ASSET PURCHASE AGREEMENT
Among
PRIME LITHOTRIPSY SERVICES, INC.
as Buyer,
RESTON HOSPITAL LITHOTRIPTER JOINT VENTURE
as Seller,
RESTON LITHOTRIPSY ASSOCIATES, INC.
COLUMBIA ARLINGTON HEALTHCARE SYSTEM, L.L.C.
and
XXXXXX XXXX, M.D.
Dated July 21, 1999
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into as of the
21 day of July, 1999 ("Effective Date"), between and among PRIME LITHOTRIPSY
SERVICES, INC., a New York corporation ("Buyer"), RESTON HOSPITAL LITHOTRIPTER
JOINT VENTURE, a Virginia general partnership ("Seller"), RESTON LITHOTRIPSY
ASSOCIATES, INC., a Virginia corporation and partner in Seller ("RLA"), COLUMBIA
ARLINGTON HEALTHCARE SYSTEM, L.L.C., a Virginia limited liability company and
partner in Seller ("CAHS"), and Xxxxxx Xxxx, M.D., an individual residing in the
Commonwealth of Virginia and partner in Seller ("XXXXXX XXXX, M.D.").
Preliminary Statements
Seller owns a Dornier Model HMT 482L Extracorporeal Shockwave Renal
Lithotripter, serial number 293, ("Lithotripter"), leases the Lithotripter for
use to others, and provides related services to others.
Buyer desires to purchase from Seller and Seller desires to sell to
Buyer the Lithotripter.
RLA, CAHS and XXXXXX XXXX, M.D. are the only partners of Seller, and each
joins in the execution of this Agreement for the purposes set forth herein.
Statement of Agreement
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties intending to be legally bound
hereby, agree as follows:
ARTICLE I.
SALE AND PURCHASE OF ASSETS
On the terms and subject to the conditions contained in this Agreement,
at the Closing (as hereinafter defined), Seller hereby agrees to sell, convey,
assign and transfer to Buyer, and Buyer agrees to purchase from Seller, the
assets of Seller set forth below, free and clear of any indebtedness, liens,
encumbrances or claims by any person or entity. The assets of Seller to be
purchased by Buyer pursuant to this Agreement shall be collectively referred to
herein as the "Assets," and are as follows:
a. Property and Equipment. Lithotripter, operating manuals and the trailer.
b. Goodwill. The goodwill and business reputation related to Seller's
business as of the Closing Date.
ARTICLE II.
WARRANTIES, REPRESENTATIONS AND
COVENANTS OF SELLER, RLA, CAHS AND XXXXXX XXXX, M.D.
Each of the parties hereto other than Buyer (collectively, the "Control
Parties") hereby represents and warrants to Buyer as follows. If a particular
representation and warranty is expressly stated below to be made, in whole or in
part, about the "Control Parties," each Control Party will be deemed to be
making that representation and warranty only about itself. Representations and
warranties expressly about the "Seller" will be deemed to be made jointly and
severally by Seller and each of the other Control Parties. Otherwise, each
Control Party (severally, and not jointly) is making each of the representations
and warranties in this Article II as to all matters stated therein (including
without limitation paragraph h of this Article II). Any reference in this
Agreement to the "actual knowledge" of Seller shall be defined as the actual
knowledge of Xxxxxx Xxxx, M.D., Xxxxxxx X. Xxxxx and A. Xxxxxx Xxxxxxx, M.D. Any
reference in this Agreement to the "actual knowledge" of a particular Control
Party shall be defined (i) in the case of XXXXXX XXXX, M.D., as the actual
knowledge of Xxxxxx Xxxx, M.D.; (ii) in the case of CAHS, as the actual
knowledge of Xxxxxxx X. Xxxxx; and (iii) in the case of RLA, as the actual
knowledge of A. Xxxxxx Xxxxxxx, M.D.
a. Existence and Power. Seller is a general partnership duly
organized, validly existing and in good standing under the laws of the State of
Virginia and has all requisite power to own and operate its business as now
conducted and as proposed to be conducted, and to enter into and perform the
terms of this Agreement. RLA represents that it is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation, and has all requisite corporate power to enter into and perform
the terms of this Agreement. CAHS represents that it is a limited liability
company duly organized, validly existing and in good standing under the laws of
the Commonwealth of Virginia, and has all requisite limited liability company
power to enter into and perform the terms of this Agreement. XXXXXX XXXX, M.D.,
represents that he is an individual residing in the Commonwealth of Virginia and
possesses all necessary power to enter into and perform the terms of this
Agreement.
b. Corporate Action. The execution, delivery and performance
of this Agreement and each other agreement, document, instrument or certificate
required to be executed by Seller or any other Control Party in connection
herewith (collectively, including this Agreement, the "Transaction Documents"),
are authorized by (as applicable) Seller's or such other Control Party's
respective shareholders, members, directors, governors, partners, managers or
other persons having a right to direct its affairs, and no further action or
consent is needed by or from Seller or such other Control Party to make any of
the Transaction Documents valid and binding upon Seller or such other Control
Party in accordance with its terms. Except with respect to Buyer, each of the
Transaction Documents has been, or prior to Closing will be, duly and validly
executed and delivered by Seller and/or the other Control Parties (if a party
thereto) and constitutes a valid and binding obligation of Seller and/or the
other Control Parties, enforceable against each of them in accordance with its
terms.
c. Consents and Approvals. No action, consent, or approval of, or filing
with, any governmental authority is required by Seller or any of the other
Control Parties in connection with the execution, delivery or performance of any
of the Transaction Documents.
d. Title to Assets. Seller represents that it holds good and
marketable record and beneficial title and ownership to all of the Assets, free
and clear of any lien, security interest, encumbrance or claim and that the
Lithotripter and the trailer are in reasonably good operating condition.
Furthermore, Seller represents that, except for personnel and Permits (defined
below), all the assets of Seller used in connection with the operation of
Seller's business as it is presently conducted, are included in the Assets to be
acquired by Buyer pursuant to this Agreement.
e. Licenses and Permits. Schedule II(e) lists, to the best of
Seller's actual knowledge, all third party and federal, state, county and local
governmental licenses, certificates and permits held by Seller and required in
connection with Seller's business activities or Seller's operation or use of the
Assets (the "Permits"). These Permits are not assignable and will not be
transferred to Buyer at the Closing. Seller represents that it is in compliance
with the terms and conditions of the Permits, except to the extent that a
violation does not and cannot reasonably be expected to have a material adverse
effect on the Assets. Seller further represents that it does not possess, nor is
it required to possess, a certificate of public need to conduct the Seller's
business as it is currently being conducted.
f. List of Procedures. Schedule II(f) lists the total number
of lithotripsy procedures performed by Columbia Reston Hospital Center for each
of the calendar years ending December 31, 1996, 1997 and 1998, and for the
period beginning January 1, 1999 and ending May 31, 1999. Schedule II(f) also
lists the total number of Maryland residents who received lithotripsy services
at Columbia Reston Hospital Center for the calendar year ending December 31,
1998 and for the period beginning January 1, 1999 and ending June 29, 1999.
