Exhibit 2.3
TRANSACTION AGREEMENT
Dated as of August 31, 2001
By and Between
Xxxxxxxx Xxxxx Health System, Inc. (Seller)
and
APS Healthcare Bethesda, Inc. (Buyer)
TABLE OF CONTENTS
ARTICLE I ................................................................. 1
DEFINITIONS ............................................................... 1
DEFINITIONS ............................................................... 1
Section 1.01 Definitions .................................................. 1
ARTICLE II ................................................................ 1
Section 2 01 Closing Transactions ......................................... 4
Section 2.03 Closing ...................................................... 5
Section 2.14 Adjustment of Initial Purchase Price ......................... 5
ARTICLE III ............................................................... 6
REPRESENTATIONS AND WARRANTIES OF SELLER .................................. 6
Section 3.01 Representations and Warranties of Seller ..................... 6
ARTICLE IV ................................................................ 6
REPRESENTATIONS AND WARRANTIES OF BUYER ................................... 6
Section 4.01 Representations and Warranties of Buyer ...................... 6
ARTICLE V ................................................................. 7
COVENANTS AND AGREEMENTS OF SELLER ........................................ 7
Section 5.01 Preservation of Business ..................................... 7
Section 5.02 Access to Information; Confidentiality ....................... 8
Section 5.03 Lockbox Accounts ............................................. 8
Section 5.04 Access to Information; Cooperation After Closing ............. 8
Section 5.05 Casualty Prior to Closing .................................... 8
Section 5.10 Retained Liabilities ......................................... 9
ARTICLE VI ................................................................ 10
COVENANTS AND AGREEMENTS OF BUYER ......................................... 10
Section 6.01 Confidentiality .............................................. 10
ARTICLE VII ............................................................... 11
COVENANTS AND AGREEMENTS OF THE PARTIES ................................... 11
Section 7.01 Further Assurances ........................................... 11
Section 7.02 Certain Filings; Consents .................................... 11
Section 7.03 Public Announcements ......................................... 11
Section 7.04 Legal Privileges ............................................. 11
Section 7.05 ALLOCATION OF ADJUSTED PURCHASE PRICE ........................ 11
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ARTICLE VIII .............................................................. 11
HIRING OF TRANSFERRED EMPLOYEES ........................................... 11
Section 8.01 Covenants Relating to the Hiring by Buyer of
Employees of Seller ....................................... 12
ARTICLE IX ................................................................ 12
CONDITIONS TO CLOSING ..................................................... 12
Section 9.01 Conditions to Obligations of Each Parry ...................... 12
Section 9.02 Conditions to Obligation of Buyer ............................ 12
Section 9.03 Conditions to Obligation of Seller ........................... 13
ARTICLE X ................................................................. 14
SURVIVAL; INDEMNIFICATION ................................................. 14
Section 10.01 Survival of Representations and Warranties .................. 14
Section 10.02 Indemnification Obligation of Seller ........................ 14
Section 10.03 Indemnification Obligation of Buyer ......................... 14
Section 10.04 Procedure for Indemnification Claim ......................... 15
ARTICLE XI ................................................................ 17
TERMINATION ............................................................... 17
Section 11.01 Termination ................................................. 17
Section 11.02 Effect of Termination ....................................... 17
ARTICLE XII ............................................................... 18
MISCELLANEOUS ............................................................. 18
Section 12.01 Notices ..................................................... 18
Section 12.02 Amendments; Waivers ......................................... 18
Section 12.03 Expenses; Taxes ............................................. 19
Section 12.04 Successors and Assigns ...................................... 19
Section 12.05 Construction ................................................ 19
Section 12.06 Entire Agreement ............................................ 19
Section 12.07 Governing Law ............................................... 19
Section 12.08 Counterparts; Effectiveness ................................. 19
Section 12.10 Severability ................................................ 20
Section 12.11 Captions .................................................... 20
Section 12.12 Bulk Sales .................................................. 20
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TRANSACTION AGREEMENT
This Transaction Agreement (together with the Exhibits, Schedules and
Attachments hereto, this "Agreement') is made as of the 31st day of August,
2001, by and between Xxxxxxxx Xxxx Health System, Inc., a Maryland corporation
("Seller"), and APS Healthcare Bethesda, Inc., Iowa corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller, as one of its operating divisions, is engaged in the
business of providing employee assistance programs, behavioral health
administrative services only programs and certain organizational consulting
services relating to behavioral health, more fully defined in EXHIBIT 1.01 as
the Health Plan Business; and
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, seller desires to sell and to transfer certain of the assets held,
owned by or used by it to conduct the Health Plan Business, and to assign
certain contracts and contractual liabilities associated with the Health Plan
Business, to Buyer, and Buyer desires to receive such assets and assume such
contractual liabilities; and
WHEREAS, in connection with the sale of the Health Plan Business by Seller
to Buyer, Seller and Buyer desire to enter into certain agreements and
arrangements ancillary to such sale;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. Capitalized terms used in this Agreement shall
have the meanings specified in this Agreement or in EXHIBIT 1.01.
ARTICLE II
THE TRANSACTION; CLOSING
Section 2.01 THE TRANSACTION. Upon the terms and conditions hereinafter
set forth, Seller shall sell and transfer to Buyer all Transferred Assets,
conditionally license to Buyer the use of the name "Xxxxxxxx Xxxxx Health Plan,"
lease to Buyer certain space, and assign to Buyer the Assigned Contracts, in
consideration of which Buyer shall pay the Exchange Consideration and assume the
Assumed Liabilities (all together, the "Transaction").
Section 2.02 EXCHANGE CONSIDERATION.
(a) The consideration to be paid to Seller by Buyer for the
Transferred Assets (the "Exchange Consideration") shall, in the aggregate
and subject to certain contingencies set forth in Section 2.05, consist of
the assumption of the Assumed Liabilities and the sum of Two Million Four
Hundred Forty-Eight Thousand Dollars ($2,448,000) (the "Initial Purchase
Price"). The initial Purchase Price shall be subject to decrease as
provided below by the amounts of the Contingent Cash Portion, the
Additional Contingent Cash Portion, the Earnout, and the Contingent
Promissory Note; the Initial Purchase Price shall be subject to increase
as provided below by the amount of the Chevy Chase Percent (as so
decreased and increased, the "Adjusted Purchase Price").
