
OTHER AGREEMENTS
SECTION 2.1. FINANCIAL STATEMENTS. If the Closing occurs, then within
sixty (60) days after the Closing Date, Seller shall cause to be prepared by
an independent public accountant, at Seller's cost and expense, audited
financial statements of the Business for the fiscal year ended December 31,
1996.
SECTION 2.2. PROFESSIONAL SERVICES AGREEMENT. Buyer, a professional
corporation owned by Seller, and Seller shall enter into, as of the Closing
Date, a Professional Services Agreement, as set forth in SCHEDULE D, attached
hereto and incorporated herein by reference.
SECTION 2.3. NONCOMPETITION AGREEMENT.
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Seller shall enter into and deliver to Buyer, as of the Closing Date, a
Noncompetition Agreement, as set forth in SCHEDULE E, attached hereto and
incorporated herein by reference.
SECTION 2.4. FURTHER ASSURANCES. From time to time after the Closing
Date at Buyer's request and without further consideration, Seller shall give
to Buyer and its representatives, auditors, and counsel full access during
normal business hours to all of the properties, books, records, tax returns,
contracts, licenses, franchises, and all of the documents of Seller relating
to the Assets and Assumed Liabilities, and shall furnish to Buyer all
information with respect thereto as Buyer may from time to time reasonably
request. From time to time after the Closing, at Buyer's request and without
further consideration, Seller shall execute and deliver at Seller's expense,
such other instruments of conveyance and transfer and take such other actions
as Buyer reasonably may require to more effectively deliver and vest in
Buyer, and to put Buyer in legal and physical possession of, all of the
Assets and the Assumed Liabilities.
SECTION 2.5. LEASE AGREEMENT. Buyer and Seller shall enter into a
Lease Agreement, as set forth in SCHEDULE F, attached hereto and incorporated
herein by reference, relative to the Center.
SECTION 2.6. COLLECTION OF PRE-CLOSING ACCOUNTS RECEIVABLE. InSight
agrees that it shall take reasonable measures, consistent with its own
collections policies, to collect Seller's accounts receivable related to
Business as of the Closing Date and to remit to Seller all such accounts
receivable actually collected, without charge or set-off. At the Closing or
as soon thereafter as reasonably possible, Seller shall provide Buyer with an
accurate and complete list of all such outstanding accounts receivable as of
the Closing Date. Seller will cooperate in Buyer's efforts to collect such
accounts receivable.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to Buyer as follows, except as set forth
on the Disclosure Schedule attached as SCHEDULE G, attached hereto and
incorporated herein by reference (which Disclosure Schedule makes explicit
reference to the particular representation or warranty as to which exception
is taken, which in each case shall constitute the sole representation and
warranty as to which such exception shall apply):
SECTION 3.1. POWER OF SELLER. Seller has all requisite power and
authority and licenses, permits, franchises, certificates, authorizations,
approvals, consents, and rights to own the Assets which are the
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subject of this Agreement, and to be a party to the contracts, leases, and
other agreements which are the subject of this Agreement.
SECTION 3.2. VALIDITY. Seller has the full legal power and authority to
execute, deliver, and perform this Agreement and all other agreements and
documents necessary to consummate the transactions contemplated hereby. This
Agreement and all agreements related to this transaction have been duly
executed and delivered by Seller and constitute the legal, valid, and binding
obligation of Seller enforceable in accordance with their terms (subject as
to enforcement of remedies to equitable principles and to the discretion of
courts in awarding equitable relief and to applicable bankruptcy,
reorganization, insolvency, moratorium, and similar laws affecting the rights
of creditors generally). Any other agreement contemplated to be entered into
by Seller in connection with this Agreement and the transactions contemplated
hereby, when executed and delivered, will constitute the legal, valid, and
binding obligation of Seller enforceable in accordance with its respective
terms (subject as to enforcement of remedies to equitable principles and to
the discretion of courts in awarding equitable relief and to applicable
bankruptcy, reorganization, insolvency, moratorium, and similar laws
affecting the rights of creditors generally). The execution and delivery by
Seller of this Agreement, and the performance of his obligations hereunder,
and the sale and delivery of the Assets and assignment of the Assumed
Liabilities, do not require any action or consent of any party other than
Seller pursuant to any contract, agreement, or other undertaking material to
Seller, or pursuant to any order or decree to which Seller is a party or to
which any of his properties or assets are subject, and will not materially
violate any provision of law, any order of any court or other agency of the
government, or any indenture, agreement, or other instrument to which Seller,
or any of Seller's properties or assets are bound, or materially conflict
with, result in a material breach of or constitute (with due notice or lapse
of time or both) a material default under any such indenture, agreement, or
other instrument, or result in the creation or imposition of any lien,
charge, restriction, claim, or encumbrance of any nature whatsoever upon any
of the properties or assets of Seller relating to the Business.
SECTION 3.3. TITLE TO ASSETS. Seller has good and marketable title to
all of the Assets, and all such Assets are free and clear of any title
defect, mortgage, assignment, pledge, hypothecation, security interest, title
or retention agreement, levy, execution, seizure, attachment, garnishment,
deemed trust, lien, easement, option, right or claim of others, or charge or
encumbrance of any kind whatsoever. The possession by Seller of any property
used in the Business has not been disturbed and no claim has been asserted or
threatened against Seller adverse to his rights in such property.
SECTION 3.4. CONTRACTS, LEASEHOLD INTERESTS. SCHEDULE H, attached hereto
and incorporated herein by reference, sets forth a list of all contracts,
leases, or agreements to which Seller is a party related to the Business. Each
such contract, lease, or agreement is a valid and subsisting contract, lease, or
agreement without any default of Seller and, to the best knowledge of Seller,
without any default thereunder of any other party thereto. No event has
occurred and is
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continuing which, with due notice or lapse of time or both, would constitute
a default or event of default by Seller under any such contract, lease, or
agreement or, to the best knowledge of Seller, by any other party thereto.
SECTION 3.5. CONDITION OF PROPERTY. All fixtures, machinery, equipment,
and other tangible property to be purchased and sold hereunder are in good
operating condition.
SECTION 3.6. TRADEMARKS, PATENTS, AND OTHER RIGHTS. Set forth in
SCHEDULE I, attached hereto and incorporated herein by reference, is a list
and brief description of all patents, patent rights, patent applications,
trademarks, trademark applications, service marks, service xxxx applications,
trade names, and copyrights, and all applications for such which are in the
process of being prepared, are owned by, or are registered in the name of
Seller or of which Seller is a licensor or licensee, or in which any of
Seller has any right, and in each case a brief description of the nature of
such right. Seller owns or possesses adequate licenses or other rights to
use all patents, patent applications, trademarks, trademark applications,
service marks, service xxxx applications, trade names, copyrights,
manufacturing processes, formulae, trade secrets, and know how (collectively,
the "SELLER'S INTELLECTUAL PROPERTY") necessary or desirable to the conduct
of the Business as conducted and as proposed to be conducted. No claim is
pending or threatened to the effect that the operations of the Business
infringe upon or conflict with the asserted rights of any other person under
Seller's Intellectual Property, and, to the best knowledge of Seller, there
is no basis for any such claim (whether or not pending or threatened). No
claim is pending or, to the best knowledge of Seller, threatened to the
effect that Seller's Intellectual Property owned or licensed by Seller or
which Seller otherwise has the right to use, is invalid or unenforceable by
Seller, and there is no known basis for any such claim (whether or not
pending or threatened).
