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EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") effective as of
December 31, 1999, is entered into by and between FROC, P.C., a Colorado
professional corporation ("Buyer"), and IOI MANAGEMENT SERVICES OF COLORADO,
INC., a Colorado corporation ("Seller") (Buyer and Seller are referred to herein
collectively as the "Parties").
W I T N E S S E T H:
WHEREAS, Seller owns certain assets, exclusive of the real estate, of
the orthopedic medical practice located at 0000 Xxxxxxxxxxxx, Xxxxx 000,
Xxxxxxxx, XX 00000 (the "Practice") which Practice is operated by Buyer;
WHEREAS, Buyer desires to purchase certain assets of the Practice, and
Seller desires that Buyer purchase such assets all in accordance with the terms
and conditions provided herein;
WHEREAS, there is that certain Management Services Agreement dated
March 11, 1998 (the "Initial Management Agreement"), pursuant to which Seller
provides management services to Front Range Orthopedic Center, P.C., a Colorado
professional corporation ("FROC I"), as amended by that certain Recruitment
Agreement and Modification to Management Services Agreement dated April 13, 1999
(the "Recruitment and Modification Agreement"; at times the Initial Management
Agreement as modified by the Recruitment and Modification Agreement are
collectively referred to as the "Management Agreement");
WHEREAS, FROC I has assigned or contemporaneously with the execution
hereof will assign the Management Agreement to Buyer; and
WHEREAS, Buyer desires to, and Seller agrees to, terminate the
Management Agreement, and Buyer agrees to pay consideration for such termination
as described further in Section 6.1 hereinbelow.
NOW, THEREFORE, for and in consideration of the premises and promises
herein contained, and for other good and valuable consideration, the adequacy of
which is hereby acknowledged, the Parties hereby mutually agree as follows:
ARTICLE I
THE TRANSACTION
1.1. Purchase and Sale of Assets. As of the Closing Date, (as
hereinafter defined), the Seller shall sell, transfer, assign, and deliver to
the Buyer, and the Buyer shall purchase, accept, assume, and receive all right,
title, and interest in, to, or arising from the Purchased Assets (as defined
below).
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1.2. Purchased Assets. The "Purchased Assets" are the following assets
as specifically listed on Exhibit 1.2 attached hereto:
(a) The personal property at the location of the Practice,
including, but not limited to furniture, fixtures and equipment; and
(b) Inventories of supplies and goods at the location of the
Practice.
1.3. Assumed Liabilities and Obligations. At Closing, the Buyer shall
assume only the liabilities and obligations listed on Exhibit 1.3 (the "Assumed
Liabilities and Obligations").
ARTICLE II
CONSIDERATION FOR TRANSFER
2.1 Consideration. The aggregate consideration for the Purchased Assets
to be paid to the Seller shall be as follows:
(a) Two Hundred Ten Thousand Dollars ($210,000) in a
promissory note (the "Note") payable to Seller; and
(b) Assumption of the Assumed Liabilities and Obligations
(collectively, the "Purchase Price").
2.2 Payment of Consideration. On the Closing Date, the Buyer shall
assume the Assumed Liabilities and Obligations and deliver to Seller the
Purchase Price in the form specified in Article 2.1(a) hereinabove.
2.3 Allocation of Consideration. The consideration for the Purchased
Assets shall be allocated by Buyer and Seller pursuant to Exhibit 2.3 attached
hereto. Such allocation shall be used for all purposes, including preparation
and filing of the Internal Revenue Service Form 8594 with respect to the
transactions contemplated hereby.
ARTICLE III
THE CLOSING AND CLOSING DATE
3.1. Closing. The execution of this Agreement and other collateral
agreements (the "Closing") shall occur at a location to be mutually agreed upon
by the parties on January 27, 2000, or at such other time or place as may be
mutually agreed upon by the parties. Upon consummation, the Closing shall be
deemed to take place and be effective as of 12:01 A.M., January 27, 2000 (the
"Closing Date"). At the Closing, the actions described in this Article shall be
taken. All actions shall be deemed to have occurred simultaneously, and the
effectiveness of any action taken at the Closing shall, unless otherwise agreed
by the Seller and Buyer, be conditioned upon the taking of all other action
called for in this Article.
