1
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "AGREEMENT") is made and entered
into as of this 28th day of December, 2000, by and among:
United Therapeutics Corporation (a Delaware corporation)
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxxxxx 00000 ("UTC"),
UTSC Sub Acquisition, Inc. (a Delaware corporation)
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxxxxx 00000 ("UTSC SUB"), a subsidiary of UTC,
Medicomp, Inc. (a Florida corporation)
0000 Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000 ("MEDICOMP, INC."), and
Telemedical Procedures LLC (a Florida limited liability company)
0000 Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000 ("TELEMEDICAL PROCEDURES LLC").
Medicomp, Inc. and Telemedical Procedures are at times referred to in this
Agreement jointly and severally as "the MEDICOMP COMPANIES".
Unless the context provides otherwise, capitalized terms used herein are
defined in Section 10.1.
RECITALS
A. The Boards of Directors of Medicomp, Inc., Telemedical
Procedures LLC, UTC and UTSC Sub have determined that the acquisition of the
Medicomp Assets and assumption of certain Medicomp Liabilities by UTSC Sub
pursuant to the terms and conditions of this Agreement (the "ACQUISITION") are
to the long term benefit of the shareholders or members of each entity and
will provide strategic benefits to Medicomp, Inc., Telemedical Procedures LLC,
UTC and UTSC Sub and, accordingly, the respective Boards of Directors have
approved the Acquisition, subject to approval of the Medicomp Stockholders;
B. The Medicomp Companies desire to sell the Medicomp Assets and
assign the Medicomp Liabilities to UTSC Sub as provided in this Agreement;
C. UTSC Sub desires to purchase the Medicomp Assets and assume the
Medicomp Liabilities as provided in this Agreement; and
2
D. The Medicomp Companies, UTSC Sub and UTC desire to make certain
representations, warranties and agreements in connection with and establish
various conditions precedent to the Acquisition.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements hereinafter set forth,
the parties hereto agree as follows:
ARTICLE I. PURCHASE AND SALE OF THE MEDICOMP ASSETS AND ASSUMPTION AND
TRANSFER OF THE MEDICOMP LIABILITIES
1.1 Medicomp Assets and Medicomp Liabilities.
(a) Subject to the terms of this Agreement, at the Closing (defined
in Section 1.2 below), the Medicomp Companies shall sell, convey and deliver
to UTSC Sub and UTSC Sub shall purchase all right, title and interest in and
to the Medicomp Assets, free and clear of any Liens, and the Medicomp
Companies shall transfer and assign to UTSC Sub and UTSC Sub shall assume the
Medicomp Liabilities. The parties intend that the Acquisition shall be treated
as a fully taxable asset acquisition transaction for tax purposes.
(b) The consideration for the transfer and sale to UTSC Sub of the
Medicomp Assets shall be the assumption by UTSC Sub of the Medicomp
Liabilities and the Shares issued and cash consideration pursuant to Section
1.3.
(c) If the assignment or transfer of any obligation or instrument
would cause a breach thereof and if no required consent to such assignment or
transfer has been obtained, then, at UTSC Sub's election and in its sole
discretion, such obligation or instrument shall not be assigned or
transferred, but UTSC Sub shall act as agent for the Medicomp Companies in
order to obtain for UTSC Sub the benefits under such obligation or instrument.
(d) EXCEPT AS EXPRESSLY AND UNAMBIGUOUSLY PROVIDED IN THIS SECTION
1.1, NEITHER UTC, UTSC SUB NOR ANY OF THEIR AFFILIATES ASSUMES OR AGREES TO
BECOME LIABLE FOR OR SUCCESSOR TO ANY LIABILITIES OR OBLIGATIONS WHATSOEVER,
LIQUIDATED OR OTHERWISE, WHETHER OF THE MEDICOMP COMPANIES OR ANY OTHER PERSON
OR OF THE BUSINESS. NO OTHER STATEMENT IN OR PROVISION OF THIS AGREEMENT AND
NO OTHER STATEMENT, WRITTEN OR ORAL, ACTION OR FAILURE TO ACT INCLUDES OR
CONSTITUTES ANY SUCH ASSUMPTION OR AGREEMENT, AND ANY STATEMENT TO THE
CONTRARY BY ANY PERSON IS UNAUTHORIZED AND HEREBY DISCLAIMED.