SECTION 3.7. PROPRIETARY INFORMATION OF THIRD PARTIES. No third party
has claimed or has any reason known to Seller to claim that any person
employed by or affiliated with Seller has: (i) violated or may be violating
any of the terms or conditions of his or her employment, noncompetition, or
nondisclosure agreement with such third party; (ii) disclosed or may be
disclosing or utilized or may be utilizing any trade secret or proprietary
information or documentation of such third party; or (iii) interfered or may
be interfering in the employment relationship between such third party and
any of its current or former employees. No third party has requested
information from Seller which suggests that such a claim is being
contemplated. To the best knowledge of Seller, no person employed by or
affiliated with Seller has employed or proposes to employ any trade secret or
any information or documentation proprietary to any former employer, and, to
the best knowledge of Seller, no person employed by or affiliated with Seller
has violated any confidential relationship which such person may have had
with any third party in connection with the development or sale of any
product or proposed product or the
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development or sale of any service or proposed service of Seller, and Seller
does not have any reason to believe there will be any such employment or
violation. To the best knowledge of Seller, the execution, delivery, or
performance of this Agreement, the carrying on of the Business as employees
or agents by any key employee or affiliated person of Seller, and the conduct
or proposed conduct of the Business, will not materially conflict with or
result in a material breach of the terms, conditions, or provisions of, or
constitute a material default under any contract, covenant, or instrument
under which any such person is obligated.
SECTION 3.8. LITIGATION AND INVESTIGATIONS. There is no: (i) action,
suit, claim, proceeding, or investigation relating to the Business which is
pending or, to the best knowledge of Seller, threatened against or affecting
Seller or any of his employees, by any private party or any federal, state,
municipal, or other governmental department, commission, board, bureau,
agency, or instrumentality, domestic or foreign; or to the best knowledge of
Seller, pending, threatened against, or affecting persons or entities who
perform professional services under agreement with Seller before any
professional self-governance, oversight, or regulatory body with respect to
such agreement, (ii) arbitration proceeding relating to Seller pending under
collective bargaining agreements or otherwise; or (iii) governmental or
professional inquiry pending or, to the best knowledge of Seller, threatened
against or directly or indirectly affecting Seller (including without
limitation any inquiry as to the qualification of Seller to hold or receive
any license or permit), and, to the best knowledge of Seller, there is no
basis for any of the foregoing as to Seller and his employees or, to the best
knowledge of Seller, as to entities or persons who perform professional
services for Seller with respect to any agreements of such persons with
Seller. Seller has not received any opinion, memorandum, or legal advice
from legal counsel to the effect that Seller is exposed, from a legal
standpoint, to any liability which may reasonably be expected to be material
to the Business, prospects, financial condition, operations, property, or
affairs of Seller. Seller is not in default with respect to any order,
writ, injunction, or decree known to or served upon him of any court or of
any federal, state, municipal, or other governmental department, commission,
board, bureau, agency, or instrumentality, domestic or foreign. There is no
action or suit by Seller pending or threatened against others. Upon the
receipt of written approval for the transactions contemplated hereby from the
applicable state regulatory bodies (to the extent any such approval is
required), Seller will be in compliance in all material respects with all
laws, rules, regulations, and orders applicable to the Business, operations,
properties, assets, products, and services, and Seller has all necessary
permits, licenses, and other authorizations required to conduct the Business
as conducted and as proposed to be conducted. There is no existing law,
rule, regulation, or order, or proposed law, rule, regulation, or order known
to Seller, whether federal, state, local, or professional, which would
prohibit or restrict Seller from, or otherwise materially adversely affect
Seller in, conducting his respective business in any jurisdiction in which he
is now conducting business or in which he proposes to conduct business.
SECTION 3.9. TAXES. Seller has filed or caused to be filed all tax
returns, federal, state, county, and local including, without limitation,
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income, sales, payroll, premium, withholding, informational and personal
property tax returns, required to be filed by him and such returns have been
duly prepared and filed. All taxes due by reason of the operations of the
Business have been paid or reserved, including, without limitation, all taxes
which Seller is obligated to withhold from accounts owing to employees,
creditors, and third parties. All such taxes for which any such party has
become obligated pursuant to elections made in accordance with generally
accepted practice have been paid and adequate reserves have been established
for all taxes accrued but not yet payable. The federal income tax returns of
Seller with respect to the Business have never been audited by the Internal
Revenue Service. No deficiency assessment relating to the Business with
respect to any proposed adjustment of Seller's federal, state, county, or
local taxes is pending, or to the best knowledge of Seller, threatened.
There is no tax lien, whether imposed by any federal, state, county, or local
taxing authority outstanding against the Assets and properties of Seller
relating to the Business. To the best knowledge of Seller, there is no
pending examination or proceeding by any authority or agency relating to the
assessment or collection of any such taxes, interest, or penalties thereon,
nor, to the best knowledge of Seller, do there exist any facts that would
provide a basis for any such assessment.
SECTION 3.10. INSURANCE COVERAGE. With respect to the Business, Seller
has maintained professional liability, casualty, fire, property loss,
business interruption, and other insurance coverage of such types and in such
amounts as is customary for businesses similarly situated. SCHEDULE J,
attached hereto and incorporated herein by reference, sets forth a complete
and correct list of all insurance policies in force with respect to Seller on
the Closing Date and identifies the insurer, type, and amount of coverage for
each, and the anniversary date for each.
SECTION 3.11. FEES AND COMMISSIONS. Seller has not agreed to pay or
become liable to pay any broker's, finder's, or originator's fees or
commissions by reason of services alleged to have been rendered for, or at
the insistance of, Seller in connection with this Agreement and the
transactions contemplated hereby.
SECTION 3.12. INSIDER INTERESTS. No current employee, health care
provider, or ancillary health service provider of Seller: (i) owns, directly
or indirectly, in whole or in part, any of the properties used in the
Business; (ii) has received a loan or advance from Seller which is currently
outstanding; (iii) has any obligation to make any loan to Seller; or (iv) has
any other business relationship with Seller other than in his or her capacity
as an employee, health care provider, or ancillary health service provider.
