ASSET PURCHASE AGREEMENT between MD ON CALL, LLC, and CAPITOL MEDICAL BUREAU, INC. as Sellers, and JAMES K. CARDI, MD and GINAMARIA SHAPIRO as Stockholders and Members and LOUIS S. SHAPIRO as an officer of the Sellers MD ONCALL ACQUISITION CORP. as...
Exhibit
10(x)(iii)
[*]
Confidential Treatment Requested. Confidential portions of this agreement have
been omitted and filed separately with the Securities and Exchange
Commission.
between
MD
ON
CALL, LLC,
and
CAPITOL
MEDICAL BUREAU, INC.
as
Sellers,
and
XXXXX
X.
XXXXX, MD
and
XXXXXXXXX
XXXXXXX
as
Stockholders and Members
and
XXXXX
X.
XXXXXXX
as
an
officer of the Sellers
MD
ONCALL
ACQUISITION CORP.
as
Buyer
_______________________
March
10,
2006
______________________
TABLE
OF CONTENTS
Page
SECTION 1. SALE AND PURCHASE OF ASSETS |
1
|
1.1
Sale and Purchase
|
1
|
1.2
No Assumption of Liabilities
|
3
|
1.3
Purchase Price
|
4
|
1.4
Sellers’
and Stockholders’ Closing Deliveries
|
5
|
1.5
Adjustments for Payables
|
6
|
1.6
Adjustment for Receivables
|
7
|
1.7
Contingent Additional Good Will Payment
|
7
|
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SELLERS, THE STOCKHOLDERS AND THE OFFICER |
7
|
2.1
Organization
|
7
|
2.2
Title to Purchased Assets; Ownership of Stock or Membership
Interests
|
7
|
2.3
Authorization; Validity of Agreement, Etc
|
8
|
2.4
Consents and Approvals; No Violation
|
8
|
2.5
Condition of Purchased Assets
|
9
|
2.6
Receivables
|
9
|
2.7
Taxes
|
9
|
2.8
Real Property
|
12
|
2.9
Intellectual Property
|
12
|
2.10 Material
Contracts
|
13
|
2.11
Customers, Suppliers and Distributors
|
13
|
2.12
Litigation; Compliance with Laws; Licenses and
Permits
|
14
|
2.13
Product or Service Claims
|
14
|
2.14
No Brokers
|
14
|
2.15
Assets Utilized in the Business
|
15
|
2.16
Related Party Transactions
|
15
|
2.17
Insurance
|
15
|
2.18
No Misstatements or Omissions
|
15
|
2.19
Labor Matters and Employment Matters
|
15
|
2.20
Environmental Matters
|
17
|
-i-
TABLE
OF CONTENTS
(continued)
Page
2.21
No Material Adverse Change
|
19
|
2.22
No Undisclosed Liabilities
|
19
|
2.23
Solvency
|
20
|
2.24
Employee Benefits
|
20
|
2.25
Investment Representations
|
22
|
SECTION
3. REPRESENTATIONS AND WARRANTIES OF BUYER
|
23
|
3.1
Organization
|
23
|
3.2
Authorization; Validity of Agreement
|
23
|
3.3
Consents and Approvals; No Violation
|
24
|
SECTION
4. COVENANTS OF THE PARTIES
|
24
|
4.1
Employee Matters
|
24
|
4.2
Non-disclosure of Confidential Information
|
27
|
4.3
Non-solicitation of Employees
|
27
|
4.4
Non-Competition
|
28
|
4.5
Public Statements
|
28
|
4.6
Use of Name
|
28
|
4.7
Purchase Price Allocation
|
29
|
4.8
Other Actions
|
29
|
4.9
Payment of Payables
|
29
|
4.10
Financial Statements
|
29
|
4.11
Discharge of Liabilities; Sales Taxes
|
29
|
4.12
Assigned Contracts
|
30
|
SECTION
5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
|
30
|
5.1
Survival of Representations and Warranties of the Sellers, the
Stockholders and the Officer
|
30
|
5.2
Survival of Representations and Warranties of Buyer
|
30
|
SECTION
6. INDEMNIFICATION
|
30
|
6.1
Indemnification by the Sellers, the Stockholders and the
Officer
|
30
|
6.2
Indemnification by Buyer
|
31
|
6.3
Indemnification Procedures; Limitations on Indemnification
|
31
|
-ii-
6.4
Right to Set-Off
|
33
|
SECTION
7. MISCELLANEOUS
|
33
|
7.1
Transaction Fees and Expenses
|
33
|
7.2
Notices
|
33
|
7.3
Amendment
|
35
|
7.4
Waiver
|
35
|
7.5
Governing Law
|
35
|
7.6
Jurisdiction
|
35
|
7.7
Remedies
|
35
|
7.8
Severability
|
35
|
7.9
Further Assurances
|
36
|
7.10
Assignment
|
36
|
7.11
No Third Party Beneficiaries
|
36
|
7.12
Entire Agreement
|
36
|
7.13
Headings
|
36
|
7.14
Counterparts
|
36
|
-iii-
List
of Exhibits
Page
Exhibit
A Sellers’
Secretary’s Certificates
Exhibit
B Xxxx
of
Sale and Assignment Agreement
Exhibit
C Legal
Opinion of Counsel to Sellers and Stockholders
Exhibit
D Management
Employment Agreement
Exhibit
E Wire
Transfer Instructions
Exhibit
F Assignment
of Leases
Exhibit
G Domain
Name Assignment
Exhibit
H Articles
of Transfer
i
ASSET
PURCHASE AGREEMENT, dated March 10, 2006 (together with all Schedules hereto,
this "Agreement"),
among
MD OnCall Acquisition Corp., a New York corporation,
with offices at 0000 Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Buyer"),
on
the one hand, and MD On Call, LLC, a Rhode Island limited liability company
doing business as (i) Xxxxxxxxxxxxxxx.xxx, (ii) Capitol Medical Answering
Service, (iii) Solutions Medical Answering Service, and (iv) RI Medical Bureau,
and having offices at 00 Xxxxxxxxxxx Xxxxx Xxxx, #000, Xxxxxxxx, XX 00000
(“MD
OnCall”),
Capitol Medical Bureau, Inc., a Maryland corporation doing business as Doctors’
Answering Service and having offices 00000 Xxxxxx Xxxxxx Xxx, Xxxxxxxxx, XX
00000 (“Capital Medical Bureau”, and together with MD OnCall, the “Sellers”),
Xxxxx
X. Xxxxx MD, an individual and a 50% member of MD OnCall and a 50% stockholder
of Capitol Medical Bureau, residing at 0000 Xxxxx Xxxx Xxxx, Xxxxxxxxx, XX
00000
(“Xx.
Xxxxx”),
Xxxxxxxxx Xxxxxxx, an individual and a 50% member of MD OnCall and a 50%
stockholder of Capitol Medical Bureau, residing at 000 Xxxxxxxx Xxxx,
Xxxxxxxxxxxx, XX 00000 (“Xxxxxxx”,
and
together with Xx. Xxxxx, the "Stockholders"),
and
Xxxxx X. Xxxxxxx, an individual and an officer of each of the Sellers, residing
at 000 Xxxxxxxx Xxxx, Xxxxxxxxxxxx, XX 00000 (the "Officer"), on the other
hand.
RECITALS
A.
Each
of
the Sellers is in the business of providing telephone answering services,
message services, faxing services, paging services and other ancillary office
services (collectively, the "Business").
B.
Buyer
desires to purchase from each of the Sellers, and each of Sellers desires to
sell to Buyer, certain of each such Sellers’ assets and properties relating to
the Business, on the terms and subject to the conditions set forth
herein.
C.
The
parties have drafted a disclosure schedule (the "Disclosure Schedule")
corresponding to various provisions of this Agreement, in order to record
various disclosures made pursuant to the various provisions hereof.
AGREEMENT
In
consideration of the mutual covenants and agreements herein contained, and
other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
Section
1. Sale
and
Purchase of Assets.
1.1 Sale
and Purchase.
Upon
the terms and subject to the conditions contained in this Agreement, each of
the
Sellers, as of the date hereof (the “Closing
Date”),
hereby sells, assigns, transfers and delivers to Buyer, and Buyer, as of the
Closing Date, purchases and accepts from each of the Sellers, all of the assets
and rights of every nature, kind and description, tangible and intangible,
wherever located, that are owned, used or held for use by each such Seller
in or
for each Seller's Business, as the same exists on the Closing Date
(collectively, the "Purchased
Assets"),
free
and clear of any and all liens, charges, claims, pledges, security interests
or
other encumbrances of any kind whatsoever ("Liens"),
other
than (i) cash, except for cash relating to Accounts Receivable belonging to
Buyer as set forth in Section 1.6, (ii) all assets and rights in connection
with
the Employee Plans (as defined in Section 2.24 of this Agreement), except for
those listed in Section 4.1 of the Disclosure Schedule, and (iii) all assets
listed in Section 1.1 of the Disclosure Schedule hereto (collectively, the
"Excluded
Assets").
The
Purchased Assets shall include, without limitation, the following:
(a) customer
accounts (both actual and prospective), including barter accounts, if
any;
(b) all
accounts receivable, subject, however, to the provisions of Section 1.6
hereof;
(c) deposits
or expenses prepaid by each of the Sellers, and deposits made by
customers;
(d) customer
and supplier lists, mailing lists, telephone numbers, DID numbers, catalogs,
yellow pages advertising, brochures, promotional materials and handbooks
relating to the Business;
(e) other
books, records, files, contracts, plans, notebooks, production and sales data
and other data of each of the Sellers relating to the Business, including but
not limited to book keeping records and ledgers, whether or not in tangible
form
or in the form of intangible computer storage media such as optical disks,
magnetic disks, tapes and all similar storage media;
(f) machinery,
computers, file servers, networking hardware, software licensing and other
data
processing hardware (and all software related thereto or used therewith) and
other tangible personal property of similar nature, including but not limited
to
all items set forth on each of Sellers’ fixed asset ledger attached to this
Agreement on Section 2.5 of the Disclosure Schedule, the Pinnacle telephony
equipment and all telephony hardware and peripherals, including, but not limited
to, telephony chassis, expansion cards, monitors, spare equipment, operator
audio boxes, amplifiers and headsets;
(g) office
furniture, office equipment, fixtures and other tangible personal property
of
similar nature, as set forth in Section 2.5 of the Disclosure Schedule, and
all
other such items located in the premises identified in the Assigned Leases
(as
hereinafter defined), whether or not set forth in Section 2.5 of the Disclosure
Schedule;
(h) all
inventory including, but not limited to, any pagers;
(i) interests
to the extent owned by each of the Sellers in any patent, copyright, trademark,
trade name, brand name, service xxxx, service name, assumed name, domain name,
website, logo, symbol, trade dress, design or representation or expression
of
any thereof, or registration or application for registration thereof, or any
other invention, trade secret, technical information, know-how, proprietary
right or intellectual property, technologies, methods, designs, drawings,
software (including documentation and source code listings), processes and
other
proprietary properties or information (collectively, the "Intellectual
Property");
2
(j) real
property interests described in Section 2.8 of the Disclosure Schedule to this
Agreement together with all licenses, leases, rights, privileges and
appurtenances thereto including, without limitation, all leases, agreements
and
other rights to use, occupy or possess, or otherwise with respect to, real
property or machinery, equipment, vehicles, and other tangible personal property
of similar nature to which each of the Sellers is a party, and all rights
arising under or pursuant to such leases, agreements and rights;
(k) to
the
extent not included above, all rights under contracts, agreements, options,
commitments, understandings, licenses, leases, permits and instruments relating
to the Business including, without limitation, customer and supplier contracts,
sales representative and distributor contracts and commission contracts with
respect thereto, all as listed (the "Assigned
Contracts")
on
Schedule 1.1(k) of the Disclosure Schedule, but no Liabilities (as defined
below) associated with any of the Assigned Contracts, except as set forth in
Section 1.2 below;
(l) all
of
the Sellers' rights, title and interest in and to the
names
“MD OnCall”, “Capitol Medical Bureau”, “Xxxxxxxxxxxxxxx.xxx”, “Capitol Medical
Answering Service”, “Solutions Medical Answering Service”, “RI Medical Bureau”
and “Doctors’ Answering Service” and all variations thereof and all similar
names and the goodwill associated therewith and with the Purchased Assets,
together with all trademarks, service marks and trade names each of the of
Sellers related to the Business, if any;
(m) third
party warranties and guarantees and other similar contractual rights as to
third
parties held by or in favor of each of the Sellers, and arising out of,
resulting from or relating to the Business or the Purchased Assets, to the
extent not included as part of the Assigned Contracts;
(n) rights
to
insurance and condemnation proceeds relating to any damage, destruction, taking
or other similar impairment of any of the Purchased Assets; and
(o) cash
related to Accounts Receivable belonging to Buyer as set forth in Section
1.6.
1.2 No
Assumption of Liabilities.
Except
as
provided herein, Buyer is not assuming any Seller's direct or indirect
liabilities, obligations, undertakings, indebtedness, obligations under
guaranties, endorsements, adverse claims, losses, damages, deficiencies, costs,
expenses or responsibilities of any kind, fixed or unfixed, known or unknown,
asserted or unasserted, due or undue, liquidated or unliquidated, secured or
unsecured, accrued or unaccrued, contingent or non-contingent, subordinated
or
non-subordinated (collectively, "Liabilities").
