EXHIBIT 2.13
TECHNOLOGY PURCHASE AGREEMENT
THIS TECHNOLOGY PURCHASE AGREEMENT is made and entered into on April
15, 2000 by and between DSM, LLC, a Florida limited liability company (the
"SELLER"), and MEDCOM U.S.A., Inc., a Delaware corporation (the "Purchaser").
RECITALS
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WHEREAS, the Seller desires to sell to the Purchaser, and the Purchaser
desires to purchase from the Seller, certain technology and intellectual
property including but not limited to Methodology for automated assessing and
controlling of medical risks in health insurance (collectively, the
"METHODOLOGY"), and
WHEREAS, the Purchaser and Xxxxx Xxxxxxxx and Xxxxxxxx Xxxxxxx as
shareholders of DCB Actuaries and Consultants, S.R.O., a Czech Republic limited
liability company ("DCB") have concurrently herewith executed a Share Purchase
Agreement ("Share Purchase Agreement") to sell all their shares of DCB which
transactions are an integral part of this Agreement.
NOW, THEREFORE, for and in consideration of the premises and mutual
covenants and agreements contained herein and in the Share Purchase Agreement,
and intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF TECHNOLOGY AND PURCHASE PRICE
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1.1 PURCHASE AND SALE OF TECHNOLOGY. Subject to the terms and
conditions of this Agreement, on the Closing Date (as defined in Section 2.1)
the Seller shall sell, transfer, convey, assign and deliver ("TRANSFER") to the
Purchaser, and the Purchaser shall purchase, acquire and accept from the Seller,
all of the Seller's right, title and interest in and to all of the Methodology
as of the Closing Date as set forth in Schedule 1.1, less and except the
Excluded Assets (as defined in Section 1.2) (after giving effect to the
exclusion of the Excluded Assets, such assets are hereinafter collectively
referred to as the "TRANSFERRED ASSETS"), free and clear of all Liens (as
defined in Section 3.5(b)).
1.2 EXCLUDED ASSETS. Notwithstanding anything in Section 1.1 to the
contrary, the Seller shall retain all of its right, title and interest in and to
all of, and shall not Transfer to the Purchaser any of, the following assets,
rights and properties (the "EXCLUDED ASSETS"):
(a) all other assets of Seller other than the Methodology set
forth in Schedule 1.1 whether tangible or intangible and wherever
located
1.3 NO ASSUMPTION OF LIABILITIES. Subject to the terms and conditions
of this Agreement, on the Closing Date, the Purchaser shall not assume nor agree
to pay, perform and discharge when due any liabilities and obligations of the
Seller.
1.4 PURCHASE PRICE. The aggregate purchase price ("Purchase Price") to
be paid for the Transferred Assets shall include (i) Seven Hundred Forty-Six
Thousand One Hundred Fifty Three Dollars ($746,153.00) and (ii) 2356 shares of
Series D Cumulative Convertible Preferred Stock of Purchaser with a face value
of $11,638.64 ("Preferred Shares").
The Purchase Price shall be paid as follows:
(a) CASH. $746,153.00 in cash at the Closing;
(b) PREFERRED SHARES. 1644 Preferred Shares to be delivered to
Seller at Closing which is less the Hold Back referred to in this
Section 1.4(c). The Preferred Shares will have the conversion features
set forth in the Summary of Terms of Preferred Shares Schedule 1.4(b)
attached hereto.
(c) HOLD BACK. At the Closing, Purchaser shall hold back 712
Preferred Shares of the Purchase Price ("Hold Back Shares") for a
period of one (1)year (the "Hold Back Period") from the Closing Date as
a source of payment for the indemnification obligations of Seller
pursuant to Section 9 and to assure compliance with restrictions upon
transfer under applicable Federal and State securities laws. The Hold
Back Shares shall be held and disbursed to Seller in accordance with
the terms of this Agreement. The parties understand and agree that the
Purchaser has the absolute right, in accordance with Section 9.2, to
setoff immediately against any portion of the Hold Back Shares and
otherwise distributable to Seller upon conclusion of the Hold Back
Period, the full amount of any claims that Purchaser may have for
indemnity pursuant to the provisions of Section 9.2.
ARTICLE II
CLOSING
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2.1 CLOSING.
(a) The closing (the "Closing") of the transactions
contemplated by this Agreement will be held on April 15, 2000 (the
"Closing Date") at 10:00 a.m. at the offices of Holland & Knight, LLP,
0000 Xxxx Xxxxxxxxx Xxxxxx X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, or
at such other time, date or location as the parties hereto may mutually
agree upon.
(b) At the Closing, the Purchaser shall deliver (i) by wire
transfer $746,153.00 to Seller, (ii) the Preferred Shares less the Hold
Back Shares; and (iii) those items deliverable by Purchaser pursuant to
Article VI.
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2.2 INSTRUMENTS OF CONVEYANCE AND TRANSFER.
(a) At the Closing, the Seller shall deliver to the Purchaser:
(i) with respect to the Methodology and copyrights,
if any, such assignments and endorsements and other good and
sufficient instruments of conveyance and transfer, in form
reasonably satisfactory to the Purchaser, as shall be
effective to vest in the Purchaser all of the Seller's right,
title and interest in and to the Methodology, all in
recordable form , to the extent possible, as may be required
by the U.S. Patent and Trademark Office;
(ii) those items deliverable by Seller pursuant to
Article VII.
(b) Simultaneously with such deliveries, the Seller shall take
such steps as may be necessary to put the Purchaser in actual
possession and control of the Transferred Assets.
