1
================================================================================
ASSET PURCHASE AGREEMENT
dated as of
April 28, 1998
by and among
AMERICAN PHYSICIAN PARTNERS, INC.
(a Delaware corporation),
VALLEY IMAGING PARTNERS, INC.
(a California corporation),
LXL, LTD.
(a California partnership)
and
the Partners of LXL, LTD.
================================================================================
2
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section_1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section_1.2 Rules of Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section_2.1 Purchased Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section_2.2 Subsequent Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III ASSUMED LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section_3.1 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV PURCHASE PRICE AND CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section_4.1 Purchase Price and Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . 5
Section_4.2 Closing and Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section_4.3 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section_4.4 Certain Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section_4.5 Closing Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER AND PARTNERS . . . . . . . . . . . . . . . . . . . . 6
Section_5.1 Organization and Good Standing; Qualification . . . . . . . . . . . . . . . . . . . . . . . . 6
Section_5.2 Authorization and Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section_5.3 Title to Purchased Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section_5.4 Condition of Tangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section_5.5 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section_5.6 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section_5.7 Contracts and Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section_5.8 Continuity of Business Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section_5.9 Subsidiaries and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section_5.10 Absence of Conflicting Agreements or Required Consents . . . . . . . . . . . . . . . . . . . 7
Section_5.11 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section_5.12 Litigation and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section_5.13 No Violation of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section_5.14 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section_5.15 No Other Agreements to Sell the Assets of the Seller's Business . . . . . . . . . . . . . . . 8
Section_5.16 Lease Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section_5.17 Real and Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section_5.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section_5.19 Filing Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section_5.20 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Section_5.21 Accounts Receivable; Payors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Section_5.22 Accounts Payable; Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Section_5.23 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Section_5.24 Licenses, Authorization and Provider Programs . . . . . . . . . . . . . . . . . . . . . . . 110
Section_5.25 Inspections and Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section_5.26 Proprietary Rights and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section_5.27 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section_5.28 Banking Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section_5.29 Fraud and Abuse and Self Referral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section_5.30 Restrictions on Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section_5.31 Agreements in Full Force and Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Section_5.32 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
i
3
Section_5.33 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Section_5.34 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER AND APP . . . . . . . . . . . . . . . . . . . . . . 142
Section_6.1 Organization and Good Standing; Qualification . . . . . . . . . . . . . . . . . . . . . . . 142
Section_6.2 Authorization and Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Section_6.3 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Section_6.4 Intentionally omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Section_6.5 Absence of Conflicting Agreements or Required Consents . . . . . . . . . . . . . . . . . . 143
Section_6.6 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Section_6.7 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Section_6.8 Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
ARTICLE VII PRE-CLOSING COVENANTS OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
ARTICLE VIII PRE-CLOSING COVENANTS OF APP AND BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . 154
ARTICLE IX CONDITIONS PRECEDENT OF APP AND BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE X CONDITIONS PRECEDENT OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
ARTICLE XI CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Section_11.1 Deliveries of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Section_11.2 Deliveries of APP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
ARTICLE XII CERTAIN ADDITIONAL AGREEMENTS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . 175
ARTICLE XIII POST CLOSING MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
Section_13.1 Further Instruments of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
ARTICLE XIV REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
Section_14.1 Indemnification by Seller and the Partners . . . . . . . . . . . . . . . . . . . . . . . . 175
Section_14.2 Indemnification by APP and Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
Section_14.3 Conditions of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Section_14.4 Remedies Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section_14.5 Costs, Expenses and Legal Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section_14.6 Tax Benefits; Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE XV TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE XVI NONDISCLOSURE OF CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section_16.1 Non-Disclosure Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section_16.2 Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section_16.3 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XVII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section_17.1 Amendment; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section_17.2 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section_17.3 Parties in Interest; No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . 19
Section_17.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section_17.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section_17.6 Survival of Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . 19
Section_17.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section_17.8 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
Section_17.9 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
Section_17.10 Reference to Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
Section_17.11 Confidentiality; Publicity and Disclosures . . . . . . . . . . . . . . . . . . . . . . . . 220
Section_17.12 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
Section_17.13 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
Section_17.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
Section_17.15 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
ii
4
SCHEDULES
Schedule 2.1(a) Personal Property
Schedule 3.1 Assumed Liabilities
Schedule 4.4(a) Certain Prorations
Schedule 5.3(a) Claims, Liabilities, Liens and Pledges
Schedule 5.3(b) Permitted Encumbrances
Schedule 5.4 Condition of Tangible Assets
Schedule 5.5 Consents and Approvals
Schedule 5.6 Governmental Authorizations
Schedule 5.7 Contracts and Commitments
Schedule 5.8 Continuity of Business Enterprise
Schedule 5.9 Subsidiaries and Investments
Schedule 5.10 Absence of Conflicting Agreements or Required Consents
Schedule 5.11 No Undisclosed Liabilities
Schedule 5.12 Litigation and Claims
Schedule 5.14 Contracts and Commitments
Schedule 5.16 Lease Agreements
Schedule 5.18(b) Environmental Matters
Schedule 5.18(d) Environmental Audits
Schedule 5.20 Insurance Policies
Schedule 5.27(b) Payment of Taxes
Schedule 5.27(c) No Pending Deficiencies, Delinquencies, Assessments or Audits
Schedule 5.30 Restrictions on Business Activities
Schedule 5.34 Finders' Fees
Schedule 6.3 Governmental Authorizations
Schedule 6.5 Absence of Conflicting Agreements or Required Consents
5
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement"), dated as of April
28, 1998, is by and among American Physician Partners, Inc., a Delaware
corporation ("APP"), Valley Imaging Partners, Inc., a California corporation
and a wholly-owned subsidiary of APP (collectively, "Buyer") and LXL, LTD., a
California partnership ("LXL"), and the Partners (collectively, "Seller").
RECITALS
A. Seller owns certain assets and equipment in connection with
the operation of diagnostic imaging centers (the "Business").
B. Buyer is a wholly-owned subsidiary of APP. APP is engaged in
the business of owning, operating and acquiring the assets of, and managing the
non-medical aspects of, radiology practices and diagnostic imaging centers.
C. Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer certain of the assets and other rights related to the Business,
(which assets and rights are defined in Section 2.1 as the "Purchased Assets"),
and to assume certain liabilities of Seller relating thereto, as set forth
herein, on the terms and conditions in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the preceding recitals and the
mutual representations, warranties, covenants and agreements set forth herein,
the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below:
"Affiliate" with respect to any person shall mean a person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such person.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"Assumed Liabilities" shall have the meaning set forth in Section 3.1.
"APP" shall have the meaning set forth in the preamble to this
Agreement.
"Best knowledge" or "to the knowledge of" and similar phrases shall
mean (i) in the case of a natural person, the particular fact was known, or not
known, as the context requires, to such person after diligent investigation and
inquiry by such person, and (ii) in the case of an entity, the particular fact
was known, or not known, as the context requires, to any Stockholder, director
or executive officer of such entity after diligent investigation and inquiry by
the executive officers of such entity.
"Business" shall have the meaning set forth in the Recitals.
"Buyer" shall have the meaning set forth in the preamble to this
Agreement.
"Claim Notice" shall have the meaning set forth in Section 14.3(a).
1
6
"Closing" shall mean the closing of the transactions contemplated by
this Agreement as set forth in Article IV.
"Closing Date" shall have the meaning set forth in Section 4.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Confidential Information" shall mean all trade secrets and other
confidential and/or proprietary information of the particular person,
including, but not limited to, information derived from reports, processes,
data, know-how, software programs, improvements, inventions, strategies,
compensation structures, reports, investigations, research, work in progress,
codes, marketing and sales programs and plans, financial projections, cost
summaries, formulae, contract analyses, financial information, forecasts,
confidential filings with any state or federal agency, and all other
confidential concepts, methods of doing business, ideas, materials or
information prepared or performed for, by or on behalf of such person by its
employees, officers, directors, agents, representatives, or consultants.
"Damages" shall have the meaning set forth in Section 14.1.
"Deposits" shall have the meaning set forth in Section 2.1(d)(v).
"Election Period" shall have the meaning set forth in Section 14.3(a).
"Encumbrance" shall mean any charge, claim, community property
interest, condition equitable interest, lien, option, pledge, security
interest, right of first refusal, or restriction of any kind, including any
restriction on use, voting, transfer, receipt of income or exercise of any
other attribute of ownership.