Seller represents and warrants that Schedule II(f) fairly represents the number
of lithotripsy procedures performed on patients for the indicated periods.
Seller also represents and warrants that Schedule II(f) fairly represents ^ the
number of Maryland residents receiving lithotripsy procedures at Columbia Reston
Hospital Center for the indicated periods.
g. No Adverse Changes. Since ^ May 31, 1999, there has not
been any adverse change in the Assets, business or operations of Seller, other
than changes in the ordinary course of business that are not (when viewed in
conjunction with all other such changes) materially adverse.
h. Claims and Litigation. To the best of Seller's actual
knowledge, after due inquiry, there are no claims, actions, litigation, suits or
proceedings pending or threatened against or affecting Seller, Seller's
business, the Assets, or the transactions contemplated by this Agreement, at law
or in equity, at or before any federal, state or municipal court or other
governmental department, commission, board, bureau, agency or instrumentality.
None of the Control Parties is subject to or in default with respect to any
order, writ, injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality or arbitration tribunal with respect to
the ownership, operation or sale of the Assets or having a material and adverse
effect on the ability of such Control Party to perform their respective
covenants and obligations set forth in this Agreement.
i. No Material Misstatements. No representation, warranty or
covenant of any of the Control Parties that is contained in this Agreement, or
in any Schedule or Exhibit hereto, contains any untrue statement of a material
fact or omits any material fact necessary to make any such representation,
warranty or covenant, in light of the circumstances under which they were made,
not misleading.
37
j. No Violation; Compliance with Laws. The execution, delivery
and performance of each of the Transaction Documents, and the consummation of
the transactions contemplated hereby and thereby, do not and will not (i)
violate any law or regulation or any judicial or administrative order, award,
judgment or decree applicable to Seller or the Assets (other than applicable
"bulk sales" laws); (ii) result in the creation of any lien, security interest,
charge or encumbrance upon any of the Assets; or (iii) violate or conflict with
any provision of Seller's organizational documents, excluding from the foregoing
clauses (i) and (iii) such violations that do not and cannot reasonably be
expected to have a material adverse effect on the Assets.
k. No Known Breaches by Other Parties. Each Control Party (severally, and
not jointly) represents and warrants to Buyer that it has no actual knowledge of
any breach or default by any of the other Control Parties hereto of any
representation, warranty or covenant contained in any of the Transaction
Documents.
l. Representations and Warranties True at Closing. Each and
every representation and warranty by the Control Parties shall be true and
correct as of the Closing Date in all respects, regardless of whether the
Closing Date occurs on the date of execution of this Agreement or some later
date pursuant to Section 7.1 hereof.
m. Ownership of Seller; Equity Interest Owners of RLA. RLA, CAHS and XXXXXX
XXXX, M.D. each possess a partnership interest in Seller of 72%, 27% and 1%,
respectively. RLA, CAHS and XXXXXX XXXX, M.D. are the only partners of Seller
and no other person or entity holds an equity interest of Seller. Schedule II(m)
sets forth a list of each and every person or entity that owns an ownership
interest in RLA.
n. Disclaimer of Warranties. BUYER ACKNOWLEDGES AND AGREES
THAT EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, SELLER HAS MADE AND MAKES
NO WARRANTIES EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE ASSETS, INCLUDING
WITHOUT LIMITATION, THE IMPLIED WARRANTY OF MERCHANTABILITY OR THE IMPLIED
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. BUYER FURTHER ACKNOWLEDGES AND
AGREES THAT EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, THE ASSETS ARE
BEING TRANSFERRED AS IS, WHERE IS, AND WITH ALL FAULTS.
ARTICLE III.
WARRANTIES, REPRESENTATIONS AND
COVENANTS OF BUYER
Buyer hereby represents, warrants to, and covenants with Seller as
follows:
a. Corporate Existence. Buyer is a corporation duly organized, validly
existing in good standing under the laws of the State of New York. Buyer is
authorized to transact business in Virginia, and Buyer has all requisite
corporate power to own and operate its business and to enter into and perform
the terms of this Agreement.
b. Corporate Action. The execution, delivery and performance
of each Transaction Document to which Buyer is a party have been authorized by
all necessary corporate action, and such Transaction Document constitutes a
valid and binding obligation upon Buyer, enforceable against it in accordance
with its terms.
c. No Violation. The execution, delivery and performance by Buyer of each
Transaction Document to which Buyer is a party, and the consummation of the
transactions contemplated herein and therein, do not and will not violate any
law or regulation or any judicial or administrative order, award, judgment or
decree applicable to Buyer.
ARTICLE IV.
PURCHASE PRICE AND PAYMENT
The total purchase price and consideration for the Assets to be sold to
Buyer pursuant to this Agreement shall be $2,400,000.00, to be paid to Seller at
the Closing in immediately available funds.
ARTICLE V.
ALLOCATION OF PURCHASE PRICE
Seller and Buyer hereby agree to allocate the purchase price among the
Assets, the non-competition covenant set forth in Article VIII hereof, and the
other agreements entered into in connection with this Agreement, in accordance
with the allocations set forth on Schedule V hereto. Such allocations have been
mutually determined by the parties at arm's length and the parties hereto agree
to use such allocations for federal income tax purposes.
ARTICLE VI.
LIABILITIES
Buyer is not assuming any debts, liabilities or obligations of any
kind, of Seller or any Control Parties, or otherwise, in connection with the
purchase of the Assets, the Closing or the consummation of the transactions
contemplated by this Agreement. All claims, liabilities or obligations of, or
against, Seller and each other Control Party (including, without limitation, any
and all federal, state or other governmental taxes and related liabilities),
whether accrued, absolute, contingent or otherwise, and whether due or to become
due, fixed or contingent, known or unknown, will be and remain the liability and
responsibility of Seller or such other Control Party, as applicable. SELLER AND
EACH OTHER CONTROL PARTY AGREE TO HOLD BUYER AND THE BUYER INDEMNIFIED PARTIES
HARMLESS FOR SAME AND AGREE TO DEFEND AND INDEMNIFY BUYER AND THE BUYER
INDEMNIFIED PARTIES IN CONNECTION WITH ANY SUCH CLAIMS, LIABILITIES, OR
OBLIGATIONS ASSERTED AGAINST BUYER, PURSUANT TO THE PROVISIONS OF ARTICLE IX
HEREOF.