2.3 FURTHER ASSURANCES. From time to time after the Closing, and
without further consideration, the Seller shall execute and deliver such other
instruments of conveyance, assignment, transfer and delivery, and take such
other actions as the Purchaser may reasonably request in order more effectively
to Transfer to the Purchaser, and to place the Purchaser in possession or
control of, all of the rights, properties, and assets intended to be Transferred
hereunder, to reasonably assist in the collection of any and all such rights,
properties and assets, and to enable the Purchaser to exercise and enjoy all of
the rights and benefits of the Seller with respect thereto.
2.4 TRANSFER TAXES. The Purchaser shall pay all sales and excise taxes,
if any, incurred in connection with the transactions contemplated by this
Agreement. With respect to any item that is exempt from sales or use tax on any
basis, the Seller shall deliver to the Purchaser an appropriate certificate
establishing the basis for such exemption. Except as hereinabove provided, the
party hereto which is responsible under applicable law shall bear and pay in
their entirety all other taxes and registration and transfer fees, if any,
payable by reason of the Transfer of the Transferred Assets pursuant to this
Agreement. Each party hereto will cooperate to the extent practicable in
minimizing all taxes (other than income taxes) and fees levied by reason of the
Transfer of the Transferred Assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
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The Seller hereby represents and warrants to the Purchaser that the
following representations and warranties are true and correct at the date
hereof:
3.1 CORPORATE EXISTENCE. The Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Florida and has full corporate power and authority to conduct its business as it
is now being conducted and to own or lease all of its properties and assets. The
Seller is duly qualified or licensed to do business as a foreign company, and is
in good standing as a foreign company, in every jurisdiction in which the
ownership of its property or assets or the conduct or nature of its business
requires such qualification or license. The Seller has previously delivered to
the Purchaser true and complete copies of its Articles of Organization and
Regulations as in effect on the date hereof.
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3.2 CORPORATE POWER AND AUTHORITY. The Seller has full corporate power
and authority to enter into this Agreement, perform its obligations hereunder,
Transfer the Transferred Assets and carry out the transactions contemplated
hereby. The execution and delivery of this Agreement, the performance by the
Seller of its obligations hereunder and the consummation of the transactions
contemplated hereby have been duly authorized by all corporate, member and other
actions on the part of the Seller required by applicable law, its Articles of
Organization or Regulations, or otherwise. This Agreement constitutes the legal,
valid and binding obligation of the Seller, enforceable against it in accordance
with its terms, except (i) as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
3.3 NO VIOLATION. Neither the execution and delivery of this Agreement
nor the performance by the Seller of its obligations hereunder nor the
consummation of the transactions contemplated hereby will (a) contravene any
provision of the Articles of Organization or Regulations of the Seller; (b)
violate, be in conflict with, constitute a default under, permit the termination
of, cause the acceleration of the maturity of any debt or obligation of the
Seller under, require the consent of any other party to, constitute a breach of,
create a loss of a benefit under, or result in the creation or imposition of any
Lien (as defined in Section 3.5(b)), upon the Methodology under, any mortgage,
indenture, lease, contract, agreement, instrument or commitment to which the
Seller is a party; (c) violate any statute or law or any judgment, decree,
order, regulation or rule of any court or governmental authority to which the
Seller or the Methodology is subject; or (d) result in the loss of any license,
privilege or certificate benefiting the Methodology.
3.4 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be made or obtained by the
Seller in connection with the execution, delivery or performance of this
Agreement by the Seller.
3.5 TITLE TO PROPERTIES; ENCUMBRANCES.
(a) The Seller has good and marketable title to all of its
properties and assets (tangible or intangible) constituting all or part
of the Transferred Assets. None of the Transferred Assets are subject
to any Lien (as defined in subsection (b) below).
(b) When used in this Agreement, "LIEN" or "LIENS" shall mean
any mortgage, pledge, security interest, conditional sale or other
title retention agreement, encumbrance, lien, claim, right, covenant,
restriction, warrant, option or charge of any kind.
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3.6 METHODOLOGY AND OTHER INTANGIBLE PROPERTY.
(a) The Seller owns, or is licensed or otherwise has the full
right to use, all intellectual property rights, both registered and at
common law, relating to the Methodology, irrespective of where any of
the same were issued, whether pending or existing, and set forth on
Schedule 3.6, including, without limitation, all: registrations of
trademarks, service marks and of other marks, registrations of trade
names, labels, logos, trading styles or other trade rights, registered
user entries, and applications for any such registrations or entries;
United States and foreign copyrights, copyright registrations and
applications therefor; United States and foreign trademarks and other
marks, trade names, labels and other trade rights, whether or not
registered, and applications therefor; trade secrets, know-how,
inventions, discoveries, improvements, engineering or other drawings,
designs, processes and formulae, whether patented or patentable or not;
customer lists, technical data, marketing information and plans,
software and software documentation source codes; any other proprietary
information or intangible rights related in any way to the Methodology;
shop rights, license agreements and other agreements relating in whole
or in part to any of the foregoing; and all claims and causes of action
on behalf of the Seller or against third parties relating to any of the
foregoing, including claims and causes of action for past infringement.