Buyer
will assume (i) all Liabilities relating to the Purchased Assets and the
Business to the extent arising from activity of Buyer relating to periods after
the Closing Date, and (ii) any liabilities relating to deposits made by
customers (collectively, the "Assumed
Liabilities").
3
1.3 Purchase
Price.
The
aggregate purchase price for the Purchased Assets is Three Million Four Hundred
Thirty Thousand Six Hundred Forty Two and 54/100 ($3,430,642.54) Dollars (the
"Purchase
Price").
The
Purchase Price shall be payable as set forth below:
(a) One
Million Seven Hundred Fifteen Thousand Three Hundred Twenty One and 27/100
($1,715,321.27) Dollars, payable to MD OnCall, LLC by wire transfer on the
Closing Date (the "MD
OnCall Closing
Cash Purchase Price");
(b) One
Million Twenty Nine Thousand One Hundred Ninety Two and 76/100 ($1,029,192.76)
Dollars, payable to Capitol Medical Bureau by wire transfer on the Closing
Date
(the “Capitol
Medical Bureau Closing Cash Purchase Price”).
(c) Thirty
Five Thousand Two Hundred and Twenty Five (35,225) shares of American Medical
Alert Corp. ("AMAC"), the Buyer's indirect parent, common stock issued to MD
OnCall (the "MD
OnCall Shares");
and
(d) Twenty
One Thousand One Hundred and Thirty Five (21,135) shares of AMAC common stock
issued to Capitol Medical Bureau (the “Capitol
Medical Bureau Shares”)
and
together with the MD OnCall Shares, the “Shares”).
(e) One
Hundred Seven Thousand Two Hundred Seven and 58/100 ($107,207.58) Dollars,
payable to MD OnCall upon the six month anniversary of the Closing Date;
provided,
however,
that to
the extent any such amounts are not paid because of a properly asserted claim
pursuant to Section 6.4 hereof, such amounts shall not be deemed to be an amount
payable under this Section 1.3(e);
(f) Sixty
Four Thousand Three Hundred and 55/100 Twenty Four ($64,324.55) Dollars, payable
to Capitol Medical Bureau upon the six month anniversary of the Closing Date;
provided, however, that to the extent any such amounts are not paid because
of a
property asserted claim pursuant to Section 6.4 hereof, such amounts shall
not
be deemed an amount payable under this Section 1.3(f);
(g) One
Hundred Seven Thousand Two Hundred Seven and 58/100 ($107,207.58) Dollars,
payable to MD OnCall upon the one year anniversary of the Closing Date;
provided,
however,
that to
the extent any such amounts are not paid because of a properly asserted claim
pursuant to Section 6.4 hereof, such amounts shall not be deemed to be an amount
payable under this Section 1.3(g); and
(h) Sixty
Four Thousand Three Hundred and 55/100 Twenty Four ($64,324.55)
Dollars,
payable
to Capitol Medical Bureau upon the one year anniversary of the Closing Date;
provided,
however,
that to
the extent any such amounts are not paid because of a properly asserted claim
pursuant to Section 6.4 hereof, such amounts shall not be deemed an amount
payable under this Section 1.3(h).
4
(i)
As
additional consideration, the Buyer shall pay each Seller the amounts set forth
in Section 1.7 hereof (the "Contingent
Additional Good Will Payment"),
to
the extent so payable.
1.4 Sellers’
and Stockholders’ Closing Deliveries.
(a)On
or
prior to the Closing Date, each of the Sellers and the Stockholders, will have
delivered to Buyer each of the following documents (collectively, the
"Seller's
Closing Documents"):
(i)
Certificate
of Secretary.
A
certificate of the Secretary of each of the Sellers in the form of Exhibit
A,
setting forth a copy of the resolutions adopted by its board (in the case of
Capitol Medical Bureau) or its managers (in the case of MD OnCall) and the
Stockholders in their respective capacities as stockholders or members of each
of the Sellers, as the case may be, approving the execution and delivery of
this
Agreement, ratifying all past corporate action, and the other documents and
instruments contemplated hereby to which it is a party (this Agreement and
all
other documents and instruments to which Buyer, the Sellers, the Stockholders
or
the Officer (as hereinafter defined) is a party in connection herewith being
sometimes collectively referred to herein as the "Purchase
Documents")
and
the consummation of the transactions contemplated hereby;
(ii)
Instruments
of Transfer.
Two
separate Bills of Sales and Assignment Agreements, in the form of Exhibit
B
attached
hereto (the "Xxxx
of Sale"),
duly
executed by each of the Sellers, respectively, that, among other things,
conveys, transfers and sells to Buyer all right, title and interest of each
of
the Sellers in and to the Purchased Assets owned by each of the Sellers,
respectively.
(iii)
Legal
Opinion of Counsel to Sellers and Stockholders.
An
opinion, in the form of Exhibit
C
attached
hereto, from Cameron & Mitttleman LLP, counsel to Sellers and the
Stockholders.
(iv)
Wire
Transfer Instructions.
Wire
transfer instructions for the payment of each of the MD OnCall and the Capitol
Medical Bureau Closing Cash Purchase Price, respectively, in the forms attached
hereto as Exhibit
E.
(v)
Schedule
of Receivables.
A
schedule of all receivables due to each of the Sellers as of the close of
business on the Closing Date.
(vi)
Customer
List.
A
complete and unrestricted list of all customers of each of the Sellers,
including the name, address, telephone number and contact for each such
customer, which list shall only be delivered and transferred to the Buyer either
by electronic mail or by facsimile.
(vii)
Management
Employment Agreement.
Employment agreement between the Buyer and the Officer in the form of
Exhibit
D
attached
hereto (the "Management
Employment Agreement"),
duly
executed by the Officer.
(viii)
Books
and Records.
All
books and records of each of the Sellers relating to the Business.
5
(ix)
Assigned
Leases.
A
consent to assignment of each of the leases for the premises at 00 Xxxxxxxxxxx
Xxxxx Xxxx, #000 and #209, Xxxxxxxx, XX 00000 (the "Assigned
Leases"), in the form of Exhibit
F
hereto,
duly executed by the respective landlords of each such premises.
(x)
Assigned
License Agreement.
A
consent to assignment of that certain Purchase, License and Support Agreement
between Capitol Medical Bureau and Professional Inbound, Inc., doing business
as
Professional Teledata ("Professional
Teledata")
dated
September 3, 2004 (the "Pinnacle
Agreement"),
duly
executed by Professional Teledata.
(xi)
Customer
Deposits.
The
parties hereto agree that in lieu of a bank check in the amount equal to the
Sellers' customer deposits on the Closing Date, the amount of the customer
deposits, which is $48,200, will be offset against the MD OnCall Closing Cash
Purchase Price.
(xii)
Assignment
of Domain Names.
An
assignment of domain names in the form attached hereto as Exhibit
G
hereto,
evidencing the assignment of certain domain names from the Officer to MD OnCall,
dated prior to the Closing Dated and duly executed by the Officer.
(xiii)
Articles
of Transfer.
Articles of Transfer in the form attached hereto as Exhibit
H
hereto,
duly executed by Capitol Medical Bureau.
1.4A. Deliveries
of Buyer.
On or
prior to the Closing Date, Buyer will have delivered to the Sellers each of
the
following documents and payments (collectively "Buyer's
Closing Documents"):
(i)
Certificate
of Secretary.
A
certificate of the Secretary of Buyer setting forth a copy of the resolutions
adopted by its Board of Directors approving the execution and delivery of this
Agreement and the other Purchase Documents and the consummation of transactions
contemplated hereby and thereby.
(ii)
Closing
Cash Purchase Price.
Each of
the MD OnCall and Capitol Medical Bureau Closing Cash Purchase Price,
respectively, in immediately available funds.
(iii)
Shares.
Irrevocable instructions to AMAC's transfer agent for the issuance of the
Shares, as well as an opinion by AMAC's counsel relating to such
issuance.
(iv)
Management
Employment Agreement.
The
Management Employment Agreement, duly executed by the Buyer.
1.5 Adjustments
for Payables.
Within
90 days after the Closing Date, Buyer will prepare an accrual based statement
of
accounts payable (including the Payables) as of the Closing Date with respect
to
each of the Sellers. Any such accounts payable which relate to any period prior
to the Closing Date and which are paid by Buyer, shall be a credit in Buyer’s
favor. Any amounts paid by either Seller prior to the Closing Date that relate
to periods after the Closing Date shall also be scheduled and shall act as
a
credit in favor of such Seller. The net amount shall be paid by the Buyer or
Sellers, as the case may be, to the other within 30 days of the determination
thereof. If either of the Sellers fails to timely pay any amounts due to Buyer
pursuant to this Section, then such amounts may be debited from any amounts
due
to Sellers or the Stockholders pursuant to this Agreement.
6
1.6 Adjustment
for Receivables.
All
accounts receivable resulting from invoices after the close of business on
the
Closing Date shall belong to the Buyer. All accounts receivable of each Seller
outstanding as of the close of business on the Closing Date shall be payable
as
follows upon collection: 25% to the Buyer and 75% to the Seller with respect
to
which such accounts receivable relate. Attached hereto as Schedule 2.6 is a
list
of all outstanding accounts receivable of each Seller as of the date
hereof.
1.7 Contingent
Additional Good Will Payment.
[*].
Section
2. Representations
and Warranties of the Sellers, the Stockholders and the Officer.
Each
of
the Sellers, the Stockholders and the
Officer,
jointly
and severally, represent and warrant to Buyer that each of the following
statements is true and correct as of the date hereof, and with respect to
representations and warranties that speak as of a subsequent date, such
representations and warranties will also be true and correct in
all
material respects as
of
such date:
2.1 Organization.
Capitol
Medical Bureau is a Maryland corporation duly organized, validly existing and
in
good standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business and to own and operate
its
assets and properties as presently conducted and operated. MD OnCall is a Rhode
Island limited liability company duly formed, validly existing and in good
standing under the laws of its jurisdiction of formation, with full limited
liability company power and authority to conduct its business and to own its
assets and properties as presently conducted and operated. Neither Capitol
Medical Bureau nor MD OnCall does any business in any other jurisdiction in
any
manner which would require it to become qualified or licensed as a foreign
entity. Capitol Medical Bureau has delivered to Buyer, as Section 2.1A of the
Disclosure Schedule, true, correct and complete copies of Capitol Medical
Bureau’s certificate of incorporation (the "Certificate
of Incorporation")
and by
laws (the "By
Laws"),
as
currently in effect. MD OnCall has delivered to Buyer, as Section 2.1B of the
Disclosure Schedule, true, correct and complete copies of MD OnCall’s
certificate of formation (the “Certificate
of Formation”)
and
operating agreement (the “Operating
Agreement”),
as
currently in effect.
2.2 Title
to Purchased Assets; Ownership of Stock or Membership Interests.
(a) Each
Seller has good and marketable title to the Purchased Assets owned by it
including, without limitation, all assets set forth on each Seller's respective
fixed asset ledgers attached to this Agreement on Section 2.5 of the Disclosure
Schedule, free and clear of all Liens, other than (i) Liens, if any, for
personal property taxes and assessments not yet due and payable and (ii) Liens
disclosed on Section 2.2 of the Disclosure Schedule. Upon consummation of the
transactions contemplated by this Agreement, Buyer will acquire all of each
Seller's respective rights, title and interests in and to the Purchased Assets
owned by it, free and clear of all Liens.
7
(b) Each
Stockholder is the sole record and beneficial owner of 5,000 shares of Capitol
Medical Bureau’s common stock, par value $.01 per share, which constitute all of
the outstanding capital stock of Capitol Medical Bureau. Each Stockholder is
the
sole record and beneficial owner of 50% of all outstanding membership interests
of MD OnCall. No Person has any right, interest or claim to any of the Sellers’
capital stock or membership interests (other than the Stockholders in the
amounts set forth in the first two sentences of this Section 2.2(b)) or the
Purchased Assets. There are no subscriptions, warrants, options, convertible
securities or other rights (contingent or other) to purchase or acquire any
shares of any class of capital stock of Capitol Medical Bureau or any membership
interests of MD OnCall, issued or outstanding, and there is no commitment of
either Capitol Medical Bureau or MD OnCall to issue any shares, membership
interests, warrants, options or other such rights or to distribute to holders
of
any class of its capital stock or membership interests, any evidences of
indebtedness or assets. Xx. Xxxxx is the sole manager of MD OnCall. The
Stockholders and Officer are the sole directors of Capitol Medical
Bureau.
2.3 Authorization;
Validity of Agreement, Etc.
Each of
the Stockholders and the Officer has the requisite capacity, and each of the
Sellers has the full right, power and authority, to execute and deliver this
Agreement and the other Purchase Documents to which, as applicable, it or they
are a party and to consummate the transactions contemplated hereby and thereby,
and to make the representations set forth herein and therein. The execution
and
delivery of this Agreement and the other Purchase Documents to which each Seller
is a party and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by each of the Sellers and no
other proceedings on the part of either of the Sellers are necessary to
authorize the execution and delivery of this Agreement and the other Purchase
Documents to which each Seller is a party to or the consummation of the
transactions contemplated hereby and thereby by each of the Sellers and the
Stockholders. Each of this Agreement and the other Purchase Documents to which
the Sellers are party have been duly and validly executed by each of the Sellers
and constitute the valid and binding agreement of each of the Sellers,
enforceable against each of the Sellers in accordance with its respective terms.