(b) The Initial Purchase Price shall be allocated among the
Transferred Assets as follows:
Equipment $
----------------------------------
Inventory $
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Intellectual Property $
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Business Information $
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Established Provider Network $
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Assigned Contracts $
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Conditional License Agreement Balance of Initial Purchase Price
Adjustments of the allocation to correspond to the Adjusted Purchase
Price shall be reflected in the allocation to the Assigned Contracts.
(c) The Buyer shall pay to the Seller the Initial Purchase Price as
follows:
(i) On the Closing Date, Buyer shall pay and deliver to Seller, for
Seller's account One Million, Four Hundred and Seven Thousand and
no/100 ($1,407,000) Dollars in immediately available funds (the
"Cash Portion") by wire transfer to an account designated by Seller
no later than two business days or as required by Buyer. If,
however, the condition to closing set forth in Section 9.02(d)
hereof is not fully satisfied, and Buyer elects to waive the
condition at the Closing, the Cash Portion shall be reduced by Two
Hundred Thousand and no/100 ($200,000) Dollars (the "Contingent Cash
Portion").
(ii) On the Closing Date and on the dates that are (i) Thirty (30)
days after the Closing Date; (ii) Sixty (60) days after the Closing
Date; and (iii) Ninety (90) days after the Closing Date, Buyer shall
pay to Seller Four Thousand Dollars ($4,000.00) for each of the
fifty (50) Assigned Contract set forth on SCHEDULE 2.02(c)(ii) for
which an executed consent to assignment is delivered to Buyer, which
payment shall be made in the same manner as the Cash Portion.
(iii) On the Closing Date and on the dates that are (i) Thirty (30)
days after the Closing Date; (ii) Sixty (60) days after the Closing
Date; and (iii) Ninety (90) days
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after the Closing Date, Buyer shall pay to Seller that percentage of
One Hundred Thousand ($100,000) Dollars ("Additional Contingent Cash
Portion") as is calculated by dividing that number of the Assigned
Contracts set forth on SCHEDULE 2.02(c)(iii) for which an executed
consent to assignment is delivered to Buyer as set forth herein by
such date by the number of contract listed on Schedule 2.02(c)(iii),
less the amount of all payments previously made pursuant to this
subparagraph (so that the total amount paid pursuant to this
subparagraph shall in no event exceed $100,000) which payment shall
be made in the same manner as the Cash Portion.
(iv) On the Closing Date, Buyer shall deliver to Seller a
Subordinated Promissory Note in the principal amount of Four Hundred
Sixty-Six Thousand and no/100 ($466,000.00) Dollars in the form of
Attachment IV (the "Subordinated Promissory Note").
(v) On the earlier to occur of (i) March 10, 2002 or (ii) that date
on which executed consents to assignment are delivered to Buyer as
set forth herein for Assigned Contracts identified on Schedule
2.02(c)(ii) whose associated revenues as shown on Schedule
2.02(c)(ii) (the "Associated Revenues") total at least Two Million
Four Hundred Thousand and no/100 ($2,400,000) Dollars, Buyer shall
deliver to Seller a Contingent Subordinated Promissory Note in the
principal amount of Two Hundred Forty Thousand and no/100
($240,000.00) Dollars in the form of Attachment VIII (the
"Contingent Subordinated Promissory Note"). If, however, as of March
1, 2002, Seller has not met the condition set forth in the
immediately foregoing sentence, on March 10, 2002 Buyer shall
deliver to Seller the Contingent Subordinated Promissory Note for a
lesser principal amount which shall be determined by multiplying
$240,000.00 by a percentage derived by calculating the sum of the
total Associated Revenues for those Assigned Contracts on Schedule
2.02(c)(ii): (x) for which Buyer has received executed consents to
assignment or (y) for which Buyer has received at least one
quarterly payment, or (z) for which Buyer as executed a new
contract, and dividing that sum by $2,400,000.
(vi) On that date which is twenty-five (25) months after the Closing
Date, Buyer shall pay to Seller Two Hundred and Thirty Five Thousand
and no/100 ($235,000) Dollars (the "Earnout"), or such lesser amount
as is determined in accordance with Section 2.06.
(vii) If that certain Agreement between Seller and Chevy Chase, a
Federal Savings Bank, dated February 15, l989, is renewed pursuant
to its terms and assigned to Buyer as set forth herein, on each of
the first and second anniversaries of the Closing Date, Buyer shall
pay to Seller Twenty-Six and 25/100 (26.25%) Percent of the Actual
Revenues received by the Buyer during the immediately preceding
twelve (12) month period (the "Chevy Chase Percent").
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Section 2.03 ASSIGNED CONTRACTS AND ASSUMED LIABILITIES. At the
Closing, Seller shall assign to Buyer all of the contracts listed on
SCHEDULE 2.02(c)(ii), SCHEDULE 2.02(c)(iii), SCHEDULE 2.03 AND SCHEDULE
5.07 (the "Assigned Contracts"). Seller shall provide duly executed
Consents the assignments with respect to each Assigned Contract for which
such Consent is required pursuant to Section 5.07 below.
Buyer shall assume responsibility for the performance of all of the
obligations associated with the Assigned Contracts from and after the
Effective Date (the "Assumed Liabilities"). Buyer shall not assume or be
deemed to assume any other liabilities of Seller or of the Health Plan
Business, including, but not limited to any liability or obligation with
respect to performance of the Assigned Contracts due from or undertaken by
Seller prior to the Effective Date.
Revenues from the Assigned Contracts listed on Schedule 2.02(c)(ii) and
Schedule 2.02(c)(iii) shall be allocated between Seller and Buyer as of the
Effective Date, with Seller entitled to all revenue earned prior to the
Effective Date and Buyer entitled to all revenue pertaining to periods from and
after the Effective Date.
Section 2.04 CLOSING DELIVERIES. Upon the terms and subject to the
conditions set forth in this Agreement, the parties agree that at the Closing,
among other things:
(a) Seller shall deliver the Equipment and Inventory to Buyer and
Seller and Buyer shall execute and deliver a xxxx of sale for the
Equipment, Inventory, and Business Information substantially in the form
of ATTACHMENT I (the "Xxxx of Sale"). The Business Information shall be
available to Buyer from and after the Closing Date, but shall be delivered
over the period that Seller is providing transition services.
(b) Seller shall deliver the Assigned Contracts to Buyer together
with any Consents to assignment required in accordance with Section 5.07,
and Seller and Buyer shall execute and deliver an assignment and
assumption agreement substantially in the form of ATTACHMENT II (the
"Assignment and Assumption Agreement").