Schedule 3.6 contains a true and complete list of (a) the Methodology
used or proposed to be used by the Seller, any applications therefor
and all licenses and other agreements relating thereto and (b) all
agreements relating to technology, know-how or processes which the
Seller is licensed or authorized to use by others or which the Seller
licenses or authorizes others to use in connection with the
Methodology. The Seller has (i) the sole and exclusive right to use the
trademarks, service marks, trade names, copyrights, technology,
know-how and processes described on Schedule 3.6, and no consent of any
third party is required for the use thereof by the Purchaser upon the
consummation of the transactions contemplated hereby or, if such
consent shall be necessary to assign such Methodology, such consent
shall have been obtained prior to the Closing Date. No claims have been
asserted by any person to the use any of the items of Methodology or
challenging or questioning the validity or effectiveness of any such
license or agreement, and the Seller knows of no valid basis for any
such claims. The Seller has no notice that the use of the Methodology
by the Seller infringes on the rights of any other person or entity.
Each item of Methodology is in full force and effect, fully protected
and, if registered, filed or issued, then duly and properly registered,
filed or issued in the appropriate office and jurisdiction for such
registration, filings or issuance. Each license, contract or other
agreement to which the Seller is a party pertaining to any item of
Methodology owned, used or available for use by the Seller is a valid,
legally binding obligation of all parties thereto, enforceable in
accordance with its terms. Each such license, contract or other
agreement is in full force and effect. With respect to each such
license, contract or other agreement, there is no payment due and not
paid and no default (or event which, with or without notice, lapse of
time or both, would constitute a default) by any party thereto. The
Seller has good and valid title to, or otherwise possesses adequate and
exclusive rights to use, all Methodology and other proprietary
information necessary to permit the Seller to operate the Methodology
in the same manner as the Methodology is presently operated, and all
items of Methodology is being transferred to the Purchaser free of any
encumbrance whatsoever.
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(b) The proprietary rights, software, copyright and technology
and other legal rights owned by DCB, together with the Transferred
Assets, constitute the entire technology rights and legal and
proprietary rights relating to the Health Information Gateway Program
(the "Program") developed by DCB, and constitute all legal rights
necessary for the continued development, distribution and licensing of
such program by DCB. Except for DCB and the Seller, no other party owns
any legal or proprietary rights to any aspect of the Program, other
than nonexclusive licenses (which do not include the right to
sublicense) sold to DCB's customers in the ordinary course of business.
The Program performs substantially in compliance with the
specifications and operating manuals therefor which have been delivered
by DCB to Purchaser
3.7 LITIGATION. There are no actions, claims and proceedings and, to
the Seller's best knowledge, investigations to which the Seller is a party
(individually, an "Action" and, collectively, "Actions"), including, without
limitation, Actions for personal injury, products liability, wrongful death or
other tortious conduct, or breach of warranty arising from or relating to
materials, commodities, products or goods used, transferred, processed,
manufactured, sold, distributed or shipped by the Seller concerning the
Methodology (a) involving or relating to the Seller concerning the Methodology,
or (b) pending, or, to Seller's knowledge, after due inquiry and reasonable
investigation, threatened, against the Methodology before any court, arbitrator
or administrative or governmental body. There is no Action pending, or, to
Seller's knowledge, after due inquiry and reasonable investigation, threatened,
against the Seller, or the Methodology before any court, arbitrator or
administrative or governmental body, which questions or challenges the validity
of this Agreement or any Action taken or proposed to be taken by the Seller
pursuant to this Agreement or in connection with the transactions contemplated
hereby. No state of facts exists or has existed which would constitute grounds
for the institution of any Action against the Methodology, the Seller or against
any assets, properties or rights of the Seller which would adversely affect the
Methodology, which would not be covered or defended against by a carrier under
policies of insurance in favor of the Seller. The Seller is not subject to any
judgment, order or decree entered in any lawsuit or proceeding which has
affected, or which can reasonably be expected to affect, the Seller's business
practices as they affect the Methodology or its ability to acquire any property
or operate the Methodology in any way.
3.8 COMPLIANCE WITH LAWS. The Seller has not been charged with, and is
not threatened with or under any investigation with respect to, any charge
concerning any violation of any provision of any federal, state, local or
foreign law, regulation, ordinance, order or administrative ruling affecting the
Methodology, and the Seller is not in default with respect to any order, writ,
injunction or decree of any court, agency or instrumentality affecting the
Methodology. The Seller (a) is not in violation of any federal, state, local or
foreign law, ordinance or regulation or any other requirement of any
governmental or regulatory body, court or arbitrator applicable to the
Methodology or (b) would not, to the Seller's knowledge, be in violation of any
such law, ordinance, regulation or other requirement that has been enacted or
adopted but is not yet effective if it were effective at the date hereof.
3.9 BROKER'S AND FINDER'S FEES. The Seller is not a party to, nor in
any way obligated to make any payment relating to, any contract or outstanding
claim for the payment of any broker's or finder's fee in connection with the
origin, negotiation, execution or performance of this Agreement or the
consummation of the transactions contemplated hereby.
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3.10 DISCLOSURE OF CONFIDENTIAL INFORMATION. The Seller has fully
disclosed, or will disclose on or before the Closing Date, to the Purchaser, all
processes, inventions, methods, formulae, plans, drawings, customer lists,
secret information and know-how (whether secret or not) known to it or usable by
it in connection with the Methodology as it is now operated.
3.11 GENERAL DISCLOSURE. No representation or warranty by the Seller in
this Agreement (including, without limitation, the Schedules hereto) contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary to make the statements herein or therein not
misleading. There is no fact known to the Seller which adversely affects, or
which might in the future adversely affect, the operations, business, assets,
properties, prospects or condition (financial or otherwise) of the Seller or the
Methodology which has not been set forth in this Agreement or on the Schedules
hereto.