"Environmental Laws" shall have the meaning set forth in Section
5.18(e).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Indemnified Party" shall have the meaning set forth in Section
14.3(a).
"Indemnifying Party" shall have the meaning set forth in Section
14.3(a).
"Indemnity Notice" shall have the meaning set forth in Section
14.3(d).
"Insurance Policies" shall have the meaning set forth in Section 5.20.
"IRS" shall mean the Internal Revenue Service.
"Lease Assignments" shall have the meaning set forth in Section
11.1(c).
"Lease Agreements" shall have the meaning set forth in Section 5.15.
"Material Adverse Effect" shall mean a material adverse effect on the
assets, properties, business, operations, condition (financial or otherwise),
liabilities or results of operations of the Person or Persons being referred
to, taken as a whole, in consideration of all relevant facts and circumstances.
"Medical Waste" shall mean (i) pathological waste, (ii) blood, (iii)
sharps, (iv) wastes from surgery or autopsy, (v) dialysis waste, including
contaminated disposable equipment and supplies, (vi) cultures and stocks of
infectious agents and associated biological agents, (vii) contaminated animals,
(viii) isolation wastes, (ix) contaminated equipment, (x) laboratory waste,
(xi) any substance, pollutant, material, or contaminant listed or regulated
under any Medical Waste Law, and (xii) other biological waste and discarded
materials contaminated with or exposed to blood, excretion, or secretions from
human beings or animals.
2
7
"Medical Waste Laws" shall mean the following, including regulations
promulgated and orders issued thereunder, as in effect of the date hereof and
the Closing Date: (i) the MWTA, (ii) the U.S. Public Vessel Medical Waste Anti-
Dumping Act of 1988, 33 USCA Sections 2501 et seq., (iii) the Marine
Protection, Research, and Sanctuaries Act of 1972, 33 USCA Sections 1401 et
seq., (iv) The Occupational Safety and Health Act, 29 USCA Sections 651 et
seq., (v) the United States Department of Health and Human Services, National
Institute for Occupational Safety and Health, Infectious Waste Disposal
Guidelines, Publication No. 88-119, and (vi) any other federal, state,
regional, county, municipal, or other local laws, regulations, and ordinances
insofar as they are applicable to any Seller's assets or operations and purport
to regulate Medical Waste or impose requirements related to Medical Waste.
"Merger Agreement" shall mean that certain Agreement and Plan of
Reorganization and Merger dated June 27, 1997, as amended, by and between APP,
Buyer and the Stockholders.
"MWTA" shall mean the Medical Waste Tracking Act of 1988, 42 U.S.C.
Sections 6992, et seq.
"Partners" shall mean the individuals listed on Exhibit A attached
hereto who are all of the partners of Seller.
"Payors" shall mean any and all third-party payors including, but not
limited to, Medicare and Medicaid programs, insurance companies, health
maintenance organizations, preferred provider organizations, independent
practice associations, hospitals, hospital systems, integrated delivery
systems, CHAMPUS, and any and all other private or governmental entity
rendering payment to Seller for professional medical or technical services.
"Person" shall mean any natural person, corporation, partnership,
joint venture, limited liability company, association, group, organization or
other entity.
"Personal Property" shall have the meaning set forth in Section
2.1(b).
"Purchased Assets" shall have the meaning set forth in Section 2.1.
"Regulated Activity" shall have the meaning set forth in Section
5.18(e).
"Schedules" shall mean the schedules attached hereto as of the date
hereof or otherwise delivered by any party hereto pursuant to the terms hereof,
as such may be amended or supplemented from time to time pursuant to the
provisions hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller" shall have the meaning set forth in the preamble to this
Agreement.
"Stockholders" shall mean all of the stockholders of Valley Radiology
Medical Group, Inc.
"Tax Returns" shall include all federal, state, local or foreign
income, excise, corporate, franchise, property, sales, use, payroll,
withholding, provider, environmental, duties, value added and other tax returns
(including information returns).
"Third Party Claim" shall have the meaning set forth in Section
14.3(a).
"Unassumed Liabilities" shall have the meaning set forth in Section
3.1.
Section 1.2 Rules of Interpretation. The definitions set forth
in Section 1.1 shall be equally applicable to both the singular and the
plural forms of the terms therein defined and shall cover both genders.
3
8
Unless otherwise indicated "herein," "hereby," "hereunder," "hereof,"
"hereinabove," "hereinafter" and other equivalent words refer to this Agreement
and not solely to the particular Article, Section or subdivision hereof in
which such word is used.
This Agreement occasionally omits the modifying words "all" and "any"
and the articles "the" and "an," but the fact that a modifier or an article is
absent from one statement and appears in another is not intended to affect the
interpretation of either statement.
Unless otherwise indicated, reference herein to an Article number
(e.g., Article IV) or a Section number (e.g., Section 6.2) shall be construed
to be a reference to the designated Article number of Section number of this
Agreement.
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.1 Purchased Assets. On the Closing Date, Seller shall,
sell, assign, transfer, convey and deliver to Buyer, and Buyer shall acquire,
all right, title and interest of Seller in and to the following assets, rights
and interests used in the operation of the Business excluding the Excluded
Assets (as such term is defined in Section 2.2 below), including the following
assets, rights and interests (collectively, the "Purchased Assets"):
(a) Personal Property. All tangible personal property
(collectively, the "Personal Property") listed in Schedule 2.1(a) hereto;
(b) Insurance Benefits. All benefits, proceeds or any
other amounts payable, if any, under any policy of insurance maintained by
Seller with respect to destruction of, damage to or loss of use of any of the
Purchased Assets;
(c) Warranty Rights. To the extent assignable, all
warranties, guarantees and covenants not to compete, if any, with respect to
the Purchased Assets.
(d) Books and Records. Seller shall make available to
Buyer, and at the Closing Date Buyer shall take possession of, all operating
data and records pertaining to the Purchased Assets.
Section 2.2 Subsequent Actions. If, at any time after the
Closing Date, APP or Buyer shall consider or be advised that any deeds, bills
of sale, assignments, assurances or any other actions or things are necessary
or desirable to vest, perfect or confirm of record or otherwise in APP or Buyer
its right, title or interest in, to or under any of the Purchased Assets or
otherwise to carry out the transactions described in this Agreement, Seller
shall, at the sole cost and expense of Seller, execute and deliver all such
deeds, bills of sale, assignments and assurances and to take and do all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to and under the Purchased
Assets or otherwise to carry out the transactions described in this Agreement.
ARTICLE III
ASSUMED LIABILITIES
Section 3.1 Assumed Liabilities. As of the Closing, Buyer hereby
agrees to assume, satisfy or perform when due only those liabilities and
obligations of Seller as set forth on Schedule 3.1 hereto (the "Assumed
Liabilities"). Other than the Assumed Liabilities, Buyer shall not assume, nor
shall APP, Buyer or any of their respective Affiliates be deemed to have
assumed, guaranteed, agreed to perform or otherwise be bound by, or be
responsible or otherwise liable for, any liability or obligation of any nature
of Seller (whether or not related to the Business), or claims for such
liability or obligation, whether accrued, matured
4
9
or unmatured, liquidated or unliquidated, fixed or contingent, known or unknown
(the "Unassumed Liabilities"). Specifically, and without limiting the
generality of the foregoing, other than the Assumed Liabilities, neither APP,
Buyer nor any of their respective Affiliates shall have any liability or
obligation with respect to or arising out of: (a) acts or omissions of Seller
or any of its Affiliates whether prior or subsequent to the Closing Date,
whether or not in the ordinary course of business; (b) liabilities or
obligations relating to or secured by any portion of the Purchased Assets prior
to the Closing; (c) employee related liabilities (including accrued wages,
vacation, employee-related insurance or deferred compensation claimed by any
person in connection with his or her employment by, or termination of
employment with, Seller or payroll taxes payable or liabilities arising under
any employee benefit plan maintained by Seller); (d) liabilities or obligations
of Seller, including those for attorneys' fees, arising out of any litigation
or other proceeding pending as of the Closing Date or any claim, whether or not
asserted and whether or not liquidated or contingent, arising from acts or the
failure to take any action by Seller or any of its Affiliates prior to the
Closing Date; (e) liabilities for any income or other tax, whether disputed or
not, attributable to Seller for any period or transaction through the Closing;
(f) except as set forth on Schedule 3.1, trade payables which arise prior to
the Closing; (g) claims by any third party payor (including Medicare or
Medi-Cal) or patient with respect to any matter or billing occurring prior to
the Closing; and (h) any other liability or obligation of Seller. All
employment tax liabilities of Seller shall remain the Seller's responsibility
for collection, remittance and tax filing purposes for the period through the
Closing.