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3.2. Deliveries by Buyer. To effectuate the Closing, Buyer shall:
(a) execute and deliver to the Seller a Release substantially
in the form of Exhibit 3.2 attached hereto;
(b) deliver to Seller a certificate of good standing of Buyer,
dated on a recent date prior to the Closing Date, from the Secretary of State of
Colorado; and
(c) deliver to the Seller such other resolutions, documents,
and certificates as are required to be delivered by Buyer under the provisions
of this Agreement or as may be necessary or appropriate to carry out the
transactions contemplated hereby.
3.3. Deliveries by Seller. To effectuate the Closing, the Seller shall:
(a) execute and deliver to the Buyer a Release substantially
in the form of Exhibit 3.3, attached hereto;
(b) deliver to Buyer a Xxxx of Sale transferring the ownership
of the Purchased Assets from Seller to Buyer;
(c) deliver to Buyer a certificate of good standing of Seller,
dated on a recent date prior to the Closing Date, from the Secretary of State of
Colorado; and
(d) deliver to Buyer such other resolutions, documents and
certificates as are required under the provisions of this Agreement or as may be
necessary or appropriate to carry out the transactions contemplated hereby.
ARTICLE IV
SELLER'S REPRESENTATIONS AND WARRANTIES
The Seller warrants and represents to Buyer, as of the date of this
Agreement and as of the Closing Date, as follows:
4.1. Legal Authority. Seller is a business corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado.
Seller has all requisite corporate power and authority to enter into the
transactions contemplated hereby and is entitled to carry on its business as now
being conducted and to own, lease, or operate its properties, which are either
owned or leased by Seller, as and in the places where such business is now
conducted; and Seller is duly qualified, licensed and in good standing in each
jurisdiction in which the character of the business conducted by it or the
location of the properties owned by it make such qualification necessary, except
for jurisdictions in which the failure to so qualify would not have a material
adverse effect on the business condition of Seller.
4.2. Execution, Delivery and Performance of Agreement; Authority.
Seller is not in violation of any term of its articles of incorporation or
by-laws, or in any material respect of any agreement, contract, note, mortgage,
indenture, lease, instrument, permit, concession, franchise
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or license to which it is a party or to which it or its properties or assets are
subject, and, to the best of Seller's knowledge, is not in material violation of
any order, statute, rule or regulation applicable to it. The execution,
delivery, and/or performance of this Agreement by Seller will not, with or
without the giving of notice or the passage of time, or both, (i) violate,
conflict with, result in a default, right to accelerate or loss of rights under,
or result in the creation of any lien, charge or encumbrance pursuant to, any
provision of Seller's articles of incorporation or by-laws or any agreement,
contract, note, mortgage, indenture, lease, instrument, permit, concession,
franchise or license to which Seller is a party or by which it or its properties
or assets may be bound or affected (except as otherwise disclosed herein), or,
(ii) to the best of Seller's knowledge, conflict with or result in any violation
of any material statute, law, rule, regulation, judgment, order, decree or
ordinance applicable to Seller, its properties or assets (except as otherwise
disclosed herein). Seller has the full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, all proceedings
required to be taken by Seller to authorize the execution, delivery and
performance of this Agreement and the agreements relating hereto have been
properly taken, and this Agreement constitutes a valid and binding obligation of
Seller.
4.3. No Regulatory Action. No action, consent or approval by, or filing
with, any federal, state, municipal, foreign or other court or governmental or
administrative body or agency, or any other regulatory body, is required in
connection with the execution and delivery by the Seller of this Agreement or
the consummation by the Seller of the transactions contemplated hereby.