1.2 Closing. The purchase and sale contemplated by this Agreement shall be
consummated at a Closing to be held at the Melbourne, Florida offices Holland
& Knight LLP starting at 3:30 p.m. local time on December 28, 2000, or at such
other time or place as may be agreed upon by the parties upon satisfaction (or
where appropriate waiver) of the conditions to Closing set forth in Article 6
below, but not later than December 31, 2000. The consummation of such purchase
and sale is referred to in this Agreement as the "CLOSING" and the date of
such Closing is the "CLOSING DATE."
2
3
1.3 Consideration. UTC, on behalf of UTSC Sub, (i) shall pay to Medicomp,
Inc. Four Million Five Hundred Thousand Dollars ($4,500,000) cash (the
"MEDICOMP CASH CONSIDERATION"), (ii) shall issue to Medicomp, Inc. 257,142
shares of UTC Common Stock (the "SHARES") as set forth below, and (iii) shall
pay to Telemedical Procedures LLC Three Million Five Hundred Thousand Dollars
($3,500,000) cash (the "TELEMEDICAL CASH CONSIDERATION") (the Medicomp Cash
Consideration and the Telemedical Cash Consideration shall be referred to
collectively hereinafter as the "CASH CONSIDERATION"). The Shares shall be
registered by UTC for resale by Medicomp, Inc. in accordance with the terms of
the Registration Rights Agreement attached as Exhibit D hereto and shall be
subject to the Transfer Restrictions provided in Section 7.3 below.
(a) A certificate for 128,571 shares (representing 50% of the
Shares) issued in the name of Medicomp, Inc. will be delivered to Medicomp,
Inc. at Closing or, if such certificate has not been delivered by the Transfer
Agent to UTC prior to Closing, then an irrevocable letter from UTC directing
the Transfer Agent to issue a certificate for 128,571 shares (representing 50%
of the Shares) in the name of Medicomp, Inc. will be delivered to Medicomp,
Inc. at Closing; and
(b) A certificate for 128,571 shares (representing 50% of the
Shares) will be delivered to the Escrow Agent to be held in escrow pursuant to
the "hold-back" terms of the Escrow Agreement (such Shares shall be referred
to as the "ESCROW SECURITIES") or, if such certificate has not been delivered
by the Transfer Agent to UTC prior to Closing, then an irrevocable letter from
UTC directing the Transfer Agent to issue a certificate for 128,571 shares
(representing 50% of the Shares) to the Escrow Agent will be delivered to
Medicomp, Inc. at Closing; and
(c) A certified check or a wire transfer in the amount of the
Medicomp Cash Consideration will be delivered to Medicomp, Inc. and a
certified check or a wire transfer in the amount of the Telemedical Cash
Consideration will be delivered to Telemedical Procedures LLC at Closing
provided that the $500,000 loan amount evidenced by that certain Promissory
Note dated December 18, 2000 from the Medicomp Companies and Guardian
Diagnostics, Inc. to UTC (the "PROMISSORY NOTE") may be considered as an
additional payment upon Closing, with such Promissory Note marked cancelled
and paid in full at Closing and, if so, the amount of the Promissory Note
shall reduce the amount of the Medicomp Cash Consideration delivered at
Closing by such amount.
1.4 Issuance of Shares; Escrow; Restrictive Legend.
(a) UTC shall direct its Transfer Agent to issue certificates
evidencing the Shares in accordance with this Agreement.
(b) On the Closing Date, the parties shall deliver into Escrow
pursuant to the Escrow Agreement, either a share certificate evidencing the
Shares or an irrevocable letter from UTC to the Transfer Agent as set forth in
Section 1.3(b) above.