ARTICLE IV
PURCHASE PRICE AND CLOSING
Section 4.1 Purchase Price and Allocation of Purchase Price.
(a) Purchase Price. The aggregate purchase price (the
"Purchase Price") for the sale, transfer, assignment, conveyance and delivery
of the Purchased Assets from Seller to Buyer shall be Five Hundred Eighty One
Thousand Seven Hundred Dollars ($581,700) payable by cashier's check or wire
transfer of immediately available funds to one or more accounts designated by
Seller and paid by Buyer to Seller at the Closing.
(b) Allocation of Purchase Price. The Purchase Price
shall be allocated by Buyer and Seller in accordance with Schedule 4.1(b)
hereto.
Section 4.2 Closing and Effective Time. The closing of the
transactions contemplated under this Agreement (the "Closing") shall take place
at the offices of American Physician Partners, Inc., Dallas, Texas at 10:00
a.m. local time on February __, 1998, or such other date as the parties may
mutually agree in writing.
The transfer of the Purchased Assets by Seller to Buyer and Buyer's
assumption of the Assumed Liabilities shall be deemed effective as of 12:01
a.m. on February __, 1998 (the "Effective Time"). The Purchased Assets shall
be deemed to be the property of Buyer from and after the Effective Time, and
Buyer and Seller shall take any and all actions reasonably necessary to carry
out the intent of this Section 4.2.
Section 4.3 Closing Deliveries.
(c) Seller. At the Closing, Seller shall execute and
deliver to Buyer: (i) a Xxxx of Sale substantially in the form attached as
Exhibit A hereto ("Xxxx of Sale"); (ii) the documents required to be delivered
pursuant to Section 11.1 hereof; and (iii) such other instruments as shall be
reasonably requested by Buyer to vest in Buyer title in and to the Purchased
Assets. Buyer shall have possession of the tangible Purchased Assets and the
books and records immediately upon Closing.
(d) Buyer. At the Closing, Buyer shall deliver to
Seller: (i) the Purchase Price; (ii) the documents required to be delivered
pursuant to Section 11.2 hereof; and (iii) such other instruments as shall be
reasonably requested by Seller to complete the assumption of the Assumed
Liabilities by Buyer.
5
10
Section 4.4 Certain Prorations.
(a) The items set forth on Schedule 4.4(a) shall be
prorated or adjusted between the parties hereto as of the Effective Time.
(b) At Closing, each party shall pay or credit to the
other party all sums required to effectuate the prorations and adjustments
contemplated by the provisions of this Section 4.4. If final figures have not
been calculated on any of the adjustments, prorations or reimbursements as of
the Closing, then the parties hereto shall close this transaction using
estimated adjustments, prorations and reimbursements which shall be subject to
later readjustment when such final figures have been calculated. The parties
hereto shall seek to determine the amounts of all prorations, adjustments and
reimbursements required hereunder on or before the Closing, if possible, and no
later than six (6) months following the Closing.
Section 4.5 Closing Expenses.
(a) Seller shall be responsible for the following
expenses (i) obtaining, filing and recording any and all releases,
satisfactions, deeds, UCC termination statements and similar documents required
in order to cause title to the Purchased Assets to be free, clear and
unencumbered except for Permitted Encumbrances (as defined in Section 5.3
hereof) and (ii) all sales, use, transfer and other taxes, if any, required by
or imposed as a result of the transactions contemplated hereby.
(b) Each party shall be responsible for its own
attorneys', accountants' and other advisory fees associated with the closing of
the transactions contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARTNERS
As an inducement to APP and to Buyer to enter into this Agreement, LXL
and each Partner represent and warrant to APP and to Buyer as of the Closing
Date as follows:
Section 5.1 Organization and Good Standing; Qualification. LXL
is a partnership duly organized and validly existing under the laws of the
State of California with all requisite power and authority to own, operate and
lease, its assets and properties and to carry on its business as currently
conducted and as now contemplated, to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement.
Section 5.2 Authorization and Validity. Seller has all requisite
power to enter into this Agreement and all other agreements entered into in
connection with the transactions contemplated hereby and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Seller of this Agreement and the agreements contemplated herein, and the
consummation by Seller of the transactions contemplated hereby and thereby are
within Seller's respective powers and have been duly authorized by all
necessary action on the part of the Partners. This Agreement has been duly
executed by LXL and the Partners, and this Agreement and all other agreements
and obligations entered into and undertaken in connection with the transactions
contemplated hereby to which Seller is a party constitute, or upon execution
will constitute, valid and binding agreements of Seller, enforceable against it
in accordance with their respective terms, except as enforceability may be
limited by bankruptcy or other laws affecting the enforcement of creditors'
rights generally, or by general equity principles, or by public policy.
Section 5.3 Title to Purchased Assets.
(a) Schedule 5.3(a) hereto sets forth a true, correct and
complete list of any charge, claim, community property interest, condition
equitable interest, lien, option, pledge, security interest, right
6
11
of first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income or exercise of any other attribute of
ownership of any kind affecting the Purchased Assets (collectively, the
"Encumbrances").
(b) Seller shall immediately prior to the Closing have
good, clear, record and marketable title to, or valid leasehold interests in,
all of the Purchased Assets, free and clear of all Encumbrances, except as set
forth in Schedule 5.3(b) hereto (the "Permitted Encumbrances"), and, subject to
the Permitted Encumbrances, Seller shall, at the time of the Closing have full
power and right to sell, assign and deliver the Purchased Assets in accordance
with the terms of this Agreement. The delivery to Buyer of the instruments of
transfer of ownership contemplated by this Agreement shall vest valid and
marketable title to the Purchased Assets in Buyer, free and clear of all
Encumbrances, except for the Permitted Encumbrances.
Section 5.4 Condition of Tangible Assets. Except as set forth on
Schedule 5.4, the tangible Personal Property and any other tangible Purchased
Assets are in reasonable operating condition and are sufficient for the
operation of the Business as presently conducted and are in conformity in all
material respects with all applicable laws, ordinances, orders, regulations and
other requirements (including, without limitation, applicable occupational
safety and health laws and regulations) relating thereto currently in effect.
Section 5.5 Consents and Approvals. Except as set forth on
Schedule 5.5, no consent, approval or authorization of, notice to, or
declaration, filing or registration with, any governmental entity or any other
person or entity is required to be made or obtained by Seller in connection
with its execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
Section 5.6 Governmental Authorization. Except as expressly set
forth in Schedule 5.6, and other than consents, filings or notifications
required to be made or obtained by Buyer or APP, the execution, delivery and
performance by Seller of this Agreement and the agreements provided for herein,
and the consummation of the transactions contemplated hereby and thereby by
Seller require no action by or in respect of, or filing with, any governmental
body, agency, official or authority.
Section 5.7 Contracts and Commitments. Except as set forth in
Schedule 5.7, LXL has no contracts or agreements with respect to the Purchased
Assets.
Section 5.8 Continuity of Business Enterprise. Except as set
forth in Schedule 5.8, there has not been any sale, distribution or spin-off of
significant assets of LXL other than in the ordinary course of business within
the (2) two years preceding the date of this Agreement.
Section 5.9 Subsidiaries and Investments. Except as set forth in
Schedule 5.9, LXL does not own, directly or indirectly, any capital stock or
other equity, ownership or proprietary interest in any corporation,
partnership, association, trust, joint venture or other entity (each a "Seller
Subsidiary").
Section 5.10 Absence of Conflicting Agreements or Required
Consents. The execution, delivery and performance by Seller of this Agreement
and any other documents contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (i) except as set forth in Schedule 5.6
and Schedule 5.10 hereto, does not require the consent of any governmental or
regulatory body or authority or any other third party; (ii) will not conflict
with or result in a violation of any provision of LXL's partnership agreement,
(iii) will not conflict with, result in a violation of, or constitute a default
under any law, rule, ordinance, regulation or any ruling, decree,
determination, award, judgment, order or injunction of any court or
governmental instrumentality which is applicable to Seller or by which Seller
or its properties are subject to or bound; (iv) except as set forth in Schedule
5.10, will not conflict with, constitute grounds for termination of, result in
a breach of, constitute a default under, require any notice under, or
accelerate or
7
12
modify, or permit any person to accelerate or modify, any performance required
by the terms of any agreement, instrument, license or permit, to which Seller
is a party or by which Seller or any of its properties are subject to or bound;
and (v) will not create any Encumbrance or restriction upon any of the assets
or properties of Seller.