ARTICLE VII.
CLOSING
Section 7.1 Closing. The purchase, sale and transfer of possession of
the Assets (the "Closing") shall take place at the offices of Grad, Xxxxx &
Klewans, P.C., 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, on the
date of execution of this Agreement, or at such other place, date and time as
the parties hereto shall mutually agree upon in writing. The date that the
Closing occurs is referred to herein as the "Closing Date."
Section 7.2 Action by Seller. At the Closing, Seller shall execute (as
applicable), acknowledge and deliver, or cause to be executed and delivered, to
Buyer, the following:
a. Assignment and Warranty Xxxx of Sale, in substantially the form
attached hereto as Exhibit A, covering all Assets.
b. Executed copies of non-compete agreements, in the form
attached hereto as Exhibit B, for each of the sixteen shareholders in RLA who
does not own an existing, competing interest and is not engaged in a competing
activity.
c. Executed copies of non-compete agreements, in the form
attached hereto as Exhibit C, for each of the two shareholders in RLA who owns
an existing, competing interest or engages in a competing activity.
d. Closing certificate executed by an authorized general
partner of Seller stating that all representations and warranties of Seller set
forth in any Transaction Document are true, complete and correct at the time of
Closing, and that between the date hereof and the Closing, there has been no
material change in the condition of the Assets or Seller's business.
e. Closing certificate executed by the President of RLA
stating that all representations and warranties of RLA set forth in any
Transaction Document are true, complete and correct at the time of Closing and
that RLA has no actual knowledge of a breach of a representation and warranty by
either of the other Control Parties.
f. Closing certificate executed by an authorized officer of
CAHS stating that all representations and warranties of CAHS set forth in any
Transaction Document are true, complete and correct at the time of Closing and
that CAHS has no actual knowledge of a breach of any representation and warranty
by either of the other Control Parties.
g. Closing certificate executed by XXXXXX XXXX, M.D. stating that all
representations and warranties of XXXXXX XXXX, M.D. set forth in any
Transaction Document are true, complete and correct at the time of Closing
and that XXXXXX XXXX, M.D. has no actual knowledge of a breach of any
representation and warranty by either of the other Control Parties.
Section 7.3 Action by Buyer. At the Closing, Buyer shall execute (as
applicable), acknowledge and deliver, or cause to be executed and delivered, to
Seller, the following:
a. The cash sum in the amount of $2,400,000.00 pursuant to Article IV
hereof, by wire transfer to an account designated by Seller.
b. Closing certificate executed by the President or Secretary
of Buyer stating that all representations and warranties of Buyer set forth in
any Transaction Document are true, complete and correct at the time of Closing.
Section 7.4 Further Assurances. At any time and from time to time after
the Closing, Seller and the other Control Parties shall, at the reasonable
request of Buyer, execute and deliver or cause to be executed and delivered, all
such bills of sale, assignments, consents, documents (including documents of
title with respect to any titled property included among the Assets),
certificates and instruments, and take or cause to be taken all such other
action, as may be reasonably deemed necessary or desirable in order to put Buyer
in actual possession and operating control of the Assets, or to more fully and
effectively vest in Buyer or to confirm in buyer full right, title and interest
to the Assets, free and clear of all liens and security interests, in accordance
with this Agreement, or to assist Buyer in exercising its rights with respect
thereto, or otherwise to carry out the intents and purposes of this Agreement.
Section 7.5 Conditions to Closing. In the event the Closing does not
occur on the date of execution of this Agreement, it shall be a condition to
Closing by each party that (i) Buyer, Prime Medical Services, Inc., a Delaware
corporation ("Prime"), or one of Prime's subsidiaries shall have entered into a
Lithotripsy Agreement with CAHS pursuant to which Buyer or one of Prime's
subsidiaries will provide lithotripsy and related services at Reston Hospital
Center; (ii) all actions required to be taken by the other party or parties set
forth in this Article VII shall have been taken at or prior to the Closing;
(iii) all documents to be delivered pursuant to this Article VII shall be
satisfactory in form and substance to such party and its counsel; and (iv) such
party or its counsel shall have received copies of all documents, instruments or
certificates, executed or certified, whichever may be appropriate, as is
required by this Article VII. For purposes of this Section, all forms of closing
documents attached to this Agreement are hereby stipulated by the parties to be
in satisfactory form.
ARTICLE VIII.
NON-COMPETITION COVENANTS
Section 8.1 Seller, RLA and Ball, severally and not jointly, hereby
agrees that, until the expiration of its respective Restriction Period (as
defined for each below), it will not directly or indirectly, either through any
kind of ownership (other than ownership of securities of a publicly held
corporation of which they own less than five percent of any class of outstanding
securities), or as a principal, agent, employer, advisor, consultant, co-partner
or in any individual or representative capacity whatever, either for its own
benefit or for the benefit of any other person, firm or corporation, without the
prior written consent of Buyer, commit any of the following acts, which acts
shall be considered violations of this covenant not to compete:
(a) Lithotripsy Services. Except as permitted pursuant to
Section 8.3 below, directly or indirectly provide lithotripsy services,
including without limitation, patient lithotripsy services, lithotripsy
management services, Lithotripter leasing, or similar lithotripsy services
(collectively, "Lithotripsy Services"), anywhere within 50 miles of Columbia
Reston Hospital Center, Reston, Virginia.
(b) Interference with Business Relationships. Directly or
indirectly request or advise any patient or physician or any other person, firm
or corporation having a business relationship with Buyer or any of Buyer's
affiliates (or having a past business relationship with Seller) to withdraw,
curtail, or cancel its business with Buyer or Buyer's affiliates, as the case
may be; or
(c) Solicitation of Employees. Directly or indirectly hire any
employee of Buyer or any of Buyer's affiliates or induce or attempt to influence
any employee of Buyer or any of Buyer's affiliates to terminate his or her
employment with such entity.