(c) Medicomp, Inc. acknowledges that the Shares have not been
registered under the Securities Act or the securities laws of any state and
therefore shall bear a restrictive legend substantially as follows:
3
4
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND HAVE
BEEN ISSUED IN RELIANCE ON AN EXEMPTION FROM REGISTRATION AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS.
1.5 Post-Closing Adjustment to Shares. The amount of the Shares shall be
adjusted on the third anniversary of Closing (the "ANNIVERSARY DATE") as
follows: in the event that the per share average closing price of UTC Common
Stock as reported by the Nasdaq National Market or any other market on which
the Shares are then traded over the 30 calendar days prior to the Anniversary
Date (the "AVERAGE ANNIVERSARY CLOSING PRICE") is less than $70.00 per share
(as adjusted for any intervening dividends or stock splits) then, in such
event, within twenty days of the Anniversary Date, UTC will issue to Medicomp,
Inc. that number of additional shares of UTC Common Stock valued at the
Average Anniversary Closing Price in order to achieve the equivalence of
Shares valued at $70.00 per share as of Closing, up to a maximum number of
600,000 shares. In the event that UTC issues additional shares under this
Section 1.5, such shares shall be deemed "Shares" for all purposes of this
Agreement and shall be registered by UTC for resale by Medicomp, Inc. in
accordance with the terms of the Registration Rights Agreement attached as
Exhibit D hereto.
ARTICLE 2. [Reserved]
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE MEDICOMP COMPANIES
The Medicomp Companies make the following representations and warranties to
UTSC Sub and UTC, as of the date of this Agreement.
3.1 Subsidiaries.
(a) Medicomp, Inc. holds 92.499% of the membership interests in
Telemedical Procedures LLC. There are no other entities owned or controlled
by the Medicomp Companies.
(b) Other than Medicomp, Inc.'s interest in Telemedical Procedures
LLC, the Medicomp Companies neither own, directly or indirectly, nor have the
right to acquire, any share of capital stock, partnership interest, joint
venture interest or other security or equity interest in any corporation,
limited liability company, partnership, joint venture, or other entity.
4
5
3.2 Organization, Good Standing and Qualification.
Medicomp, Inc. is a corporation duly organized and validly existing
under the laws of the State of Florida. Telemedical Procedures LLC is a
limited liability company duly organized and validly existing under the laws
of the State of Florida. The Medicomp Companies have all necessary power and
authority to own their Property and to carry on the Business as now owned and
operated by them. The Medicomp Companies are duly qualified to do business or
are otherwise approved or validly registered and are in good standing in every
jurisdiction where the character of the Properties owned or leased by them or
the nature of the Business conducted by them makes such qualification,
approval or registration necessary, except where failure to be so qualified,
approved or registered would not be Materially Adverse to the Medicomp
Companies. Schedule 3.2 sets forth all of the jurisdictions in which the
Medicomp Companies are qualified to do business or otherwise are approved or
registered or have branch offices or representative offices. The only
businesses engaged in by the Medicomp Companies is the Business.
3.3 Capitalization.
(a) The authorized capital stock of Medicomp, Inc. par value per
share of $0.01 consists of 2,500,000 shares of Medicomp, Inc. common stock, of
which 2,241,667 shares are issued and outstanding as of the date hereof as set
forth on Schedule 3.3, and 1,500 shares of Medicomp, Inc. preferred stock, of
which 1,360 shares are issued and outstanding as of the date hereof as set
forth on Schedule 3.3. All shares of capital stock of Medicomp, Inc. currently
issued and outstanding and all other securities of Medicomp, Inc. currently
issued and outstanding (all as set forth on Schedule 3.3) have been duly
authorized and validly issued and are fully paid and nonassessable.
(b) The outstanding membership interests of Telemedical Procedures
LLC as of the date hereof are set forth on Schedule 3.3.