Section 5.11 No Undisclosed Liabilities. Except as listed in
Schedule 5.11 hereto, Seller does not have any liabilities or obligations of
any nature, whether known or unknown and whether accrued, absolute, contingent
or otherwise, asserted or unasserted, except for liabilities or obligations
reflected or reserved against in Seller's Current Balance Sheet.
Section 5.12 Litigation and Claims. Except as listed in Schedule
5.12 hereto, there are no claims, lawsuits, actions, arbitrations,
administrative or other proceedings, governmental investigations or inquiries
pending, or affecting LXL.
Section 5.13 No Violation of Law. LXL has not been, nor shall be
as of the Closing Date (by virtue of any action, omission to act, contract to
which it is a party or any occurrence or state of facts whatsoever), in
violation of any applicable local, state or federal law, ordinance, regulation,
order, injunction or decree, or any other requirement of any governmental body,
agency, authority or court binding on it, or relating to its properties, assets
or business or its advertising, sales or pricing practices, except for
violations which reasonably, individually or in the aggregate, would not have a
Material Adverse Effect on LXL.
Section 5.14 No Brokers. Seller has not entered into and will not
enter into any agreement, arrangement or understanding with any person or firm
which will result in the obligation of Buyer to pay any finder's fee, brokerage
commission or similar payment.
Section 5.15 No Other Agreements to Sell the Assets of the
Seller's Business. Seller does not have any legal obligation, absolute or
contingent, to any other individual or entity to sell any of the Purchased
Assets.
Section 5.16 Lease Agreements. Schedule 5.16 contains a true,
accurate and complete list of all the lease agreements and license agreements
to which LXL is a party and pursuant to which LXL leases (whether as lessor or
lessee) or licenses (whether as licensor or licensee) any real or personal
property (the "Lease Agreements"). Seller has delivered to Buyer true and
complete copies of all of the Lease Agreements. Each Lease Agreement is valid,
effective and in full force in accordance with its terms, and there is not
under any such lease (i) any existing or claimed material default by Seller or
event of material default or event which with notice or lapse of time, or both,
would constitute a material default by Seller and, individually or in the
aggregate, may reasonably result in a Material Adverse Effect on the Business,
or (ii) any existing material default by any other party under any of the Lease
Agreements or, to the knowledge of Seller, any event of material default or
event which with notice or lapse of time, or both, would constitute a material
default by any such party. There is no pending or threatened reassessment of
any property covered by the Lease Agreements. Seller has obtained the consent
of each landlord or lessor whose consent is required to the assignment of the
Lease Agreements and will, prior to Closing, deliver to Buyer in writing such
consents as are necessary to effect a valid and binding transfer or assignment
of Seller's rights thereunder. Seller has a good, clear, valid and enforceable
leasehold interest under each of the Lease Agreements. The Lease Agreements
are in compliance with all applicable safe harbor provisions promulgated by the
Department of Health and Human Services in connection with the enforcement of
the federal Fraud and Abuse Xxxxxxx, 00 XXX Part 1001 and any similar
applicable state law safe harbor or other exemption provisions.
Section 5.17 Real and Personal Property. Intentionally omitted.
8
13
Section 5.18 Environmental Matters.
(a) LXL has not, within the five (5) years preceding the
date hereof, through the Effective Time, received from any federal, state or
local governmental body, agency, authority or entity, or any other Person, any
written notice, demand, citation, summons, complaint or order or any notice of
any penalty, lien or assessment, and no investigation or review is pending by
any governmental entity, with respect to any (i) alleged violation by LXL of
any Environmental Law (as defined in subsection (e) below) (ii) alleged failure
by LXL to have any environmental permit, certificate, license, approval,
registration or authorization required pursuant to any Environmental Law in
connection with the conduct of its business; or (iii) alleged illegal Regulated
Activity (as defined in subsection (e) below) by LXL.
(b) LXL has not used, transported, disposed of or
arranged for the disposal of (as those terms are defined in and construed under
the Comprehensive Environmental Response, Compensation and Liability Act) any
Hazardous Substance (as defined herein) that would give rise to any
Environmental Liabilities (as defined in subsection (e) below) for LXL under
any applicable Environmental Law that had, or could likely have, a Material
Adverse Effect on LXL. LXL has not engaged in any activity or failed to
undertake any activity which action or failure to act has given, or could
likely give, rise to any Environmental Liabilities or enforcement action by any
federal, state or local regulatory agency or authority, or has resulted, or
could likely result, in any fine or penalty imposed pursuant to any
Environmental Law. Schedule 5.18(b) discloses any known presence of asbestos
in or on LXL's owned or leased premises.
(c) No soil or water in or under any assets currently or
formerly held for use or sale by LXL has been contaminated by any Hazardous
Substance while such assets or premises were owned, leased, operated or
managed, directly or indirectly by LXL where such contamination had or, could
likely have, a Material Adverse Effect on LXL.
(d) Schedule 5.18(d) contains a list of all environmental
audits and other similar reports which have been prepared by, for or concerning
LXL within the five (5) years preceding the date hereof through the Effective
Time with respect to any real property now or previously owned or leased by
LXL, any LXL or any of its predecessors, true and complete copies of which have
been provided to Buyer.
(e) For the purposes of this Section 5.18, the following
terms have the following meanings:
"Environmental Laws" shall mean any and all domestic federal,
state and local laws (including case law), regulations, ordinances,
rules, judgments, orders, decrees, codes, injunctions and permits
relating to the environment or to emissions, discharges or releases of
Hazardous Substances into the environment or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances or the
clean-up or other remediation thereof.
"Environmental Liabilities" shall mean all liabilities of
Seller or any Seller Subsidiary, whether contingent or fixed, which
(i) have arisen, or could likely arise, under Environmental Laws and
(ii) relate to actions occurring or conditions existing on or prior to
the date hereof or the Effective Time.
"Hazardous Substances" shall mean any air pollution, toxic,
radioactive, caustic or otherwise hazardous substance regulated by any
Environmental Law, (including but not limited to, (i) Medical Waste
and (ii) petroleum, its derivatives, by-products and other
hydrocarbons), and any material constituent elements thereof
displaying any of the foregoing characteristics.
"Regulated Activity" shall mean any generation, treatment,
storage, recycling, transportation, disposal or release of any
Hazardous Substances.
Section 5.19 Filing Reports. All returns, reports, plans and
filings of any kind or nature necessary to be filed by LXL with any
governmental agency or authority have been properly completed and
9
14
timely filed in compliance with all applicable requirements, except where
failure to so file would not have a Material Adverse Effect on LXL.
Section 5.20 Insurance Policies. Schedule 5.20 lists and briefly
describes LXL's policies of insurance to which LXL is a party or under which
LXL or any officer, Partner or director thereof is or has been covered at any
time during the last five (5) years preceding the date of this Agreement
relating to the business of LXL (the "Insurance Policies"). Except as set
forth in Schedule 5.20, all of the Insurance Policies are issued by insurers
that are financially sound and reputable, and are valid, outstanding and
enforceable policies, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies and all premiums with respect thereto are
currently paid. All Insurance Policies currently maintained by LXL ("Current
Policies") taken together, (i) provide adequate insurance coverage for the
assets, properties and operations of LXL for all risks normally insured against
by a Person carrying on a substantially similar business or businesses as LXL,
(ii) are sufficient for compliance with legal and contractual requirements to
which LXL is a party or by which any of them may be bound, and (iii) shall be
maintained in force (including the payment of all premiums and compliance with
their terms without interruption) up to and including the Closing Date. True,
complete and correct copies of all Insurance Policies have been provided to
APP. Except as set forth in Schedule 5.20, neither LXL nor any of its
Partners, officers or directors has received any notice or other communication
from any issuer of any Current Policy canceling such policy, materially
increasing any deductibles or retained amounts thereunder, or materially
increasing the annual or other premiums payable thereunder and, to the
knowledge of LXL and its Partners, no such cancellation or increase of
deductibles, retainages or premiums is threatened. Except as set forth in
Schedule 5.20, there are no outstanding claims, settlements or premiums owed
against any Insurance Policy, and all have been given and all potential or
actual claims under any Insurance Policy have been presented in due and timely
fashion. Except as set forth in Schedule 5.20, since January 1, 1993, LXL has
not filed a written application for any professional liability insurance
coverage which has been denied by an insurance agency or carrier. Schedule
5.20 also sets forth a list of all claims under any Insurance Policy in excess
of $10,000 per occurrence filed by LXL during the immediately preceding
three-year period.