Section 8.2 So long as Buyer, its affiliates, assignees or successors
continues to provide Lithotripsy Services to Reston Hospital Center, CAHS hereby
agrees that, until the expiration of its Restriction Period (as defined below),
it will not directly or indirectly, ^ whether through any kind of ownership
(other than ownership of securities of a publicly held corporation of which they
own less than five percent of any class of outstanding securities), ^ through
the actions of its member HCA Health Services of Virginia, Inc., or as a
principal, agent, employer, advisor, consultant, co-partner or in any individual
or representative capacity whatever, either for its own benefit or for the
benefit of any other person, firm or corporation, without the prior written
consent of Buyer, commit any of the following acts, which acts shall be
considered violations of this covenant not to compete:
(a) Lithotripsy Services. Except as otherwise permitted in
this subparagraph (a) and Section 8.3 below, directly or indirectly provide
Lithotripsy Services anywhere within the Restriction Area (defined below) for
the applicable period. The restriction set forth in this subparagraph (a) shall
not apply to any facility in which CAHS, or any affiliate or successor thereof,
acquires after the Closing a beneficial interest that, at the time of such
acquisition, provides Lithotripsy Services to the general public and for which ^
annual gross revenues from Lithotripsy Services do not exceed 5% of ^ such
facility's ^ annual gross revenues. For purposes of this Agreement, the
"Restriction Area" shall mean that area within the Commonwealth of Virginia
which is defined by a driving distance radius from Columbia Reston Hospital
Center, Reston, Virginia of 50 miles for the first year of the Restriction
Period, 30 miles for the second year of the Restriction Period and 20 miles for
each of the third, fourth and fifth years of the Restriction Period.
(b) Interference with Business Relationships. Directly or
indirectly request or advise any patient or physician or any other person, firm
or corporation having a business relationship with Buyer or any of Buyer's
affiliates (or having a past business relationship with Seller) to withdraw,
curtail, or cancel its business with Buyer or Buyer's affiliates, as the case
may be; or
(c) Solicitation of Employees. Directly or indirectly hire any
employee of Buyer or any of Buyer's affiliates or induce or attempt to influence
any employee of Buyer or any of Buyer's affiliates to terminate his or her
employment with such entity.
Section 8.3 Medical Judgment. Nothing in this Agreement shall be
construed to limit or infringe upon the professional medical judgment or ability
to practice medicine of any party hereto that is a physician (including, but not
limited to, the selection of appropriate facilities for medical care), and no
exercise of such a party's professional medical judgment or act constituting the
practice of medicine shall be considered a violation of this Agreement.
Section 8.4 Restriction Period. For purposes of this Agreement, the
"Restriction Period" shall begin on the Effective Date and continue until five
(5) years after the Effective Date.
Section 8.5 Affiliates. For purposes of this Agreement, the Buyer's
affiliates shall include Prime, and each of Prime's and Buyer's respective
current and future (throughout the Restriction Period), direct and indirect,
subsidiaries and affiliates.
Section 8.6 Restrictions Reasonable. RLA, CAHS and Ball have reviewed
and carefully considered the provisions of this Article VIII and, having done
so, agree that the restrictions set forth herein (a) are fair and reasonable
with respect to time, geographic area and scope, (b) are not unduly burdensome,
and (c) are reasonably required for the protection of the respective interests
of the parties.
Section 8.7 Equitable Relief. RLA, CAHS and Ball each agree that a
violation on its part of any covenant contained in this Article VIII will cause
the other parties irreparable damage for which remedies at law may be
insufficient, and for that reason, each agrees that the other parties shall
each, independently, be entitled as a matter of right to equitable remedies,
including specific performance and injunctive relief, therefor. The right to
specific performance and injunctive relief shall be cumulative and in addition
to whatever other remedies, at law or in equity, may be available, including,
specifically, recovery of additional damages.
ARTICLE IX.
INDEMNIFICATION OF BUYER
Section 9.1 Indemnification of Buyer. For a period of two years after
the Closing Date, Seller and each of the other Control Parties, jointly and
severally, but subject to the limitation set forth below, agree to indemnify and
hold Buyer, Prime and each of Prime's and Buyer's respective representatives,
officers, directors, employees, and affiliates (collectively, the "Buyer
Indemnified Parties") harmless from and against any and all damages, losses,
claims, liabilities, demands, charges, suits, penalties, costs, and expenses
(including court costs and reasonable attorneys' fees and expenses incurred in
investigating and preparing for any litigation or proceeding) (collectively,
"Indemnified Costs") in connection with the commencement or assertion of any
action, proceeding, demand, or claim by a third party (collectively, a
"third-party action") which any of the Buyer Indemnified Parties may sustain,
arising out of, or with respect to, (i) any breach or default by Seller or any
of the other Control Parties of any of the representations, warranties,
covenants or agreements contained in any Transaction Document, (ii) any
obligations or any liabilities to any finder, broker or sales agent engaged or
retained by Seller or another Control Party, (iii) any debts, liabilities or
obligations of Seller (iv) any debts, liabilities or obligations of any Control
Parties with respect to the Assets or business conducted utilizing the Assets,
(v) any act or omission by Seller that occurred prior to the Closing, or (vi)
any act or omission by any of the Control Parties that relates to the Assets or
business conducted utilizing the Assets and occurred prior to the Closing.
Regardless of anything contained in this Agreement to the contrary, Seller's
indemnification liability shall be limited to an amount equal to the purchase
price and each of the Control Parties' indemnification liability shall be
limited to an amount equal to $24,000.00 for XXXXXX XXXX, M.D., $1,728,000.00
for RLA and $648,000.00 for CAHS, and in no case shall the collective liability
of the Seller and Control Parties be greater than the purchase price.