No current employee of Seller owns, in whole or in part, directly or
indirectly, any interest in excess of five percent (5%) in, or controls, or
is an employee, officer, director, or partner of, or participant in, or
consultant to, any corporation, association, partnership, limited
partnership, joint venture, or other entity which is a competitor of Seller.
SECTION 3.13. OTHER APPROVALS.
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All consents, approvals, qualifications, orders, or authorizations of, or
filings with, any governmental authority, including any court or other third
party, required in connection with Seller's valid execution, delivery, or
performance of this Agreement, or the consummation of any transaction
contemplated by this Agreement, shall have been duly made and obtained and
shall be effective on and as of the Closing Date.
SECTION 3.14. ENVIRONMENTAL LIABILITIES.
3.14.1 Seller has not used, stored, treated, transported,
manufactured, refined, handled, produced, or disposed of any Hazardous
Materials (as defined below) or Petroleum Products (as defined below) on,
under, at, from, or in any way materially affecting any of the properties or
assets of the Business in any manner which at the time of the action in
question violated any Environmental Law (as defined below), governing the
use, storage, treatment, transportation, manufacture, refinement, handling,
production, or disposal of Hazardous Materials (as defined below) or
Petroleum Products (as defined below), and, to the best knowledge of Seller,
no prior owner of such property or asset or any tenant, subtenant, prior
tenant, or prior subtenant thereof has used Hazardous Materials (as defined
below) or Petroleum Products (as defined below) on, from, or materially
affecting such property or asset of the Business in any manner which at the
time of the action in question violated any Environmental Laws (as defined
below) governing the use, storage, treatment, transportation, manufacture,
refinement, handling, production, or disposal of Hazardous Materials (as
defined below) or Petroleum Products (as defined below).
3.14.2 No pending claims have been made against Seller and no
currently outstanding citations or notices have been issued against him and,
to Seller's best knowledge, Seller has no obligations or liabilities, matured
or not matured, absolute or contingent, assessed or unassessed, where such
could reasonably be expected to have a material adverse affect on the
Business, which in the case of any of the foregoing have been or are imposed
by reason of or based upon any provision of any Environmental Laws (as
defined below).
3.14.3 As used herein, "ENVIRONMENTAL LAWS" shall mean any and all
federal, state, local, or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, or requirements of any federal, state,
municipal, or other governmental department, commission, board, bureau,
agency, or instrumentality, or other court or arbitrator, in each case
whether of the United States or foreign, regulating, relating to, or imposing
liability or standards of conduct concerning any Hazardous Materials (as
defined below) or Petroleum Products (as defined below) or environmental
protection, as heretofore or now in effect, and the regulations adopted and
publications promulgated thereunder and all substitutions thereof.
3.14.4 As used herein, "HAZARDOUS MATERIALS" shall mean any
hazardous materials, hazardous wastes, infectious medical wastes, hazardous
or toxic substances, asbestos, asbestos fibers, friable asbestos, any PCB's,
or constituents of the foregoing, defined or regulated as such in or under
any Environmental Laws.
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3.14.5 As used herein, "PETROLEUM PRODUCTS" shall mean gasoline,
diesel fuel, motor oil, waste or used oil, heating oil, kerosene, and any
other petroleum products.
SECTION 3.15. FRAUD AND ABUSE. Seller and, to the best knowledge of
Seller, persons who provide professional services under agreements with
Seller have not engaged in any activities with respect to the Business which
are prohibited under federal Medicare and Medicaid statutes, 42 U.S.C.
Section 1320a-7b, or the regulations promulgated pursuant to such statutes or
related state or local statutes or regulations or which are prohibited by
rules of professional conduct.
SECTION 3.16. EMPLOYEES. SCHEDULE K, attached hereto and incorporated
herein by reference, sets forth a complete and accurate list of the following
information for each employee of Seller, including each employee on leave of
absence or layoff status: employer; name; job title; current compensation
paid or payable; vacation accrued; and service credited for purposes of
vesting and eligibility to participate under any of Seller's pension,
retirement, profit-sharing, thrift-saving, deferred compensation, stock
bonus, stock option, cash bonus, employee stock ownership (including
investment credit or payroll stock ownership), severance pay, insurance,
medical, welfare, or vacation plan, other employee pension benefit plan.
There are no written or verbal employment agreements, commitments, or
understandings, and all personnel are employed "at-will". The employee
relations of Seller are good in all material respects. There is no pending
or, to the best knowledge of Seller, threatened employee strike, dispute
slowdown, work stoppage, or labor dispute, and none has occurred. No union
representation question exists respecting any employees of Seller. No
collective bargaining agreement exists or is currently being negotiated by
Seller, no demand has been made for recognition by a labor organization by or
with respect to any employees of Seller is taking place, and none of the
employees of Seller is represented by any labor union or organization. There
is no unfair practice claim against Seller before the National Labor
Relations Board. Seller is in compliance in all material respects with all
federal and state laws respecting employment and employment practices, terms
and conditions of employment, and wages and hours including compliance with
any Internal Revenue Service guidelines on employees and independent
contracts. Seller has complied with all requirements with respect to the
employment of any person who is not a citizen of the United States. Seller is
not engaged in any unfair labor practices (as defined in federal and state
labor laws). There are no pending or, to Seller's best knowledge, threatened
equal employment opportunity claims, wage and hour claims, unemployment
compensation claims, or workers' compensation claims against or involving
Seller with respect to the Business.
SECTION 3.17. BENEFIT PLANS. Neither Seller, nor any other entity which
is part of a controlled group of which Seller is a part, nor any other business
or entity owned and/or controlled by Seller, maintains any qualified retirement
plan, other than the 401(k) plan (the "PLAN") listed on SCHEDULE G. The Plan
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is currently qualified and a copy of its most recent favorable IRS
determination letter has been provided to Buyer. To the best of Seller's
knowledge, the Plan has been operated in accordance with the requirements of
the Employee Retirement Income Security Act of 1974, as amended, and the
Internal Revenue Code of 1986, as amended, in all material respects. The
Plan administrator has made all applicable filings with regard to the Plan
and the related trust and will make all applicable filings required for the
plan year in which this purchase occurs. To the best knowledge of Seller,
there are no liabilities with respect to the Plan. The Plan has not been
subject to a termination or partial termination. To the best knowledge of
Seller, the Plan is not currently under audit or investigation by the
Internal Revenue Service or the Department of Labor and Seller has no
knowledge, nor has he received any notification, of a possible commencement
of an investigation or audit. There are no pending or, to the best knowledge
of Seller, threatened claims by or on behalf of the Plan, by any employee or
beneficiary covered under the Plan, or otherwise involving the Plan. Seller
has made available to Buyer a complete and accurate copy of all Plan
documents including the Plan, all amendments, summary plan descriptions and
Forms 5500 for the year ended December 31, 1995. Buyer will incur no
liability with regard to the Plan as a result of this transaction.