4.4. No Claims. There is no claim, action, suit, proceeding,
arbitration, investigation or inquiry of which Seller has notice, before any
federal, state, municipal, foreign or other court or governmental or
administrative body or agency, any securities or commodities exchange, other
regulatory body or any private arbitration tribunal now pending, or threatened
against or relating to Seller which would adversely affect the ability of the
Seller to consummate the sale of the Purchased Assets and the other transactions
contemplated by this Agreement.
4.5. Brokers. Seller has not retained any broker, finder, or agent or
incurred any liability or obligation for any brokerage fees, commissions, or
finder's fees with respect to this Agreement or the transactions contemplated
hereby.
4.6. Disclosures. No statement by Seller contained in this Agreement
and the Exhibits attached hereto, and any written statement or certificate
furnished or to be furnished pursuant hereto or in connection with the
transactions contemplated hereby, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made.
4.7. ERISA. To the best of Seller's knowledge, Seller has operated in
material compliance with ERISA with respect to the: (i) employees of Seller that
provide services on the premises of the Practice; and (ii) the physician
shareholders of Buyer.
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ARTICLE V
BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer warrants and represents to Seller, as of the date of this
Agreement and as of the Closing Date, as follows:
5.1. Legal Authority. Buyer is a professional corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado. Buyer has all requisite corporate power and authority to enter into
the transactions contemplated hereby and is entitled to carry on its business as
now being conducted and to own, lease, or operate its properties, which are
either owned or leased by Buyer, as and in the places where such business is now
conducted; and Buyer is duly qualified, licensed and in good standing in each
jurisdiction in which the character of the business conducted by it or the
location of the properties owned by it make such qualification necessary, except
for jurisdictions in which the failure to so qualify would not have a material
adverse effect on the business condition of Buyer.
5.2. Execution, Delivery and Performance of Agreement; Authority. Buyer
is not in violation of any term of its articles of incorporation or by-laws, or
in any material respect of any agreement, contract, note, mortgage, indenture,
lease, instrument, permit, concession, franchise or license to which it is a
party or to which it or its properties or assets are subject, and, to the best
of Buyer's knowledge, is not in material violation of any order, statute, rule
or regulation applicable to it. The execution, delivery, and/or performance of
this Agreement by each of Buyer will not, with or without the giving of notice
or the passage of time, or both, (i) violate, conflict with, result in a
default, right to accelerate or loss of rights under, or result in the creation
of any lien, charge or encumbrance pursuant to, any provision of Buyer's
articles of incorporation or by-laws or any agreement, contract, note, mortgage,
indenture, lease, instrument, permit, concession, franchise or license to which
Buyer, is a party or by which it or its properties or assets may be bound or
affected (except as otherwise disclosed herein), or, (ii) to the best of Buyer's
knowledge, conflict with or result in any violation of any material statute,
law, rule, regulation, judgment, order, decree or ordinance applicable to Buyer,
its properties or assets (except as otherwise disclosed herein). Buyer has the
full power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby, all proceedings required to be taken by Buyer
to authorize the execution, delivery and performance of this Agreement and the
agreements relating hereto have been properly taken, and this Agreement
constitutes a valid and binding obligation of Buyer.
5.3. No Regulatory Action. No action, consent or approval by, or filing
with, any federal, state, municipal, foreign or other court or governmental or
administrative body or agency, or any other regulatory body, is required in
connection with the execution and delivery by Buyer of this Agreement or the
consummation by Buyer of the transactions contemplated hereby.
5.4. No Claims. There is no claim, action, suit, proceeding,
arbitration, investigation or inquiry of which Buyer has notice, before any
federal, state, municipal, foreign or other court or governmental or
administrative body or agency, any securities or commodities exchange, other
regulatory body or any private arbitration tribunal now pending, or threatened
against or relating
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to Buyer which would adversely affect the ability of the Buyer to consummate the
sale of the Purchased Assets and the other transactions contemplated by this
Agreement.
5.5. Brokers. Buyer has not retained any broker, finder, or agent or
incurred any liability or obligation for any brokerage fees, commissions, or
finder's fees with respect to this Agreement or the transactions contemplated
hereby.