Section 9.2 Defense of Third-Party Claims. A Buyer Indemnified Party
shall give prompt written notice to Seller and the other Control Parties of the
commencement or assertion of any third-party action in respect of which such
Buyer Indemnified Party shall seek indemnification hereunder. Any failure so to
notify Seller and the other Control Parties shall not relieve Seller and the
other Control Parties from any liability that they may have to such Buyer
Indemnified Party under this Article IX, unless the failure to give such notice
materially and adversely prejudices Seller and the other Control Parties. Seller
and the other Control Parties shall have the right to assume control of the
defense of, settle, or otherwise dispose of such third-party action on such
terms as they deem appropriate; provided, however, that:
(a) The Buyer Indemnified Party shall be entitled, at his, her, or its
own expense, to participate in the defense of such third-party action;
(b) Seller and the other Control Parties shall obtain the
prior written approval of the Buyer Indemnified Party, which approval shall not
be unreasonably withheld or delayed, before entering into or making any
settlement, compromise, admission, or acknowledgment of the validity of such
third-party action or any liability in respect thereof if, pursuant to or as a
result of such settlement, compromise, admission, or acknowledgment, injunctive
or other equitable relief would be imposed against the Buyer Indemnified Party
or if, in the reasonable opinion of the Buyer Indemnified Party, such
settlement, compromise, admission, or acknowledgment would have a material
adverse effect on its business or, in the case of a Buyer Indemnified Party who
is a natural person, on his or her assets or interests;
(c) Seller and the other Control Parties shall not consent to
the entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by each claimant or plaintiff to each
Buyer Indemnified Party of a release from all liability in respect of such
third-party action;
(d) Seller and the other Control Parties shall not be entitled
to control (but shall be entitled to participate at their own expense in the
defense of), and the Buyer Indemnified Party shall be entitled to have sole
control over, the defense or settlement, compromise, admission, or
acknowledgment of any third-party action (i) as to which Seller and the other
Control Parties fail to assume the defense within a reasonable length of time
after giving notice to Seller and the other Control Parties or (ii) to the
extent the third-party action seeks an order, injunction, or other equitable
relief against the Buyer Indemnified Party which, if successful, would
materially adversely affect the business, operations, assets, or financial
condition of the Buyer Indemnified Party; provided, however, that the Buyer
Indemnified Party shall make no settlement, compromise, admission, or
acknowledgment which would give rise to liability on the part of Seller or the
other Control Parties without the prior written consent of Seller and the other
Control Parties;
(e) Seller and the other Control Parties shall make payments
of all amounts required to be made pursuant to the foregoing provisions of this
Article IX to or for the account of the Buyer Indemnified Party from time to
time promptly upon receipt of bills or invoices relating thereto or when
otherwise due and payable, provided that the Buyer Indemnified Party has agreed
in writing to reimburse Seller and the other Control Parties for the full amount
of such payments if the Buyer Indemnified Party is ultimately determined not to
be entitled to such indemnification; and
(f) The parties hereto shall extend reasonable cooperation in
connection with the defense of any third-party action pursuant to this Article
IX and, in connection therewith, shall furnish such records, information, and
testimony and attend such conferences, discovery proceedings, hearings, trials,
and appeals as may be reasonably requested.
ARTICLE X.
INDEMNIFICATION OF
THE CONTROL PARTIES
Section 10.1 Indemnification of Seller and the other Control Parties.
For a period of one year after the Closing Date, Buyer agrees to indemnify and
hold harmless Seller and the other Control Parties, and, where applicable, their
respective partners, officers, directors, employees, and affiliates
(collectively, the "Seller Indemnified Parties") from and against any and all
Indemnified Costs in connection with the commencement or assertion of any
third-party action, which any of the Seller Indemnified Parties may sustain,
arising out of, or with respect to, (i) any breach or default by Buyer of any of
the representations, warranties, covenants or agreements contained in any
Transaction Document, (ii) any obligations or liabilities to any finder, broker
or sales agent engaged or retained by Buyer or (iii) any act or omission by
Buyer that relates to the Assets and occurs after the Closing. Regardless of
anything contained in this Agreement to the contrary, Buyer's indemnification
liability to each Control Party shall be limited to an amount equal to
$24,000.00 for XXXXXX XXXX, M.D., $1,728,000.00 for RLA and $648,000.00 for
CAHS, and in no case shall the collective liability of the Buyer be greater than
the purchase price.
Section 10.2 Defense of Third-Party Claims. A Seller Indemnified Party
shall give prompt written notice to Buyer of the commencement or assertion of
any third-party action in respect of which such Seller Indemnified Party shall
seek indemnification hereunder. Any failure so to notify Buyer shall not relieve
Buyer from any liability that it may have to such Seller Indemnified Party under
this Article X unless the failure to give such notice materially and adversely
prejudices Buyer. Buyer shall have the right to assume control of the defense
of, settle, or otherwise dispose of such third-party action on such terms as it
deems appropriate; provided, however, that:
(a) The Seller Indemnified Party shall be entitled, at his, her, or
its own expense, to participate in the defense of such third-party action;
(b) Buyer shall obtain the prior written approval of the
Seller Indemnified Party, which approval shall not be unreasonably withheld or
delayed, before entering into or making any settlement, compromise, admission,
or acknowledgment of the validity of such third-party action or any liability in
respect thereof if, pursuant to or as a result of such settlement, compromise,
admission, or acknowledgment, injunctive or other equitable relief would be
imposed against the Seller Indemnified Party or if; in the reasonable opinion of
the Seller Indemnified Party, such settlement, compromise, admission, or
acknowledgment would have a material adverse effect on its business or, in the
case of a Seller Indemnified Party who is a natural person, on his or her assets
or interests;
(c) Buyer shall not consent to the entry of any judgment or
enter into any settlement that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to each Seller Indemnified Party of a
release from all liability in respect of such third-party action; and
(d) Buyer shall not be entitled to control (but shall be
entitled to participate at its own expense in the defense of), and the Seller
Indemnified Party shall be entitled to have sole control over, the defense or
settlement, compromise, admission, or acknowledgment of any third-party action
(i) as to which Buyer fails to assume the defense within a reasonable length of
time or (ii) to the extent the third-party action seeks an order, injunction, or
other equitable relief against the Seller Indemnified Party which, if
successful, would materially adversely affect the business, operations, assets,
or financial condition of the Seller Indemnified Party; provided, however, that
the Seller Indemnified Party shall make no settlement, compromise, admission, or
acknowledgment which would give rise to liability on the part of Buyer without
the prior written consent of Buyer.
(e) Buyer shall make payments of all amounts required to be
made pursuant to the foregoing provisions of this Article X to or for the
account of the Seller Indemnified Party from time to time promptly upon receipt
of bills or invoices relating thereto or when otherwise due and payable,
provided that the Seller Indemnified Party has agreed in writing to reimburse
Buyer for the full amount of such payments if the Seller Indemnified Party is
ultimately determined not to be entitled to such indemnification.
(f) The parties hereto shall extend reasonable cooperation in
connection with the defense of any third-party action pursuant to this Article X
and, in connection therewith, shall furnish such records, information, and
testimony and attend such conferences, discovery proceedings, hearings, trials,
and appeals as may be reasonably requested.
ARTICLE XI
GENERAL
Section 11.1 Costs. Each party hereto agrees to pay their respective
costs and expenses incurred by them in the negotiation, preparation, performance
of and compliance with all agreements, covenants and conditions contained in
each Transaction Document to which it is a party, including, but not limited to,
their respective attorney's fees and accountant's fees.
Section 11.2 No Brokers. Each party represents that no brokers, agents
or finders are involved in this transaction and each agrees to hold the other
harmless from liability for any brokerage, agency, or finder's fees or
commissions with respect to which any such party may have incurred an
obligation.