3.12 SECURITIES LAW DISCLOSURE. Seller and its Member acknowledge that
they received and had an opportunity to review: (i) the Purchaser's Annual
Report on Form 10-K for the year ended June 30, 1999; (ii) the Purchaser's
Quarterly Report on Form 10-Q for the quarter ended December 31, 1999; and (iii)
the Purchaser's supplemental disclosure document dated April 10, 2000,
concerning certain risks associated with an investment in the Purchaser's
securities. Seller and its Member further acknowledge that they have had the
opportunity to ask questions and receive answers concerning the terms and
conditions of the issuance of the Purchaser's securities to Seller, and to
obtain any additional information which the Purchaser possesses or can acquire
without unreasonable effort or expense that is necessary to verify the accuracy
of the information provided to Seller concerning the Purchaser.
3.13 RESTRICTIONS ON RESALE. Seller understands that the Preferred
Shares to be issued by the Purchaser upon the closing of the transactions
contemplated by this Agreement, and the common shares that are issuable upon the
conversion of the Preferred Shares, shall be issued pursuant to an exemption
from registration under the United States securities laws, and that,
accordingly, such shares are being purchased for investment and not with a view
to the unregistered distribution or resale thereof, except to the extent
permitted by applicable law. Seller understands that it will not be entitled to
resell or transfer the Preferred Shares or common stock of the Purchaser until
such resale or transfer is registered under the applicable securities laws or an
exemption from registration is available Purchaser has no obligation to register
such securities. The certificate representing such securities shall bear a
legend reflecting such restrictions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
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The Purchaser hereby represents and warrants to the Seller as follows:
4.1 EXISTENCE. The Purchaser is a corporation, validly existing and in
good standing under the laws of the State of Delaware.
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4.2 POWER AND AUTHORITY. The Purchaser has full power and authority to
enter into this Agreement, perform its obligations hereunder, acquire and own
the Transferred Assets, and carry out the transactions contemplated hereby. The
execution and delivery of this Agreement, the performance by the Purchaser of
its obligations hereunder and the consummation of the transactions contemplated
hereby have been duly authorized by all corporate, stockholder and other actions
on the part of the Purchaser required by applicable law, its Certificate of
Incorporation or Bylaws, or otherwise. This Agreement constitutes the legal,
valid and binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except (i) as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
4.3 NO VIOLATION. Neither the execution and delivery of this Agreement
nor the performance by the Purchaser of its obligations hereunder nor the
consummation of the transactions contemplated hereby will contravene any
provision of the Certificate of Incorporation or Bylaws of the Purchaser.
4.4 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be made or obtained by the
Purchaser in connection with the execution, delivery and performance of this
Agreement by the Purchaser.
4.5 BROKER'S AND FINDER'S FEE. The Purchaser is a party to, is
obligated to and will make payment of a fee to Xxxx Xxxxxxxxxxx in connection
with the origin, negotiation, execution and performance of this Agreement and
the Share Purchase Agreement or the consummation of the transactions
contemplated hereby.
ARTICLE V
CERTAIN OBLIGATIONS OF THE PARTIES PRIOR TO CLOSING
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The Seller and the Purchaser hereby covenant as follows:
5.1 ACCESS PRIOR TO THE CLOSING. The Seller shall afford the Purchaser
and its counsel, accountants, and other authorized agents and representatives
(its "Advisors") reasonable access during normal business hours to the Seller's
plants, properties, books, records and personnel in order that the Purchaser and
its Advisors may have the opportunity to make such reasonable investigations as
they shall desire to make of the affairs of the Seller.
5.2 CONFIDENTIALITY PRIOR TO THE CLOSING. Except as required by law or
any securities exchange, each party hereto shall, and shall cause its officers
and Advisors to, hold in strict confidence, and not disclose to others (except
its Advisors) for any reason whatsoever, without the prior written consent of
the other party, any nonpublic information received by it from the other party
in connection with the transactions contemplated hereby and will not use such
information for any purpose in the event that no Closing occurs under this
Agreement. The Purchaser shall continue to be bound by the confidentiality
provisions of the LETTER OF INTENT, dated February 25, 2000, between the
Purchaser and the Seller.
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5.3 COOPERATION. Each party hereto shall use its best efforts to cause
the transactions contemplated by this Agreement to be consummated, and to make
all filings with and give all notices to government agencies and third parties
which may be necessary or reasonably required in order to consummate the
transactions contemplated by this Agreement. The Seller shall give prompt notice
to the Purchaser, after receipt thereof by the Seller, of (i) any notice of, or
other communication relating to, any default or event which, with notice or the
lapse of time or both, would become a default under any indenture, instrument or
agreement material to the Methodology or the operations, condition (financial or
otherwise) or prospects of the Seller, to which the Seller is a party or by
which the Seller or its assets or properties or the Methodology are bound and
(ii) any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement.
5.4 NO NEGOTIATIONS, ETC. Prior to the Closing Date, the Seller shall
not, directly or indirectly, in any way contact, initiate, enter into or conduct
any discussions or negotiations, or enter into any agreements, whether written
or oral, with any Person with respect to the sale of all or any part of the
Methodology with any other Person. The Seller shall, immediately upon receipt
thereof, notify the Purchaser of any such offer for the acquisition of the
Methodology.