5.6. Disclosure. No statement by Buyer contained in this Agreement and
the Exhibits attached hereto, and any written statement or certificate furnished
or to be furnished pursuant hereto or in connection with the transactions
contemplated hereby, contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made.
5.7. Loans with Third Parties. Other than that certain revolving line
of credit in the amount of $125,000 with Bank One, Buyer is not a maker or
obligor on any loans from third parties.
5.8. Cash Collections and Payments. Since March 11, 1998 through and
including the Closing Date: (i) Buyer has processed cash collections consistent
with the normal operating procedures established by Seller; and (ii) has paid
expenses related to the Practice only as such expenses have come due.
ARTICLE VI
OTHER COVENANTS AND AGREEMENTS
6.1. Termination of Management Agreement. Buyer and Seller agree that
effective as of December 31, 1999 the Initial Management Agreement, as modified
and amended by the Recruitment and Modification Agreement pursuant to an
agreement (the "Agreement to Terminate the Management Agreement"), as assigned
from FROC I to Buyer, shall terminate pursuant to that certain Agreement to
Terminate the Management Agreement between Buyer and Seller. Buyer and Seller
agree that as of the Closing Date all agreements Seller had with either of Buyer
and/or FROC I to pursuant to which Seller provided services to FROC I shall
terminate and shall be void and of no further force or effect.
6.2. Economic Closing as of December 31, 1999. Buyer, and Seller
understand and agree that the "economic closing" of sale of the Purchased Assets
shall occur as of December 31, 1999 meaning that: (i) after the sweep of the
cash collected through December 31, 1999, Seller shall not sweep any money out
of that certain lock box accounts located at Xxxxx Fargo Bank (#4311-854723) and
Bank One (#1192541017) (collectively, the "Lock Box") except to pay the January
2000 monthly lease payment due on that certain equipment lease (the "Copelco
Equipment Lease") on which Copelco Capital, Inc. is the lessor and Seller is the
lessee for an artoscan, MRI scanner and related equipment; and (ii) after
December 31, 1999, neither Buyer nor FROC I shall write any checks for expenses
vis a vis that certain "zero balance" checking account located at Bank One. At
the Closing, Seller will deliver to Buyer the cash accumulated
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as of the Closing Date in the Lock Box. After Closing, on a periodic reasonable
basis, Seller will deliver any remaining cash that accumulates in the Lock Box.
6.3. Payment by Seller of Monies Seller Reserved for Buyer's Profit
Sharing Plan. At Closing, Seller shall deliver to the administrator of the
profit sharing plan of Buyer the monies that Seller reserved from physician
compensation for such purpose in the amount of Ninety-eight Thousand Seventeen
Dollars and Sixty-five Cents ($98,017.65).
6.4. Seller Shall Pay a Portion of FROC I's Physician Salaries. Seller
shall pay Nineteen Thousand Seven Hundred Thirty-nine Dollars and Eighty-three
Cents ($19,739.83) to FROC I as compensation for the December salaries of
physicians employed by FROC I.
6.5. Seller Shall Pay the January 7, 2000, Staff Payroll of FROC I.
Seller shall pay Thirty-three Thousand Nine Hundred Dollars and Ninety-seven
Cents to the staff employees of FROC I as compensation under the January 7,
2000, payroll of FROC I.
6.6. FROC I Shall Reimburse Seller for the January 21, 2000, Payroll of
FROC I. FROC I shall pay to Seller Thirty-seven Thousand Four Dollars and
Sixty-four Cents ($37,004.64) as reimbursement for the January 21, 2000, staff
payroll of FROC I paid by Seller.
6.7. January 21, 2000, Staff Payroll Amounts Shall be Offset Against
Seller's Portion of December Physician Salaries. At Closing, FROC I shall
deliver to Seller Seventeen Thousand Two Hundred Sixty-four Dollars and
Eighty-one Cents ($17,264.81), which amount represents the difference between
(a) the amount owed by FROC I to Seller pursuant to Section 6.6, above, and (b)
the amount owed by Seller to FROC I pursuant to Section 6.4, above.