Section 11.3 Assignability. This Agreement may not be assigned by any
party hereto without the prior written consent of all other parties to this
Agreement, except that Buyer may, upon written notice to Seller and the other
Control Parties, assign its rights pursuant to the non-competition covenants set
forth in Article VIII hereof without the written consent of any other party
hereto, provided that any such assignment is made in connection with a sale or
transfer of (i) all or substantially all of the Assets, (ii) all or
substantially all of the business or assets of Buyer (including the assets
required to provide Lithotripsy Services to Reston Hospital Center), (iii) at
least 50% of the outstanding voting stock of Buyer or consummation of a merger
or other transaction that results in a change of control of Buyer, or (iv) ^
Buyer's or Buyer's affiliates' ^ obligations under the lithotripsy services
agreement referred to in Section 7.5.
Section 11.4 Entire Agreement. This Agreement and the other Transaction
Documents, together with all schedules and exhibits referred to herein, which by
this reference are hereby incorporated herein and made a part hereof for all
purposes, contain the entire agreement between the parties hereto with respect
to the transactions contemplated herein, and supersede all written or oral
negotiations, commitments, warranties or representations, and cannot be altered
or otherwise amended except pursuant to an instrument in writing signed by each
of the parties hereto. For all purposes of this Agreement, in lieu of physically
attaching referenced exhibits to this Agreement, such exhibits may be signed and
approved by the parties hereto and delivered concurrently with the execution and
delivery of this Agreement and deemed attached hereto.
Section 11.5 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered or mailed by certified or registered mail,
postage prepaid to:
If to Buyer: Prime Lithotripsy Services, Inc.
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
With Copy to: Akin, Gump, Strauss, Xxxxx & Xxxx L.L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxx XxXxxx
If to Seller: Reston Hospital Lithotripter Joint Venture
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxxxxx 00000
With Copy to: Xxxxxxx X. Xxxxx, Esquire
Grad, Xxxxx & Klewans, P.C.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
If to RLA: Reston Lithotripsy Associates, Inc.
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attn: A. Xxxxxx Xxxxxxx, M.D.
With Copy to: Xxxxxxx X. Xxxxx, Esquire
Grad, Xxxxx & Klewans, P.C.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
If to CAHS: Reston Hospital Center
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, CEO
With Copy to: McGuire, Woods, Battle & Xxxxxx LLP
One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx
If to XXXXXX XXXX, M.D.: Xxxxxx Xxxx, M.D.
0000 Xxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Section 11.6 Waiver. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. Except as otherwise provided herein, no
waiver by any party of any condition, or of any breach of any term, covenant,
representation or warranty contained in this Agreement, in any one or more
instances, shall be deemed to be or construed as a further or continuing waiver
of any such condition or breach, or a waiver of any other condition or breach of
any other term, covenant, representation or warranty.
Section 11.7 Headings. The headings of the sections and paragraphs of
this Agreement have been inserted for convenience of reference only and shall in
no way restrict or otherwise modify any of the terms or provisions hereof.
Section 11.8 Materiality. The term "material" as used in this Agreement
is hereby defined to mean all accounting adjustments, costs, values, damages,
deficiencies, assessments or expenses with respect to the value of the Assets
and businesses to be purchased by Buyer hereunder or the liabilities to be
assumed by Buyer hereunder, which either separately or in the aggregate exceed
the sum of $10,000.
Section 11.9 Counterparts. This Agreement, and each other Transaction
Document may be executed simultaneously in multiple counterparts, each of which
when so executed shall be deemed to be an original, and such counterparts shall
together constitute one and the same instrument.
Section 11.10 Severance. Should any portion of this Agreement be
declared invalid and unenforceable, then such portion shall be deemed to be
severed from this Agreement and shall not affect the remainder thereof.
Section 11.11 Extension of Benefits. All of the terms and conditions of
this Agreement shall be binding upon and inure to the benefit of, and shall be
enforceable by, the parties hereto and their respective heirs, personal
representatives, executors, successors and assigns; provided, however, that in
the event that CAHS is dissolved, the terms and conditions of this Agreement, if
still applicable, shall solely be binding upon, and inure to the benefit of, HCA
Health Services of Virginia, Inc., a Virginia corporation and a member of CAHS.
Section 11.12 Tax Advice. Each party hereto acknowledges that they have
consulted with their respective tax advisors in connection with the transactions
contemplated by this Agreement, and each party hereto acknowledges that they
have not relied upon any advice or opinions given by the other party or its
attorneys or agents, nor has any party hereto guaranteed any particular tax
consequences in connection with the transactions contemplated by this Agreement.
Section 11.13 Survival of Representations, Warranties and Covenants.
All of the representations, warranties and covenants contained in this Agreement
shall survive the Closing Date for a period of two years.
IN WITNESS WHEREOF, the parties have executed and delivered, or caused
this Agreement to be executed and delivered by their respective duly authorized
officers, on the day and year first above written.
BUYER: PRIME LITHOTRIPSY SERVICES, INC.
By:/s/ Xxxxxx Xxxxxxxx
---------------------
Printed Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
SELLER: RESTON HOSPITAL LITHOTRIPTER
JOINT VENTURE
Reston Lithotripsy Associates, Inc.
General Partner
By: /s/ Xxxxxxx X. Xxxxx, President
----------------------------------
Printed Name: Xxxxxxx X. Xxxxx, President
Title: President, Reston Lithotripsy
Associates, Inc.
RLA: RESTON LITHOTRIPSY ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Printed Name: Xxxxxxx X. Xxxxx
Title: President
CAHS: COLUMBIA ARLINGTON HEALTHCARE SYSTEM, L.L.C.
By:/s/ Xxxxxxx X. Xxxxx
-----------------------
Printed Name: Xxxxxxx X. Xxxxx
Title: COO/Authorized Agent
BALL:
/s/ Xxxxxx Xxxx, M.D.
-------------------------------------
XXXXXX XXXX, M.D.
Schedule II(e)
Non-Assignable Permits of Seller
Business and Professional Occupations License issued by the County of
Fairfax, Virginia.
Schedule II(f)
List of Procedures
Year Procedures
1996 506
1997 443
1998 534
1999, up to May 31, 1999 228
Maryland Patients
Year Patients
1998 8
1999, up to June 29, 1999 7
Schedule II(m)
Ownership of RLA
Amer Z. Al-Juberi, M.D.
Xxxxxx Arnold, M.D.
Xxxx X. Xxxxxx, M.D.
Xxxxxxx X. Xxxxx, M.D.
Xxxxx Xxxxxx, M.D.
Xxxxxx X. Xxxxxx, M.D.
Xxxx Xxxxxxx, M.D.
Xxxxxxxx XxXxxxxx, M.D.
Xxxxxxx Xxxxxx, Jr., M.D.
Xxxxxxx X. Xxxxx, M.D.
A. Xxxxxx Xxxxxxx, M.D.
J. Xxxxxx Xxxxxxxx, M.D.
EK Xxxx Xxx, M.D.