ARTICLE VI
CONDITIONS TO THE PURCHASER'S OBLIGATIONS
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Each and every obligation of the Purchaser under this Agreement to be
performed on or before the Closing Date shall be subject to the satisfaction, on
or before the Closing Date, of each of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Seller contained herein, in the Schedules and Exhibits hereto
and in all certificates and other documents delivered by the Seller to the
Purchaser pursuant hereto or in connection with the transactions contemplated
hereby, and including the representations and warranties of certain of the
shareholders in connection with the sale of shares of DCB pursuant to the Share
Purchase Agreement, shall be true and accurate as of the date of this Agreement
and as of the Closing Date with the same effect as if made on and as of the
Closing Date.
6.2 PERFORMANCE. The Seller shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date, including, without limitation, those referred to in Article V.
6.3 AUTHORIZATIONS AND APPROVALS. Prior to or on the Closing Date, the
Purchaser shall have secured whatever authorizations or approvals are required
to enable it to consummate the transactions contemplated hereby and incident
hereto.
6.4 CONSENTS. All filings with and consents from government agencies
and third parties required to consummate the transactions contemplated hereby,
if any, shall have been obtained by the Seller, unless the failure to obtain any
such consent or make any such filing would not have an adverse effect on the
assets, properties, business or condition (financial or otherwise) of the
Methodology or the transactions contemplated hereby, or except to the extent
that making any such filing or obtaining any such consent has been waived in
writing by the Purchaser.
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6.5 TRANSFER INSTRUMENTS. The Seller shall have delivered to the
Purchaser such instruments of conveyance and transfer as are contemplated by
Section 2.2.
6.6 RESOLUTIONS. The Seller shall have furnished a copy of the
resolutions adopted by the Manager of the Seller authorizing this Agreement and
the transactions contemplated hereby.
6.7 PROCEEDINGS. All corporate and other proceedings in connection with
the transactions contemplated by this Agreement, and all documents incident
thereto, shall be in form and substance reasonably satisfactory to the Purchaser
and its counsel, and the Purchaser shall have received all such originals or
certified or other copies of such documents as it may reasonably request.
6.8 ABSENCE OF LITIGATION. There shall be no Action pending or
threatened before any federal, state or local court, governmental agency or
regulatory body which seeks (a) to invalidate or set aside, in whole or in part,
this Agreement, (b) to restrain, prohibit, invalidate or set aside, in whole or
in part, the consummation of the transactions contemplated hereby or (c) to
obtain substantial damages in connection therewith.
ARTICLE VII
CONDITIONS TO THE SELLER'S OBLIGATIONS
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Each and every obligation of the Seller under this Agreement to be
performed on or before the Closing Date shall be subject to the satisfaction, on
or before the Closing Date, of each of the following conditions:
7.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Purchaser contained herein and in all certificates and other
documents delivered by the Purchaser to the Seller pursuant hereto or in
connection with the transactions contemplated hereby shall be in all material
respects true and accurate as of the date of this Agreement and as of the
Closing Date with the same effect as if made on and as of the Closing Date.
7.2 PERFORMANCE. The Purchaser shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date, including, without limitation, those referred to in Article V.
ARTICLE VIII
CERTAIN POST-CLOSING COVENANTS
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8.1 BOOKS AND RECORDS; ACCESS. Unless otherwise consented to in writing
by the Purchaser, the Seller shall not destroy, alter or otherwise dispose of
any original books or records of the Seller without first offering to surrender
such books and records to the Purchaser and shall maintain such books and
records in good condition in a reasonably accessible location. The Seller shall
allow the Purchaser and its Advisors reasonable access during normal business
hours to examine and copy such books and records in order to perform a financial
statement audit if required by the Securities and Exchange Commission.
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8.2 NONCOMPETITION; CONFIDENTIALITY.
(a) The Purchaser and the Seller acknowledge and understand
that the Purchase Price was fixed on the basis that the Transfer of the
Transferred Assets to the Purchaser would provide the Purchaser with
the full benefit of the Methodology. The Seller acknowledges that it is
proper for the Purchaser to have assurances that the value of the
Methodology will not be diminished by acts of the Seller after the
Closing Date. Accordingly, for a period of five (5) years from and
after the Closing Date, the Seller shall not, directly or indirectly,
through Affiliates, a partnership, joint venture or otherwise, enter
into, engage in, conduct or carry on any business which produces,
manufactures, sells or distributes products now produced, manufactured,
sold or distributed by the Seller employing the Methodology, or
participate in the management of any person, firm, enterprise or
corporation if such person, firm, enterprise or corporation engages or
proposed to engage in substantial competition with the Purchaser in any
line of business actively conducted at the time by Seller employing the
Methodology and which was conducted by the Seller prior to the Closing
Date in all of the counties in California, in the remaining 00 xxxxxx
xx xxx Xxxxxx Xxxxxx, and throughout the world.
(b) The Seller shall not use or disclose, or induce the use or
disclosure of, and shall otherwise keep confidential all secrets,
know-how, processes, formulas, discoveries, improvements, designs,
business affairs and other secrets ("CONFIDENTIAL MATTERS") used or
usable by the Seller to the extent that such Confidential Matters are
not or do not become readily available to the public at any relevant
time, other than through Seller's disclosure of such Confidential
Matters.
(c) If the Seller commits a breach, or threatens to commit a
breach, of any of the provisions of this Section 8.2, the Purchaser
shall have the right and remedy (in addition to any others) to have the
provisions of this Section 8.2 specifically enforced by any court
having equity jurisdiction, together with an accounting therefor, it
being acknowledged and understood by the Seller that any such breach or
threatened breach will cause irreparable injury to the Purchaser and
that money damages will not provide an adequate remedy therefor.