SECTION 3.18. DISCLOSURE. No representation or warranty by Seller in
this Agreement, and no exhibit, schedule, or certificate furnished or to be
furnished by Seller pursuant hereto, (i) contains any untrue statement of a
material fact, or (ii) omits to state a fact required to be stated therein or
necessary to make the statements contained herein or therein, in light of the
circumstances in which they were made, not materially misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer represents and warrants to Seller as follows except as set forth on
the Disclosure Schedule attached as SCHEDULE L, attached hereto and
incorporated herein by reference (which Disclosure Schedule makes explicit
reference to the particular representation or warranty as to which exception
is taken, which in each case shall constitute the sole representation and
warranty as to which such exception shall apply):
SECTION 4.1. ORGANIZATION, QUALIFICATION, AND CORPORATE POWER OF BUYER.
Buyer (i) is a duly organized and validly existing for profit corporation in
good standing under the laws of the State of Delaware; (ii) has the corporate
power and authority to carry on its business as now conducted; and (iii) has
all requisite power and authority and licenses, permits, franchises,
certificates, authorizations, approvals, consents, and rights to own the
property which is the
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subject of this Agreement, and to be a party to the contracts, leases, and
other agreements which are the subject of this Agreement.
SECTION 4.2. VALIDITY. Buyer has the full legal power and authority to
execute, deliver, and perform this Agreement and all other agreements and
documents necessary to consummate the transactions contemplated hereby, and
all corporate action of Buyer necessary for such execution, delivery, and
performance have been or will have been duly taken by Closing. This
Agreement and all agreements related to this transaction have been duly
executed and delivered by Buyer and constitute the legal, valid, and binding
obligation of Buyer enforceable in accordance with their terms (subject as to
enforcement of remedies to equitable principles and to the discretion of
courts in awarding equitable relief and to applicable bankruptcy,
reorganization, insolvency, moratorium, and similar laws affecting the rights
of creditors generally). Any other agreement contemplated to be entered into
by Buyer in connection with this Agreement and the transactions contemplated
hereby, when executed and delivered, will constitute the legal, valid, and
binding obligation of Buyer enforceable in accordance with its respective
terms (subject as to enforcement of remedies to equitable principles and to
the discretion of courts in awarding equitable relief and to applicable
bankruptcy, reorganization, insolvency, moratorium, and similar laws
affecting the rights of creditors generally). The execution and delivery by
Buyer of this Agreement, and the performance of its obligations hereunder,
will not materially violate any provision of law, the Restated Certificate of
Incorporation or Bylaws of Buyer, any order of any court or other agency of
the government, or any indenture, agreement, or other instrument to which
Buyer, or any of its properties or assets are bound, or materially conflict
with, result in a material breach of or constitute (with due notice or lapse
of time or both) a material default under any such indenture, agreement, or
other instrument.
SECTION 4.3. FEES AND COMMISSIONS. Buyer has not agreed to pay or
become liable to pay any broker's, finder's, or organization's fees or
commissions by reason of services alleged to have been rendered for, or at
the insistence of, Buyer in connection with this Agreement and the
transactions contemplated hereby.
SECTION 4.4. OTHER APPROVALS. All consents, approvals, qualifications,
orders, or authorizations of, or filings with, any governmental authority,
including any court or other third party, required in connection with Buyer's
valid execution, delivery, or performance of this Agreement, or the
consummation of any transaction contemplated by this Agreement, shall have
been duly made and obtained and shall be effective on and as of the Closing
Date.
SECTION 4.5. DISCLOSURE. No representation or warranty by Buyer in this
Agreement, and no exhibit, schedule, or certificate furnished or to be furnished
by Buyer pursuant hereto, (i) contains any untrue statement of a material fact,
or (ii) omits to state a fact required to be stated therein or necessary to make
the
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statements contained herein or therein, in light of the circumstances in
which they were made, not materially misleading.
ARTICLE 5
COVENANTS OF SELLER
SECTION 5.1. OPERATION OF BUSINESS. Seller covenants to Buyer that he
shall operate and manage the Business until the Closing in substantially the
same manner as the Business has been operated and managed by Seller in the
past and shall maintain the physical condition of the Assets, reasonable wear
and tear excepted.
SECTION 5.2. LIENS ON ASSETS. Seller covenants to Buyer that he shall
not sell, assign, or create any right, title, easement, or interest
whatsoever in or to the Assets or create, or permit to exist, any lien,
encumbrance, option, right, claim, or charge thereon.
SECTION 5.3. LITIGATION. Seller covenants to Buyer that he shall advise
Buyer promptly upon notification to Seller of any pending or threatened
litigation or other legal or regulatory action affecting the Assets, the
Assumed Liabilities, Seller, or the Business.
SECTION 5.4. NON-CONTRAVENTION. Seller covenants to Buyer that he shall
not take any action or omit to take any action, which action or omission
would have the effect of materially violating any of Seller's covenants,
warranties, or representations in this Agreement.
SECTION 5.5. STANDSTILL. Seller covenants to Buyer that he shall not
execute any new contracts, leases, or agreements relating to the Business, or
renew, extend, amend, modify, assign, or pledge any existing contracts,
leases, and agreements relating to the Business, or assign or pledge any
amounts payable thereunder, without the express prior written consent of
Buyer.
SECTION 5.6. INSURANCE. Seller covenants to Buyer that he shall cause
all policies of insurance referenced in Section 3.10 and SCHEDULE J to be
maintained in full force and effect through and including the Closing Date.
SECTION 5.7. THIRD-PARTY CONSENTS. Seller covenants to Buyer that he
shall use his best efforts to obtain all required consents of third parties
to the assignment and assumption of the contracts, leases, and agreements
included among the Assets and Assumed Liabilities.
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SECTION 5.8. COOPERATION WITH BUYER. Seller covenants to Buyer that he
shall use his best efforts to obtain, and/or cooperate with Buyer in taking
all steps necessary for it to obtain, all required consents and approvals to
Buyer's assumption of the Assumed Liabilities pursuant to this Agreement.
SECTION 5.9. REGULATORY APPROVALS. Seller covenants to Buyer that he
shall cooperate in Buyer's efforts to obtain all necessary regulatory
approvals for consummation of the transactions contemplated hereby.
SECTION 5.10. NON-SOLICITATION. Seller covenants to Buyer that he shall
not negotiate with any other party for the sale of the Assets and Seller
shall notify Buyer of the fact of any unsolicited offer to purchase the
Assets and the identity of the offeror.
SECTION 5.11. GENERAL COOPERATION. Seller covenants to Buyer that he
shall cooperate in good faith with Buyer in addressing other matters
necessary to consummate the transactions contemplated by this Agreement.