Xxxx Xxx, M.D.
Xxxxxx X. St. Xxxxxxx, M.D.
Xxxxxxx Xxxx, M.D.
Xxxxxxx Xxxxxxxxx, M.D.
Xxxxxxx Xxxx, M.D.
Schedule V
Allocation of Purchase Price
EXHIBIT A
Form of Assignment and Warranty Xxxx of Sale
EXHIBIT B
Form of Non-compete Agreement
Non-competition Agreement
THIS NON-COMPETITION AGREEMENT (this "Agreement") entered into this ___
day of July, 1999 (the "Effective Date"), by the undersigned individual (the
"Restricted Party") for the benefit of Prime Medical Services, Inc., a Delaware
corporation (the "Company") and the Company's affiliates.
WHEREAS, the Company, through a subsidiary, has acquired certain
lithotripsy equipment from the Restricted Party and certain affiliates of the
Restricted Party; and
WHEREAS, as a material inducement for the Company's purchase of such
equipment, the Restricted Party has agreed, among other things, not to engage in
certain competitive activities, or assist or participate with any other person
or entity engaging in such activities, as provided herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, the Restricted Party
hereby covenants and agrees as follows:
1. Agreement. The Restricted Party hereby covenants and agrees that,
until the expiration of the Restriction Period (as defined below), the
Restricted Party will not, directly or indirectly, either through any kind of
ownership (other than ownership of securities of a publicly held corporation of
which the Restricted Party owns less than five percent (5%) of any class of
outstanding securities), or as a principal, agent, employer, advisor,
consultant, co-partner or in any individual or representative capacity whatever,
either for the Restricted Party's own benefit or for the benefit of any other
person, corporation or other entity, without the prior written consent of the
Company, commit any of the following acts described in paragraphs (a) through
(c) below, which acts shall be considered violations of this covenant not to
compete:
(a) Lithotripsy Services. Except as permitted pursuant to paragraph (d)
below, directly or indirectly provide lithotripsy services, including without
limitation, patient lithotripsy services, lithotripsy management services,
lithotripter leasing, or similar lithotripsy services, anywhere within fifty
(50) miles of Columbia Reston Hospital Center in Reston, Virginia. The area
described in the preceding sentence is hereinafter referred to as the
"Restricted Area."
(b) Interference with Business Relationships. Directly or indirectly
request or advise any patient or physician or any other person, corporation or
other entity having a business relationship with the Company or any of the
Company's affiliates to withdraw, curtail, or cancel its business with such
entity.
(c) Solicitation of Employees. Directly or indirectly hire any employee
of the Company or any of the Company's affiliates or induce or attempt to
influence any employee of the Company or any of the Company's affiliates to
terminate his or her employment with such entity.
(d) Medical Judgment. Nothing in this Agreement shall be construed to
limit or infringe upon the professional medical judgment or ability to practice
medicine of the Restricted Party, if the Restricted Party is a physician
(including, but not limited to, the selection of appropriate facilities for
medical care), and no exercise of professional medical judgment or act
constituting the practice of medicine shall be considered a violation of this
Agreement.
2. Restriction Period. For purposes of this Agreement, the "Restriction
Period" shall begin on the Effective Date and continue until five (5) years
after the Effective Date.
3. General. For purposes of this Agreement, the Company's affiliates
shall include its current and future (throughout the Restriction Period)
subsidiaries and affiliates. The Restricted Party has reviewed and carefully
considered the provisions of this Agreement and, having done so, agrees that the
restrictions set forth herein (a) are fair and reasonable with respect to time,
geographic area and scope, (b) are not unduly burdensome, and (c) are reasonably
required for the protection of the legitimate interests of the Company and its
affiliates. The Restricted Party agrees that a violation on its part of any
covenant contained in this Agreement will cause the Company and its affiliates
irreparable damage for which remedies at law may be insufficient, and for that
reason, agrees that the Company and its affiliates shall each, independently be
entitled as a matter of right to equitable remedies, including specific
performance and injunctive relief, therefor. The right to specific performance
and injunctive relief shall be cumulative and in addition to whatever other
remedies, at law or in equity, may be available, including, specifically,
recovery of additional damages.
4. Miscellaneous.
(a) Collateral Agreements, Amendments, and Waivers. This Agreement
(together with the documents delivered pursuant hereto) supersedes all prior
documents, understandings, and agreements, oral or written, relating to these
transactions and constitutes the entire understanding among the parties with
respect to the subject matter hereof. Any modification or amendment to, or
waiver of, any provision of this Agreement (or any document delivered pursuant
to this Agreement unless otherwise expressly provided therein) may be made only
by an instrument in writing executed by the Company.
(b) Expenses. The Restricted Party shall pay all costs and
expenses incurred by it in connection with this Agreement, including the fees
and disbursements of its counsel.
(c) Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws, such
provision shall be fully severable, this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this
Agreement.
(d) Waiver. No failure or delay on the part of the Company in
exercising any right, power, or privilege hereunder or under any of the
documents delivered in connection with this Agreement shall operate as a waiver
of such right, power, or privilege; nor shall any single or partial exercise of
any such right, power, or privilege preclude any other or future exercise
thereof or the exercise of any other right, power or privilege.
(e) Construction. This Agreement and any documents or instruments
delivered pursuant hereto or in connection herewith shall be construed without
regard to the identity of the person who drafted the various provisions of the
same. Each and every provision of this Agreement and such other documents and
instruments shall be construed as though all of the parties participated equally
in the drafting of the same. Consequently, the Restricted Party acknowledges and
agrees that any rule of construction that a document is to be construed against
the drafting party shall not be applicable either to this Agreement or such
other documents and instruments.
(f) Forum. The Restricted Party consents to the in personam
jurisdiction of any state or federal court in Alexandria, Virginia and waives
any objection to the venue of any such suit, action or proceeding. In the event
that the Restricted Party institutes a proceeding involving this Agreement in a
jurisdiction outside Alexandria, Virginia, the Restricted Party shall indemnify
the Company and its affiliates for any losses and expenses that may result from
the failure to institute such proceeding only in a state or federal court in
Alexandria, Virginia, including without limitation any additional expenses
incurred as a result of litigating in another jurisdiction, such as reasonable
fees and expenses of local counsel and travel and lodging expenses for parties,
witnesses, experts and support personnel.
[Signature page follows]
SIGNATURE PAGE
TO
NON-COMPETITION AGREEMENT
IN WITNESS WHEREOF, the Restricted Party has duly executed this
Agreement as of the day and year first above written.