Each of this Agreement and the other Purchase Documents to which the
Stockholders and the Officer are a party have been duly and validly executed
by
each of the Stockholders and the Officer and constitute the valid and binding
obligation of each of the Stockholders and the Officer, enforceable against
each
of the Stockholders and the Officer in accordance with its respective
terms.
2.4 Consents
and Approvals; No Violation.
Except
as set forth in Section 2.4 of the Disclosure Schedule, the execution,
performance and delivery by the each of the Sellers, the Stockholders and the
Officer of this Agreement and each of the other Purchase Documents to which
it
or they are a party, as applicable, and the consummation by the Sellers and
the
Stockholders of the transactions contemplated hereby and thereby, respectively,
and the compliance by each of the Sellers, the Stockholders and the Officer
with
the provisions hereof and thereof will not: (a) conflict with or breach any
provision of the Certificate of Incorporation or Bylaws of Capitol Medical
Bureau or the Articles of Organization or Operating Agreement of MD OnCall;
(b)
violate or breach in any respect any provision of, or constitute a default
(or
an event which, with notice or lapse of time or both would constitute a default)
under, any of the terms, covenants, conditions or provisions of, or give rise
to
a right to terminate or accelerate or increase the amount of payment due under,
any note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
lease, contract, agreement or other instrument, commitment or obligation to
which either of the Sellers, either of the Stockholders or the Officer is a
party (collectively, "Contracts"),
or by
which either of the Sellers, either of the Stockholders or the Officer or any
of
their respective properties or assets, as applicable, may be bound or affected;
(c) require either of the Sellers or either of the Stockholders to make any
filing or registration with, or obtain any other permit, authorization, consent
or approval of, any Person (as hereinafter defined) or Governmental Entity
(as
hereinafter defined); (d) result in the creation of any Lien on or affecting
the
Purchased Assets; (e) violate any order, writ, injunction, decree, judgment,
or
ruling of any court or governmental authority, applicable to either of the
Sellers, either of the Stockholders or the Officer or any of their respective
properties or assets; or (f) violate any statute, law, rule or regulation
applicable to either of the Sellers or any of their respective properties or
assets. "Person"
shall
mean any individual, partnership, corporation, joint venture, limited liability
company, trust, organization or any other entity. "Governmental
Entity”
shall
mean any foreign, provincial, United States federal, state, county, municipal
or
other local jurisdiction, political entity, body, organization, subdivision
or
branch, legislative or executive agency or department or other regulatory
service, authority or agency.
8
2.5 Condition
of Purchased Assets. All
items
of machinery, equipment, tooling and other tangible personal property owned
or
leased by the Sellers and used in the conduct of the Business (other than items
of inventory) are listed in the detailed fixed assets ledger of each of the
Sellers attached to Section 2.5 of the Disclosure Schedule (collectively, the
"Personal
Property").
Although it may not be specifically identified in Section 2.5 of the Disclosure
Schedule, the term "Personal Property" includes all of the telephony equipment
hardware and peripherals, including, but not limited to, telephony chassis,
expansion cards, monitors, spare equipment, operator audio boxes, amplifiers,
headsets, and all computers, furniture, fixtures and machinery, in each case
located in the premises identified in the Assigned Leases. The Personal Property
conforms in all respects to all requirements of applicable laws.
2.6 Receivables.
All
accounts receivable of each of the Sellers as of the Closing Date, are reflected
on Section 2.6 of the Disclosure Schedule and represent valid obligations
arising from bona fide transactions in the ordinary course of each of the
Sellers’ business consistent with past practice and established in the ordinary
course of each of the Sellers’ business. To the best knowledge of each of the
Sellers, each of the Stockholders and the Officer, the accounts receivable
of
each of the Sellers are collectible, and there is no contest, claim, or right
of
set off, under any contract with any obligor of an accounts receivable relating
to the amount or validity of such accounts receivable. All invoices of each
of
the Sellers' relate to and reflect services previously provided by the Sellers
to their respective customers, including base fees and usage fees.
2.7 Taxes.
(a) Except
as
set forth in Section 2.7(a) of the Disclosure Schedule:
9
(i) Each
Seller has (A) duly and timely filed or caused to be filed with the Internal
Revenue Service or other applicable Governmental Entity (collectively,
"Taxing
Authorities")
all
Tax Returns (as defined below) that are required to be filed by or on behalf
of
such Seller and that include or relate to the Purchased Assets or the Business,
which Tax Returns are true, correct and complete, and (B) duly and timely paid
in full or caused to be paid in full, or recorded a provision for such payment
on the books and records of such Seller in accordance with GAAP for the payment
of, all Taxes that are due and payable and any Taxes that could result in a
Lien
on any Purchased Asset or the Business. Each of the Sellers has adequate
reserves for the payment of all Taxes that are not due and payable;
(ii) Each
Seller has duly and timely complied with all applicable Laws relating to the
collection or withholding of Taxes, and the reporting and remittance thereof
to
the applicable Taxing Authorities;
(iii) no
audit,
examination, investigation, reassessment or other administrative or court
proceeding (collectively, a "Tax
Proceeding")
is
pending, proposed, or threatened, with regard to any Tax or Tax Return referred
to in clause (i) above;
(iv) there
is
no Lien for any Tax upon any of the Purchased Assets or the
Business;
(v) there
is
no outstanding request for a ruling from any Taxing Authority, closing agreement
(within the meaning of Section 7121 of the Code or any analogous provision
of
applicable Law) relating to any Tax for which either of the Sellers is or may
be
liable or with respect to each Seller's income, assets or business, power of
attorney relating to, or in connection with, any Tax that could result in a
Lien
on any Purchased Asset or the Business;
(vi) none
of
the Purchased Assets is "tax-exempt bond financed property" or "tax-exempt
use
property" within the meaning of Section 168(g) or (h), respectively, of the
Code
or any similar provision of applicable Law;
(vii) none
of
the Purchased Assets is required to be treated as being owned by any other
person pursuant to the "safe harbor" leasing provisions of Section 168(f)(8)
of
the Internal Revenue Code of 1954 as in effect prior to the repeal of those
"safe harbor" leasing provisions or any similar provision of applicable
Law;
(viii) no
claim
has ever been made by a Taxing Authority in a jurisdiction where either of
the
Sellers or either of the Stockholders has not paid any Tax or filed Tax Returns
relating to the Business or any Purchased Asset asserting that such Seller
or
such Stockholder is or may be subject to Tax in such jurisdiction.
(ix) Capitol
Medical Bureau is, and has always been, a "C-Corp" for all Tax
purposes.
10
(b) Each
Seller has provided to Buyer true, complete and correct copies of (i) all
Federal and Corporate Income Tax Returns relating to, and (ii) all audit reports
relating to, each proposed adjustment, if any, made by any Taxing Authority
with
respect to any taxable period ending after December 31, 2001 and any and all
Taxes with respect to which a Lien may be imposed on any Purchased Asset or
the
Business.
(c) As
used
herein, (i) "Tax
Return"
means
any return, declaration, report, information return or statement, and any
amendment thereto, including without limitation any consolidated, combined
or
unitary return or other document (including any related or supporting
information), filed or required to be filed with any Taxing Authority in
connection with the determination, assessment, collection, payment, refund
or
credit of any federal, state, local or foreign Tax or the administration of
any
Laws relating to any Tax or ERISA, and (ii) "Tax" or "Taxes" means any and
all
taxes, charges, fees, levies, deficiencies or other assessments of whatever
kind
or nature including, without limitation, all net income, gross income, profits,
gross receipts, excise, real or personal property, sales, ad
valorem,
withholding, social security, retirement, excise, employment, unemployment,
minimum, estimated, severance, stamp, property, occupation, environmental,
windfall profits, use, service, net worth, payroll, franchise, license, gains,
customs, transfer, recording and other taxes, customs duty, fees assessments
or
charges of any kind whatsoever, imposed by any Taxing Authority, including
any
liability therefor as a transferee (including without limitation under Section
6901 of the Code or any similar provision of applicable Law), as a result of
Treasury Regulation §1.1502-6 or any similar provision of applicable Law, or as
a result of any Tax sharing or similar agreement, together with any interest,
penalties or additions to tax relating thereto.
2.7A Accuracy
of Ledgers.
Each of
Sellers’ revenues and expenses ledgers delivered to Buyer are true and accurate
in all material respects.
2.7B Financial
Statements.
Attached to Section 2.7B of the Disclosure Schedules are the (i) unaudited
balance sheets of MD OnCall as of December 31, 2004 and as of November 30,
2005,
(ii) the unaudited statements of income of MD OnCall for the 12 month period
ended December 31, 2004 and the 11 month period ended November 30, 2005, (iii)
the unaudited balance sheets of Capitol Medical Bureau as of July 31, 2005
and
as of November 30, 2005, and (iv) the unaudited statements of income of Capitol
Medical Bureau for the 12 month period ended July 31, 2005 and the 4 month
period ended November 30, 2005, (collectively, the "Financial
Statements").
The
Financial Statements, (i) are derived from, and agree with, the books and
records of each of the Sellers, respectively, and (ii) fairly present the
financial condition of each of the Sellers, respectively, as of the date thereof
and the results of operations of each of the Sellers for the periods set forth
therein.
11
2.8 Real
Property.
Except
as set forth in Section 2.8 of the Disclosure Schedule, the Sellers do not
own
any real property and are neither a landlord, sublandlord or licensor nor a
tenant, subtenant or licensee under any lease, sublease, license or occupancy
agreement with respect to real property. Section 2.8 of the Disclosure Schedule
lists and briefly describes all leases, subleases and agreements by which real
property is used or occupied by the Sellers in connection with the Business.
With respect to each parcel of leased real property: (i) the leases and
subleases described on Section 2.8 of the Disclosure Schedule, constitute all
of
the leases, subleases and agreements under wich the Sellers hold any interest
in
any leased real estate used in connection with their business; (ii) the Sellers
have delivered to Buyer and its counsel true, correct and complete copies of
all
of the leases, subleases and agreements described on Section 2.8 of the
Disclosure Schedule; (iii) each such lease, sublease or agreement is in full
force and effect and is a legal, valid, binding and enforceable obligations
of
the applicable Seller and, to the best knowledge of each of the Sellers, the
Stockholders and the Officer, each of the other parties thereto, and will
continue to be legal, valid, binding, enforceable and in full force and effect
on identical terms after the Closing; (iv) none of the Sellers or, to the best
knowledge of each of the Sellers, the Stockholders and the Officer, any other
party to any such lease, sublease or agreement is in breach or default thereof,
and no event has occurred which, with notice or the lapse of time, or both,
would constitute such a breach or default or permit termination, modification
or
acceleration thereof or thereunder; (v) to the best knowledge of each of the
Sellers, the Stockholders and the Officer, no other party to any such lease,
sublease or agreement has repudiated any provision thereof; (vi) there are
no
disputes, oral agreements or forbearance programs in effect as to any such
lease, sublease or agreement; (vii) no such lease, sublease or agreement has
been modified in any respect, except to the extent disclosed in documents
delivered to Buyer and its counsel; (viii) neither of the Sellers has assigned,
transferred, conveyed, mortgaged, deeded in trust or encumbered any interest
in
any leasehold or subleasehold; (ix) to the best knowledge of each of the
Sellers, the Stockholders and the Officer, all buildings, improvements and
other
property on the leased property have received all material approvals of
governmental authorities (including certificates of occupancy, permits and
licenses) required in connection with the operation thereof and have been
operated and maintained in accordance with all material legal requirements
and
are not in violation of any material zoning, building code or subdivision
ordinance, regulation, order or law or restrictions or covenants or record;
(x)
to the best knowledge of each of the Sellers, the Stockholders and the Officer,
all buildings, improvements and other property thereon are supplied with
utitlies and other services necessary for the operation thereof (including
gas,
electricity, water, telephone, sanitary and storm sewers and access to public
roads); (xi) there are no pending or, to the best knowledge of each of the
Sellers, the Stockholders and the Officer, threatened condemnation proceedings,
lawsuits, or other administrative actions relating to such parcel or other
matters affecting adversely the current use, occupancy, or value of such parcel;
(xii) to the best knowledge of each of the Sellers, the Stockholders and the
Officer, the land does not serve any adjoining property for any purpose
inconsistent with the use of the land, and the property is not located within
any flood plain or subject to any similar type restriction for which any permits
or licenses necessary to the use thereof have not been obtained; (xiii) other
than the documents described on the attached Section 2.8 of the Disclosure,
there are no leases, subleases, licenses, concessions, or other agreements,
written or oral, by which the Sellers have granted to any Person the right
of
use or occupancy of any portion of such properties; (xiv) no Person (other
than
the Sellers) is in possession of such properties; and (xv) all such leased
real
property and improvements therein are in good operating condition and repair
and
are adequate and suitable for their intended use in the Business.
2.9 Intellectual
Property.
Section
2.9 of the Disclosure Schedule lists all Intellectual Property that is owned
by
each of the Sellers or any other Person and used by each of the Sellers in
the
operations of the Business, and there are no pending or, to the best knowledge
of each of the Sellers, each of the Stockholders or the Officer, threatened
claims by any Person relating to either Seller's use of any Intellectual
Property. With respect to such Intellectual Property, each Seller has, free
and
clear of all Liens, such rights of ownership or such rights of license, lease
or
other agreement to use the Intellectual Property as are necessary to permit
such
Seller to conduct its business and, except as set forth on Section 2.9 of the
Disclosure Schedule, neither Seller is obligated to pay any royalty or similar
fee to any Person in connection with such Seller's use or license of any of
the
Intellectual Property.