8.3 COVENANT NOT TO XXX. Except in the event of a breach of this
Agreement by the Purchaser, the Seller hereby covenants and agrees, and hereby
undertakes to have each of its executive officers and directors undertake and
agree, that from and after the Closing Date, it and they will not, directly or
indirectly, commence or prosecute, or assist in the filing, commencement or
prosecution of, any Action, claim or proceeding against the Purchaser, any of
its Affiliates and each present or former officer, director, employer of or
owner of any equity interest in the Purchaser or any of its Affiliates, in any
federal, state, local or foreign court, arbitral forum or administrative agency,
with respect to the Methodology transferred hereunder, whether known or not now
known.
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8.4 SALES TAX. Seller covenants and represents that this transaction is
an exempted sale of an intangible and is therefore not subject to sales tax in
the State of Florida.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
-----------------------------------------------------------
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding (a) the
making of this Agreement, (b) any examination made by or on behalf of the
parties hereto and (c) the Closing hereunder, the representations and warranties
of the Seller and the Purchaser contained in this Agreement, or in any document
delivered pursuant to the provisions of this Agreement, including the
representations and warranties of the shareholders pursuant to the Share
Purchase Agreement, shall survive the Closing to and including the last day of
the thirty-sixth month following the month in which the Closing occurs
("Termination Date"), at which time all such representations and warranties
shall expire and be terminated, provided however, claims for indemnity made to
Seller or pending prior to the Termination Date or representations and
warranties contained in Section 3.5 relating to title to the Transferred Assets
shall not expire or terminate on the Termination Date.
9.2 INDEMNIFICATION.
(a) Subject to Section 9.1 above, from and after the Closing,
the Seller shall indemnify and save harmless the Purchaser and its
officers, directors, partners, shareholders, successors and assigns
(collectively, the "INDEMNIFIED PARTY") from and against any loss,
claim, liability, damage (including consequential damages), punitive
damages, remedial costs, civil and criminal penalties or expenses or
other damages of any kind or nature, including Purchaser's reasonable
attorneys' fees incurred in connection with any of the foregoing
(collectively, the "DAMAGES"), caused to the Methodology by or arising
out of (i) the failure by the Seller to perform any covenant or
agreement required to be performed by it in this Agreement, after the
Closing or pursuant to Article V of this Agreement; (ii) any judgments,
orders or decrees entered in any lawsuit or proceeding or Actions
against the Seller or the Methodology arising out of activities
undertaken by the Seller or the Methodology prior to the Closing Date
and arising out of activities undertaken by the Seller on or after the
Closing Date; (iv) any breach of warranty or representation in this
Agreement (including the Schedules hereto) made by or on behalf of the
Seller, (v) any breach of any warranty, representation, or covenant of
the shareholders of DCB pursuant to the Share Purchase Agreement and
not waived in writing by the Indemnified Party, or (vi) any claim by
any holder of a limited liability company interest of DCB that the
amount of consideration paid by Purchaser hereunder in any way violated
any legal rights of such holder.
(b) The Indemnified Party shall notify the Seller within a
reasonable period of time after becoming aware of, and shall provide to
the Seller as soon as practicable thereafter all information and
documentation necessary to support and verify, any Damages which the
Indemnified Party shall have determined has given or could give rise to
a claim for indemnification hereunder, and the Seller shall be given
access to all books and records in the possession or under the control
of the Indemnified Party which the Seller reasonably determines to be
related to such claim.
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(c) All claims for indemnity under this Article IX shall be
paid by the Seller on demand in immediately available funds in U.S.
dollars. At the Purchaser's option, in lieu of payment in cash,
Purchaser shall have the absolute right in Purchaser's sole discretion
to setoff, in part or in full, against any portion or all of the Hold
Back Shares (defined in Section 1.4(c)), the full amount of any claim
for indemnity pursuant to the provisions of Sections 9.2(a)(i) through
9.2(a)(iv).
(d) The Indemnified Party shall notify the Seller with
reasonable promptness of its discovery of any matter giving rise to a
claim of indemnity or setoff pursuant to this Agreement. With respect
to any third party claim or action that could give rise to indemnity
under this Agreement, the Seller shall be entitled to assume the
defense thereof with counsel satisfactory to the Indemnified Party,
provided, that upon the request of the Indemnified Party, the Seller
provides reasonable evidence of its ability to perform its obligations
under this Section 9.2; and after notice from the Seller to the
Indemnified Party of its election so to assume the defense thereof, the
Seller shall not be liable to the Indemnified Party under the foregoing
indemnity agreement for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense
thereof other than (i) those relating to investigation or the
furnishing of documents or witnesses and (ii) all reasonable fees and
expenses of separate counsel retained by such Indemnified Party if (A)
the Seller and the Indemnified Party shall have agreed to the retention
of such counsel or (B) counsel to the Indemnified Party shall have
concluded reasonably that the representation of the Seller and the
Indemnified Party by the same counsel would be inappropriate due to
actual or potential differing interests between them in the conduct of
the defense of such action. Promptly after receipt by an Indemnified
Party of notice of the commencement of any action to which the Seller
is not a party, such Indemnified Party shall, if such claim in respect
thereof is to be made against the Seller pursuant to this Agreement,
notify the Seller in writing of the commencement thereof, but the
failure or delay in so notifying the Seller shall not relieve the
Seller of its obligations to indemnify pursuant to the terms of this
Agreement. The Indemnified Party shall keep the Seller informed of the
progress of any such action and shall not enter into any settlement of
any such action without the prior written consent of the Seller, which
consent shall not be unreasonably withheld.