(c) To effect the transfer in respect of certain Intellectual
Property of Seller, Seller and Buyer shall execute and deliver a license
and transfer agreement, substantially in the form of ATTACHMENT III (the
"License and Transfer Agreement");
(d) Buyer shall pay and deliver to Seller, for Seller's account, the
appropriate portion of the Initial Purchase Price in accordance with
Section 2.02 in immediately available funds by wire transfer to an account
designated by Seller (which account shall be designated by Seller by
written notice to Buyer at least two Business Days prior to the Closing
Date, or such shorter notice as Buyer shall agree to accept);
(e) Buyer shall deliver to Seller a Subordinated Promissory Note in
the principal amount of $466,000.00 in the form of ATTACHMENT IV;
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(f) Seller and Buyer shall execute and deliver the Lease for certain
space in the Seller's facility, in substantially the form of ATTACHMENT V
(the "Lease");
(g) To effect the conditional license to use the name "Xxxxxxxx
Xxxxx Health Plan" and the related logo, Seller and Buyer shall execute
and deliver a conditional license agreement, substantially in the form of
ATTACHMENT VI (the "Conditional Xxxxxxxx Xxxxx License Agreement").
(h) Seller shall deliver to Buyer information, agreements, schedules
and any necessary assignments pertaining to Seller's Established Provider
Network.
(i) Seller and Buyer shall execute and deliver the Transition
Services Agreement, substantially in the form of ATTACHMENT VII (the
"Transition Services Agreement").
Section 2.05 CLOSING. The closing (the "Closing") of the Transaction shall
take place at 10:00 a.m., at the offices of Seller at 0000 X. Xxxxxxx Xxxxxx xx
Xxxxxxxxx, Xxxxxxxx 00000, on August 31, 2001 (the "Closing Date"); provided,
however, that if all of the conditions to Closing set forth in Article IX have
not been satisfied (or waived) as of that date and if closing on that date,
therefore, would be impractical, the Closing shall take place on the fifth
Business Day following the satisfaction or waiver (by the party entitled to
waive the condition) of all conditions to the Closing set forth in Article IX,
or at such other time and place as the parties to this agreement may agree.
Section 2.06 ADJUSTMENT OF EARNOUT.
(a) Attached as SCHEDULE 2.06 is a schedule of the gross revenues expected
from the assigned Contracts over the period of two (2) years from the Effective
Date (the "Performance Period"). If the Actual Revenues from the Assigned
Contracts during the Performance Period total at least eighty percent (80%) of
the Expected Revenues (taken as a whole, and not by individual contract), on
that date which is twenty-five months after the Closing Date, Buyer shall pay to
Seller the sum of Two Hundred and Thirty Five Thousand Dollars ($235,000.00)(the
"Earnout"). To the extent that the Actual Revenues from the Assigned Contracts
during the Performance Period total less than eighty percent of the Expected
Revenues (taken as a whole, and not by individual contract), the Earnout shall
be reduced and paid as follows:
Actual Revenue as % of Pay % of Earnout
Expected Revenue:
79-79.99% 90%
78-78.99% 80%
77-77.99% 70%
76-76.99% 60%
75-75.99% 50%
70-74.99% 25%
Less than 70% 0%
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To effect any such reduction, Buyer shall, on the Earnout payment date, tender
to Seller the reduced amount and provide to Seller a statement, by specific
contract of the Actual Revenues. If Buyer fails to provide an Actual Revenues
statement justifying a reduction the amount of Earnout due shall be the full
amount payable in full and without further contingency or set-off as of its due
date. In the event that an Actual Revenues statement is presented by Buyer and
Seller disputes the correctness of the Actual Revenues statement, Seller shall
notify Buyer of its objections within 45 days after receipt of Buyer's statement
and shall set forth, in writing and reasonable detail, the reasons for Seller's
objections. If Seller fails to deliver such notice of objections within such
time, Seller shall be deemed, for purposes of this Section 2.06, to have
accepted Buyer's calculation. Seller and Buyer shall endeavor in good faith to
resolve any matters disputed under this Section 2.06 within 20 days after
Buyer's receipt of Seller's notice of objections. If they are unable to do so,
Seller and Buyer shall select a nationally known independent accounting firm to
resolve the matters in dispute and only those matters, and the determination of
such firm in respect of the correctness of each matter in dispute shall be
conclusive and binding on Seller and Buyer and shall establish the amount, if
any, of Earnout remaining payable. With respect to each disputed matter, the
determination of such firm as to the appropriate amount shall not exceed the
higher amount or be less than the lower amount asserted by Buyer or Seller for
such disputed matter on or before the date of Buyer's receipt of Seller's notice
of objections.
(b) Buyer shall make available and shall cause its accountant to make
available, in accordance with reasonable and customary practices and
professional standards and subject to such reasonable conditions as Buyer's
accountant shall impose, the books, records, documents and work papers
underlying the preparation and review of the Actual Revenues statement and the
calculation of the proposed reduction in the amount of Earnout payable.
(c) The fees and expenses, if any, of the accounting firm selected to
resolve any disputes between Seller and Buyer in accordance with Section 2.06
shall be paid one-half by Seller and one-half by Buyer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.01 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents
and warrants to Buyer as set forth in EXHIBIT 3.01.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 4.01 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as set forth in EXHIBIT 4.01.
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ARTICLE V
COVENANTS AND AGREEMENTS OF SELLER
Section 5.01 PRESERVATION OF BUSINESS. From the date of this Agreement
until the effective Date, Seller shall conduct the Health Plan Business in the
ordinary course consistent with its historical and customary operating practices
relating to the conduct of the Health Plan Business and in compliance with all
Applicable Law and shall use reasonable commercial efforts to preserve intact
the Health Plan Business and the relationships of Seller with third parties in
connection with the Health Plan Business. Without limiting the generality of
the foregoing, prior to the Effective Date Seller shall:
(i) pay in accordance with Seller's customary payment practices, all
accounts payable and provider payables of Seller;
(ii) use its best efforts to maintain in full force and effect all
Assigned Contracts, permits, authorizations, and approvals necessary for
or related to the operation of the Health Plan Business in all respects
and in all places as such business is now conducted;
(iii) use its best efforts to preserve the business organization and
Established Provider Network of the Seller intact, to keep available the
services of its present employees and to preserve the goodwill of its
customers and others having business relations with it.