12
2.10 Material
Contracts.
Section
2.10 of the Disclosure Schedule sets forth a true, complete and correct list
of
every Contract that: (i) provides for aggregate future payments by each Seller
or to each Seller of more than $1,000 (excluding purchase orders and invoices
arising in the ordinary course of business); (ii) was entered into by any Seller
with any of the Stockholders or the Officer, or an officer, director or
significant employee of each Seller; (iii) is a collective bargaining or similar
agreement; (iv) guarantees or indemnifies or otherwise causes either Seller
to
be liable or otherwise responsible for the Liabilities of another or provides
for a charitable contribution by either Seller; (v) involves an agreement with
any bank, finance company or similar organization; (vi) restricts either of
the
Sellers, the Stockholders or the Officer or the Business from engaging in any
business or activity anywhere in the world; (vii) is an employment agreement,
consulting agreement or similar arrangement with any employee of either of
the
Sellers; (viii) involves an agreement or any other Contract providing for
payments from either Seller to any other Person, or by any Person to either
Seller, based on sales, purchases or profits, other than direct payments for
goods; or (ix) any other Contract that is material to the rights, properties,
assets, business or operations of either Seller or the Business (the foregoing,
collectively, "Material
Contracts").
Each
Seller has heretofore provided true, complete and correct copies of all of
its
Material Contracts to Buyer.
There
is
not, and to the best knowledge of each of the Sellers, the Stockholders, and
the
Officer, there has not been claimed or alleged by any Person with respect to
any
Material Contract, any existing default, or event that with notice or lapse
of
time or both would constitute a default or event of default, on the part of
either Seller or, to the best knowledge of each of the Sellers, the Stockholders
and the Officer, on the part of any other party thereto, and no consent,
approval, authorization or waiver from, or notice to, any Governmental Entity
or
other Person is required in order to maintain in full force and effect any
of
the Material Contracts, other than such consents and waivers that have been
obtained and are unconditional and in full force and effect and such notices
that have been duly given and copies of such consents, waivers and notices
have
been delivered to Buyer.
2.11 Customers,
Suppliers and Distributors.
Sellers
have delivered to Buyer by electronic mail or facsimile dated March 10, 2006
(i)
a list of all of each of the Sellers’ customers, (ii) the sales of each Seller
for the 12 month period ended January 31, 2006, and (iii) the suppliers and
distributors of each Seller during such period. Other
than in the normal course of business, there
has not
been any adverse change in the business relationship of either Seller with
any
such customer, supplier or distributor, and neither of the Sellers, the
Stockholders or the Officer is aware of any threatened loss of any such
customer, supplier or distributor.
Attached
to Section 2.11 of the Disclosure Schedule is the most recent form of each
of
the Sellers’ standard customer agreement.
13
2.12 Litigation;
Compliance with Laws; Licenses and Permits.
(a) Except
as
set forth in Section 2.12 of the Disclosure Schedule, there is no claim, suit,
action or proceeding ("Proceeding")
pending, nor, to the best knowledge of each of the Sellers, the Stockholders
or
the Officer, is there any investigation or Proceeding threatened, that involves
or affects either Seller or the Business, by or before any Governmental Entity,
court, arbitration panel or any other Person.
(b) Except
as
set forth in Section 2.12 of the Disclosure Schedule, each of the Sellers and
the Business have complied with all applicable federal, state, county, municipal
or other local criminal, civil or common laws, statutes, ordinances, orders,
codes, rules, regulations, permits, policies, guidance documents, judgments,
decrees, injunctions, or agreements of any Governmental Entity (collectively,
"Laws"),
including but not limited to Laws relating to zoning, building codes, antitrust,
occupational safety and health, industrial hygiene, environmental protection,
water, ground or air pollution, consumer product safety, product liability,
hiring, wages, hours, employee benefit plans and programs, collective bargaining
and the payment of withholding and social security taxes. Since January 1,
2002,
neither Seller has received any notice of any violation of any Law.
(c) Except
as
set forth in Section 2.12 of the Disclosure Schedule, each of the Sellers and
the Business has every license, permit, certification, qualification or
franchise issued by any Governmental Entity (each, a "License")
and
every approval, authorization, waiver, variance, exemption, consent or
ratification by or on behalf of any Person that is not a party to this Agreement
(each, a "Permit")
required for it to conduct its business as presently conducted. All such
Licenses and Permits are specified on Schedule 2.12. All such Licenses and
Permits are in full force and effect and neither of the Sellers, the
Stockholders or the Officer has received notice of any pending cancellation
or
suspension of any thereof nor, to the best knowledge of either of the Sellers,
the Stockholders or the Officer, is any cancellation or suspension thereof
threatened. The applicability and validity of each such License and Permit
will
not be adversely affected by the consummation of the transactions contemplated
by this Agreement. Each such License or Permit is set forth in Section 2.12
of
the Disclosure Schedule.
2.13 Product
or Service Claims.
No
product or service liability claim or a claim with respect to the conduct of
the
Business is pending, or to the best knowledge of each of the Sellers, the
Stockholders or the Officer, threatened, against either Seller or against any
other party with respect to the products or services of the Business. Section
2.13 of the Disclosure Schedule lists all service and product liability claims
asserted against each Seller with respect to the products or services of the
Business or either Seller during the last five (5) years.
2.14 No
Brokers.
Neither
of the Sellers, the Stockholders or the Officer has employed, or otherwise
engaged, any broker or finder or incurred any liability for any brokerage or
investment banking fees, commissions, finders' fees or other similar fees in
connection with the transactions contemplated by this Agreement.
14
2.15 Assets
Utilized in the Business.
Except
as set forth in Section 2.15 of the Disclosure Schedule, the assets, properties
and rights owned, leased or licensed by each Seller or used in connection with
the Business and that are owned, leased or licensed by such Seller as of the
date hereof, and all the agreements to which each Seller is a party, constitute
all of the properties, assets and agreements necessary to such Seller in
connection with the operation and conduct by such Seller of the Business as
presently and as proposed to be conducted.
2.16 Related
Party Transactions.
Section
2.16 of the Disclosure Schedule sets forth all services provided by each of
the
Stockholders or the Officer to each of the Sellers and all other arrangements
or
agreements involving either of the Stockholders, the Officer or the Sellers
for
the last 5 years.
2.17 Insurance.
Section
2.17 of the Disclosure Schedule contains a complete and correct list of all
policies of insurance of any kind or nature covering each Seller, including
policies of life, fire, theft, casualty, product liability, workmen's
compensation, business interruption, employee fidelity and other casualty and
liability insurance, indicating the type of coverage, name of insured, the
insurer, the expiration date of each policy, the amount of coverage and whether
on an "occurrence" or "claims made" basis. All such policies are: (i) with
insurance companies that are financially sound and reputable and are in full
force and effect; (ii) sufficient for compliance with all material requirements
of law and of all applicable material agreements; and (iii) valid, outstanding
and enforceable policies. Complete and correct copies of such policies have
been
furnished to Buyer. All such insurance policies or comparable coverage shall
continue in full force and effect through the Closing Date.
2.18 No
Misstatements or Omissions.
No
representation or warranty by either of the Sellers, the Stockholders or the
Officer contained in this Agreement and no statement of
each
of the Sellers, the Stockholders or the Officer contained
in any certificate, list, Schedule, Exhibit or other instrument specified or
referred to in this Agreement, whether heretofore furnished to Buyer or
hereafter furnished to Buyer pursuant to this Agreement, contains or will
contain any untrue statement of a material fact or omits or will omit any
material fact necessary to make the statements contained therein, in light
of
the circumstances under which it was made, not misleading.
2.19 Labor
Matters and Employment Matters.
(a) Set
forth
on Section 2.19(a) of the Disclosure Schedule is a list of all employees of
each
of the Sellers as of the date hereof and their respective positions, hire dates
and, stated separately, their base wage rates and the nature and amount of
any
other compensation.
(b) Set
forth
on Section 2.19(b) of the Disclosure Schedule is a list of (i) each oral or
written employment agreement, contract or severance agreement existing as of
the
date hereof, individually or collectively, with any of the Sellers’ employees
(collectively, the "Employment
Agreements"),
and
(ii) the name of each employee of such Seller with whom such Seller has entered
into an agreement or contract as of the date hereof providing for retention
payments (collectively, the "Retention
Agreements").
Each
Seller has furnished to the Buyer copies of all Employment Agreements and
Retention Agreements.
15
(c) (i)
Neither Seller is a party to or bound by any collective bargaining agreement
or
similar agreement with any labor organization, or work rules or practices agreed
to with any labor organization or employee association applicable to such
Seller’s employees, (ii) none of such Seller’s employees are represented by any
labor organization, and there are no organizational campaigns, demands,
petitions or proceedings pending or, to the knowledge of each of the Sellers,
the Stockholders or the Officer, threatened by any labor organization or group
of employees seeking recognition or certification as collective bargaining
representative of any group of such Seller’s employees, (iii) to the knowledge
of each of the Sellers, the Stockholders or the Officer, there are no union
claims to represent the employees of either Seller, (iv) there are no strikes,
controversies, slowdowns, work stoppages, lockouts or labor disputes pending
or,
to the knowledge of each of the Sellers, the Stockholders or the Officer,
threatened against or affecting either Seller, and there has not been any such
action during the past five (5) years, and (v) no unfair labor practice charges,
jurisdictional disputes, or other matters within the jurisdiction of the
National Labor Relations Board has occurred, is pending or, to the knowledge
of
each of the Sellers, the Stockholders or the Officer, is threatened before
the
National Labor Relations Board or other governmental entity.
(d) Each
Seller is, and has, at all times during at least the last three (3) years,
been
in compliance with all applicable laws, regulations and ordinances respecting
immigration, employment and employment practices, and the terms and conditions
of employment, including, without limitation, employment standards, equal
employment opportunity, family and medical leave, wages, hours of work and
occupational health and safety.
(e) (i)
There
are no pending, or to the knowledge each of the Sellers, the Stockholders or
the
Officer, threatened Equal Employment Opportunity Commission or analogous state
or local agency charges, complaints or other claims of employment discrimination
against either Seller by any employee or independent contractor of either
Seller; (ii) there are no pending, or to the knowledge of each of the Sellers,
the Stockholders or the Officer, threatened wage complaints, investigations,
reviews or audits with respect to any of either Seller’s employees by the
Department of Labor or analogous state or local governmental entities, and
neither Seller has received notice of the intent of the Department of Labor
or
any other government entity to conduct any such investigation, review or audit;
(iii) there are no pending, or to the knowledge of each of the Sellers, the
Stockholders or the Officer, threatened occupational safety and health
complaints, investigations or reviews with respect to any of either Seller’s
employees by the Occupational Safety and Health Administration or analogous
state or local government entities, and neither Seller has received notice
of
the intent of the Occupational Safety and Health Administration or any other
government entity to conduct any such investigation or review; and (iv) neither
Seller has received notice of the intent of any government entity responsible
for the enforcement of labor and employment laws to conduct any investigation,
audit or review and, to the knowledge of each of the Sellers, the Stockholders
or the Officer, no such investigation is in progress with respect to either
Seller.
16
(f) Since
January 1, 2005 neither Seller has effected (i) a "plant closing" as defined
in
the Worker Adjustment and Retraining Notification Act of 1988 ("WARN") affecting
any site of employment or one or more facilities or operating units within
any
site of employment or facility of such Seller, or (ii) a "mass layoff" as
defined in WARN affecting any site of employment or facility of such Seller;
nor
has either Seller been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
similar state or local law. None of either Seller’s employees has suffered an
"employment loss" as defined in WARN since January 1, 2005. Buyer shall not
incur any liability or other obligation with respect to WARN or any state or
local plant closing or mass layoff statute in connection with or as a result
of
the transactions contemplated by this Agreement. The Sellers shall be, jointly
and severally, solely and exclusively liable to provide such WARN or other
plant
closing or mass layoff notices as may be necessary in connection with any loss
of employment by any employee of either Seller through and including the Closing
Date.
(g) The
consummation of the transaction contemplated hereunder will not accelerate
the
time of payment of any compensation due to any employee of either Seller or
result in an excess parachute payment to any employee of either Seller within
the meaning of Code Section 280G.
(h) Set
forth
on Section 2.19(h)(A) of the Disclosure Schedule is a complete list of each
Seller’s current foreign national employees on whose behalf such Seller has
submitted applications and petitions to the U.S. Department of Labor, U.S.
Immigration and Naturalization Service, and U.S. Department of State for
immigration employment and visa benefits; and each Seller has provided the
Buyer
with copies of all such applications and petitions and all government notices
regarding adjudications of such notices and petitions. Section 2.19(h)(B) of
the
Disclosure Schedule identifies and describes any pending or, to the knowledge
of
each of the Sellers, the Stockholders or Officers, threatened actions against
either Seller for violations under the Immigration Reform and Control Act of
1986 respecting such employees of either Seller.
(i) Set
forth
on Section 2.19(i) of the Disclosure Schedule is a complete list of all business
of each Seller involving federal contracts giving rise to any reporting or
filing obligations with the Office of Federal Contract Compliance Programs
("OFCCP"), and each Seller has complied in all material respects with all hiring
and employment obligations applicable under OFCCP rules and
regulations.