Section 5.21 Accounts Receivable; Payors. Intentionally omitted.
Section 5.22 Accounts Payable; Suppliers. Intentionally omitted.
Section 5.23 Inventory. Intentionally omitted.
Section 5.24 Licenses, Authorization and Provider Programs.
Intentionally omitted.
Section 5.25 Inspections and Investigations. Intentionally
omitted.
Section 5.26 Proprietary Rights and Information. Intentionally
omitted.
Section 5.27 Taxes.
(a) Filing of Tax Returns. LXL has duly and timely filed
(in accordance with any extensions duly granted by the appropriate governmental
agency, if applicable) with the appropriate governmental agencies all Tax
Returns and reports required to be filed by the United States or any state or
any political subdivision thereof or any foreign jurisdiction. All such Tax
Returns or reports are complete and accurate in all material respects and
properly reflect the taxes of LXL for the periods covered thereby.
(b) Payment of Taxes. Except for such items as LXL may
be disputing in good faith by proceedings in compliance with applicable law,
which are described in Schedule 5.27(b), (i) LXL has paid all taxes, penalties,
assessments and interest that have become due with respect to any Tax Returns
that it has filed and has properly accrued on its books and records in
accordance with generally accepted accounting principles for all of the same
that have not yet become due and payable and (ii) LXL is not delinquent in the
payment of any tax, assessment or governmental charge.
10
15
(c) No Pending Deficiencies, Delinquencies, Assessments
or Audits. Except as set forth in Schedule 5.27(c), LXL has not received any
notice that any tax deficiency or delinquency has been asserted against LXL or
to the best knowledge of LXL, there is no threat of such assertion. There is
no unpaid assessment, proposal for additional taxes, deficiency or delinquency
in the payment of any of the taxes of LXL that could be asserted by any taxing
authority. There is no taxing authority audit of LXL pending, or to the actual
knowledge of LXL, threatened within the last five (5) years, and the results of
any completed audits are properly reflected in LXL Financial Statements. LXL
has not violated any applicable federal, state, local or foreign tax law.
There are no security interests or liens on any assets of LXL which have
resulted from any failure to pay (or alleged failure to pay) taxes.
(d) No Extension of Limitation Period. LXL has not
granted an extension to any taxing authority of the statute of limitation
period during which any tax liability may be assessed or collected.
(e) All Withholding Requirements Satisfied. All monies
required to be withheld by LXL and paid to governmental agencies for all
income, social security, unemployment insurance, sales, excise, use, and other
taxes have been collected or withheld and paid to the respective governmental
agencies.
(f) Foreign Person. Neither LXL nor any Partner is a
foreign person, as such term is referred to in Section 1445(f)(3) of the Code
and Treasury Regulations Section 1.1445-2.
(g) Safe Harbor Lease. None of the properties or assets
of LXL constitutes property that LXL, APP, Buyer or any Affiliate of APP, will
be required to treat as being owned by another person pursuant to the "Safe
Harbor Lease" provisions of Section 168(f)(8) of the Code prior to repeal by
the Tax Equity and Fiscal Responsibility Act of 1982.
(h) Tax Exempt Entity. None of the assets or properties
of LXL are subject to a lease to a "tax exempt entity" as such term is defined
in Section 168(h)(2) of the Code.
(i) Collapsible Corporation. Intentionally omitted.
(j) Boycotts. LXL has not at any time participated in or
cooperated with any international boycott as defined in Section 999 of the
Code.
(k) Parachute Payments. No payment required or
contemplated to be made by LXL will be characterized as an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Code.
(l) S Corporation. Intentionally omitted.
(m) Personal Holding Companies. LXL is not or has been a
personal holding company within the meaning of Section 542 of the Code.
Section 5.28 Banking Relations. Intentionally omitted.
Section 5.29 Fraud and Abuse and Self Referral. Neither LXL nor
any Partner have engaged in any activities which are prohibited under 42 U.S.C.
Sections 1320a 7, 7a or 7b or 42 U.S.C. Section 1395nn or (subject to the
exceptions or safe harbor provisions set forth in such legislation), or the
regulations promulgated thereunder or pursuant to similar state or local
statutes or regulations, or which are prohibited by applicable rules of
professional conduct.
Section 5.30 Restrictions on Business Activities. Except as
disclosed in Schedule 5.30, there is no material agreement, judgment,
injunction, order or decree binding upon LXL or any Partner, which has
11
16
or reasonably could be expected to have the effect of prohibiting or materially
impairing any current or future business practice of LXL, any acquisition of
property by Seller, or the conduct of business by LXL.
Section 5.31 Agreements in Full Force and Effect. Except as
expressly set forth in Seller's Schedules to this Agreement, all contracts,
agreements, plans, leases, policies and licenses referred to, or required to be
referred to, in Seller's Schedules delivered hereunder are valid and binding,
and are in full force and effect and are enforceable in accordance with their
terms, except to the extent that the validity or enforceability thereof may be
limited by bankruptcy or other laws affecting the enforcement of creditors'
rights generally, or by general equity principles, or by public policy. There
is no pending or, to the knowledge of Seller, threatened bankruptcy, insolvency
or similar proceeding with respect to any other party to such agreements, and
no event has occurred which (whether with or without notice, lapse of time or
the happening or occurrence of any other event) would constitute a default
thereunder by Seller or any other party thereto. Seller has not received any
termination notice regarding a contract with a health care provider in the last
twelve (12) months.
Section 5.32 Statements True and Correct. No representation or
warranty made herein by Seller or any Partner, nor any statement, certificate,
exhibit or instrument to be furnished by Seller or any Partner to APP or Buyer
pursuant to this Agreement, contains or will contain as of the Closing any
untrue statement of material fact or omits or will omit to state a material
fact necessary to make the statements contained herein and therein not
misleading.
Section 5.33 Schedules. All Schedules required by Article V
hereof and attached hereto are true, correct and complete in all material
respects as of the date of this Agreement.
Section 5.34 Finders' Fees. Except as set forth in Schedule 5.34,
no investment banker, broker, finder or other intermediary has been retained by
or is authorized to act on behalf of any of the Partners or Seller who is
entitled to any fee or commission upon consummation of the transactions
contemplated by this Agreement or referred to herein.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER AND APP
Buyer and APP each represents and warrants to Seller as follows:
Section 6.1 Organization and Good Standing; Qualification. Each
of Buyer and APP is a corporation duly organized, validly existing and in good
standing under the laws of the state of California and Delaware, respectively,
with all requisite corporate power and authority to own, operate and lease its
assets and properties and to carry on its business as currently conducted.
Each of Buyer and APP is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where the character of the
property owned or leased by it or the nature of its activities makes such
qualification necessary, except where such failure to be so qualified or in
good standing would not have a Material Adverse Effect on Buyer or APP. Copies
of the certificate of incorporation and all amendments thereto of Buyer and APP
and the bylaws of Buyer and APP, as amended, and copies of the corporate
minutes of Buyer and APP regarding this transaction, all of which have been or
will be made available to Seller for review, are true, correct and complete as
in effect on the date of this Agreement and accurately reflect all material
proceedings of the Stockholders and directors of Buyer and APP (and all
committees thereof) regarding this transaction.
Section 6.2 Authorization and Validity. Each of Buyer and APP
has all requisite corporate power to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The
12
17
execution, delivery and performance by Buyer and APP of this Agreement and the
agreements provided for herein, and the consummation by Buyer and APP of the
transactions contemplated hereby and thereby are within Buyer and APP's
respective corporate powers and have been duly authorized by all necessary
action on the part of Buyer and APP's Board of Directors. This Agreement has
been duly executed by Buyer and APP. This Agreement and all other agreements
and obligations entered into and undertaken in connection with the transactions
contemplated hereby to which Buyer and APP is a party constitute, or upon
execution will constitute, valid and binding agreements of Buyer and APP,
enforceable against it in accordance with their respective terms, except as may
be limited by bankruptcy or other laws affecting creditors' rights generally,
or by general equity principles, or by public policy.