(iv) not impair the use of or substantially change the condition of
any of the Transferred Assets either by Seller's actions or otherwise;
(v) use its best efforts to preserve and maintain any assets that
would constitute Transferred Assets if owned, held or used by Seller on
the Closing Date;
(vi) preserve and maintain in the ordinary course of business any
Intellectual Property used in the Health Plan Business;
(vii) not settle any lawsuit or claim if such settlement imposes a
material continuing non-monetary obligation on the Health Plan Business or
any of the Transferred Assets;
(viii) except as provided for substantially all of Seller's other
employees, or as required by Applicable Law, not adopt or amend in any
material respect any Benefit Arrangement in respect of any Transferred
Employee or, increase the compensation or fringe benefits of such
Transferred Employee or pay any benefit not required by any Employee Plan
or Benefit Arrangement with respect to such Transferred Employee.
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Section 5.02 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Except as may be necessary to comply with any Applicable Law and
subject to any applicable privileges (including, without limitation, the
attorney-client privilege), from the date of this Agreement until the Effective
Date, to facilitate Buyer's take over of the operation of the Health Plan
Business, Seller shall (i) give Buyer and its Representatives reasonable access
to the records of Seller relating to the Health Plan Business during normal
business hours and upon reasonable prior notice, (ii) furnish to Buyer and its
Representatives such financial and operating data and other information relating
to the Health Plan Business as Buyer may reasonably request and (iii) instruct
the employees and Representatives of Seller to provide reasonable cooperation to
Buyer. All activities by Buyer or its Representatives shall be solely at Buyer's
expense.
(b) For a period of three (3) years after the Effective Date. Seller will
treat and hold as confidential, any confidential information relating to the
operations or affairs of the Health Plan Business. In the event Seller is
requested or required (by oral or written request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigative demand or
similar process or by Applicable Law) to disclose any such confidential
information, then Seller shall notify Buyer promptly of the request or
requirement so that Buyer, at its expense, may seek an appropriate protective
order or waive compliance with this Section 5.02(b). If, in the absence of a
protective order or receipt of a waiver hereunder, Seller is, on the advice of
counsel, compelled to disclose such confidential information, Seller may so
disclose the confidential information, provided that Seller shall use reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded to such confidential information.
Section 5.03 COLLECTION OF ACCOUNTS RECEIVABLE. Seller may take such
actions as may be reasonable under the circumstances to collect accounts
receivable related to the Health Plan business and accrued prior to the
Effective Date. Prior to Seller's initiation of any legal action for
collection, Seller shall provide Buyer at least twenty (20) days written notice,
and, if Buyer shall tender, within said twenty (20) days seventy-five percent
(75%) of the amount claimed by Seller, Seller shall assign its entire
claim to Buyer. The foregoing provisions of this Section 5.03 shall not relieve
Buyer in any respect from its duty to remit to Seller any allocated or pro-rata
amounts due to Seller and collected by Buyer after the Effective Date, unless
the claim for such amount has been assigned to Buyer.
Section 5.04 COOPERATION AFTER CLOSING. On and after the Closing Date and
subject to any applicable privileges (including, without limitation, the
attorney-client privilege), Seller shall cooperate fully with Buyer with respect
to matters relating to the conduct of the Health Plan Business prior to the
Closing, including, without limitation, in the defense or pursuit of any claim
or action that relates to occurrences involving the Health Plan Business prior
or subsequent to the Effective Date. Buyer shall cooperate with Seller in
Seller's solicitation of required consents.
Section 5.05 CASUALTY PRIOR TO EFFECTIVE DATE. Seller agrees that the
Transferred Assets are and shall be kept by Seller fully insured against fire
and other casualties to the extent of their full insurable value through the
Effective Date. Any and all risk of loss with respect to the Equipment,
Inventory, and Business Information (whether by casualty or otherwise) shall be
borne by Seller until the Effective Date. In the event that prior to the
Effective Date, all or any
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material portion of the Equipment, Inventory, or Business Information shall be
stolen or destroyed or damaged by fire or other casualty, Buyer shall have the
option, to be exercised in writing within 10 days after receipt of notice of
the loss: (i) if Closing has not occurred, to proceed with Closing adjusting the
Exchange Consideration amount of the Subordinated Promissory Note by the amount
of the initial Purchase Price allocated to the lost Equipment, Inventory, or
Business Information, in which event Seller shall retain all right to the
proceeds of all insurance covering such loss or damage to the Equipment,
Inventory, or Business Information; or (ii) if Closing has not occurred, to
proceed with the Closing with no adjustment of the Exchange Consideration for
such loss, in which event Seller shall assign to Buyer at the Closing, and Buyer
shall be subrogated to and shall be entitled to receive, the proceeds of all
insurance covering such loss or damage to the Equipment, Inventory, or Business
Information; or (iii) if Closing has occurred but the Effective Date has not
occurred, to proceed to the Effective Date without adjustment of the Exchange
Consideration for such casualty loss, in which event Seller shall promptly
assign to Buyer, and Buyer shall be subrogated to and shall be entitled to
receive, the proceeds of all insurance covering such loss or damage to the
Equipment, Inventory, or Business Information, but if such proceeds are less
than the amount of the Initial Purchase Price allocated to the lost Equipment,
Inventory, or Business Information, then the balance due on the Subordinated
Promissory Note shall be reduced by the amount of such deficiency. Buyer and
Seller acknowledge that prior to Closing, Seller retains all equitable and legal
rights of ownership and title to the Transferred Assets, and between the Closing
Date and the Effective Date, Seller retains an equitable and insurable
interest in the Inventory, Equipment and Business Information, necessarily being
used by Seller to conduct the Health Plan Business as required herein.
Section 5.06 ASSISTANCE IN SOLICITATIONS. From and after the date of this
Agreement, Buyer may solicit any Health Plan division employees of Seller for
employment by Buyer after the Effective Date and may solicit customers of the
Health Plan Business to continue as customers after the Effective Date. Seller
shall assist Buyer in connection with such solicitations, and shall use its
best efforts to encourage all such employees receiving offers from Buyer to
accept such employment with Buyer and all customers of the Health Plan Business
to continue as customers after the Effective Date.