RESTRICTED PARTY
Signature:
Printed Name:
EXHIBIT C
Form of Non-compete Agreement
Non-competition Agreement
THIS NON-COMPETITION AGREEMENT (this "Agreement") entered into this ___
day of July, 1999 (the "Effective Date"), by the undersigned individual (the
"Restricted Party") for the benefit of Prime Medical Services, Inc., a Delaware
corporation (the "Company") and the Company's affiliates.
WHEREAS, the Company, through a subsidiary, has acquired certain
lithotripsy equipment from the Restricted Party and certain affiliates of the
Restricted Party; and
WHEREAS, as a material inducement for the Company's purchase of such
equipment, the Restricted Party has agreed, among other things, not to engage in
certain competitive activities, or assist or participate with any other person
or entity engaging in such activities, as provided herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, the Restricted Party
hereby covenants and agrees as follows:
1. Agreement. The Restricted Party hereby covenants and agrees that,
until the expiration of the Restriction Period (as defined below), the
Restricted Party will not, directly or indirectly, either through any kind of
ownership (other than ownership of securities of a publicly held corporation of
which the Restricted Party owns less than five percent (5%) of any class of
outstanding securities), or as a principal, agent, employer, advisor,
consultant, co-partner or in any individual or representative capacity whatever,
either for the Restricted Party's own benefit or for the benefit of any other
person, corporation or other entity, without the prior written consent of the
Company, commit any of the following acts described in paragraphs (a) through
(c) below, which acts shall be considered violations of this covenant not to
compete:
(a) Lithotripsy Services. Except as permitted pursuant to paragraph (d)
below, directly or indirectly provide lithotripsy services, including without
limitation, patient lithotripsy services, lithotripsy management services,
lithotripter leasing, or similar lithotripsy services, anywhere within fifty
(50) miles of Columbia Reston Hospital Center in Reston, Virginia. The area
described in the preceding sentence is hereinafter referred to as the
"Restricted Area." Notwithstanding the foregoing, the passive ownership interest
by Restricted Party in that certain lithotripsy partnership described on
Exhibit-A hereto shall not be deemed a violation by Restricted Party of this
paragraph (a); provided, however, that Restricted Party agrees that, during the
term of this Agreement, Restricted Party shall not increase its ownership in
such lithotripsy partnership.
(b) Interference with Business Relationships. Directly or indirectly
request or advise any patient or physician or any other person, corporation or
other entity having a business relationship with the Company or any of the
Company's affiliates to withdraw, curtail, or cancel its business with such
entity.
(c) Solicitation of Employees. Directly or indirectly hire any employee
of the Company or any of the Company's affiliates or induce or attempt to
influence any employee of the Company or any of the Company's affiliates to
terminate his or her employment with such entity.
(d) Medical Judgment. Nothing in this Agreement shall be construed to
limit or infringe upon the professional medical judgment or ability to practice
medicine of the Restricted Party, if the Restricted Party is a physician
(including, but not limited to, the selection of appropriate facilities for
medical care), and no exercise of professional medical judgment or act
constituting the practice of medicine shall be considered a violation of this
Agreement.
2. Restriction Period. For purposes of this Agreement, the
"Restriction Period" shall begin on the Effective Date and continue until five
(5) years after the Effective Date.
3. General. For purposes of this Agreement, the Company's
affiliates shall include its current and future (throughout the Restriction
Period) subsidiaries and affiliates.The Restricted Party has reviewed and
carefully considered the provisions of this Agreement and, having done so,
agrees that the restrictions set forth herein (a) are fair and reasonable with
respect to time, geographic area and scope, (b) are not unduly burdensome, and
(c) are reasonably required for the protection of the legitimate interests of
the Company and its affiliates.
The Restricted Party agrees that a violation on its part of any
covenant contained in this Agreement will cause the Company and its affiliates
irreparable damage for which remedies at law may be insufficient, and for that
reason, agrees that the Company and its affiliates shall each, independently be
entitled as a matter of right to equitable remedies, including specific
performance and injunctive relief, therefor. The right to specific performance
and injunctive relief shall be cumulative and in addition to whatever other
remedies, at law or in equity, may be available, including, specifically,
recovery of additional damages.
4. Miscellaneous.
(a) Collateral Agreements, Amendments, and Waivers. This Agreement
(together with the documents delivered pursuant hereto) supersedes all prior
documents, understandings, and agreements, oral or written, relating to these
transactions and constitutes the entire understanding among the parties with
respect to the subject matter hereof. Any modification or amendment to, or
waiver of, any provision of this Agreement (or any document delivered pursuant
to this Agreement unless otherwise expressly provided therein) may be made only
by an instrument in writing executed by the Company.
(b) Expenses. The Restricted Party shall pay all costs and expenses
incurred by it in connection with this Agreement, including the fees and
disbursements of its counsel.
(c)Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws, such
provision shall be fully severable, this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this
Agreement.
(d) Waiver. No failure or delay on the part of the Company in
exercising any right, power, or privilege hereunder or under any of the
documents delivered in connection with this Agreement shall operate as a waiver
of such right, power, or privilege; nor shall any single or partial exercise of
any such right, power, or privilege preclude any other or future exercise
thereof or the exercise of any other right, power or privilege.
(e) Construction. This Agreement and any documents or instruments
delivered pursuant hereto or in connection herewith shall be construed without
regard to the identity of the person who drafted the various provisions of the
same. Each and every provision of this Agreement and such other documents and
instruments shall be construed as though all of the parties participated equally
in the drafting of the same. Consequently, the Restricted Party acknowledges and
agrees that any rule of construction that a document is to be construed against
the drafting party shall not be applicable either to this Agreement or such
other documents and instruments.
(f) Forum. The Restricted Party consents to the in personam
jurisdiction of any state or federal court in Alexandria, Virginia and waives
any objection to the venue of any such suit, action or proceeding. In the event
that the Restricted Party institutes a proceeding involving this Agreement in a
jurisdiction outside Alexandria, Virginia, the Restricted Party shall indemnify
the Company and its affiliates for any losses and expenses that may result from
the failure to institute such proceeding only in a state or federal court in
Alexandria, Virginia, including without limitation any additional expenses
incurred as a result of litigating in another jurisdiction, such as reasonable
fees and expenses of local counsel and travel and lodging expenses for parties,
witnesses, experts and support personnel.
[Signature page follows]
SIGNATURE PAGE
TO
NON-COMPETITION AGREEMENT
IN WITNESS WHEREOF, the Restricted Party has duly executed this
Agreement as of the day and year first above written.
RESTRICTED PARTY
Signature:
Printed Name:
EXHIBIT A
TO NON-COMPETITION AGREEMENT
DESCRIPTION OF EXISTING INVESTMENT