2.20 Environmental
Matters.
To the
best knowledge of each of the Sellers, the Stockholders and the
Officer:
(a) Each
Seller is in compliance with, and the Business has been conducted in material
compliance with, all Environmental Laws (as defined below) and Environmental
Permits (as defined below);
(b) no
Site
(as defined below) is a treatment, storage or disposal facility, as defined
in
and regulated under the Resource Conservation and Recovery Act, 42 U.S.C. § 6901
et seq., is on or ever was listed or is proposed for listing on the National
Priorities List pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq., or on any similar
state list of sites requiring investigation or cleanup;
17
(c) Neither
of the Sellers, the Stockholders or the Officer have received any notice that
remains pending or outstanding with respect to its business or any Site from
any
governmental entity or person alleging that either Seller is not in material
compliance with any Environmental Law;
(d) there
has
been no release of a Hazardous Substance (as defined below) at, from, in, to,
on
or under any Site and no Hazardous Substances are present in, on, about or
migrating to or from any Site that could give rise to an Environmental Claim
(as
defined below) against either Seller;
(e) there
are
no pending or outstanding corrective actions requested, required or being
conducted by any governmental entity for the investigation, remediation or
cleanup of any Site, and there have been no such corrective actions, whether
still pending or otherwise;
(f) the
Business has obtained and holds all necessary environmental permits, and those
environmental permits will remain in full force and effect after the
consummation of the transactions contemplated hereby;
(g) there
are
no past or pending, or to the knowledge of each of the Sellers, the Stockholders
and the Officer, threatened, Environmental Claims against either Seller or,
with
respect to the Business, either Seller or the Purchased Assets, the Stockholders
or the Officer, and neither of the Sellers, the Stockholders or the Officer
is
aware of any facts or circumstances which could be expected to form the basis
for any Environmental Claim against the Business;
(h) neither
of the Sellers, nor any predecessor of such Seller, nor any entity previously
owned by either Seller, has transported or arranged for the treatment, storage,
handling, disposal, or transportation of any Hazardous Substance to any off-Site
location that could result in an Environmental Claim against such
Seller;
(i) there
are
no (i) underground storage tanks, active or abandoned, (ii) polychlorinated
biphenyl containing equipment, or (iii) asbestos containing material at any
Site; and
(j) there
have been no environmental investigations, studies, audits, tests, reviews
or
other analyses (which have been reduced to writing) conducted by, on behalf
of,
or that are in the possession of either Seller with respect to any Site or
any
transportation, handling or disposal of any Hazardous Substance that has not
been delivered to Buyer prior to execution of this Agreement.
18
As
used
herein, (i) "Environment"
means
all air, surface water, groundwater, or land, including land surface or
subsurface, including all fish, wildlife, biota and all other natural resources;
(ii) "Environmental
Claim"
means
any and all administrative or judicial actions, suits, orders, claims, liens,
notices, notices of violations, investigations, complaints, requests for
information, proceedings or other communications (written or oral), whether
criminal or civil, (collectively, "Claims")
pursuant to or relating to any applicable Environmental Law by any person
(including, but not limited to, any governmental entity, person and citizens'
group) based upon, alleging, asserting, or claiming any actual or potential
(x)
violation of or liability under any Environmental Law, (y) violation of any
environmental permit, or (z) liability for investigatory costs, cleanup costs,
removal costs, remedial costs, response costs, natural resource damages,
property damage, personal injury, fines, or penalties arising out of, based
on,
resulting from, or related to the presence, release, or threatened release
into
the Environment, of any Hazardous Substances at any location, including, but
not
limited to, any off-Site location to which Hazardous Substances or materials
containing Hazardous Substances were sent for handling, storage, treatment,
or
disposal; (iii) "Environmental
Law"
means
any and all Laws relating to the protection of health and the Environment,
worker health and safety, and/or governing the handling, use, generation,
treatment, storage, transportation, disposal, manufacture, distribution,
formulation, packaging, labeling, or release of Hazardous Substances, whether
now existing or subsequently amended or enacted, and the state analogies
thereto, all as amended or superseded from time to time; and any common law
doctrine, including, but not limited to, negligence, nuisance, trespass,
personal injury, or property damage related to or arising out of the presence,
Release, or exposure to a Hazardous Substance; (iv) "Hazardous
Substance"
means
petroleum, petroleum hydrocarbons or petroleum products, petroleum by-products,
radioactive materials, asbestos or asbestos-containing materials, gasoline,
diesel fuel, pesticides, radon, urea formaldehyde, lead or lead-containing
materials, polychlorinated biphenyls; and any other chemicals, materials,
substances or wastes in any amount or concentration which are now included
in
the definition of "hazardous substances," "hazardous materials," "hazardous
wastes," "extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," "pollutants," "regulated substances," "solid
wastes," or "contaminants" or words of similar import, under any Environmental
Law; and (v) "Site"
means
any of the real properties currently or previously owned, leased, used or
operated by either Seller, any predecessors of either Seller or any entities
previously owned by either Seller, including all soil, subsoil, surface waters
and groundwater thereat.
2.21 No
Material Adverse Change.
Except
as disclosed in Section 2.21 of the Disclosure Schedule, since December 31,
2005, (a) no event, condition or circumstance has occurred that could, or could
be reasonably likely to, have a material adverse effect on the Business or
the
Purchased Assets, or on the condition (financial or otherwise), results of
operations or prospects of either Seller or the Business; and (b) the Business
has been conducted in the ordinary course and consistent with past practice.
2.22 No
Undisclosed Liabilities.
(a) Neither
Seller has any Liabilities other than those identified in the Disclosure
Schedule, each of which was incurred in the ordinary course of
business.
(b) All
accounts payable of each Seller are set forth in Section 1.4(viii) of the
Disclosure Schedule, are the result of bona fide transactions in the ordinary
course of business and are not yet due and payable as at the date hereof, in
accordance with the respective invoices relating thereto.
19
2.23 Solvency.
Immediately prior to and upon consummation of the transactions contemplated
under this Agreement, each Seller will be solvent, will have assets having
a
fair value in excess of the amount required to pay its Liabilities as they
become due and will have access to adequate capital for the conduct of its
business and the ability to pay its debts and such Liabilities as they
mature.
2.24 Employee
Benefits.
(a) Disclosure
of All Plans.
Except
as set forth in Section 2.24 of the Disclosure Schedule, neither of the Sellers
nor any other company or entity, which
together with either of the Sellers has at any time constituted a member of
the
Sellers’ "controlled group" or "affiliated service group" (within the meaning of
Sections 4001(a)(14) and/or (b) of the Employee Retirement Income Security
Act
of 1974, as amended ("ERISA")
and/or
Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended (the "Code")
(such
group or groups and each member thereof hereinafter referred to individually
and
collectively as the "Group")),
has
at any time adopted, sponsored or maintained, has any liability for or is a
fiduciary with respect to, or has any present or future obligation to contribute
to or make payment under, or has or is making contributions or payments under,
(i) any employee benefit plan (as defined in Section 3(3) of ERISA) regardless
of whether such plan is actually covered by ERISA (including any Employee
Welfare Benefit Plan or Employee Pension Plan, as defined in ERISA), or (ii)
any
other benefit plan, program, policy, practice, contract or arrangement of any
kind whatsoever (whether for the benefit of present, former, retired or future
employees, officers, directors, managers, consultants or each of independent
contractors of either of the Sellers or any member of the Group, or for the
benefit of any other person or persons) including, without limitation, with
respect to disability, relocation, child care, educational assistance, deferred
compensation, pension, retirement, profit sharing, thrift, savings, stock
ownership, stock bonus, restricted stock, health, dental, medical, life,
hospitalization, stock purchase, stock option, incentive, bonus, sabbatical
leave, vacation, severance, cafeteria, performance award, stock or stock-related
awards, fringe benefits or other contribution, benefit or payment of any kind,
whether formal or informal, oral or written, funded or unfunded and whether
or
not legally binding, or (iii) any employment, consulting, service or other
contract or agreement of any kind whatsoever (collectively, "Employee
Plans").
Neither of the Sellers nor any member of the Group has any plan or commitment,
whether legally binding or not, to establish any new Employee Plan, to modify
any Employee Plan, or to enter into any Employee Plan, nor do they have any
intention or commitment to do any of the foregoing.
(b) Documentation.
Each of
the Sellers and all members of the Group have provided to Buyer (i) correct
and
complete copies of all documents embodying or relating to each Employee Plan
including all amendments thereto and copies of all forms of agreement and
enrollment used therewith, and all trusts, group annuity contracts, insurance
policies or other funding media in connection with these Employee Plans; (ii)
the most recent annual reports (Series 5500 and all schedules thereto), if
any,
required under ERISA or the Code in connection with each Employee Plan or
related trust; and (iii) the most recent Internal Revenue Service ("IRS")
determination letter, opinion letter and rulings relating to each Employee
Plan.
Except as required to comply with applicable law or as otherwise required by
this Agreement, no plan amendments have been adopted, no changes to the
documents have been made, and no such amendments or changes shall be adopted
or
made prior to the Closing Date and since the date such documents were supplied
to the Buyer.
20
(c) Qualified
Status and Current Determination Letter.
Each
Employee Plan which is intended to qualify under Section 401(a) of the Code
and
each trust intended to qualify under Section 501(a) of the Code has received
a
favorable determination letter from the IRS with respect to each such Employee
Plan as to its qualified status under the Code, including all amendments to
the
Code effected by the Tax Reform Act of 1986 and subsequent legislation enacted
through 2001, and neither of the Sellers nor any member of the Group knows
or
has reason to know why each such Employee Plan or trust should not continue
to
be so qualified.
(d) Employee
Plan Compliance.
Except
as set forth in Section 2.24 of the Disclosure Schedule, (i) each Employee
Plan
has been established and maintained in all material respects in accordance
with
its terms and in compliance with all applicable laws, statutes, orders, rules
and regulations including, without limitation, ERISA and the Code, and no
communication has been received from a governmental authority asserting that
an
Employee Plan is not in compliance with applicable laws, statutes, orders,
rules
and regulations; (ii) no prohibited transaction (within the meaning of Section
4975 of the Code or Section 406 of ERISA) has occurred with respect to any
Employee Plan; (iii) there are no actions, suits, claims, or governmental agency
action or investigation pending or threatened (other than routine claims for
benefits) against any Employee Plan or against the assets of any Employee Plan,
and neither of the Sellers nor any member of the Group have any reason to expect
such an action, suit, claim, or governmental agency action or investigation
to
arise; (iv) each Employee Plan can be amended, terminated or otherwise
discontinued before or after the Closing Date in accordance with its terms,
without liability to either of the Sellers, any member of the Group or the
Buyer
(other than ordinary administration expenses or Liabilities typically incurred
in a termination event); (v) there are no audits, inquiries or proceedings
pending or threatened by the IRS or Department of Labor ("DOL") with respect
to
any Employee Plan; (vi) neither of the Sellers nor any member of the Group
is
subject to any penalty or tax with respect to any Employee Plan under Section
402(i) of ERISA or Sections 4975 through 4980 of the Code; and (vii) neither
of
the Sellers nor any member of the Group has engaged in a transaction that could
be subject to Section 4069 or 4212(c) of ERISA.
(e) No
Pension Plans.
Neither
of the Sellers nor any members of the Group have ever maintained, established,
sponsored, participated in or contributed to any employee pension benefit plan
(as defined Section 3(2) of ERISA) which was, or is, subject to Part 3 of
Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the Code,
and neither of the Sellers nor any member of the Group has incurred, or expects
to incur, any liability under Title IV of ERISA.
(f) No
Multiemployer Plans.
At no
time has either of the Sellers or any member of the Group sponsored, maintained,
contributed to, had any obligation to contribute to, or incurred, or expects
to
incur, any liability regarding any multiemployer plan (as defined in Section
3(37) or Section 4001(a)(2) of ERISA).
21
(g) No
Retiree Benefits.
Neither
of the Sellers nor any member of the Group maintains, sponsors, contributes
to,
or has any obligation to any retired or former employee of either of the Sellers
with respect to the provision of any disability (long or short term),
hospitalization, medical, dental or life insurance benefits, whether insured
or
self-insured, or coverage under any employee welfare benefit plan (within the
meaning of Section 3(1) of ERISA) or any similar benefit plan maintained by
either of the Sellers or any member of the Group, other than as required under
Section 4980B of the Code or Part 6 of Title I of ERISA or any similar state
law. Neither of the Sellers nor any member of the Group have represented,
promised or contracted (whether in oral or written form) to an employee (either
individually or to employees as a group) that such employee(s) would be provided
with life insurance, medical or other employee benefits upon their retirement
or
termination of employment, except to the extent required by statute.
(h) Compliance
with COBRA.
Each of
the Sellers and all member of the Group have complied with all notice and
continuation of health care coverage requirements under Section 4980B of the
Code and Part 6 of Title I of ERISA or any applicable state law.
(i) No
Foreign Plans.
Neither
of the Sellers nor any member of the Group maintains, sponsors, has any
obligation or liability to or provides or otherwise makes available retirement
or deferred benefits of any kind whatsoever under any benefit plan or Employee
Plan established or maintained outside of the United States.
(j) Effect
of Transaction.