SECTION 5.12. NOTIFICATION. Between the date of this Agreement and the
Closing Date, Seller promptly will notify Buyer in writing if Seller becomes
aware of any fact or condition that causes or constitutes a breach of any of
Seller's representations and warranties as of the date of this Agreement, or
if Seller becomes aware of the occurrence after the date of this Agreement of
any fact or condition that would (except as expressly contemplated by this
Agreement) reasonably be expected to cause or constitute a breach of any such
representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. During the
same period, Seller will promptly notify Buyer of the occurrence of any
breach of any covenant of Seller in this Article 5 or of the occurrence of
any event that may make the satisfaction of the conditions in Article 7
impossible or unlikely.
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ARTICLE 6
COVENANTS OF BUYER
SECTION 6.1. THIRD-PARTY CONSENTS. Buyer covenants to Seller that Buyer
shall cooperate with Seller in taking all steps necessary, and shall use
Buyer's best efforts with respect thereto, to obtain all required consents of
third parties to the assignment and assumption of the contracts, leases, and
agreements included among the Assets and the Assumed Liabilities. Buyer
further covenants that Buyer shall use its best efforts to obtain the consent
of General Electric Company (acting through GEMS) and any other third parties
(to the extent their consent is necessary) to this Agreement and the
consummation and performance of the transactions contemplated hereby.
SECTION 6.2. GENERAL COOPERATION. Buyer covenants to Seller that Buyer
shall cooperate in good faith with Seller in addressing other matters
necessary to consummate the transactions contemplated by this Agreement.
SECTION 6.3. EMPLOYMENT. Buyer covenants to Seller that Buyer shall
offer employment to Seller's employees listed on SCHEDULE M on terms and
conditions established by Buyer.
SECTION 6.4. NON-CONTRAVENTION. Buyer covenants to Seller that it shall
not take any action or omit to take any action, which action or omission
would have the effect of materially violating any of Buyer's covenants,
warranties or representations in this Agreement.
SECTION 6.5. REGULATORY APPROVALS. Buyer covenants to Seller that Buyer
shall cooperate in Seller's efforts to obtain all necessary regulatory
approvals for consummation of the transactions contemplated hereby.
SECTION 6.6. NOTIFICATION. Between the date of this Agreement and the
Closing Date, Buyer will promptly notify Seller in writing if Buyer becomes
aware of any fact or condition that causes or constitutes a breach of any of
Buyer's representations and warranties as of the date of this Agreement, or
if Buyer becomes aware of the occurrence after the date of this Agreement of
any fact or condition that would (except as expressly contemplated by this
Agreement) reasonably be expected to cause or constitute a breach of any such
representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. During the
same period, Buyer will promptly notify Seller of the occurrence of any
breach of any covenant of Buyer in this Article 6 or of the occurrence of any
event that may take the satisfaction of the
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conditions in Article 8 impossible or unlikely.
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligation of Buyer to purchase and pay for the Assets and assume the
Assumed Liabilities on the Closing Date, and consummate any other
transactions contemplated by this Agreement, is, at its option, subject to
the satisfaction, on or before the Closing Date, of the following conditions:
SECTION 7.1. OPINION OF COUNSEL. Buyer shall have received from counsel
for Seller a legal opinion dated as of the Closing Date, substantially
identical to the form set forth in SCHEDULE N, attached hereto and
incorporated herein by reference.
SECTION 7.2. REPRESENTATIONS AND WARRANTIES. All of Seller's
representations and warranties contained in Article 3 of this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), shall be true, complete, and correct in all
material respects on and as of the Closing Date with the same effect as
though such representations and warranties have been made by Seller on and as
of the Closing Date, without giving effect to any supplement or change to
SCHEDULE G, and Seller shall have certified to such effect to Buyer in
writing.
SECTION 7.3. COMPLIANCE WITH COVENANTS. All of the covenants and
obligations that Seller is required to perform or comply with pursuant to
this Agreement at or prior to Closing (considered collectively), and each of
these covenants (considered individually), must have been duly performed and
complied with in all material respects.
SECTION 7.4. BOARD AND OTHER APPROVALS. Buyer shall have obtained all
Board approvals and third-party consents to material contracts necessary to
consummate the transactions contemplated hereby, including, but not limited
to, the consent of General Electric Company, acting through GEMS, as Buyer's
primary lender.
SECTION 7.5. CORPORATE PROCEEDINGS. All corporate and other proceedings
to be taken by Seller in connection with the transactions contemplated hereby
and all documents incident thereto shall be satisfactory in form and
substance to Buyer and its counsel, and Buyer and its counsel shall have
received all such counterpart originals or certified or other copies of
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such documents as they reasonably may request.
SECTION 7.6. NO ADVERSE CHANGE. Between the Due Diligence Termination
Date and the Closing Date, (i) no material adverse change in the results of
operations or, financial condition of the Business, and no loss or damage to
the Assets (whether or not covered by insurance), shall have occurred; and
(ii) no material decline from the level of revenues of the Business shall
have occurred.
SECTION 7.7. REGULATORY APPROVALS. All necessary corporate and
regulatory approvals for the transactions contemplated by this Agreement,
including the approvals referenced in SCHEDULE H, shall have been obtained
and must be in full force and effect.
SECTION 7.8. SUPPORTING DOCUMENTS. Buyer and its counsel shall have
received copies of all supporting documents reasonably requested by them.
SECTION 7.9. MANUFACTURER'S SPECIFICATIONS. The service department of
the manufacturer of Seller's MRI unit shall have completed an audit of
Seller's MRI unit and shall have brought such unit up to manufacturer's
specifications, all at Seller's cost.
SECTION 7.10. AMENDMENT OF PHYSICIAN CONTRACTS. Seller shall have
amended all consulting, reading, or other similar agreements with physicians
in form and substance acceptable to Buyer.
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligation of Seller to sell the Assets and assign the Assumed
Liabilities on the Closing Date, and consummate any other transactions
contemplated by this Agreement, is, at his option, subject to the
satisfaction, on or before the Closing Date, of the following conditions:
SECTION 8.1. OPINION OF COUNSEL. Seller shall have received from
counsel for Buyer a legal opinion dated as of the Closing Date, substantially
identical to the form set forth in SCHEDULE O, attached hereto and
incorporated herein by reference.
SECTION 8.2. REPRESENTATIONS AND WARRANTIES. All of Buyer's
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representations and warranties contained in Article 4 of this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), shall be true, complete, and correct in all
material respects on and as of the Closing Date with the same effect as
though such representations and warranties have been made by Buyer on and as
of the Closing Date, and Buyer shall have certified to such effect to Seller
in writing.