6.8. No Reconciliation of Amounts Owing between Buyer and Seller Except
as Otherwise Expressly Stated in this Agreement. Except as expressly provided
for in this Agreement there shall be no reconciliation of amounts owing, whether
actual or alleged, between Seller on the one hand and Buyer on the other hand.
6.9. Return of Video Conference Equipment and CISCO 2500 Series Router.
On or before the Date, Buyer agree to return to Seller the two (2) following
pieces of equipment at the location of the Practice: (i) Seller's video
conference equipment; and (ii) the CISCO 2500 Series Router.
6.10. Further Assurances. Subject to the terms and conditions of this
Agreement, each of the parties hereto shall use its best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws, rules and regulations to
consummate and make effective the transactions contemplated by this Agreement.
If at any time after the Closing Date any party shall consider or be advised
that any further deeds, assignments or assurances in law or in any other things
are necessary, desirable or proper to vest, perfect or confirm, or record or
otherwise, in such party, the title to any property or rights acquired or to be
acquired by reason of or as a result of the acquisition of any shares hereunder,
the other parties agree that they shall execute and deliver all such proper
deeds, assignments and assurances in law and do all things necessary, desirable
or proper to vest, perfect or confirm title
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to such property or rights in the original party and to otherwise carry out the
purpose of this Agreement.
6.11. Modification of Copelco Lease. On or before the Closing Date,
Buyer and FROC I shall contact Copelco and arrange for that certain Equipment
Lease by and between Seller as lessee and Copelco as lessor for equipment
pertaining to the Practice (the "Copelco Lease") to be modified so that Seller
and Integrated Orthopaedics, Inc. ("IOI"), shall be removed from such lease as
lessee and guarantor, respectively (the "Lease Modification").
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
Each and all of the obligations of Buyer to consummate the transactions
contemplated by this Agreement are subject to fulfillment prior to or at the
Closing Date of the following conditions:
7.1. Accuracy of Warranties and Performance of Covenants. The
representations and warranties of Seller contained herein shall be accurate in
all material respects as if made on and as of the Closing Date. Seller shall
have performed all of its obligations and complied with each and all of the
covenants, agreements, and conditions required to be performed or complied with
by it on or prior to the Closing Date.
7.2. No Pending Action. No action, suit, proceeding, or investigation
before any court, administrative agency, or other governmental authority shall
be pending or threatened wherein an unfavorable judgment, decree, or order would
prevent the carrying out of this Agreement or any of the transactions
contemplated hereby, declare unlawful the transactions contemplated hereby, or
cause such transactions to be rescinded.
7.3. Consents. All material consents by third parties that are required
for the consummation of the transactions contemplated hereby, or that are
required in order to prevent a breach of or a default under or a termination of
any agreement to which the Seller is a party, shall have been provided for or
obtained.
7.4. Regulatory Approvals. All regulatory agencies shall have taken
such action as may be required to permit the consummation of the transactions
contemplated hereby, and such actions shall remain in full force and effect and
shall be reasonably satisfactory in form and substance to Buyer.
7.5. Exhibits. All of the Exhibits shall be completed and attached
hereto in final form.
7.6. Deliveries. All documents to be executed and/or delivered by
Seller pursuant to Section 3.3 shall have been executed and or delivered, as
applicable.
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ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
Each and all of the obligations of Seller to consummate the
transactions contemplated by this Agreement are subject to fulfillment prior to
or at the Closing Date of the following conditions:
8.1. Accuracy of Warranties and Performance of Covenants. The
representations and warranties of Buyer contained herein shall be accurate in
all material respects as if made on and as of the Closing Date. Buyer shall have
performed all of its obligations and complied with each and all of the
covenants, agreements, and conditions required to be performed or complied with
by it on or prior to the Closing Date.
8.2. No Pending Action. No action, suit, proceeding, or investigation
before any court, administrative agency, or other governmental authority shall
be pending or threatened wherein an unfavorable judgment, decree, or order would
prevent the carrying out of this Agreement or any of the transactions
contemplated hereby, declare unlawful the transactions contemplated hereby, or
cause such transactions to be rescinded.