The
execution of this Agreement and the consummation of the transactions
contemplated hereby and thereby will not (either alone or upon the occurrence
of
any additional or subsequent events) constitute an event under any Employee
Plan, trust or loan that will or may result in any payment (whether of severance
pay or otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with respect
to any Employee Benefit Plan. No payment or benefit which will or may be made
by
either of the Sellers, any member of the Group or the Buyer as a result of
the
execution of this Agreement and consummation of the transactions contemplated
hereby will be characterized as a parachute payment (within the meaning of
Section 280G of the Code).
2.25 Investment
Representations.
(a)
Each of the Sellers is an "Accredited Investor", as that term is defined under
Section 501(a) of Regulation D under the Securities Act of 1933, as amended
(the
"Act"), by virtue of the fact that all of their respective equity owners are
accredited investors. Neither of the Sellers is a broker or dealer registered
with the Securities and Exchange Commission under the Securities Exchange Act
of
1934, or an entity engaged in a business that would require it to be so
registered.
(b)
Prior
to the date hereof and the Closing Date, each Seller has had full opportunity
to
ask questions of and receive answers from AMAC and its officers and authorized
represen-ta-tives regarding the merits of an investment in the Shares. Each
Seller confirms that it does not desire to receive any further information.
Each
Seller has sufficient knowledge and experience in financial and business matters
so as to be able to evaluate the merits and risks of acquiring the
Shares.
22
(c)
Each
Seller acknowledges that the Shares have not been registered under the Act
or
the securities laws of any state, are exempt from such registration and are
being issued in reliance on Section 4(2) of the Act, specifically Rule 506
promulgated under Regulation D, and in reliance on each Seller’s representations
and warranties contained herein. Neither Seller has received any general
solicitation or general advertising regarding the acquisition of the Shares.
Each Seller acknowledges that the Shares cannot be resold unless they are
registered under the Act or exemption from registration is
available.
(d)
Each
Seller represents and warrants that the Shares are being acquired by it for
its
own account, for investment purposes and not with a view to distribu-tion or
resale, nor with the intention of sale, transfer or other disposition, in whole
or any part for any particular price, or at any particular time, or upon the
happening of any particular event or circum-stance. Each Seller agrees to hold
the Shares indefinitely unless they are subsequently registered under the Act,
or an exemption from such registration is available, and acknowledges that
AMAC
will require an opinion of counsel, as a condition of any sale or transfer,
that
registration is not required under the Act or applicable state securities laws.
Certificates to be issued will bear a legend indicating that the Shares have
not
been registered under the Act and are subject to restrictions on
transferability.
Section
3. Representations
and Warranties of Buyer.
Buyer
represents and warrants to each of the Sellers and the Stockholders that each
of
the following statements is true and correct as of the date hereof:
3.1 Organization.
Buyer
is a corporation duly organized, validly existing and in good standing under
the
laws of its jurisdiction of organization, with full power and authority to
conduct its business and to own and operate its assets and properties as
presently conducted and operated.
3.2 Authorization;
Validity of Agreement.
Buyer
has the right, power and authority to execute and deliver this Agreement and
each of the other Purchase Documents to which it is a party (the "Buyer
Purchase Documents")
and to
consummate the transactions contemplated hereby and thereby and to make the
representations set forth herein and therein. The execution and delivery of
the
Buyer Purchase Documents and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by Buyer and no other
proceedings on the part of Buyer are necessary to authorize the Buyer Purchase
Documents or the consummation of the transactions contemplated hereby and
thereby. Each of the Buyer Purchase Documents have been duly and validly
executed by Buyer and constitute the valid and binding agreement of Buyer,
enforceable against Buyer in accordance with its terms, except as such
enforceability may be subject to or limited by applicable bankruptcy,
insolvency, reorganization, or other similar laws, now or hereafter in effect,
affecting the enforcement of creditors' rights generally. The
Shares, when issued, shall be validly issued, non-assessable and fully paid
shares of AMAC's common stock.
23
3.3 Consents
and Approvals; No Violation.
The
execution, performance and delivery by Buyer of the Buyer Purchase Documents
and
the consummation by Buyer of the transactions contemplated hereby and thereby,
and compliance by Buyer with the provisions hereto and thereto do not and will
not: (a) conflict with or breach any provision of the Certificate of
Incorporation of Buyer; (b) violate or breach in any respect any provision
of,
or constitute a default (or an event which, with notice or lapse of time or
both
would constitute a default) under, any of the terms, covenants, conditions
or
provisions of, or give rise to a right to terminate or accelerate or increase
the amount of payment due under, any note, bond, mortgage, indenture, deed
of
trust, license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which Buyer is a party, or by which
Buyer or any of its properties or assets may be bound; (c) require Buyer to
make
any filing or registration with, or obtain any other permit, authorization,
consent or approval of, any governmental or regulatory authority; (d) violate
any order, writ, injunction, decree, judgment, or ruling of any court or
governmental authority applicable to Buyer or any of its assets; or (e) violate
any statute, law, rule or regulation applicable to Buyer.
Section
4. Covenants
of the Parties.
4.1 Employee
Matters.
(a) Nothing
in this Agreement shall confer upon any employee of the either Seller the right
to employment with Buyer after the Closing Date. Buyer shall offer employment
to
all the of the Sellers’ current employees as listed on Schedule 2.19(a) hereto
(all such employees accepting such offer are hereinafter referred to as the
"Transferred
Employees"),
at no
less than the base wage rates set forth on Schedule 2.19(a) hereto and no less
favorable terms as set forth on Schedule 2.19(a) hereto, and on such other
terms
to be established by Buyer in its sole discretion. Buyer shall have no
Liabilities with respect to either of the Sellers’ employees or independent
contractors for periods prior to any such person becoming employees of, or
independent contractors to, Buyer, including, but not limited to, Liabilities
for wages, bonuses, vacation pay and employee benefits of any kind, and each
of
the Sellers shall be solely liable, jointly and severally, for the payment
of
any such Liabilities.
(b) Except
to
the extent specifically set forth in Section 4.1 of the Disclosure Schedule
hereto, Buyer is not assuming and the Sellers shall remain liable, jointly
and
severally, for all Liabilities arising out of or in any way related to (i)
all
amounts required to be paid pursuant to any Employment Agreements, Retention
Agreements and any other similar agreements between either Seller and any of
such Seller’s employees, subject to and in accordance with the terms and
conditions set forth in such agreements; (ii) any and all severance or
termination costs that arise with respect to employees of either Seller
terminated from employment with such Seller on or before the Closing Date (or
whose notice of termination was delivered prior to such date); (iii) any claims
by any employee of either Seller relating to a termination or deemed termination
on or prior to the Closing Date as a result of the transactions contemplated
by
this Agreement; (iv) any claims by any Seller's employees who refuse Buyer’s
offer of employment; (v) any workers’ compensation claims by any Transferred
Employee for injuries or illnesses incurred, sustained or resulting from
work-related exposures or conditions prior to such Transferred Employee’s
employment date with Buyer, if any (regardless of whether the claim related
thereto is filed before or after the Closing Date); (vi) claims for any benefits
accruing, or with respect to occurrences commencing, on or before the Closing
Date under any Seller's benefit plans, including, but not limited to, (A)
hospital benefits or any confinements that commenced on or before the Closing
Date, including any covered charges of health care professionals relating to
such confinements, (B) short-term and long-term disability
24
benefits,
if any, for disabilities that commenced on or before the Closing Date for the
period that each of such affected individuals remain disabled, (C) life and
survivor income benefits, if any, for deaths that occur on or prior to the
Closing Date, (D) all benefits that are being, or may be, paid to, or with
respect to, any of such employees who are on long-term or short-term disability
or medical, family, personal or other leaves of absence as of the Closing Date,
or who go on short-term, long-term, medical, family, personal or other leaves
of
absence after the Closing Date as a result of any injury, illness or other
factor occurring on or prior to the Closing Date pursuant to
the terms of such Seller benefit plans as in effect immediately prior
to the Closing Date (including any subsequent benefit increases); (E) benefits
under any "spending account" or similar arrangement under any "cafeteria plan"
(as defined in Section 125 of the Internal Revenue Code of 1986, as amended)
with respect to salary reduction elections made prior to the Closing Date,
(F)
benefits under all other benefit plans of either Seller which accrue on or
before the Closing Date; (vii) any independent contractor agreement or
relationship to or involving either Seller entered into prior to the Closing
Date; (viii) other acts or omissions occurring or otherwise attributable to
the
period on or before the Closing Date with respect to the employment of,
termination of employment of, provision of benefits to, and/or compensation
of
any of the Sellers’ employees, including, but not limited to, any personal
injury, discrimination, wage/hour, family and medical leave, mass layoff, plant
closing, harassment, wrongful discharge, or other wrongful employment practice,
unfair labor practice, claims for benefits (including claims arising under
ERISA
or workers’ compensation laws), or other violation of, or obligations under, any
labor, employment or benefits law; and (ix) all wages and salaries of the
Sellers’ employees for work performed or services rendered by such employees on
or prior to the Closing Date. The parties hereto acknowledge and agree that,
except with respect to those benefit plans listed on Section 4.1 of the
Disclosure Schedule (the “Assumed
Plans”),
as of
the Closing Date, the Transferred Employees will cease accruing benefits under
and shall cease participation in all of the Sellers’ benefit plans. Buyer shall
not have any liability or obligations of any nature, whether known or unknown,
absolute, accrued, contingent or otherwise, and whether due or to become due,
arising out of relating to either Seller being, or being deemed to be, a joint
employer or part of a single employer group. Sellers shall pay all Transferred
Employees an amount equal to their respective accrued vacation within 24 hours
of the Closing Date.
(c) The
Buyer
shall not adopt, assume or otherwise become responsible for, either primarily
or
as a successor employer, any assets or Liabilities of any Employee Plans,
employee benefit plans, arrangements, commitments or policies currently provided
by either Seller or by any member of the Group and each Seller shall remain
solely liable for any Liability related to Employee Plans or other employee
benefit plans, arrangements, commitments or policies, except that Buyer shall
assume all obligations under the Assumed Plans for periods beginning after
the
Closing Date; and if and to the extent that the Buyer is deemed by law or
otherwise to be liable as a successor employer for such purposes, each of the
Sellers, the Stockholders and the Officer shall, jointly and severally,
indemnify the Buyer for the full and complete costs, fees and other Liabilities
which result. Each Seller shall honor and be solely responsible for all
Liabilities under such Seller’s benefit plans.
(d) Neither
Seller shall take any action, including, but not limited to, offering employment
with such Seller, to induce Transferred Employees not to accept employment
with
Buyer.
25
(e) To
the
extent permitted by law, as soon as reasonably practicable after the date
hereof, each Seller will provide to Buyer the necessary employee data, including
personnel and benefits information, maintained with respect to the Transferred
Employees by such Seller or by its independent contractors, such as insurance
companies and actuaries, in order to facilitate benefit and payroll transition
for the Transferred Employees. After the date hereof, each Seller shall
cooperate and provide Buyer with reasonable assistance in connection with the
establishment of any applicable employee benefit plans and programs and shall
cooperate with the Buyer in assisting the Transferred Employees in rolling
over
amounts attributable to their participation in each Seller’s defined
contribution plan(s) into any comparable defined contribution retirement plan
that may be established by the Buyer.
(f) Notwithstanding
anything to the contrary contained in Section 6 hereof, each of the Sellers,
the
Stockholders and the Officer shall, jointly and severally, pay and shall assume,
indemnify, defend, and hold harmless Buyer from and against and in respect
of
any and all losses, damages, claims for benefits, Liabilities, taxes, and
sanctions that arise under the Section 4980B of the Code, or Part 6 of Title
I
of ERISA or any similar state law (individually and collectively "COBRA"),
interest and penalties, costs, and expenses (including, without limitation,
disbursements and reasonable legal fees incurred in connection with any action,
suit, proceeding, claim, appeal, demand, assessment, or judgment) imposed upon,
incurred by, or assessed against Buyer and any of its employees arising by
reason of or relating to any failure of either Seller to comply with the
continuation health care coverage provisions of COBRA which failure occurred
with respect to any current or prior employee of such Seller or any qualified
beneficiary of such employee (as defined in COBRA) prior to the Closing Date
or
as otherwise required as a result of either Seller’s dissolution and/or
termination of its group health plan or plans or any other transactions or
matters contemplated by this Agreement. In particular, if and to the extent
that
the Buyer is deemed by law or otherwise to be liable as a successor employer
for
such COBRA purposes, each of the Sellers, the Stockholders and the Officer
shall, jointly and severally, indemnify the Buyer for the full and complete
costs, fees and other Liabilities which result.
(g) In
respect of grievances or Labor Claims of Transferred Employees to the extent
relating to their employment by either Seller including, without limitation,
any
such grievances or Labor Claims filed before state or local authorities for
which payment has not been made prior to the Closing Date, each Seller shall
retain responsibility and liability for all amounts due with respect thereto
including, without limitation, the payment of any amounts in the nature of
back
pay or employee compensation, and any state or federal taxes in connection
with
such back pay or employee compensation, and each of the Sellers, the
Stockholders and the Officer shall, jointly and severally, indemnify the Buyer
with respect to any such Liabilities. Handling of such grievances and Labor
Claims shall be at the Sellers’ cost and expense. Buyer shall have sole
responsibility and liability for any Labor Claims of Transferred Employees
that
relate to their employment with Buyer.
(h) Nothing
in this Section 4.1 shall limit the at will nature of the employment of the
Transferred Employees or the right of Buyer to alter or terminate any employee
benefit plan, program or arrangement.