SECTION 8.3. COMPLIANCE WITH COVENANTS. All of the covenants and
obligations that Buyer is required to perform or comply with pursuant to this
Agreement at or prior to Closing (considered collectively), and each of these
covenants (considered individually), must have been duly performed and
complied with in all material respects.
SECTION 8.4. SUPPORTING DOCUMENTS. Seller and its counsel shall have
received copies of all supporting documents reasonably requested by them.
ARTICLE 9
JOINT COVENANTS OF THE PARTIES
SECTION 9.1. CONFIDENTIALITY OF BUSINESS INFORMATION. The parties
heretofore have received and hereafter may receive various financial and
other information concerning their respective activities, business, assets,
and properties. The parties agree that:
9.1.1 all such information thus received by the parties shall not
at any time, or in any way or manner, be utilized by the parties for their
respective advantage or disclosed by the parties to others for any purpose
whatsoever; and
9.1.2 the parties shall take all reasonable measures to assure that
no employee or agent under their respective control shall at any time use or
disclose any information described in this Section; and
9.1.3 this Section shall not apply to (i) any such information that
was known to the parties prior to its disclosure to the parties in accordance
with this Section or was, is, or becomes generally available to the public
other than by disclosure by the parties or any of their respective employees
or agents in violation of this Section; or (ii) any disclosure which such
party makes to any regulatory agency pursuant to that party's obligations of
disclosure to such agency.
SECTION 9.2. CONFIDENTIALITY OF THIS AGREEMENT. The existence and
contents of this Agreement and its Schedules and the nature and status of the
transactions described herein and
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therein are confidential. Without the prior written consent of the other
party, no party will disclose to any person, other than to its respective
directors, officers, key employees, affiliates, accounting, investment
banking, and legal advisers, the existence and contents of this Agreement and
its Schedules and the nature and status of the transactions described herein
unless, in the written opinion of counsel to the party seeking to make the
disclosure, such a disclosure is required by applicable corporation or
securities laws. The timing and content of any announcements, press
releases, or other public statements concerning the transactions contemplated
by this Agreement will occur upon, and be determined by, the mutual agreement
and consent of the parties, unless, in the written opinion of counsel to the
party seeking to make the announcement, press release, or other public
statement, such a disclosure is required by applicable corporation or
securities laws.
ARTICLE 10
INDEMNIFICATION
SECTION 10.1 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER. Seller
will indemnify and hold harmless Buyer, its officers, employees, agents,
directors, representatives, stockholders, controlling persons, and affiliates
(collectively, the "BUYER INDEMNIFIED PERSONS") for, and will pay to Buyer
Indemnified Persons the amount of, any loss, liability, claim, damage
(including incidental and consequential damages), expense (including costs of
investigation and defense and reasonable attorneys' fees) or diminution of
value, whether or not involving a third-party claim, arising, directly or
indirectly, from or in connection with:
(a) any breach of any representation or warranty made by Seller in
this Agreement or any other certificate or document delivered by
Seller pursuant to this Agreement;
(b) any federal, state or local tax or fee incurred, accrued, or
assessed in connection with the Assets or the Business with
respect to any period prior to the Closing;
(c) any liability or obligation related to or in connection with the
Assets or the Business, including those liabilities and
obligations set forth on Schedule G or as otherwise disclosed to
Buyer, which are or were incurred with respect to any period
prior to the Closing or which relate to the operation of the
Business with respect to any period prior to the Closing; or
(d) any breach by Seller of any covenant or obligation of Seller in
this Agreement.
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The remedies provided in this Section 10.1 will not be exclusive of or
limit any other remedies that may be available to Buyer or other Buyer
Indemnified Persons.
SECTION 10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer
will indemnify and hold harmless Seller, his employees, agents, and
representatives (collectively, the "SELLER INDEMNIFIED PERSONS") for, and
will pay to Seller Indemnified Persons the amount of, any loss, liability,
claim, damage (including incidental and consequential damages), expense
(including costs of investigation and defense and reasonable attorneys' fees)
or diminution of value, whether or not involving a third-party claim,
arising, directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by Buyer in
this Agreement or any other certificate or document delivered by
Buyer pursuant to this Agreement;
(b) any federal, state or local tax or fee incurred, accrued, or
assessed in connection with the Assets or the Business relating
thereto as owned or operated by Buyer with respect to any period
from and after the Closing;
(c) any liability or obligation related to or in connection with the
Assets or the Business as owned or operated by Buyer, incurred
with respect to any period from and after the Closing or which
relate to the operation of the Business by Buyer with respect to
any period from and after the Closing; or
(d) any breach by Buyer of any covenant or obligation of Buyer in
this Agreement.
The remedies provided in this Section 10.2 will not be exclusive of or
limit any other remedies that may be available to Seller or other Seller
Indemnified Persons.
SECTION 10.3. LIABILITY AND RISK OF LOSS. Seller shall remain liable
for all obligations and liabilities, costs and expenses, fixed or contingent,
arising out of the operation or ownership of any of the Assets, the Center or
the Business and out of the conduct of any business related to the Assets or the
Business prior to the Closing, and shall remain liable for all such obligations
and liabilities not assumed by Buyer pursuant to this Agreement following the
Closing. All risk of loss of, and related to, the Assets, Business, or Center
shall remain with Seller through the Closing.
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SECTION 10.4. PROCEDURE FOR SELLER INDEMNIFICATION - THIRD PARTY CLAIMS.
(a) Promptly after receipt by a Buyer Indemnified Person under Section
10.1 of notice of the commencement of any proceeding against it, such
Buyer Indemnified Person will, if a claim is to be made against
Seller, give notice to Seller of the commencement of such claim, but
the failure to notify Seller will not relieve Seller of any liability
that he may have to any Buyer Indemnified Person, except to the extent
that Seller demonstrates that the defense of such action is prejudiced
by Buyer Indemnified Person's failure to give such notice.
(b) If any proceeding referred to in Section 10.1 is brought against a
Buyer Indemnified Person and Buyer Indemnified Person gives notice to
Seller of the commencement of such proceeding, Seller will be entitled
to participate in such proceeding and, to the extent that he wishes
(unless (i) Seller is also a party to such proceeding and Buyer
Indemnified Person determines in good faith that joint representation
would be inappropriate or (ii) Seller fails to provide reasonable
assurance to Buyer Indemnified Person of his financial capacity to
defend such proceeding and provide indemnification with respect to
such proceeding), to assume the defense of such proceeding with
counsel satisfactory to Buyer Indemnified Person and, after notice
from Seller to Buyer Indemnified Person of his election to assume the
defense of such proceeding, Seller will not, as long as he diligently
conducts such defense, be liable to Buyer Indemnified Person under
this Section 10.1 for any fees of other counsel or any other expenses
with respect to the defense of such proceeding, in each case
subsequently incurred by Buyer Indemnified Person in connection with
the defense of such proceeding, other than reasonable costs of
investigation. If Seller assumes the defense of a proceeding, (i) it
will be conclusively established for purposes of this Agreement that
the claims made in that proceeding are within the scope of and subject
to indemnification; (ii) no compromise or settlement of such claims
may be effected by Seller without Buyer Indemnified Person's consent
unless (A) there is no finding or admission of any violation of legal
requirements or any violation of the rights of any person and no
effect on any other claims that may be made against Buyer Indemnified
Person, and (B) the sole relief provided is monetary damages that are
paid in full by Seller; and (iii) Buyer Indemnified Person will have
no liability with respect to any compromise or settlement of such
claims effected without its consent. If notice is given to Seller of
the commencement of any proceeding and Seller does not, within ten
(10) days after Buyer Indemnified Person's notice is given, give
notice to Buyer Indemnified Person of his election to assume the
defense of such proceeding, Seller will be bound by any determination
made in such proceeding or any compromise or settlement effected by
Buyer Indemnified Person which is approved by Seller.