8.3. Consents. All material consents by third parties that are required
for the consummation of the transactions contemplated hereby, or that are
required in order to prevent a breach of or a default under or a termination of
any agreement to which Buyer is a party, shall have been provided for or
obtained.
8.4. Regulatory Approvals. All regulatory agencies shall have taken
such action as may be required to permit the consummation of the transactions
contemplated hereby, and such actions shall remain in full force and effect and
shall be reasonably satisfactory in form and substance to Seller.
8.5. Exhibits. All of the Exhibits shall be completed and attached
hereto in final form.
8.6. Deliveries. All documents to be executed and/or delivered by Buyer
pursuant to Section 3.2 shall have been executed and or delivered, as
applicable.
ARTICLE IX
SURVIVAL AND INDEMNIFICATION
9.1. Survival. All representations, warranties, covenants, and
agreements contained in this Agreement or in any document delivered pursuant
hereto shall be deemed to be material and to have been relied upon by the
parties hereto. All representations, warranties, covenants, and agreements
contained herein or in a document or agreement called for hereby, except as
otherwise limited therein, shall survive the Closing and be fully effective and
enforceable for a period of five (5) years following the Closing Date. Any claim
for indemnification asserted in writing during the applicable survival period
shall survive until resolved or judicially determined.
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9.2. Seller's Indemnification. Seller shall indemnify, hold harmless
and defend Buyer, from and against all losses (including court costs and
reasonable attorneys' fees at all levels of trial and through all levels of
appeal and expenses and costs of investigation), suits, actions, claims,
deficiencies, liabilities or obligations (collectively referred to as "Losses")
related to, caused by or arising from: (i) any misrepresentation, breach of
warranty or failure to fulfill any covenant or agreement of Seller contained
herein or in any agreement or other document delivered pursuant hereto; and (ii)
any and all claims of third parties made based upon facts alleged that, if true,
would have constituted such a misrepresentation, breach or failure.
9.3. Buyer's Indemnification. Buyer shall indemnify, hold harmless and
defend Seller, from and against all Losses related to, caused by or arising
from: (i) any misrepresentation, breach of warranty or failure to fulfill any
covenant or agreement of Buyer contained herein or in any agreement or other
document delivered pursuant hereto; and (ii) any and all claims of third parties
made based upon facts alleged that, if true, would have constituted such a
misrepresentation, breach or failure.
9.4. Indemnification Procedure. The party seeking indemnification under
this Article shall give written notice to the indemnifying party of the facts
and circumstances giving rise to any claim for indemnification. All rights
contained in this Article are cumulative and are in addition to all other rights
and remedies which are otherwise available, pursuant to the terms of this
Agreement or applicable law. All indemnification rights shall be deemed to apply
in favor of the indemnified party's officers, directors, representatives,
subsidiaries, affiliates, successors, assigns, heirs and devisees.