Section 6.3 Governmental Authorization. Except as expressly set
forth in Schedule 6.3, and other than consents, filings or notifications
required to be made or obtained by Buyer and APP, the execution, delivery and
performance by Buyer and APP of this Agreement and the agreements provided for
herein, and the consummation of the transactions contemplated hereby and
thereby by Buyer and APP, to the best knowledge of Buyer and APP, requires no
action by or in respect of, or filing with, any governmental body, agency,
official or authority.
Section 6.4 Intentionally omitted.
Section 6.5 Absence of Conflicting Agreements or Required
Consents. To the best knowledge of Buyer and APP, the execution, delivery and
performance of this Agreement by Buyer and/or APP and any other documents
contemplated hereby (with or without the giving of notice, the lapse of time,
or both): (i) except as set forth in Schedule 6.3 and Schedule 6.5 hereto, does
not require the consent of any governmental or regulatory body or authority or
any other third party; (ii) will not conflict with any provision of Buyer's or
APP's certificate of incorporation or bylaws; (iii) will not conflict with,
result in a violation of, or constitute a default under any law, ordinance,
regulation, ruling, judgment, order or injunction of any court or governmental
instrumentality to which Buyer or APP is a party or by which Buyer or APP or
their or its properties are subject to or bound; and (iv) except as set forth
in Schedule 6.5, will not conflict with, constitute grounds for termination of,
result in a breach of, constitute a default under, require any notice under, or
accelerate or permit the acceleration of any performance required by the terms
of any agreement, instrument, license or permit, material to this transaction,
to which Buyer or APP is a party or by which APP or any of its respective
properties are bound.
Section 6.6 Statements True and Correct. No representation or
warranty made herein by Buyer or APP, nor any statement, certificate or
instrument to be furnished by Buyer or APP to Seller or a Stockholder pursuant
to this Agreement, contains or will contain as of the Effective Time any untrue
statement of material fact or omits or will omit to state a material fact
necessary to make the statements contained herein and therein not misleading.
Section 6.7 Schedules. All Schedules required by Article VI
hereof and attached hereto are true, correct and complete in all material
respects as of the date of this Agreement.
Section 6.8 Finder's Fees. No investment banker, broker, finder
or other intermediary has been retained by or is authorized to act on behalf of
Buyer or APP who is entitled to any fee or commission upon consummation of the
transactions contemplated by this Agreement or referred to herein.
ARTICLE VII
PRE-CLOSING COVENANTS OF SELLER
Intentionally Omitted.
13
18
ARTICLE VIII
PRE-CLOSING COVENANTS OF APP AND BUYER
Intentionally Omitted.
ARTICLE IX
CONDITIONS PRECEDENT OF APP AND BUYER
Intentionally Omitted.
ARTICLE X
CONDITIONS PRECEDENT OF SELLER
Intentionally Omitted.
ARTICLE XI
CLOSING DELIVERIES
Section 11.1 Deliveries of Seller. At or prior to the Closing
Date, Seller shall deliver to Buyer the following, all of which shall be in a
form satisfactory to Buyer and APP:
(a) Xxxx of Sale;
(b) all authorizations, consents, approvals, permits and
licenses referenced in Section 5.5;
(c) an assignment to Buyer of (i) each lease for real or
personal property described on Schedule 5.16 (the "Lease Assignments") and (ii)
all contracts described on Schedule 5.7 which can be assigned to Buyer ("Non-
Payor Contract Assignments"); and
(d) such other instrument or instruments of transfer
prepared by Buyer as shall be necessary or appropriate, as Buyer or its counsel
shall reasonably request, to carry out and effect the purpose and intent of
this Agreement.
Section 11.2 Deliveries of APP. At or prior to the Closing Date,
APP shall deliver to Seller the following, all of which shall be in a form
satisfactory to Seller:
(a) a copy of resolutions of the Board of Directors of
APP authorizing the execution, delivery and performance of this Agreement, and
all related documents and agreements, certified by APP's Secretary as being
true and correct copies of the originals thereof subject to no modifications or
amendments;
(b) the Purchase Price in accordance with Article IV
hereof;
(c) a certificate of the Secretary of Buyer certifying as
to the incumbency of the officers of Buyer who have executed documents
delivered at the Closing on behalf of Buyer,
(d) a certificate, dated within ten (10) days prior to
the Closing Date, of the Secretary of State of Delaware establishing that APP
and Buyer, respectively, are in existence, have paid all franchise
14
19
or similar taxes, if any, and, if applicable, otherwise are in good standing to
transact business in the state of Delaware and California, respectively; and
(e) certificates (or photocopies thereof), dated within
ten (10) days prior to the Closing Date, of the Secretaries of State of the
states in which Buyer and APP are qualified to do business, to the effect that
Buyer and APP are qualified to do business and, if applicable, are in good
standing as foreign corporations in such state;
ARTICLE XII
CERTAIN ADDITIONAL AGREEMENTS OF THE PARTIES
Intentionally omitted.
ARTICLE XIII
POST CLOSING MATTERS
Section 13.1 Further Instruments of Transfer. Following the
Closing, at the request of Buyer and at Buyer's sole cost and expense, the
Partners and Seller shall deliver any further instruments of transfer and take
all reasonable action as may be necessary or appropriate to carry out the
purpose and intent of this Agreement.
ARTICLE XIV
REMEDIES
Section 14.1 Indemnification by Seller and the Partners. Subject
to the terms and conditions of this Article XIV, Seller and the Partners
jointly and severally agree to indemnify, defend and hold APP and Buyer and
their respective directors, officers, members, managers, employees, agents,
attorneys and Affiliates harmless from and against all losses, claims,
obligations, demands, assessments, penalties, liabilities, costs, damages,
reasonable attorneys' fees and expenses (collectively, "Damages") asserted
against or incurred by such indemnitees arising out of or resulting from:
(a) a breach of any representation, warranty or covenant
(without giving effect to any Material Adverse Effect qualifier contained as
part of any such representation or warranty) of Seller contained herein or in
any Schedule or certificate delivered hereunder;
(b) any violation (or alleged violation) by Seller of state
or federal laws governing health care fraud and abuse (including, but not
limited to, fraud and abuse in the Medicare and Medicaid programs) occurring on
or before the Closing Date, or any overpayment or obligation (or alleged
overpayment or obligation) arising out of or resulting from claims submitted to
any Payor on or before the Closing Date, and
(c) any liability under the Securities Act, the Exchange Act
or any other federal or state "blue sky" or securities law or regulation, at
common law or otherwise, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact relating to Seller and provided to
APP or its counsel by Seller, specifically for inclusion in any preliminary
prospectus, registration statement or prospectus forming a part thereof, or any
amendment thereof or supplement thereto), arising out of or based upon any
omission or alleged omission to state therein a material fact relating to
Seller (including its Subsidiaries) required to be stated therein or necessary
to make the statements therein not misleading.
Section 14.2 Indemnification by APP and Buyer. Subject to the
terms and conditions of this Article XIV, APP and Buyer jointly and severally
hereby agree to indemnify, defend and hold Seller and its respective agents,
attorneys and Affiliates harmless from and against all Damages asserted against
or incurred by such indemnitees arising out of or resulting from a breach by
APP or Buyer of any
15
20
representation, warranty or covenant (without giving effect to any Material
Adverse Effect qualifier contained as part of any such representation or
warranty) of APP or Buyer contained herein or in any schedule or certificate
delivered hereunder.
Section 14.3 Conditions of Indemnification. All claims for
indemnification under this Agreement shall be asserted and resolved as follows:
(a) A party claiming indemnification under this Agreement
(an "Indemnified Party") shall promptly (and, in the event, at least ten (10)
days prior to the due date for any responsive pleadings, filings or other
documents) (i) notify the party from whom indemnification is sought (the
"Indemnifying Party") of any third-party claim or claims asserted against the
Indemnified Party ("Third Party Claim") that could give rise to a right of
indemnification under this Agreement and (ii) transmit to the Indemnifying
Party a written notice ("Claim Notice") describing in reasonable detail the
nature of the Third Party Claim, a copy of all papers served with respect to
such claim (if any), an estimate of the amount of Damages attributable to the
Third Party Claim and the basis of the Indemnified Party's request for
indemnification under this Agreement. Except as set forth in Section 14.6, the
failure to promptly deliver a Claim Notice shall not relieve the Indemnifying
Party of its obligations to the Indemnified Party with respect to the related
Third Party Claim except to the extent that the resulting delay is materially
prejudicial to the defense of such claim.