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(c) Notwithstanding the foregoing, if a Buyer Indemnified Person
determines in good faith that there is a reasonable probability that a
proceeding may adversely affect it or its affiliates other than as a
result of monetary damages for which it would be entitled to
indemnification under this Agreement, Buyer Indemnified Person may, by
notice to Seller, assume the exclusive right to defend, compromise, or
settle such proceeding, but Seller will not be bound by any
determination of a proceeding so defended or any compromise or
settlement effected without his consent (which may not be unreasonably
withheld).
SECTION 10.5. PROCEDURE FOR BUYER INDEMNIFICATION - THIRD PARTY CLAIMS.
(a) Promptly after receipt by a Seller Indemnified Person under Section
10.2 of notice of the commencement of any proceeding against it, such
Seller Indemnified Person will, if a claim is to be made against
Buyer, give notice to Buyer of the commencement of such claim, but the
failure to notify Buyer will not relieve Buyer of any liability that
it may have to any Seller Indemnified Person, except to the extent
that Buyer demonstrates that the defense of such action is prejudiced
by Seller Indemnified Person's failure to give such notice.
(b) If any proceeding referred to in Section 10.2 is brought against a
Seller Indemnified Person and Seller Indemnified Person gives notice
to Buyer of the commencement of such proceeding, Buyer will be
entitled to participate in such proceeding and, to the extent that it
wishes (unless (i) Buyer is also a party to such proceeding and Seller
Indemnified Person determines in good faith that joint representation
would be inappropriate or (ii) Buyer fails to provide reasonable
assurance to Seller Indemnified Person of its financial capacity to
defend such proceeding and provide indemnification with respect to
such proceeding), to assume the defense of such proceeding with
counsel satisfactory to Seller Indemnified Person and, after notice
from Buyer to Seller Indemnified Person of its election to assume the
defense of such proceeding, Buyer will not, as long as it diligently
conducts such defense, be liable to Seller Indemnified Person under
this Section 10.2 for any fees of other counsel or any other expenses
with respect to the defense of such proceeding, in each case
subsequently incurred by Seller Indemnified Person in connection with
the defense of such proceeding, other than reasonable costs of
investigation. If Buyer assumes the defense of a proceeding, (i) it
will be conclusively established for purposes of this Agreement that
the claims made in that proceeding are within the scope of and subject
to indemnification; (ii) no compromise or settlement of such claims
may be effected by Buyer without Seller Indemnified Person's consent
unless (A) there is no finding or admission of any violation of legal
requirements or any violation of the
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rights of any person and no effect on any other claims that may be
made against Seller Indemnified Person, and (B) the sole relief
provided is monetary damages that are paid in full by Buyer; and
(iii) Seller Indemnified Person will have no liability with respect
to any compromise or settlement of such claims effected without its
consent. If notice is given to Buyer of the commencement of any
proceeding and Buyer does not, within ten (10) days after Seller
Indemnified Person's notice is given, give notice to Seller
Indemnified Person of its election to assume the defense of such
proceeding, Buyer will be bound by any determination made in such
proceeding or any compromise or settlement effected by Seller
Indemnified Person which is approved by Buyer.
(c) Notwithstanding the foregoing, if a Seller Indemnified Person
determines in good faith that there is a reasonable probability that a
proceeding may adversely affect it or its affiliates other than as a
result of monetary damages for which it would be entitled to
indemnification under this Agreement, Seller Indemnified Person may,
by notice to Buyer, assume the exclusive right to defend, compromise,
or settle such proceeding, but Buyer will not be bound by any
determination of a proceeding so defended or any compromise or
settlement effected without its consent (which may not be unreasonably
withheld).
SECTION 10.6. PROCEDURE FOR INDEMNIFICATION - OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
SECTION 10.7. TIME LIMITATIONS. If the Closing occurs, Seller will
have no liability (for indemnification or otherwise) with respect to any
representation or warranty, or covenant or obligation to be performed and
complied with on or prior to the Closing Date, unless on or before a date two
(2) years from the Closing Date, Buyer notifies Seller of a claim specifying
the factual basis of that claim in reasonable detail to the extent then known
by Buyer. If the Closing occurs, Buyer will have no liability (for
indemnification or otherwise) with respect to any representation or warranty,
or covenant or obligation to be performed and complied with on or prior to
the Closing Date, unless on or before a date two (2) years from the Closing
Date, Seller notifies Buyer of a claim specifying the factual basis of that
claim in reasonable detail to the extent then known by Seller. A claim for
indemnification or reimbursement not based upon any representation or
warranty or any covenant or obligation to be performed and complied with on
or prior to the Closing Date, may be made at any time.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.1. TERMINATION EVENTS. This Agreement may, by written notice
given prior to or at the Closing, be terminated:
(a) by Buyer if a material breach of this Agreement has been
committed by Seller and such breach has not been expressly waived
in writing and has not been cured by the earlier of (a) ten (10)
days after written notice of such breach has been provided to
Seller or (b) the Closing Date;
(b) by Seller if a material breach of this Agreement has been
committed by Buyer and such breach has not been expressly waived
in writing and has not been cured by the earlier of (a) ten (10)
days after written notice of such breach has been provided to
Buyer or (b) the Closing Date;
(c) by Buyer if any of the conditions in Article 7 have not been
satisfied as of the Closing Date or if satisfaction of such
condition is or becomes impossible (other than through failure of
Buyer to comply with its obligations under this Agreement) and
Buyer has not expressly waived such condition in writing on or
before the Closing Date;
(d) by Seller if any of the conditions in Article 8 have not been
satisfied as of the Closing Date or if satisfaction of such
condition is or becomes impossible (other than through failure of
Seller to comply with his obligations under this Agreement) and
Seller has not expressly waived such conditions in writing on or
before the Closing Date;
(e) by mutual consent of Seller and Buyer; and
(f) by Seller or Buyer in accordance with Section 1.7 of this
Agreement.