9.5. Defense Against Asserted Claims. Any party seeking indemnification
(the "Indemnified Party") shall give written notice to the indemnifying party
(the "Indemnifying Party") of the facts and the circumstances giving rise to any
claim (the "Notice"). The Indemnified Party shall not settle or compromise any
claim by a third party for which the Indemnified Party is entitled to
indemnification hereunder without the prior written consent of the Indemnifying
Party (which consent shall not be unreasonably withheld), unless legal action
shall have been instituted against the Indemnified Party and the Indemnifying
Party shall not have taken reasonable control of such suit within fifteen (15)
days after notification thereof as provided herein. In connection with any claim
giving rise to indemnification hereunder resulting from or arising out of any
claim or legal proceeding by a person other than the Indemnified Party, the
Indemnifying Party shall, upon written notice to the Indemnified Party, assume
the defense of any such claim or legal proceeding without prejudice to the right
of the Indemnifying Party thereafter to contest its obligation to indemnify the
Indemnified Party in respect to the claims asserted therein. If the Indemnifying
Party assumes the defense of any such claim or legal proceeding, the
Indemnifying Party shall select counsel, the selection of which counsel shall be
subject to the approval of the Indemnified Party, which approval shall not be
unreasonably withheld, to conduct the defense in such claims and legal
proceedings and at its sole cost and expense shall take all steps necessary in
the defense or settlement thereof. The Indemnifying Party shall not consent to a
settlement of, or the entry of any judgment arising from, any claim or legal
proceeding, without the prior written consent of the Indemnified Party, unless
the Indemnifying Party admits in writing its liability to hold the Indemnified
Party harmless from and against any losses, damages, expenses and liabilities
arising out of such
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settlement. The Indemnified Party shall be entitled to participate in the
defense of any such action with its own counsel and at its own expense. If the
Indemnifying Party does not assume the defense of any such claim or litigation
resulting therefrom in accordance with the terms hereof, the Indemnified Party
may defend such claim or litigation in such a manner as it may deem appropriate,
including settling such claim or litigation after giving notice of the same to
the Indemnifying Party on such terms as the Indemnified Party may deem
appropriate and after action by the Indemnified Party seeking indemnification
from the Indemnifying Party in accordance with the provisions of this Section;
in such case, the Indemnifying Party shall not be entitled to question the
manner in which the Indemnified Party defended such claim or litigation or the
amount or nature of any such settlement. In the event of a claim by a third
party, the Indemnified Party shall cooperate with the Indemnifying Party in the
defense of such action (including making a personal contact with the third party
if deemed beneficial) and the relevant records of each party shall be made
available on a timely basis.
9.6. Indemnification for Copelco Lease. Buyer, jointly and severally
together with FROC I, hereby agrees to indemnify, hold harmless and defend
Seller and IOI, from and against any and all losses and liability related to,
caused by or arising from the Copelco Lease.
ARTICLE X
GENERAL PROVISIONS
10.1. Survival. Those provisions which by their nature are intended to
survive beyond the execution of this Agreement shall survive same.
10.2. Attorneys' Fees. In the event any adversarial legal action arises
between any of the parties as a result of this Agreement, the prevailing party
shall be entitled to recover from the other party its attorneys' fees and costs
incurred at all pre-trial, trial and appellate proceedings.
10.3. Parties in Interest. This Agreement and all of the terms,
covenants and conditions herein shall bind and inure to the benefit of the
parties named herein and their respective personal representatives, legal
representatives, heirs, successors and assigns. No party may assign its rights
and/or duties hereunder without the prior written consent of the other parties.
10.4. Entire Agreement and Modification. This Agreement and the
exhibits and schedules attached hereto contain the entire understanding among
the parties with respect to the transactions contemplated hereby, and no
representations, warranties or agreements have been made or, if made, have been
relied upon by any party except those specifically referred to herein. This
Agreement may only be amended, modified or supplemented by written instrument
signed by all of the parties hereto.
10.5. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal substantive laws of the State of Colorado. Venue
of any legal action arising under or pursuant to this Agreement shall be in
Boulder County, Colorado.
10.6. Severability. If any provision of this Agreement is found to
violate any statute, regulation, rule, order or decree of any governmental
authority, court, agency or exchange, such
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invalidity shall not be deemed to affect any other provision hereof or the
validity of the remainder of this Agreement, and such invalid provision shall be
deemed deleted from this Agreement to the minimum extent necessary to cure such
violation.
10.7. Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.8. Notices. All notices and other communications under this
Agreement shall be given in writing or by overnight delivery service, charges
prepaid, or by registered or certified mail, return receipt requested, postage
prepaid, or hand delivered, personally addressed to the parties set forth below
at the stated addresses or at such other address as any party shall designate in
a notice to the other.
To Seller: IOI Management Services of Colorado, Inc.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxxxxx, Xx. V.P./C.O.O.
With a copy to: XxXxxxxxx, Will & Xxxxx
Miami Center, 22nd Floor
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxx X. Xxxxxxx, Esq.
To Buyer: FROC, P.C.
0000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, M.D.