Section 5.07 CONSENTS. The Seller shall obtain prior to Closing the
consents, approvals or permissions of the parties (other than Seller) to the
Assigned Contracts shown on SCHEDULE 2.02(c)(ii), SCHEDULE 2.02(c)(iii), and the
additional consents described in SCHEDULE 5.07 (collectively, the "Consents). To
the extent that Seller's obtaining the Consents as a precondition to Closing is
waived, Seller shall continue to pursue the Consents after Closing.
Section 5.08 RETAINED LIABILITIES. Seller shall retain all liabilities and
obligations of Seller that are not specifically assumed by Buyer as an Assumed
Liability, and shall indemnify Buyer against such liabilities and obligations in
accordance with Section 10.02.
Section 5.09 DUTY REMIT. From and after Closing, Seller shall within
twenty (20) days of receipt, remit to Buyer Buyer's pro-rata share of any
amounts collected by Seller which pertain, in whole or in part, to services
rendered with respect to the Assigned Contract from and after the Effective
Date. Payments which are not identified by the payor as pertaining to any
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particular period or any particular individual shall be deemed to relate to the
earliest period for which payment for services rendered is due.
Section 5.10 TRANSITION SERVICES. To facilitate the transition of the
operation of the Health Plan Business, Seller will provide Buyer with transition
services in accordance with the Transition Services Agreement.
ARTICLE VI
COVENANTS AND AGREEMENTS OF BUYER
Section 6.01 CONFIDENTIALITY. Buyer agrees that, in accordance with a
Confidentiality Agreement heretofore executed by Buyer, all information provided
or otherwise made available in connection with the Transaction to Buyer or any
of its Representatives shall be treated as confidential. Prior to the Closing
Date, Buyer will not disclose or use any of the information except in connection
with the acquisition of the Health Plan Business as contemplated herein. In the
event that Closing fails to occur for any reason, Buyer will continue to be
bound by the provisions of the Confidentiality Agreement as provided therein.
Section 6.02 COOPERATION AFTER CLOSING. After the Closing Date and subject
to any applicable privileges (including, without limitation, the attorney-client
privilege), Buyer shall afford Seller and its Representatives, at Seller's
expense, reasonable access upon reasonable prior notice during normal business
hours, to all employees, offices, properties, agreements, records, books and
affairs of the Health Plan Business relating to the conduct of the Health Plan
Business prior to the Effective Date.
Section 6.03 DUTY TO REMIT. From and after Closing, Buyer shall, within
twenty (20) days of receipt, remit to Seller Seller's pro-rata share of any
amounts collected by Buyer which pertain, in whole or in part, to services
rendered with respect to the Assigned Contracts prior to the Effective Date.
Payments which are not identified by the payor as pertaining to any particular
period or any particular individual shall be deemed to relate to the earliest
period for which payment for services rendered is due.
Section 6.04 DUTY TO OPERATE. From and after the Effective Date, Buyer
shall operate the Health Plan Business diligently and in good faith to maximize
the receipt and collection of Expected Revenues. If any Assigned Contract is
terminated by a customer on account of a breach thereof by Buyer, or if any
Assigned Contract is cancelled by Buyer, or if Buyer fails to offer to renew
(upon rates and terms determined by Buyer) any Assigned Contract upon its
expiration, then for the purpose of calculating the Actual Revenues from such
Assigned Contract to make any Section 2.06 adjustment of the Initial Purchase
Price, the Actual Revenues shall be deemed to equal one hundred percent (100%)
of the Expected Revenues from such Assigned Contract.
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ARTICLE VII
COVENANTS AND AGREEMENTS OF THE PARTIES
Section 7.01 FURTHER ASSURANCES. Subject to the terms and conditions of
this Agreement, each party shall use reasonable commercial efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary or desirable under Applicable Law to consummate the Transaction.
Seller and Buyer shall execute and deliver such other actions as may be
necessary or desirable to consummate or implement the Transaction. Except as
otherwise expressly set forth in the Transaction Documents, nothing in this
Section 7.01 shall require Seller or Buyer to make any payments in order to
obtain any Consents or approvals necessary or desirable in connection with the
consummation of the Transaction.
Section 7.02 COOPERATION IN OBTAINING CONSENTS. Seller and Buyer shall
cooperate with one another (i) in obtaining Consents required to be obtained
from parties to any Assigned Contracts in connection with the consummation of
the Transaction and (ii) in taking such actions, furnishing information required
in connection therewith and seeking timely to obtain any such Consents.
Section 7.03 PUBLIC ANNOUNCEMENTS. Prior to the Effective Date, Seller and
Buyer shall consult with each other before issuing any press release or making
any public statement with respect to this Agreement or the Transaction and shall
not issue any such press release or make any such public statement prior to such
consultation.
Section 7.04 LEGAL PRIVILEGES. Seller and Buyer acknowledge and agree that
all attorney-client, work product and other legal privileges that may exist with
respect to the Transferred Assets or Assumed Liabilities shall, from and after
the Closing Date, be deemed joint privileges of Seller and Buyer. Both Seller
and Buyer shall use all commercially reasonable efforts after the Closing Date
to preserve all such privileges and neither Seller nor Buyer shall knowingly
waive any such privilege without the prior written consent of the other party
(which consent shall not be unreasonably withheld or delayed).
Section 7.05 TAX RETURNS. Buyer and Seller agree (i) to file all tax
returns and other required reports relating to the Transaction in a manner which
is consistent with this Agreement. and (ii) that no party will take a position
on any report, return or other documents filed with any governmental authority
in any judicial or administrative proceeding that is in any manner inconsistent
with the Agreement. Buyer and Seller shall report the federal, state and local
income and other tax consequences of the purchase and sale contemplated hereby
in a manner consistent with the allocation contained in Section 2.02 and shall
not take any position inconsistent therewith upon examination of any tax return,
in any refund claim, in any litigation, or otherwise.
ARTICLE VIII
HIRING OF TRANSFERRED EMPLOYEES
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Section 8.01 Convenants Relating to the Hiring by Buyer of Employees of Seller
(a) As of the date hereof, Buyer shall be entitled to offer continued
employment commencing on the Effective Date to certain employees of the Health
Plan Business on such terms and conditions as Buyer, in its sole discretion,
shall determine and Buyer will thereafter assume full responsibility for all
such employees accepting employment by Buyer ("Transferred Employees"). Buyer
shall notify Seller of the names of the employees to be employed by Buyer not
later than the date of Closing.