Notwithstanding the above, the parties agree that Sections 9.1 and 9.2
shall survive termination for any reason.
SECTION 11.2. NOTICE. Whenever notice must be given under the provisions
of this Agreement, such notice must be in writing and will be deemed to have
been duly given by (a) hand-delivery (with written confirmation of receipt)
addressed to the parties at their respective addresses set forth below; or (b)
certified mail, return receipt requested, postage prepaid, and addressed to the
parties at their respective addresses set forth below; or (c) telecopier (with
written confirmation of receipt), provided that a
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copy is mailed by registered mail, return receipt requested, addressed to the
parties at their respective addresses set forth below:
If to Seller:
1301 McCallie
Xxxxxxxxxxx, XX 00000
Fax: 000-000-0000
with a copy to:
Xxxxxxx X. Xxxxx, Xx., Esquire
Xxxxxxxxx, Xxxxxx & Xxxxxxx, P.C.
0000 Xxxxxx Xxxxxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax: 000-000-0000
If to Buyer:
0000 XxxXxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: General Counsel
Fax: 000-000-0000
with a copy to:
Xxxx X. Xxxxx, Esquire
Green, Stewart, Xxxxxx & Xxxxxxxx, P.C.
0000 Xxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Fax: 000-000-0000
SECTION 11.3. SURVIVAL OF COVENANTS, REPRESENTATIONS, AND WARRANTIES.
Except as limited by Section 10.7, all warranties, representations, hold
harmless, indemnity, noncompetition, and other obligations and restrictions
made, undertaken, and agreed to by Seller or Buyer under this Agreement shall
survive the Closing.
SECTION 11.4. AMENDMENT.
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No modification, waiver, amendment, discharge, or change of this Agreement
shall be valid unless in writing and signed by the party against whom
enforcement of such modification, waiver, amendment, discharge or change is
sought.
SECTION 11.5. ASSIGNMENT. This Agreement shall not be assignable by any
party without the prior written consent of the other, except that Buyer may,
provided that Buyer remains liable for its obligations hereunder, assign its
rights and obligations under this Agreement in whole or in part, and from
time to time, to any affiliate of Buyer upon written notice to Seller, and
such assignee shall be considered Buyer for purposes of this Agreement and
all related documents. Except as noted above, no other person or corporate
entity shall acquire or have any rights under or by virtue of this Agreement.
SECTION 11.6. SEVERABILITY. If any one or more of the provisions of this
Agreement should be ruled wholly or partly invalid or unenforceable by a court
or other government body of competent jurisdiction, then: (a) the validity and
enforceability of all provisions of this Agreement not ruled to be invalid or
unenforceable shall be unaffected; (b) the effect of the ruling shall be limited
to the jurisdiction of the court or other government body making the ruling; (c)
the provision(s) held wholly or partly invalid or unenforceable shall be deemed
amended, and the court or other government body is authorized to reform the
provision(s), to the minimum extent necessary to render them valid and
enforceable in conformity with the parties' intent as manifested herein and a
provision having a similar economic effect shall be substituted; and (d) if the
ruling and/or the controlling principle of law or equity leading to the ruling,
is subsequently overruled, modified, or amended by legislative, judicial, or
administrative action, the provision(s) in question as originally set forth in
this Agreement shall be deemed valid and enforceable to the maximum extent
permitted by the new controlling principle of law or equity.
SECTION 11.7. CHOICE OF LAW. The interpretation of this Agreement and the
rights and obligations of Buyer and Seller hereunder shall be governed by the
laws of the State of Tennessee, without regard to choice of law provisions.
SECTION 11.8. BINDING BENEFIT. The provisions, covenants and agreements
herein contained shall inure to the benefit of, and be binding upon, the parties
hereto and their respective legal representatives, successors and assigns.
SECTION 11.9. HEADINGS; USE OF TERMS. All headings contained in this
Agreement are for reference purposes only and are not intended to affect in any
way the meaning or interpretation of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require.
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SECTION 11.10. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which collectively shall constitute one and the same agreement.
SECTION 11.11. EXPENSES. Each of the parties shall bear its own
expenses in connection with this Agreement.
SECTION 11.12. WAIVER. The waiver by any party of a breach or violation
of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach of such provision or any other provision of
this Agreement.
SECTION 11.13. CONSTRUCTION. This Agreement shall not be construed more
strictly against any party hereto by virtue of the fact that the Agreement
may have been drafted or prepared by such party or its counsel, it being
recognized that the parties hereto have contributed substantially and
materially to its preparation and that this Agreement has been the subject of
and is the product of negotiations between the parties.
SECTION 11.14. CUMULATIVE REMEDIES. Any right, power, or remedy
provided under this Agreement to any party hereto shall be cumulative and in
addition to any other right, power or remedy provided under this Agreement
now or hereafter existing at law or in equity, and may be exercised
singularly or concurrently.
SECTION 11.15. ATTORNEYS FEES. In the event that any party breaches
this Agreement in any respect, the prevailing party shall be entitled to
recover, in addition to any and all other remedies, which shall be
cumulative, the reasonable attorney's fees, expenses, and costs which it
incurs as a result thereof.
SECTION 11.16. ARBITRATION. In the event of a dispute between the
parties arising from or relating to this Agreement, including, but not
limited to, construction, interpretation, implementation, or enforcement of
this Agreement or the performance or breach of any provision in this
Agreement, the parties shall meet and confer in good faith to resolve such
dispute. In the event such efforts do not resolve the dispute within fifteen
(15) days from the date the dispute arises, either party may demand
arbitration administered and conducted by the American Arbitration
Association, before one (1) arbitrator, under its Commercial Arbitration
Rules, such arbitration to be final, conclusive, and binding. Judgment on
the award rendered by the arbitrator may be entered by any court having
proper jurisdiction. This provision shall survive termination of this
Agreement. Notwithstanding the foregoing, any party may seek or assert
entitlement to injunctive relief or
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specific performance in court as an initial matter and shall have no prior
obligation to establish in arbitration the entitlement to injunctive relief
or specific performance.
SECTION 11.17. ENTIRE AGREEMENT. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter (including
the Letter of Intent dated February 24, 1997) and constitutes (along with the
documents referred to in this Agreement) a complete and exclusive statement
of the terms of the agreement among the parties with respect to its subject
matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
XXXXXXX X. XXXXXXX, M.D. INSIGHT HEALTH CORP.
_______________________________ ____________________________________
SIGNATURE SIGNATURE
____________________________________
PRINT NAME
____________________________________
OFFICE OR TITLE
[Signature Page for Asset Purchase and Liabilities Assumption Agreement
by and between Xxxxxxx X. Xxxxxxx, M.D. and InSight Health Corp.]
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