26
(i) Immediately
following the Closing Date, each of the Sellers and all members of the Group
shall each terminate, effective as of the day immediately preceding the Closing
Date, any and all Employee Plans, except for the Assumed Plans. Buyer shall
receive from each Seller evidence that all tax qualified Employee Plans (other
than those which are Assumed Plans) have been terminated by such Seller and
all
members of the Group pursuant to resolutions of each such entity’s Board of
Directors or managers (the form and substance of such resolutions being subject
to the review and approval of Buyer), effective as of the day immediately
preceding the Closing Date. Each of the Sellers and each member of the Group
shall submit, or have submitted on its behalf, to the Internal Revenue Service
an application for determination of the tax-qualified status upon its
termination of each Employee Plan which is intended to qualify under Section
401(a) of the Code and each trust intended to qualify under Section 501(a)
of
the Code. Each such application shall be (i) submitted as soon as
administratively possible following the Closing Date, and (ii) paid for
(including all related legal, administrative and other costs and expenses)
solely by each such Seller. Each of the Sellers shall periodically notify Buyer
of the status of each such submission and shall provide Buyer with a copy of
each determination letter, if and when received. Each of the Sellers and all
members of the Group shall operate and maintain the Employee Plans in all
respects in accordance with its terms and in compliance with all applicable
laws, statutes, orders, rules and regulations including, without limitation,
ERISA and the Code, until all amounts are distributed from such Employee
Plan.
4.2 Non-disclosure
of Confidential Information.
Neither
the Sellers, the Stockholders, the Officer, nor any affiliate thereof, shall
divulge, communicate, or use to the detriment of the Buyer or for the benefit
of
any other Person, or misuse in any way, any confidential information pertaining
to the Business or the Purchased Assets. For purposes hereof, "confidential
information" means information, including but not limited to, technical or
non
technical data, a formula, pattern, compilation, program, device, method,
technique, drawing, process, marketing methods or data, financial data, or
list
of actual or potential customers or suppliers, that: (i) is sufficiently secret
to derive economic value, actual or potential, from not being generally known
to
other persons who can obtain economic value from its disclosure or use; and
(ii)
is the subject of efforts that are reasonable under the circumstance to maintain
its secrecy or confidentiality.
4.3 Non-solicitation
of Employees.
Until
the fifth anniversary of the Closing Date (the "Non-Solicitation
Period"),
neither the Sellers,
the
Stockholders,
the
Officer nor any affiliate thereof, shall, directly or indirectly, for itself
or
for any other person, firm, corporation, partnership, association or other
entity, (i) attempt to employ or enter into any contractual arrangement with
any
employee or former employee of either of the Sellers, unless such employee
or
former employee has not been employed by Buyer for a period in excess of one
year, or (ii) solicit business from any person or entity that was a customer
of
either of the Sellers at any time prior to the Closing Date or was a customer
of
Buyer at any time after the Closing Date.
27
4.4 Non-Competition. Until
the
fifth anniversary of the Closing Date (the "Non-Compete
Period"),
neither the Sellers, the Stockholders, the Officer nor any affiliate thereof,
shall directly or indirectly, engage in the Business or any business comparable
to or competitive with the Business, or have any interest in or engage in any
transaction with, any sole proprietorship, partnership, corporation (other
than
the Buyer or any of its affiliates) or business or any other person or entity
(whether as an employee, officer, director, partner agent, security holder,
creditor, consultant or otherwise) that directly or indirectly engages in the
Business (or any aspect thereof), or any business comparable to or competitive
with the Business, in the states of Rhode Island, Maryland, Connecticut,
Massachusetts, New Jersey, Pennsylvania or New York; provided, however,
that
nothing contained herein shall be deemed to prevent or restrict the Sellers,
the
Stockholders, the Officer or their affiliates, from owning up to 1% of the
shares of any class of capital stock of any corporation whose shares are listed
on a national securities exchange or are regularly traded in the
over-the-counter market so long as neither the Sellers, the Stockholders, the
Officer nor their respective affiliates actively participate or engage in the
conduct of the business of any such other corporation.
Each
of
the Sellers, the Stockholders and the Officer acknowledge that the provisions
of
Sections 4.3 and 4.4, and the period of time, geographic area and scope and
type
of restrictions on its activities set forth in Section 4.3 and 4.4, are
reasonable and necessary for the protection of Buyer and are an essential
inducement to Buyer's entering into the transaction documents to which it is
a
party and consummating the transactions contemplated thereby. If, at the time
of
enforcement of Sections 4.3 or 4.4, a court shall hold that the period of time,
geographic area or scope or type of restrictions set forth in Sections 4.3
or
4.4 are unreasonable under circumstances then existing, the parties hereto
agree
that the maximum period of time, geographic area or scope or type of
restrictions deemed reasonable under such circumstances by such court shall
be
substituted for the stated period of time, geographic area or scope or type
of
restrictions set forth in Sections 4.3 and 4.4.
4.5 Public
Statements.
From
and after the date hereof neither Buyer, on the one hand, nor the Sellers,
the
Stockholders or the Officer, on the other hand, shall, or permit any affiliate
thereof to, either make, issue or release any press release or any oral or
written public announcement or statement concerning or with respect to, or
acknowledgment of the existence of, or reveal the terms, conditions and status
of the transactions contemplated hereby, without the prior written consent
of
the other party or parties hereto, as the case may be (which consent shall
not
be unreasonably withheld or delayed), unless such announcement is required
by
law or a governmental authority, in which case the other parties shall be given
notice of such requirement prior to such announcement and the parties shall
consult with each other as to the scope and substance of such disclosure.
Notwithstanding the foregoing, the Sellers and the Stockholders understand
and
agree that Buyer's ultimate parent company will file a Form 8-K with the U.S.
Securities and Exchange Commission in connection with the transactions
contemplated hereby, which shall disclose the items as required by such Form
8-K.
4.6 Use
of
Name.
As of
the Closing Date, MD OnCall shall cease using the names “MD OnCall”, “Capitol
Medical Bureau”, “Xxxxxxxxxxxxxxx.xxx”, “Capitol Medical Answering Service”,
“Solutions Medical Answering Service”, “RI Medical Bureau” and shall (i) file an
amendment to its Certificate of Formation within two business days of the
Closing Date, changing its name to GIJALO, LLC, and (ii) terminate any and
all
of its assumed name filings. As of the Closing Date, Capitol Medical Bureau
shall cease using the names “Capitol Medical Bureau” and “Doctors’ Answering
Service” or words similar thereto and shall file an amendment to its Certificate
of Incorporation with two business days of the Closing Date, changing its name
to GIJALO, Inc.
28
4.7 Purchase
Price Allocation.
For tax
reporting purposes, the Purchase Price shall be allocated among the Sellers,
the
Purchased Assets and the goodwill of the Business in accordance with the mutual
agreement of the parties, such allocation to be set forth in writing prior
to
the Closing Date. For tax reporting purposes, Buyer and each of the Sellers
agree to report the transactions contemplated under this Agreement in a manner
consistent with the terms of this Agreement (including, without limitation,
the
agreed upon purchase price allocation) and neither will take any position
inconsistent herewith in any tax related (i) return, (ii) refund claim, or
(iii)
litigation.
4.8 Other
Actions.
Each of
the parties hereto hereby agree that from and after the date hereof they shall
use all reasonable efforts to: (i) take, or cause to be taken, all actions,
(ii)
do, or cause to be done, all things, and (iii) execute and deliver all such
documents, instruments and other papers, as in each case may be necessary,
proper or advisable under applicable laws, or reasonably required in order
to
carry out the terms and provisions of this Agreement and to consummate and
make
effective the transactions contemplated hereby, and to vest in Buyer title
to
the Purchased Assets, free and clear of all Liens. In addition, each of the
Sellers, the Stockholders and the Officer will cooperate with Buyer and use
their best efforts to cause the conditions to Buyer's obligation to close the
transactions contemplated hereunder to be satisfied (including, without
limitation, the execution and delivery of all agreements contemplated hereunder
to be executed and delivered) on or prior to the Closing Date.
4.9 Payment
of Payables.
Following the Closing Date, each of the Sellers will promptly pay any
outstanding Payables relating to their respective operations, but in no event
later than 15 days from the Closing Date.
4.10 Financial
Statements.
As soon
as reasonably practicable, but no later than April 30, 2006, each of the
Sellers, the Stockholders and the Officer shall provide to Buyer with an
unaudited balance sheet of each Seller as of December 31, 2005, an unaudited
statement of income and accumulated deficit of each Seller, in each case, for
the 12 month period ended December 31, 2005 (the "Year
End Financial Statements"),
all
prepared in accordance with U.S. generally accepted accounting principles.
Each
of the Sellers, the Stockholders and the Officer shall cooperate fully with
the
Buyer’s designated registered independent accounting firm in connection with the
review of the Year End Financial Statements, and shall cooperate fully with
the
Buyers in connection with the preparation of other financial information
required by the Buyer in connection with any of the Buyer’s ultimate parent's
filings with the United States Securities and Exchange Commission.
4.11 Discharge
of Liabilities; Sales Taxes.
Other
than the Assumed Liabilities, each Seller shall, and each of the Stockholders
and the Officer shall cause each Seller to, perform and discharge all
Liabilities relating to the Business or the Purchased Assets, as required under
the terms and conditions with respect to such Liabilities. Each of the Sellers,
the Stockholder and the Officer shall be jointly and severally liable for all
sales taxes and other charges relating to the Purchased Assets in connection
with any sales tax audit or other taxes due for any period prior to the Closing.
Each of the Sellers, the Stockholder and the Officer shall jointly and severally
liable indemnify the Buyer with respect to any Damages (as hereinafter defined)
due to the failure of either Seller to discharge any such Liabilities in
accordance with this Section.
29
4.12 Assigned
Contracts.
To the
extent any Assigned Contract for which assignment to Buyer as provided herein
is
not permitted without consent of another party, this Agreement shall not
constitute an assignment thereof if such assignment would constitute a breach
thereof. Each of the Sellers, the Stockholders, the Officer and the Buyer agree
to use reasonably commercial efforts to obtain consent of such other party
to
the assignment of any such Assigned Contract to Buyer in all cases in which
such
consent is required for such assignment. Until such consent is obtained or
if it
is not obtained, each of the Sellers, the Stockholders and the Officer shall
cooperate with Buyer in any reasonable arrangement (such as by agency or
sublicense) designed to provide the Buyer with the economic benefits under
such
relevant contract.
Section
5. Survival
of Representations and Warranties.
5.1 Survival
of Representations and Warranties of the Sellers, the Stockholders and the
Officer.
Notwithstanding any right of Buyer to fully investigate the affairs of each
Seller and notwithstanding any knowledge of facts determined or determinable
by
Buyer pursuant to such investigation or right of investigation, Buyer has the
right to rely fully upon the representations and warranties of each of the
Sellers, the Stockholders and the Officer contained in this Agreement or in
any
other Purchase Document. All such representations and warranties shall survive
the execution and delivery of this Agreement until the third anniversary hereof.
Covenants shall be binding and shall survive in accordance with their respective
terms.
5.2 Survival
of Representations and Warranties of Buyer.
Notwithstanding any right of each of the Sellers and the Stockholders fully
to
investigate the affairs of Buyer and notwithstanding any knowledge of facts
determined or determinable by each of the Sellers or the Stockholders pursuant
to such investigation or right of investigation, each of the Sellers and the
Stockholders have the right to rely fully upon the representations and
warranties of Buyer contained in this Agreement or in any other Purchase
Document. All such representations and warranties shall survive the execution
and delivery of this Agreement until the third anniversary of the Closing Date.
Covenants shall be binding and shall survive in accordance with their respective
terms.
Section
6. Indemnification.
6.1 Indemnification
by the Sellers, the Stockholders and the Officer.
Each of
the Sellers, the Stockholders and the Officer shall, jointly and severally,
indemnify and defend Buyer, AMAC and each of their respective officers,
directors, employees, shareholders, agents, advisors or representatives (each,
a
"Buyer
Indemnitee")
against, and hold each Buyer Indemnitee harmless from, any loss, liability,
obligation, deficiency, damage or expense including, without limitation,
interest, penalties, reasonable attorneys' and consultants' fees and
disbursements (collectively, "Damages"),
that
any Buyer Indemnitee may suffer or incur based upon, arising out of, relating
to
or in connection with any of the following (whether or not in connection with
any third party claim):
30
(a) any
breach of any representation or warranty made by either of the Sellers, either
of the Stockholders or the Officer, contained in this Agreement or in any other
Purchase Document or in respect of any third party claim made based upon facts
alleged which, if true, would constitute any such breach;
(b) Any
failure by any of the Sellers, the Stockholders or the Officer to perform or
to
comply with any covenant or condition required to be performed or complied
with
by such Seller, such Stockholder or the Officer contained in this Agreement
or
in any other Purchase Document;
(c) the
ownership or operation of the Business or the Purchased Assets prior to the
Closing Date; or
(d) the
ownership or operation of the Excluded Assets.
6.2 Indemnification
by Buyer.