(b) The Transferred Employees will be deemed employees-at-will and nothing
express or implied in this Section 8.01 or in this Agreement will obligate Buyer
to provide continued employment to any Transferred Employee for a specified
period of time following the Closing Date, and Buyer will be the sole judge of
the number, identity and qualifications of employees necessary for the conduct
of its business operations.
ARTICLE IX
CONDITIONS TO CLOSING
Section 9.01 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The obligations of
Seller and Buyer to consummate the Closing are subject to the satisfaction (or
waiver) of the following conditions:
(a) no provision of any Applicable Law and no judgment, injunction, order
or decree shall prohibit the Closing, and no action or proceeding shall be
pending before any court, arbitrator or Governmental Authority with respect to
which counsel to Buyer shall have rendered a written opinion that there is a
substantial likelihood of a determination that would prohibit the Closing;
(b) all actions by or in respect of or filings with any Governmental
Authority required to permit the consummation of the Closing shall have been
obtained.
Section 9.02 CONDITIONS TO OBLIGATION OF BUYER, The obligations of Buyer
to consummate the purchase of the Transferred Assets and the assumption of the
Assumed Liabilities on the Closing Date are subject to the satisfaction (or
waiver) of the following further conditions:
(a) Seller shall have performed in all material respects all of its
obligations under the Transaction Documents required to be performed by it on or
prior to the Closing Date.
(b) The representations and warranties of Seller contained in the
Transaction Documents shall be true and correct at and as of the date of this
Agreement and as of the Closing Date, as if made at and as of each such date,
except that those representations and warranties which are by their express
terms made as of a specific date shall be true and correct only as of
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such date, and Buyer shall have received a certificate signed by an executive
officer of Seller to the foregoing effect.
(c) On the Closing Date, no proceeding shall be pending or threatened
before any court or governmental agency which seeks to restrain or prohibit or
to obtain damages or other relief in connection with the conduct of the Health
Plan Business, and no investigation that might eventually result in any such
suit, action or proceeding shall be pending or threatened.
(d) On the Closing Date, Seller shall have delivered to Buyer written
evidence reasonably satisfactory to Buyer that the Consents have been obtained
or will be obtained.
(e) On the Closing Date, Seller shall have delivered to Buyer all of the
Transferred Assets, in accordance with this Agreement, the Transferred Assets
shall be usable for the purposes for which they have been historically used in
the conduct of the Health Plan Business and shall be in substantially the same
condition as at the date of this Agreement.
(f) All corporate and other proceedings of the Seller in connection with
the execution, delivery and performance of the Transaction Documents, the
consummation of the Transaction hereby, and all documents and records incident
thereto, including, without limitation, the approval of this Agreement and the
Transaction by the Board of Trustees, shall be certified to Buyer in form and
content satisfactory to Buyer, and Buyer shall have received true and complete
copies of all such documents and records including, without limitation, a good
standing certificate of Seller and authorizing resolutions of the Board of
Trustees of Seller (certified by the corporate secretary of Seller) as Buyer may
request.
(g) Seller shall have executed and delivered, on or before the Closing
Date, the Transaction Documents that are required to be signed by Seller.
(h) The Buyer shall receive from Seller documentation in recordable form
and satisfactory to Buyer releasing and terminating any Liens encumbering the
Transferred Assets.
Section 9.03 CONDITIONS TO OBLIGATION OF SELLER. The obligation of Seller
to consummate the Closing is subject to the satisfaction (or waiver) of the
following further conditions:
(a) Buyer shall have performed in all material respects all of its
respective obligations under the Transaction Documents required to be performed
by it at or prior to the Closing Date.
(b) The representations and warranties of Buyer contained in the
Transaction Documents shall be true and correct at and as of the date of this
Agreement and as of the Closing Date, as if made at and as of each such date,
except that those representations and warranties which are by their express
terms made as of a specific date shall be true and correct only as of such date,
and Seller shall have received a certificate signed by an executive officer of
Buyer to the foregoing effect.
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(c) All corporate and other proceedings of the Buyer in connection with
the execution, delivery and performance of the Transaction Documents, the
consummation of the Transaction hereby, and all documents and records incident
thereto, including, without limitation, the approval of this Agreement and the
Transaction by the Board of Directors, shall be certified to Seller in form and
content satisfactory to Seller, and Seller shall have received true and complete
copies of all such documents and records including, without limitation, a good
standing certificate of Buyer and authorizing resolutions of the Board of
Directors of Buyer (certified by the corporate secretary of Buyer) as Seller may
request.
(d) Buyer shall have executed and delivered, on or before the Closing
Date, the Transaction Documents that are required to be signed by Buyer.
ARTICLE X
SURVIVAL; INDEMNIFICATION
Section 10.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in the Transaction Documents and any
agreement, document, instrument or certificate delivered hereunder shall survive
the Closing.
Section 10.02 INDEMNIFICATION OBLIGATION OF SELLER. Effective as of the
Closing, Seller shall indemnify Buyer and hold Buyer harmless from and against
any and all Damages that result from or arise out of:
(a) any breach of any representation or warranty made by Seller in this
Agreement, or the nonfulfillment of any agreement, covenant or obligation on the
part of Seller under the Transaction Documents;
(b) all Damages sustained by Buyer from any claims of liability, made
against Buyer which are a result of Seller's conduct of the Health Plan
Business, including, but not limited to, its performance of the Assigned
Contracts, or any of its other actions prior to the Effective Date, and which
are not expressly assumed as Assumed Liabilities pursuant to the Transaction
Documents; and
(c) any action, suit, proceeding, assessment or judgment, incident to any
of the foregoing.
Section 10.03 INDEMNIFICATION OBLI2ATION OF BUYER. Effective as of the
Closing, Buyer shall indemnify Seller and hold Seller harmless from and against
any and all damages that result from or arise out of:
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(a) any breach of any representation or warranty made by Buyer in this
Agreement, or the nonfulfillment of any agreement, covenant or obligation on the
part of Buyer under the Transaction Documents;
(b) all Damages sustained by Seller from any claims of liability made
against Seller and its Affiliates which are a result of Buyer's conduct of the
Health Plan Business, including, but not limited to, its performance of the
Assumed Liabilities, or any of its other actions from and after the Effective
Date; and
(c) any action, suit, proceeding, assessment or judgment incident to any
of the foregoing.
Section 10.04 PROCEDURE FOR INDEMNIFICATION CLAIM.