ARTICLE X
TERMINATION
-----------
10.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by the mutual consent of the Purchaser and the Seller; or
(b) by either the Purchaser or the Seller, upon written
notice, if there has been a material misrepresentation or any breach on
the part of the other party hereto in the representations, warranties
or covenants contained in this Agreement which is not cured within
twenty (20) business days after such other party has been notified of
the intent to terminate this Agreement pursuant to this subsection (b).
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10.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement as expressly permitted under Section 10.1, such termination shall be
the sole remedy and this Agreement shall forthwith become void (except for
Sections 5.2 and 11.3) and there shall be no liability on the part of either the
Seller or the Purchaser or any of their Affiliates; provided, however, that if
such termination shall result from the willful breach by a party hereto of its
obligations under this Agreement, such party shall be fully liable for any and
all damages, costs and expenses sustained or incurred by the other party as a
result of such breach. In the event of the termination of this Agreement without
a Closing, the Seller shall return promptly to the Purchaser all documents, work
papers and other materials of the Purchaser furnished or made available to the
Seller or its Advisors, and all copies thereof, and no information received by
the Seller shall be revealed to any third party or used for the advantage of the
Seller or any other party; and the Purchaser shall return promptly to the Seller
all documents, work papers and other material of the Seller furnished or made
available to the Purchaser or its Advisors, and all copies thereof, and no
information received by the Purchaser shall be revealed to any third party or
used for the advantage of the Purchaser or any other party.
ARTICLE XI
MISCELLANEOUS PROVISIONS
------------------------
11.1 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, the Purchaser and
the Seller shall notify and consult with each other prior to issuing any
statement or communication to the public or the press regarding the transactions
contemplated by this Agreement. Except as required by law or by any securities
exchange and except as the other party hereto shall authorize in writing or as
provided under this Section 11.1, the parties hereto shall not, and shall cause
their respective officers, directors, employees, Affiliates and Advisors not to,
disclose any matter or matters relating to this transaction to any Person not an
officer, director, employee, Affiliate or Advisor of such party.
11.2 AMENDMENT; WAIVER. Neither this Agreement, nor any of the terms or
provisions hereof, may be amended, modified, supplemented or waived, except by a
written instrument signed by the parties hereto (or, in the case of a waiver, by
the party granting such waiver). No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver. No failure of either party hereto to insist upon strict compliance by
the other party with any obligation, covenant, agreement or condition contained
in this Agreement shall operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 11.2.
11.3 FEES AND EXPENSES. Except as otherwise provided in this Agreement,
each of the parties hereto shall bear and pay its own costs and expenses
incurred in connection with the origin, preparation, negotiation, execution and
delivery of this Agreement and the agreements, instruments, documents and
transactions referred to in or contemplated by this Agreement (whether or not
such transactions are consummated) including, without limitation, any fees,
expenses or commissions of any of its Advisors, attorneys, agents, finders or
brokers. The Purchaser shall indemnify the Seller against any claims of third
parties for any brokerage, finder's, agent's or similar fees or commissions in
connection with the transactions contemplated hereby insofar as such claims are
alleged to be based on arrangements or contacts made by, to or with the
Purchaser or its Advisors or representatives. The Seller shall indemnify the
Purchaser against all such claims insofar as they are alleged to be based on
arrangements or contacts made by, to or with the Seller or its Advisors or
representatives.
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11.4 BULK SALES LAW WAIVER. The Purchaser and the Seller each agrees to
waive compliance by the other with the provisions of the Bulk Sales Law of any
jurisdiction to the extent that the same may be applicable to the transactions
contemplated by this Agreement. In addition to any other indemnities provided in
this Agreement, the Seller agrees to indemnify and hold harmless the Purchaser
from and against any and all claims that may be asserted against the Purchaser
or liens claimed against any of the Transferred Assets by the creditors of the
Seller or other third parties under the Bulk Sales Law of any State.
11.5 NOTICES.
(a) All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing
(including telefax, telegraphic, telex or cable communication) and
mailed, telefaxed, telegraphed, telexed, cabled or delivered:
(i) If to the Seller, to:
DSM, LLC
X.X. Xxx 00000
Xxxxxxxx, XX 00000-0000
Attention: Manager
with a copy to:
Holland & Knight, LLP
Xxx Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
(ii) If to the Purchaser, to
MEDCOM U.S.A., Inc.
00000 Xxxxx, Xxxxx X-X
Xxxxxx, XX 00000
Attention: Xxxx Xxxxx, Chief Financial
Officer
with a copy to:
Xxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxx X. X'Xxxx, Esq.
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(b) All notices and other communications required or permitted
under this Agreement which are addressed as provided in this Section
11.5 (i) if delivered personally against proper receipt or by confirmed
telefax or telex, shall be effective upon delivery and (ii) if
delivered (A) by certified or registered mail with postage prepaid, (B)
by Federal Express or similar courier service with courier fees paid by
the sender or (C) by telegraph or cable, shall be effective two (2)
business days following the date when mailed, couriered, telegraphed or
cabled, as the case may be. Either party may from time to time change
its address for the purpose of notices to that party by a similar
notice specifying a new address, but no such change shall be deemed to
have been given until it is actually received by the party sought to be
charged with its contents.