With a copy to: Xxxxx & Lardner
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
All notices shall be deemed effective when received, or if delivery is
refused, on the date of such refusal.
10.9. Waiver. A waiver of any breach or violation of any term,
provision or covenant contained herein shall not be deemed a continuing waiver,
or a waiver of any future or past breach or violation, or a waiver of any other
term, provision or covenant of this Agreement. All waivers must be in writing.
10.10. Confidentiality. Each of the Parties hereto agrees to keep all
terms of this Agreement and all terms of the documents and agreements executed
pursuant to the terms of this Agreement confidential, except with respect to
communications the undersigned has with: (i) its
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advisors, such as accountants or attorneys, to assist in interpreting or
enforcing the terms of this Agreement and the documents and agreements executed
pursuant to the terms of this Agreement; (ii) third parties as necessary to
carry out the terms of this Agreement as long as the undersigned divulges only
the minimal information necessary to carry out the terms of this Agreement; and
(iii) third parties as required by law or court order as long as the undersigned
divulges only the minimal information required. In the event that any of the
shareholders or practice administrators of Buyer or FROC II, as well as any
staff upon the direct or indirect instructions of any of the shareholders or
practice administrators of Buyer or FROC II, violate this confidentially
covenant set forth in this Article 10.10, then Buyer and FROC II are jointly and
severally liable to immediately pay to Seller in cash a penalty fee in the
amount of $1,000,000. Such penalty fee is in addition to any other remedies
available to Seller.
10.11. No Disparagement. Buyer agrees that neither Buyer nor any of its
officers, directors, shareholders or employees, nor any of its affiliates, nor
any officers, directors, shareholders or employees of such affiliates, shall
make any disparaging statements about: (i) Seller or IOI; (ii) any of Seller's
affiliated corporations or Seller 's affiliated corporations; or (iii) any
directors, officers, principal shareholders or employees of Seller or IOI. Buyer
agrees that each of Seller and IOI has a legitimate business interest justifying
such no disparagement condition and agreement. Seller agrees that neither Seller
nor any of its officers, directors, shareholders or employees, nor any of its
affiliates, nor any officers, directors, shareholders or employees of such
affiliates, shall make any disparaging statements about the Buyer, or any of
Buyer's officers, directors, shareholders, employees or affiliates. Seller
agrees that Buyer has a legitimate business interest justifying such no
disparagement condition and agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
Signed, sealed and delivered BUYER:
in the presence of:
FROC, PC, a Colorado professional
corporation
By:
------------------------------
------------------------------- Print Name:
----------------------
------------------------------- Print Title:
---------------------
SELLER:
IOI MANAGEMENT SERVICES OF
COLORADO, INC.,
a Colorado corporation
By:
------------------------------
------------------------------- Print Name:
----------------------
------------------------------- Print Title:
---------------------
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EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
1.2 - Purchased Assets
1.3 - Assumed Liabilities and Obligations
2.3 - Allocation of Consideration
3.2 - Buyer's Release
3.3 - Seller's Release
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EXHIBIT 1.2
PURCHASED ASSETS
Please see attached schedule of assets.
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EXHIBIT 1.3
ASSUMED LIABILITIES AND OBLIGATIONS
1. Any and all liabilities and obligations of Seller to pay compensation of any
kind to the physician employees and shareholders of Buyer which accrue and/or
are payable on or after December 31, 1999, except as set forth in this
Agreement.
2. Any and all liabilities and obligations of Seller to pay compensation of any
kind to the staff employees and independent contractors of Buyer which accrue
and/or are payable on or after December 31, 1999, except as set forth in this
Agreement.
3. Any and all other liabilities and obligations of Seller to Buyer or to the
operation of the Practice which accrue and/or are payable on or after December
31, 1999, except as set forth in this Agreement.
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EXHIBIT 2.3
ALLOCATION OF CONSIDERATION
Assets: 100%
19
EXHIBIT 3.2
BUYER'S RELEASE
20
EXHIBIT 3.3
SELLER'S RELEASE