(a) If Seller or any of its directors, officers, employees and agents,
shall seek indemnification pursuant to Section 10.03, or if Buyer or any of its
Affiliates, any of its directors, officers, employees and agents, shall seek
indemnification pursuant to Section 10.02, the Person seeking indemnification
(the "Indemnified Party") shall give written notice to the party from whom such
indemnification is sought (the "Indemnifying Party") promptly (and in any event
within 30 days) after the Indemnified Party (or, if the Indemnified Party is a
corporation, any officer or employee of the Indemnified Party) becomes aware of
the facts giving rise to such claim for indemnification (an "Indemnified Claim")
specifying in reasonable detail the factual basis of the Indemnified Claim,
stating the amount of the Damages, if known, the method of computation thereof,
containing a reference to the provision of the Transaction Documents in respect
of which such Indemnified Claim arises and demanding indemnification therefor.
The failure of an Indemnified Party to provide notice in accordance with this
Section 10.04 shall not constitute a waiver of that party's claims to
indemnification pursuant to Sections 10.02 or 10.03, except to the extent that
any such failure or delay in giving notice causes the amounts paid by the
Indemnifying Party to be greater than they otherwise would have been or
otherwise results in prejudice to the Indemnifying Party. If the Indemnified
Claim arises from the assertion of any claim, or the commencement of any suit,
action, proceeding or Remedial Action brought by a Person that is not a party
hereto (a "Third Party Claim"), any such notice to the Indemnifying Party shall
be accompanied by a copy of any papers theretofore served on or delivered to the
Indemnified Party in connection with such Third Party Claim. With respect to any
Third Party Claim asserted or brought prior to the Closing Date, notice of such
Third Party Claim shall be deemed delivered on the Closing Date.
(b) (i) Upon receipt of notice of a Third Party Claim from an Indemnified
Party pursuant to Section 10.04(a), the Indemnifying Party will be
entitled to assume the defense and control of such Third Party Claim
subject to the provisions of this Section 10.04. After written notice by
the Indemnifying Party to the Indemnified Party of its election to assume
the defense and control of a Third Party Claim, the Indemnifying Party
shall not be liable to such Indemnified Party for any legal fees or
expenses subsequently incurred by such Indemnified Party in connection
therewith. Notwithstanding anything in this Section 10.04 to the contrary,
if the Indemnifying Party does not assume defense and control of a Third
Party Claim as provided in this
15
Section 10.03, the Indemnified Party shall have the right to defend such
Third Party Claim, subject to the limitations set forth in this Section
10.04, in such manner as it may deem appropriate. Whether the Indemnifying
Party or the Indemnified Party is defending and controlling any such Third
Party Claim, they shall select counsel reasonably satisfactory to the
other party, contractors, experts and consultants of recognized standing
and competence, shall take all steps necessary in the investigation,
defense or settlement thereof and shall at all times diligently and
promptly pursue the resolution thereof. The party conducting the defense
thereof shall at all times act as if all Damages relating to the Third
Party Claim were for its own account and shall act in good faith and with
reasonable prudence to minimize Damages therefrom. The Indemnified Party
shall, and shall cause each of its directors, officers, employees, and
agents to, cooperate fully with the Indemnifying Party in connection with
any Third Party Claim.
(ii) Subject to the provisions of Section 10.04(b)(iii), the
Indemnifying Party shall be authorized to consent to a settlement of, or
the entry of any judgment arising from, any Third Party Claims, and the
Indemnified Party shall consent to a settlement of, or the entry of any
judgment arising from, such Third Party Claims; provided, that the
Indemnifying Party shall (1) pay or cause to be paid all amounts arising
out of such settlement or judgment concurrently with the effectiveness
thereof; (2) shall not encumber any of the assets of any Indemnified Party
or agree to any restriction or condition that would apply to such
Indemnified Party or to the conduct of that party's business; and (3)
shall obtain, as a condition of any settlement or other resolution, a
complete release of each Indemnified Party. Except for the foregoing, no
settlement or entry of judgment in respect of any Third Party Claim shall
be consented to by any Indemnifying Party or Indemnified Party without the
express written consent of the other party.
(iii) In the event that the Indemnifying Party desires to settle a
Third Party Claim or consent to the entry of any judgment arising
thereunder in a manner that satisfies the conditions described in Section
10.04(b)(iii) and the Indemnified Party does not wish to consent to such
settlement or entry of judgment, the Indemnified Party shall have no
obligation to consent to the settlement or entry of judgment provided that
it agrees in writing to pay and be responsible for 100% of any Damages.
(c) If an Indemnifying Party makes any payment on an Indemnified Claim,
the Indemnifying Party shall be subrogated, to the extent of such payment, to
all rights and remedies of the Indemnified Party to any insurance benefits or
other claims or benefits of the Indemnified Party with respect to such claim and
the Indemnified Party shall cooperate with the Indemnifying Party in the
assessment, assertion, negotiation, prosecution and settlement of such rights of
subrogation.
(d) The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any Third Party Claim
and to provide each other with all materials, information and data as reasonably
requested by the other. The Indemnifying Party shall from time to time and
promptly upon the request of the Indemnified Party keep the indemnified Party
reasonably informed of the Indemnifying Party's conduct of and any
16
negotiations relating to the defense of any Third Party Claim and shall use its
reasonable efforts to afford the Indemnified Party sufficient notice to enable
the Indemnified Party and its advisors to attend as an observer and at the
Indemnified Party's cost and expense any meeting in respect of the negotiation
of any Third Party Claim.
ARTICLE XI
TERMINATION
Section 11.01 TERMINATION. This Agreement may be terminated at any time
prior to the Closing only:
(i) by mutual written agreement of Seller and Buyer;
(ii) by Seller or Buyer if the Closing shall not have been
consummated by September 15, 2001; provided, however, that neither Seller
nor Buyer may terminate the Transaction Documents pursuant to this clause
(ii) if the Closing shall not have been consummated by September 15, 2001,
by reason of the failure of such party to perform in all material respects
any of its or their respective covenants or agreements, contained in the
Transaction Documents;
(iii) by either Seller or Buyer if there shall be any Applicable Law
or regulation that makes consummation of the Transaction illegal or
otherwise prohibited or if consummation of the Transaction would violate
any nonappealable final order, decree or judgment of any Governmental
Authority having competent jurisdiction.
(iv) by either Seller or Buyer if the other party is in material
breach of any of the representations, warranties or covenants of such
party under any of the Transaction Documents.