Within thirty (30) days after receipt of any Claim
Notice (the "Election Period"), the Indemnifying Party shall notify the
Indemnified Party (i) whether the Indemnifying Party disputes its potential
liability to the Indemnified Party under this Article XIV with respect to such
Third Party Claim and (ii) whether the Indemnifying Party desires, at the sole
cost and expense of the Indemnifying Party, to defend the Indemnified Party
against such Third Party Claim.
(b) If the Indemnifying Party notifies the Indemnified
Party within the Election Period that the Indemnifying Party elects to assume
the defense of the Third Party Claim, then the Indemnifying Party shall have
the right to defend, at its sole cost and expense, such Third Party Claim by
all appropriate proceedings, which proceedings shall be prosecuted diligently
by the Indemnifying Party to a final conclusion or settled at the discretion of
the Indemnifying Party in accordance with this Section 14.3(b). The
Indemnifying Party shall have full control of such defense and proceedings,
including any compromise or settlement thereof. The Indemnified Party is
hereby authorized, at the sole cost and expense of the Indemnifying Party (but
only if the Indemnified Party is entitled to indemnification hereunder), to
file, during the Election Period, any motion, answer or other pleadings that
the Indemnified Party shall deem necessary or appropriate to protect its
interests or those of the Indemnifying Party and not prejudicial to the
Indemnifying Party (it being understood and agreed that if an Indemnified Party
takes any such action that is prejudicial and causes a final adjudication that
is adverse to the Indemnifying Party, the Indemnifying Party shall be relieved
of its obligations hereunder with respect to such Third Party Claim). If
requested by the Indemnifying Party, the Indemnified Party agrees, at the sole
cost and expense of the Indemnifying Party, to cooperate with the Indemnifying
Party and its counsel in contesting any Third Party Claim that the Indemnifying
Party elects to contest, including, without limitation, the making of any
related counterclaim against the person asserting the Third Party Claim or any
cross-complaint against any person. The Indemnified Party may participate in,
but not control, any defense or settlement of any Third Party Claim controlled
by the Indemnifying Party pursuant to this Section 14.3(b) and shall bear its
own costs and expenses with respect to such participation; provided, however,
that if the named parties to any such action (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party, and the
Indemnified Party has been advised by counsel that there may be one or more
legal defenses available to it that are different from or additional to those
available to the Indemnifying Party, then the Indemnified Party may employ
separate counsel at the expense of the Indemnifying Party, and upon written
notification thereof, the Indemnifying Party shall not have the right to assume
the defense of such action on behalf of the Indemnified Party; provided further
that the Indemnifying Party shall not, in connection with any one such action
or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for the Indemnified Party, which firm shall be designated
in writing by the Indemnified Party.
16
21
(c) If the Indemnifying Party fails to notify the
Indemnified Party within the Election Period that the Indemnifying Party elects
to defend the Indemnified Party pursuant to Section 14.3(b), or if the
Indemnifying Party elects to defend the Indemnified Party pursuant to Section
14.3(b) but fails diligently and promptly to prosecute or settle the Third
Party Claim, then the Indemnified Party shall have the right to defend, at the
sole cost and expense of the Indemnifying Party (if the Indemnified Party is
entitled to indemnification hereunder), the Third Party Claim by all
appropriate proceedings, which proceedings shall be promptly and vigorously
prosecuted by the Indemnified Party to a final conclusion or settled. The
Indemnified Party shall have full control of such defense and proceedings,
provided, however, that the Indemnified Party may not enter into, without the
Indemnifying Party's consent, which shall not be unreasonably withheld, any
compromise or settlement of such Third Party Claim. Notwithstanding the
foregoing, if the Indemnifying Party has delivered a written notice to the
Indemnified Party to the effect that the Indemnifying Party disputes its
potential liability to the Indemnified Party under this Article XIV and if such
dispute is resolved in favor of the Indemnifying Party, the Indemnifying Party
shall not be required to bear the costs and expenses of the Indemnified Party's
defense pursuant to this Section or of the Indemnifying Party's participation
therein at the Indemnified Party's request, and the Indemnified Party shall
reimburse the Indemnifying Party in full for all costs and expenses of such
litigation. The Indemnifying Party may participate in, but not control, any
defense or settlement controlled by the Indemnified Party pursuant to this
Section 14.3(c), and the Indemnifying Party shall bear its own costs and
expenses with respect to such participation; provided, however, that if the
named parties to any such action (including any impleaded parties) include both
the Indemnifying Party and the Indemnified Party, and the Indemnifying Party
has been advised by counsel that there may be one or more legal defenses
available to it that are different from or additional to those available to the
Indemnified Party, then the Indemnifying Party may employ separate counsel and
upon written notification thereof, the Indemnified Party shall not have the
right to assume the defense of such action on behalf of the Indemnifying Party.
(d) In the event any Indemnified Party should have a
claim against any Indemnifying Party hereunder that does not involve a Third
Party Claim, the Indemnified Party shall transmit to the Indemnifying Party a
written notice (the "Indemnity Notice") describing in reasonable detail the
nature of the claim, an estimate of the amount of damages attributable to such
claim and the basis of the Indemnified Party's request for indemnification
under this Agreement. If the Indemnifying Party does not notify the
Indemnified Party within sixty (60) days from its receipt of the Indemnity
Notice that the Indemnifying Party disputes such claim, the claim specified by
the Indemnified Party in the Indemnity Notice shall be deemed a liability of
the Indemnifying Party hereunder. If the Indemnifying Party has timely
disputed such claim, as provided above, such dispute shall be resolved by
litigation in an appropriate court of competent jurisdiction if the parties do
not reach a settlement of such dispute within thirty (30) days after notice of
a dispute is given.
(e) Payments of all amounts owing by an Indemnifying
Party pursuant to this Article XIV relating to a Third Party Claim shall be
made within thirty (30) days after the latest of (i) the settlement of such
Third Party Claim, (ii) the expiration of the period for appeal of a final
adjudication of such Third Party Claim, or (iii) the expiration of the period
for appeal of a final adjudication of the Indemnifying Party's liability to the
Indemnified Party under this Agreement. Payments of all amounts owing by an
Indemnifying Party pursuant to Section 14.3(d) shall be made within 30 days
after the later of (i) the expiration of the 60-day Indemnity Notice period or
(ii) the expiration of the period for appeal of a final adjudication of the
Indemnifying Party's liability to the Indemnified Party under this Agreement.
(f) Notwithstanding any provision herein to the contrary,
the obligation of APP or Buyer on the one hand, or Seller or the Partners, on
the other hand, to provide indemnification for breach of any representation or
warranty as provided in Section 14.1(a) or 14.2(a) hereof shall not take effect
unless and until the Damages asserted against or incurred in the aggregate and
on a collective basis by APP or Buyer, on the one hand, or Seller or the
Partners, on the other hand, as a result of such a breach or breaches exceeds
$10,000. Notwithstanding anything to the contrary contained herein, Seller's
aggregate indemnification obligation hereunder and under the Merger Agreement
shall not exceed fifty percent (50%) of the total consideration paid to the
Partners under (i) this Agreement and (ii) the Merger Agreement; and any one
Partner's aggregate indemnification obligation hereunder and as a Stockholder
under the Merger
17
22
Agreement shall not exceed fifty percent (50%) of (i) one-thirteenth of the
total consideration paid to Seller under this Agreement and (ii) the total
consideration paid such Partner as a Stockholder under the Merger Agreement.
Section 14.4 Remedies Exclusive. The remedies provided in this
Agreement are the exclusive rights or remedies available to one party against
the other, either at law or in equity, except in the case of fraud.
Section 14.5 Costs, Expenses and Legal Fees. Whether or not the
transactions contemplated hereby are consummated, each party hereto shall bear
its own costs and expenses (including attorneys' fees), except that each party
hereto agrees to pay the costs and expenses (including reasonable attorneys'
fees and expenses) incurred by the other parties in successfully (a) enforcing
any of the terms of this Agreement or (b) proving that another party breached
any of the terms of this Agreement.
Section 14.6 Tax Benefits; Insurance Proceeds. The total amount
of any indemnity payments owed by one party to another party to this Agreement
shall be reduced by any correlative tax benefit received by the party to be
indemnified or the net proceeds received by the party to be indemnified with
respect to recovery from third parties or insurance proceeds, and such
correlative insurance benefit shall be net of the insurance premium, if any,
that becomes due as a result of such claim.
ARTICLE XV
TERMINATION
Intentionally Omitted.