Buyer
shall indemnify and defend each of the Sellers and each of Sellers’ respective
officers, managers, employees, members, agents, advisors or representatives
(each, a "Seller
Indemnitee")
against, and hold each Seller Indemnitee harmless from, any Damages that such
Seller Indemnitee may suffer or incur arising from, related to or in connection
with any of the following:
(a) any
breach of any representation or warranty made by Buyer contained in this
Agreement or in any other Purchase Document or in respect of any third party
claim made based upon facts alleged which, if true, would constitute any such
breach;
(b) Buyer's
failure to perform or to comply with any covenant or condition required to
be
performed or complied with by Buyer contained in this Agreement or in any other
Purchase Document; or
(c) the
ownership or operation of the Business or the Purchased assets, to extent
relating to activities of the Buyer after the Closing Date, except with respect
to Damages relating to or arising out of the negligence, gross negligence or
willful misconduct of the Officer.
6.3 Indemnification
Procedures; Limitations on Indemnification.
(a) Promptly
after notice to an indemnified party of any claim or the commencement of any
action or proceeding, including any actions or proceedings by a third party
(hereafter referred to as "Proceeding"
or
"Proceedings"),
involving any Damage referred to in sections 6.1 and 6.2, such indemnified
party
shall, if a claim for indemnification in respect thereof is to be made against
an indemnifying party pursuant to this Section 6, give written notice to the
indemnifying party, setting forth in reasonable detail the nature thereof and
the basis upon which such party seeks indemnification hereunder; provided,
however,
that
the failure of any indemnified party to give such notice shall not relieve
the
indemnifying party of its obligations hereunder, except to the extent that
the
indemnifying party is actually prejudiced by the failure to give such
notice.
31
(b) In
the
case of any Proceeding by a third party against an indemnified party, the
indemnifying party shall, upon notice as provided above, have the right at
its
expense to promptly and diligently assume the defense thereof, with counsel
reasonably satisfactory to the indemnified party, and, after notice from the
indemnifying party to the indemnified party of its assumption of the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the indemnified party
in connection with the defense thereof or for any amounts paid or foregone
by
the indemnified party as a result of any settlement or compromise thereof that
is effected by the indemnified party (without the prior written consent of
the
indemnifying party).
(c) Anything
in this Section 6 notwithstanding, if both the indemnifying party and the
indemnified party are named as parties or subject to such Proceeding and the
indemnified party determines with advice of 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 or that a material conflict of
interest between such parties may exist in respect of such Proceeding, then
upon
written notice by the indemnified party of such determination, the indemnified
party shall have the right, but not the obligation, to participate at its own
cost and expense in such defense by counsel of its own choice.
(d) If
the
indemnifying party assumes the defense of any such Proceeding, the indemnified
party shall cooperate fully with the indemnifying party and shall appear and
give testimony, produce documents and other tangible evidence, allow the
indemnifying party access to the books and records of the indemnified party
and
otherwise assist the indemnifying party in conducting such defense. No
indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement or compromise which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
of such claim or Proceeding. Provided that proper notice is duly given, if
the
indemnifying party shall not promptly and diligently assume the defense thereof,
then the indemnified party may respond to, contest and defend against such
Proceeding and may make in good faith any compromise or settlement with respect
thereto, and recover from the indemnifying party the entire cost and expense
thereof including, without limitation, reasonable attorneys' fees and
disbursements and all amounts paid or foregone as a result of such Proceeding,
or the settlement or compromise thereof. The indemnification required hereunder
shall be made by periodic payments of the amount thereof during the course
of
the investigation or defense, as and when bills or invoices are received or
loss, liability, obligation, damage or expense is actually suffered or
incurred.
32
(e) The
maximum aggregate amount of payments made to the Buyer Indemnitees pursuant
to
Section 6.1 hereto shall not exceed any amounts paid to the Sellers or the
Stockholders pursuant to this Agreement (including any amounts paid in stock)
plus any amounts paid to the Officer pursuant to the Management Employment
Agreement. The maximum aggregate amount of payments made to the Seller
Indemnitees pursuant to Section 6.2 hereto shall not exceed any amounts not
paid
but due to the Sellers or the Stockholders pursuant to this Agreement plus
any
amounts not paid but due to the Officer pursuant to the Management Employment
Agreement. No indemnified party hereunder shall be entitled to receive any
indemnification payments under Section 6.1 or Section 6.2, as applicable, until
the aggregate amount of Damages incurred by the indemnified party exceed $30,000
in the aggregate; provided,
however,
that
the foregoing $30,000 threshold shall not in any event apply to any Damages
arising in connection with any amounts owed by the Sellers under the Pinnacle
Agreement as of the Closing Date. If this limit is reached, all Damages from
the
first dollar of Damages shall be recoverable.
6.4 Right
to Set-Off.
Buyer
shall have the right, but not the obligation, to set-off (i) the amount of
any
and all Damages for which any Seller, any Stockholder or
the
Manger may
become liable to Buyer under any provisions of this Agreement, against any
sums
otherwise payable to either of the Sellers, either of the Stockholders or the
Officer hereunder, or under any other document or instrument executed and
delivered pursuant to this Agreement or contemplated hereby including, without
limitation, any amounts payable to either of the Sellers or either of the
Stockholders pursuant to Section 1.3(e), Section 1.3(f), Section 1.3(g), Section
1.3(h), Section 1.6, Section 1.7 hereof or any amounts payable to the Officer
pursuant to the Management Employment Agreement. Buyer
will not exercise any right to set-off until it has given the Sellers, the
Stockholders or the Officer, as the case may be, not less than five (5) days
notice within which period the Sellers, the Stockholders and the Officer shall
have the right to pay the amount of the Damages proposed by Buyer in cash.
The
remedies provided herein shall be cumulative and shall not preclude assertion
by
any party hereto of any other rights or the seeking of any other remedies
against any other party hereto. No assertion of the right of set-off shall
impair Buyer’s title in the Purchased Assets or any other of Buyer’s rights
under this Agreement.
Section
7. Miscellaneous.
7.1 Transaction
Fees and Expenses.
Each
party hereto shall bear such costs, fees and expenses as may be incurred by
it
in connection with this Agreement and the transactions contemplated hereby,
including each party’s respective attorney's costs and fees.
7.2 Notices.
Any
notice, demand, request or other communication which is required, called for
or
contemplated to be given or made hereunder to or upon any party hereto shall
be
deemed to have been duly given or made for all purposes: if (a) in writing
and
sent by (i) messenger or a recognized national overnight courier service for
next day delivery with receipt therefor, or (ii) certified or registered mail,
postage paid, return receipt requested, or (b) sent by facsimile transmission
with a written copy thereof sent on the same day by postage paid first-class
mail or (c) by personal delivery to such party at the following
address:
33
To
Buyer:
0000
Xxxxxx Xxxxxxxxx
Xxxxxxxxx,
Xxx Xxxx 000000
Attention:
Mr. Jack Rhian
Facsimile
No.: (000) 000-0000
with
a
copy to:
Moses
& Singer LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx Xxxxxxxxx
Facsimile
No.: (000) 000-0000
To
either
Xxxxxxx or the Officer at:
00
Xxxxxxxxxxx Xxxxx Xxxx, #000
Xxxxxxx,
XX 00000
Attention:
Xxxxx X. Xxxxxxx
Facsimile
No.: 000-000-0000
To
Xx.
Xxxxx at:
0000
Xxxxx Xxxx Xxxx
Xxxxxxxxx,
XX 00000
Attn:
Xxxxx X. Xxxxx, MD
Facsimile
No.: [__________]
with
respect to each Seller, each Stockholder and the Officer, with a copy
to:
E.
Xxxxx
Xxxxxxx, Esq.
Cameron
& Xxxxxxxxx LLP
00
Xxxxxxxx Xxxxxxx
Xxxxxxxxxx,
XX 00000
Facsimile
No.: (000) 000-0000
or
such
other address as either party hereto may at any time, or from time to time,
direct by notice given to the other party in accordance with this section.
The
date of giving or making of any such notice or demand shall be, in the case
of
clause (a)(i), the date of the receipt, in the case of clause (a)(ii), five
business days after such notice or demand is sent, and, in the case of clause
(b), the business day next following the date such notice or demand is sent,
and
in the case of clause (c), upon delivery. A copy of any notice to either Seller,
either Stockholder or the Officer shall be sent concurrently to each other
Seller, Stockholder or the Officer, as the case may be.
34
7.3 Amendment.
Except
as otherwise provided herein, no amendment of this Agreement shall be valid
or
effective unless in writing and signed by or on behalf of the Buyer, each of
the
Sellers and each of the Stockholders; provided, however, that any such amendment
or waiver of a provision by which the Officer is bound and which would adversely
affect the Officer, shall also require the written consent of the Officer to
such amendment or waiver.
7.4 Waiver.
No
course of dealing of any party hereto, no omission, failure or delay on the
part
of any party hereto in asserting or exercising any right hereunder, and no
partial or single exercise of any right hereunder by any party hereto shall
constitute or operate as a waiver of any such right or any other right
hereunder. No waiver of any provision hereof shall be effective unless in
writing and signed by or on behalf of the party to be charged therewith. No
waiver of any provision hereof shall be deemed or construed as a continuing
waiver, as a waiver in respect of any other or subsequent breach or default
of
such provision, or as a waiver of any other provision hereof unless expressly
so
stated in writing and signed by or on behalf of the party to be charged
therewith. Buyer's receipt of information contained herein shall not be deemed
to waive any of Buyer's rights under the indemnification provisions of Section
6.
7.5 Governing
Law.
This
Agreement shall be governed by, and interpreted and enforced in accordance
with,
the internal laws of the State of New York, other than those which would defer
to the substantive laws of another jurisdiction.
7.6 Jurisdiction.
Each of
the parties hereto hereby irrevocably consents and submits to the exclusive
jurisdiction of the federal and state courts located in New York County, New
York, in connection with any claim or dispute arising out of or relating to
this
Agreement or the transactions contemplated hereby, waives any objection to
venue
in such courts and agrees that service of any summons, complaint, notice or
other process relating to such claim or dispute may be effected in the manner
provided by Section 7.2.
7.7 Remedies.
In the
event of any actual or prospective breach or default by any party hereto, the
other parties shall be entitled to equitable relief, including remedies in
the
nature of rescission, injunction and specific performance. All remedies
hereunder are cumulative and not exclusive. Nothing contained herein and no
election of any particular remedy shall be deemed to prohibit or limit any
party
from pursuing, or be deemed a waiver of the right to pursue, any other remedy
or
relief available now or hereafter existing at law or in equity (whether by
statute or otherwise) for such actual or prospective breach or default,
including the recovery of damages.
7.8 Severability.
The
provisions hereof are severable and if any provision of this Agreement shall
be
determined to be legally invalid, inoperative or unenforceable in any respect
by
a court of competent jurisdiction, then the remaining provisions hereof shall
not be affected, but shall, subject to the discretion of such court, remain
in
full force and effect, and any such invalid, inoperative or unenforceable
provision shall be deemed, without any further action on the part of the parties
hereto, amended and limited to the extent necessary to render such provision
valid, operative and enforceable.
35
7.9 Further
Assurances.
Each
party hereto covenants and agrees promptly to execute, deliver, file or record
such agreements, instruments, certificates and other documents and to perform
such other and further acts as the other party hereto may reasonably request
or
as may otherwise be necessary or proper to consummate and perfect the
transactions contemplated hereby.
7.10 Assignment.
This
Agreement and all of the provi-sions hereof shall be binding upon and inure
to
the benefit of the parties hereto, their heirs and their respective successors
and assignees; provided,
however,
that
neither of the Sellers, neither of the Stockholders nor the Officer shall assign
any of its or their respective rights or delegate any duties hereunder without
the prior written consent of Buyer.
7.11 No
Third Party Beneficiaries.
Nothing
contained in this Agreement, whether express or implied, is intended, or shall
be deemed, to create or confer any right, interest or remedy for the benefit
of
any Person other than as otherwise provided in this Agreement.
7.12 Entire
Agreement.
This
Agreement (including all the schedules and exhibits hereto), together with
the
Exhibits, Schedules, certificates and other documentation referred to herein
or
required to be delivered pursuant to the terms hereof, contains the terms of
the
entire agreement among the parties with respect to the subject matter hereof
and
supersedes any and all prior agreements, commitments, understandings,
discussions, negotiations or arrangements of any nature relating
thereto.
7.13 Headings.
The
headings contained in this Agreement are included for convenience and reference
purposes only and shall be given no effect in the construction or interpretation
of this Agreement.
7.14 Counterparts.
This
Agreement may be executed in any number of counterparts and delivered by
facsimile, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
[Rest
of page intentionally left blank]
36
IN
WITNESS WHEREOF, the undersigned have executed this Asset Purchase Agreement
as
of the date first set above.
Sellers:
|
CAPITOL MEDICAL BUREAU, INC. | |
|
|
|
By: | /s/ Xxxxx Xxxxx | |
Xxxxx Xxxxx |
||
Title: President |
MD ON CALL, LLC | ||
|
|
|
By: | /s/ Xxxxx Xxxxx | |
Xxxxx Xxxxx |
||
Title: Manager |
|
||
|
|
|
Stockholders:
|
By: | /s/ Xxxxx Xxxxx |
Xxxxx X. Xxxxx, MD |
||
|
|
|
By: | /s/ Xxxxxxxxx Xxxxxxx | |
Xxxxxxxxx Xxxxxxx |
||
|
|
|
Officer:
|
By: | /s/ Xxxxx Xxxxxxx |
Xxxxx X. Xxxxxxx |
||
Buyer:
|
MD ONCALL ACQUISITION CORP. | |
|
|
|
By: | /s/ Xxxx Rhian | |
Xxxx Rhian |
||
Title: President |
37