Any party desiring to terminate this Agreement pursuant to this Section 11.01
shall give written notice of such termination to the other party to this
Agreement.
Section 11.02 EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 11.01, such termination shall be without liability of any
party (or any stockholder, director, officer, employee, agent, consultant or
Representative of such party) to the other party to this Agreement; provided,
however, that if the Transaction fails to close as a result of a breach of the
provisions of any Transaction Document by Seller or Buyer, such party shall be
fully liable for any and all damages incurred or suffered by the other party as
a result of all such breaches if the other party is ready, willing and able to
otherwise satisfy its obligations under the Transaction Documents.
Notwithstanding the foregoing, the provisions of Section 12.03 and this Section
11.02 shall survive any termination hereof pursuant to Section 11.01.
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ARTICLE XII
MISCELLANEOUS
Section 12.01 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy or similar writing)
and shall be given,
if to Seller: Xxxxxxxx Xxxxx Health System, Inc.
Attention: Chief Financial Officer
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopy: 000-000-0000
with a copy to: General Counsel at the same address
if to Buyer: APS Healthcare Bethesda, Inc.
Attention: Chief Executive Officer
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy: 000-000-0000
with a copy to: General Counsel at the same address
or to such other address or telecopy number and with such other copies, as such
party may hereafter specify for the purpose by notice to the other parties. Each
such notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified in
this Section 12.01 and evidence of receipt is received or (ii) if given by any
other means, upon delivery or refusal of delivery at the address specified in
this Section 12.01.
Section 12.02 AMENDMENTS; WAIVERS.
(a) Any provision of the Transaction Documents may be amended or waived
prior to the Closing Date if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by Seller and Buyer, or in the
case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege under any Transaction Document shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right,
18
power or privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.
Section 12.03 EXPENSES; TAXES. Except as otherwise provided in the
Transaction Documents, all costs and expenses incurred in connection with the
Transaction Documents shall be paid by the party incurring such cost or expense.
Notwithstanding the foregoing, all transfer, sales, use and similar taxes or
governmental charges resulting from or relating to the transfer of the
Transferred Assets to Buyer by Seller, shall be paid by Buyer.
Section 12.04 SUCCESSORS AND ASSIGNS. The provisions of the Transaction
Documents shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns; provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other party.
Section 12.05 CONSTRUCTION. As used in the Transaction Documents, any
reference to the masculine, feminine or neuter gender shall include all genders,
the plural shall include the singular, and the singular shall include the
plural. With regard to each and every term and condition of the Transaction
Documents, the parties understand and agree that the same have or has been
mutually negotiated, prepared and drafted, and that if at any time the parties
desire or are required to interpret or construe any such term or condition or
any agreement or instrument subject hereto, no consideration shall be given to
the issue of which party actually prepared, drafted or requested any term or
condition of the Transaction Documents.
Section 12.06 ENTIRE AGREEMENT.
(a) The Transaction Documents and any other agreements contemplated
thereby constitute the entire agreement among the parties with respect to the
subject matter of such documents and supersede all prior agreements,
understandings and negotiations, both written and oral, between the parties with
respect to the subject matter thereof (including, without limitation, the Letter
of Agreement dated June 11, 2001 between Buyer and Seller).
(b) Except as expressly provided herein or in any other Transaction
Document, no Transaction Document or any provision thereof is intended to confer
upon any Person other than the parties hereto any rights or remedies hereunder.
Section 12.07 GOVERNING LAW. This Agreement and the other Transaction
Documents shall be construed in accordance with and governed by the law of the
State of Maryland (without regard to the choice of law provisions thereof).
Section 12.08 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart hereof signed by the other party hereto.
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Section 12.09 SEVERABILITY. Any provision of the Transaction Documents
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of the
Transaction Documents or affecting the validity or enforceability of such
provision in any other jurisdiction. To the extent any provision of the
Transaction Documents is determined to be prohibited or unenforceable in any
jurisdiction, Seller and Buyer agree to use reasonable commercial efforts to
substitute one or more valid, legal and enforceable provisions that, insofar as
practicable implement the purposes and intent of the prohibited or unenforceable
provision.
Section 12.10 CAPTIONS. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
Section 12.11 BULK SALES. Buyer hereby waives compliance by Seller in
connection with the Transaction, with the provisions of Article 6 of the Uniform
Commercial Code as adopted in the State of Maryland, and as adopted in any other
states or jurisdictions where any of the Transferred Assets are located, and any
other applicable bulk sales laws with respect to or requiring notice to Seller's
creditors, as the same may be in effect on the Closing Date. Seller shall
indemnify and hold harmless Buyer against any and all liabilities (other than
liabilities in respect of Assumed Liabilities) which may be asserted by third
parties against Buyer as a result of noncompliance with any such bulk sales law.
Section 12.12 SURVIVAL. Any provisions of this Agreement which, by their
terms, have not been fully performed as of the Closing Date shall survive the
Closing of the Transaction.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be duly
executed by their respective authorized officers on the day and year first above
written.
BUYER: APS Healthcare Bethesda, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------
NAME: Xxxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
SELLER: Xxxxxxxx Xxxxx Health System, Inc.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Vice President
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List of Omitted Exhibits, Schedules and Attachements
EXHIBITS
EXHIBIT 1.01 Definitions
EXHEBIT 3.01 Representations and Warranties of Seller
EXHIBIT 4.01 Representations and Warranties of Buyer
SCHEDULES
SCHEDULE 2.02(c)(ii) Fifty Assigned Contracts Requiring Consent with
Associated Revenues
SCHEDULE 2.02(c)(iii) Other Assigned Contracts Requiring Consent
SCHEDULE 2.03 Assigned Contracts Not Requiring Consents
SCHEDULE 2.06 Expected Revenues
SCHEDULE 5.07 Other Required Consents
SCHEDULE B.06 Disclosed Changes
SCHEDULE B.08 Equipment
SCHEDULE B.09 Inventory
SCHEDULE B.15 Intellectual Property
ATTACHMENTS
ATTACHMENT I Xxxx of Sale
ATTACHMENT II Assignment and Assumption Agreement
ATTACHMENT III License and Transfer Agreement
ATTACHMENT IV Subordinated Promissory Note
ATTACHMENT V Lease
ATTACHMENT VI Conditional Xxxxxxxx Xxxxx License Agreement
ATTACHMENT VII Transition Services Agreement
ATTACHMENT VIII Contingent Subordinated Promissory Note