ARTICLE XVI
NONDISCLOSURE OF CONFIDENTIAL INFORMATION
Section 16.1 Non-Disclosure Covenant. Seller recognizes and
acknowledges that it has in the past, currently has, and in the future may
possibly have, access to certain Confidential Information of APP that is
valuable, special and unique assets of APP's businesses. APP and Buyer
acknowledge that they had in the past, currently have, and in the future may
possibly have, access to certain Confidential Information of Seller that is
valuable, special and unique assets of Seller's business. Seller and APP agree
that they will not disclose such Confidential Information to any person, firm,
corporation, association or other entity for any purpose or reason whatsoever,
except (a) to authorized representatives of APP and Seller and (b) to counsel
and other advisers to APP and Seller provided that such advisers (other than
counsel) agree to the confidentiality provisions of this Section 16.1, unless
(i) such information becomes available to or known by the public generally
through no fault of Seller or APP, as the case may be, (ii) disclosure is
required by law or the order of any governmental authority under color of law,
provided, that prior to disclosing any information pursuant to this clause (ii)
Seller or APP, as the case may be, shall, if possible, give prior written
notice thereof to Seller and APP and provide Seller and APP with the
opportunity to contest such disclosure, (iii) the disclosing party reasonably
believes that such disclosure is required in connection with the defense of a
lawsuit against the disclosing party, or (iv) the disclosing party is the sole
and exclusive owner of such Confidential Information as a result of the
Acquisition or otherwise. In the event of a breach or threatened breach by
Seller or APP of the provisions of this Section, APP and Seller shall be
entitled to an injunction restraining the other party, as the case may be, from
disclosing, in whole or in part, such Confidential Information. Nothing herein
shall be construed as prohibiting APP and Seller from pursuing any other
available remedy for such breach or threatened breach, including the recovery
of damages.
18
23
Section 16.2 Damages. Because of the difficulty of measuring
economic losses as a result of the breach of the foregoing covenants, and
because of the immediate and irreparable damage that would be caused for which
they would have no other adequate remedy, APP and Seller agree that, in the
event of a breach by any of them of the foregoing covenant, the covenant may be
enforced against them by injunctions and restraining orders.
Section 16.3 Survival. The obligations of the parties under this
Article XVI shall survive the termination of this Agreement.
ARTICLE XVII
MISCELLANEOUS
Section 17.1 Amendment; Waivers. This Agreement may be amended,
modified or supplemented only by an instrument in writing executed by all the
parties hereto. Any waiver of any terms and conditions hereof must be in
writing, and signed by the parties hereto. The waiver of any of the terms and
conditions of this Agreement shall not be construed as a waiver of any other
terms and conditions hereof.
Section 17.2 Assignment. Neither this Agreement nor any right
created hereby or in any agreement entered into in connection with the
transactions contemplated hereby shall be assignable by any party hereto,
except by APP to a wholly owned subsidiary of APP; provided that any such
assignment shall not relieve APP of its obligations hereunder.
Section 17.3 Parties in Interest; No Third Party Beneficiaries.
Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto. Neither this
Agreement nor any other agreement contemplated hereby shall be deemed to confer
upon any person not a party hereto or thereto any rights or remedies hereunder
or thereunder.
Section 17.4 Entire Agreement. This Agreement and the agreements
contemplated hereby constitute the entire agreement of the parties regarding
the subject matter hereof, and supersede all prior agreements and
understandings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof.
Section 17.5 Severability. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws
effective during the term hereof, such provision shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance
therefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision as similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
Section 17.6 Survival of Representations, Warranties and
Covenants. The representations, warranties and covenants contained herein
shall survive the Closing for a period of two (2) years from the Closing and
all statements contained in any certificate, exhibit or other instrument
delivered by or on behalf of Seller, any Partner, APP or Buyer pursuant to this
Agreement shall be deemed to have been representations and warranties by such
Seller, such Partner, APP or Buyer and, notwithstanding any provision in this
Agreement to the contrary, the representations and warranties contained herein
shall survive the Closing for a period of two (2) years from the Closing.
19
24
Section 17.7 Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING
CONFLICTS OF LAWS) OF THE STATE OF CALIFORNIA.
Section 17.8 Captions. The captions in this Agreement are for
convenience of reference only and shall not limit or otherwise affect any of
the terms or provisions hereof.
Section 17.9 Gender and Number. When the context requires, the
gender of all words used herein shall include the masculine, feminine and
neuter and the number of all words shall include the singular and plural.
Section 17.10 Reference to Agreement. Use of the words "herein,"
"hereof," "hereto" and the like in this Agreement shall be construed as
references to this Agreement as a whole and not to any particular Article,
Section or provision of this Agreement, unless otherwise noted.
Section 17.11 Confidentiality; Publicity and Disclosures. Each
party shall keep this Agreement and its terms confidential, and shall make no
press release or public disclosure, either written or oral, regarding the
transactions contemplated by this Agreement without the prior knowledge and
consent of the other parties hereto; provided that the foregoing shall not
prohibit any disclosure (a) by press release, filing or otherwise that APP has
determined in its good faith judgment to be required by federal securities laws
or the rules of the National Association of Securities Dealers, (b) to
attorneys, accountants, investment bankers or other agents of the parties
assisting the parties in connection with the transactions contemplated by this
Agreement and (c) by APP in connection with conducting an examination of the
operations and assets of Seller; provided that APP shall reasonably promptly
provide notice of any release. In the event that the transactions contemplated
hereby are not consummated for any reason whatsoever, the parties hereto agree
not to disclose or use any Confidential Information they may have concerning
the affairs of the other parties, except for information that is required by
law to be disclosed; provided that should the transactions contemplated hereby
not be consummated, nothing contained in this Section shall be construed to
prohibit the parties hereto from operating businesses in competition with each
other.
Section 17.12 Notice. Whenever this Agreement requires or permits
any notice, request, or demand from one party to another, the notice, request
or demand must be in writing to be effective and shall be deemed to be
delivered and received (i) if personally delivered or if delivered by telex,
telegram, facsimile or courier service, when actually received by the party to
whom notice is sent or (ii) if delivered by mail (whether actually received or
not), at the close of business on the third business day next following the day
when placed in the mail, postage prepaid, certified or registered, addressed to
the appropriate party or parties, at the address of such party set forth below
(or at such other address as such party may designate by written notice to all
other parties in accordance herewith):
20
25
If to APP and Buyer: American Physician Partners, Inc.
000 Xxxx Xxxxxx
0000 XxxxxxxXxxx Xxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, President
Xxxx X. Xxxxx, Esq., General
Counsel and Sr. V.P.
with a copy to: XxXxxxxxx, Will & Xxxxx
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax No. (000) 000-0000
Attn: Xxxxxxxx X. Xxxxx, Esq.
If to Seller
or any Stockholder: LXL, LTD.
---------------------------
---------------------------
Attn: Xxxxxxx X. Xxxx, M.D.
with a copy to Xxxx Xxxxxx Xxxxx & Xxxxx, Inc.
00 X. Xxxxxx Xxxxxx, #0000
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Fax No.: (000) 000-0000
Attn: Xxxxxxx X. XxXxxx, Esq.
Section 17.13 No Waiver; Remedies. No party hereto shall by any
act (except by written instrument pursuant to Section 17.1 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default in or breach of any of the terms
and conditions hereof. No failure to exercise, nor any delay in exercising, on
the part of any party hereto, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. No remedy set forth in
this Agreement or otherwise conferred upon or reserved to any party shall be
considered exclusive of any other remedy available to any party, but the same
shall be distinct, separate and cumulative and may be exercised from time to
time as often as occasion may arise or as may be deemed expedient.
Section 17.14 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
Section 17.15 Defined Terms. Terms used in the attached Exhibits
and the Schedules attached hereto with their initial letter capitalized and not
otherwise defined therein shall have the meanings as assigned to such terms in
this Agreement.
21
26
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
APP:
AMERICAN PHYSICIAN PARTNERS, INC.
By:
---------------------------------------------
Xxxxxxx X. Xxxxxxx, President
Buyer:
VALLEY IMAGING PARTNERS, INC.
By:
--------------------------------------------
Xxxxxxx X. Xxxxxxx, President
Seller:
LXL, LTD.
By:
---------------------------------------------
Xxxxxxx X. Xxxx, M.D.
Its: President
Partners:
Signature pages for each Partner attached hereto.
22