11.6 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder may be assigned by the parties
hereto without the prior written consent of the other party; provided, however,
that the Purchaser may assign its rights and obligations under this Agreement to
any of its Affiliates or any entity who by merger, consolidation, purchase or
sale subsequently becomes an Affiliate without the prior consent of the Seller.
Any assignment which contravenes this Section 11.6 shall be void ab initio.
11.7 GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE. This Agreement
and the legal relations between the parties hereto shall be governed by and
construed in accordance with the internal laws of the State of California,
without giving effect to the conflicts of laws principles thereof. Any dispute
concerning this Agreement and the transactions contemplated hereby shall be
heard and decided in the Federal and state courts of Orange County, California.
11.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
11.9 HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not constitute a part hereof or define,
limit or otherwise affect the meaning of any of the terms or provisions hereof.
11.10 ENTIRE AGREEMENT. This Agreement (which defined term includes the
Schedules and Exhibits to this Agreement) embodies the entire agreement and
understanding among the parties hereto with respect to the subject matter of
this Agreement and supersedes all prior agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, between the parties
with respect thereto. There are no agreements, covenants, undertakings,
representations or warranties with respect to the subject matter of this
Agreement other than those expressly set forth or referred to herein.
11.11 SEVERABILITY. Each term and provision of this Agreement
constitutes a separate and distinct undertaking, covenant, term and/or provision
hereof. In the event that any term or provision of this Agreement shall be
determined to be unenforceable, invalid or illegal in any respect, such
unenforceability, invalidity or illegality shall not affect any other term or
provision of this Agreement, but this Agreement shall be construed as if such
unenforceable, invalid or illegal term or provision had never been contained
herein. Moreover, if any term or provision of this Agreement shall for any
reason be held to be excessively broad as to time, duration, activity or
subject, it shall be construed, by limiting and reducing it, so as to be
enforceable to the extent permitted under applicable law as it shall then exist.
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11.12 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is
intended, nor shall anything in this Agreement be construed, to confer any
rights, legal or equitable, in any Person (other than the parties hereto and
their respective heirs, distributees, beneficiaries, executors, successors and
assigns), including, without limitation, any employee of the Seller or any
beneficiary of such employee.
11.13 MISCELLANEOUS. The persons executing this Agreement in behalf of
the parties hereto are duly authorized to execute, acknowledge and deliver this
Agreement.
11.14 AFFILIATE. When used in this Agreement, "Affiliate" or
"Affiliates" shall mean, with respect to any individual, partnership,
corporation, association, business trust, joint venture, governmental entity or
other entity of any nature ("Person"), any Person that controls, is controlled
by, or is under common control with, such Person.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"SELLER": DSM, LLC, a Florida limited liability company
By: /S/ XXXXXXXX XXXXXXX
------------------------------------------
Xxxxxxxx Xxxxxxx
Its: Member/Manager
"PURCHASER": MEDCOM U.S.A., INC., a Delaware corporation
By: /S/ XXXXXXX XXXXX
------------------------------------------
Xxxxxxx Xxxxx, Vice President
By: /S/ XXXXXXX XXXXX
------------------------------------------
Xxxxxxx Xxxxx, Secretary
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TECHNOLOGY PURCHASE AGREEMENT
SCHEDULE 1.1
METHODOLOGY
TECHNOLOGY PURCHASE AGREEMENT
SCHEDULE 1.4(b)
SUMMARY OF TERMS OF PREFERRED SHARES SCHEDULE
SUMMARY OF TERMS OF PREFERRED STOCK
The following provides a summary or certain material terms of the
Series D Cumulative Convertible Preferred Stock to be issued in connection with
the purchase of the outstanding limited liability company interests of DCB
Actuaries and Consultants, S.R.O. Reference should be made to the Certificate of
Designation for the Series D Cumulative Convertible Preferred Shares for a
complete description of the terms of such shares.
NUMBER OF SHARES AUTHORIZED: 2,900
DIVIDENDS: 4% of the Liquidation Preference (which is initially $1,000
per share), payable annually. The Company has the option of paying the dividends
in cash or in the form of shares of the Company's Common Stock, valued at it's
then Market Value.
LIQUIDATION PREFERENCE: $1,000 per share plus accrued but unpaid
dividends.
CONVERSION RIGHTS: After amendment of the Company's Certificate of
Incorporation to increase the Company's authorized Common Stock, the Series D
Cumulative Convertible Preferred Stock is convertible into Common Stock of the
Company, at a conversion price of $4.94 per share of Common Stock.. After one
year, the Company can require conversion of the preferred stock into Common
Stock, so long as the Market Price of the Common Stock at the time of conversion
exceeds the Conversion Price, and the resale of such Common Stock by the holder
is either registered under the Securities Act of 1933 or exempt from
registration.
VOTING RIGHTS: Votes with other voting securities of the Company, with
each share of preferred stock having that number of votes equal to the number of
shares of Common Stock into which it is convertible.
TECHNOLOGY PURCHASE AGREEMENT
SCHEDULE 3.6
The Methodology is described in Schedule 1.1, attached hereto and
incorporated herein by reference. The Methodology is subject to the following
License and Sub-License.
1. License Agreement for the Methodology for Automated Assessing and
Controlling of Medical Risks in Health Insurance by and between DSM, LLC and
Callucia Holding B.V., dated as of August 31, 1999.
2. Sub-License Agreement for the Methodology for Automated Assessing
and Controlling of Medical Risks in Health Insurance by and between Callucia
Holding B.V. and DCB Actuaries and Consultants S.R.O. dated as of August 31,
1999.