3.4 No Conflict.
The execution and delivery of this Agreement and the other Transaction
Agreements do not, and the performance of and compliance with this Agreement
and such other Transaction Agreements will not:
(a) give rise to, accelerate the maturity of or otherwise modify
any obligation of the Medicomp Companies or result in a material breach of or
constitute (with or without the giving of notice or the passage of time or
both) a material default under any material obligation of the Medicomp
Companies or result in the creation of a Lien on the Medicomp Assets pursuant
to (i) the terms of any applicable statute, law, ordinance, rule or
regulation, or (ii) the terms, conditions or provisions of the constituent
documents of the Medicomp Companies, or any Contract, permit, concession,
grant, franchise, license, judgment, order, decree or other instrument or
arrangement to which the Medicomp Companies are a party or by which the
Medicomp Companies or any of the Property of the Medicomp Companies are bound;
or
(b) give rise to (i) any loss of subsidies, bonuses, exemptions,
rebates, discounted loans
5
6
or other advantages, (ii) any early termination or significant modification of
any Contract to which the Medicomp Companies are a party, (iii) any obligation
to pay a bonus, or indemnity or other payment to any director, employee or
contractor of the Medicomp Companies, (iv) any calls for early repayment of
any loans or financing granted to the Medicomp Companies, (v) any
modification, suspension or withdrawal of any permits or authorization granted
to the Medicomp Companies, or of any favorable fiscal or corporate regime in
place as a result of an agreement or otherwise, (vi) payment of any taxes,
fees or duties, (vii) any entitlement for any Person to be released from its
obligations under the terms of any guarantee, comfort letter or other similar
document issued as a security or in support of any undertakings on the part of
the Medicomp Companies, and (viii) any registration or constitution of a
pledge or other security on the assets of the Medicomp Companies.
3.5 Approvals and Consents.
Other than as disclosed on Schedule 3.5, no consent, permit or
approval of, filing with or notice to any Governmental Agency or any other
Person (whether or not governmental in character) has been or is required to
be obtained, made or given by the Medicomp Companies in connection with the
execution and delivery of this Agreement or the other Transaction Agreements
or the performance of and compliance by the Medicomp Companies with this
Agreement and such other Transaction Agreements, other than those which have
been obtained and other than approval of the Medicomp Stockholders as
contemplated by Section 6.1(a).
3.6 Authorization; Validity.
Subject to approval of the Medicomp Stockholders, the Medicomp
Companies have full power, legal capacity and authority to enter into, perform
and comply with this Agreement and each of the other Transaction Agreements to
which they are or will be a party. This Agreement and each of the other
Transaction Agreements have been, or will at Closing be, duly executed by the
Medicomp Companies and constitutes, or will constitute at Closing, the valid
and binding obligations of the Medicomp Companies, enforceable against the
Medicomp Companies in accordance with their terms, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether enforceability is considered in a
proceeding in equity or at law).
3.7 Financial Statements.
Schedule 3.7(i) includes the balance sheets and related statements of
income (including notes, accounting estimates and principles) of the Medicomp
Companies as set forth in U.S. dollars and prepared in accordance with
generally accepted accounting principles consistently applied as of and for
the tax years ending October 31,1998, and 1999, and 2000, which balance sheets
and related statements of income for 1998, 1999 and 2000 are unaudited. The
financial statements in Schedules 3.7(i) are referred to collectively as the
"FINANCIAL STATEMENTS." The Financial Statements (a) have
6
7
been prepared in accordance with generally accepted accounting principles
consistently applied, (b) subject to any limiting conditions or statements set
forth therein, fairly present the financial position of the Medicomp Companies
as of the respective dates indicated and the results of the Medicomp
Companies' operations for the respective periods indicated, and (c) were
prepared from existing books, records, descriptions and representations of the
Medicomp Companies, which books, records, descriptions and representations of
the Medicomp Companies, when taken in conjunction with the audit statement and
work papers, are substantially complete and correct in all material respects
and do not contain or reflect any material inaccuracies or discrepancies.
3.8 Absence of Specified Changes.
Except as set forth in Schedule 3.8, as specifically disclosed in the
Financial Statements and as otherwise expressly contemplated by this
Agreement, since December 31, 1999, there has not been any:
(a) Materially Adverse change in the financial condition,
liabilities, assets, Business or prospects of the Medicomp Companies;
(b) Labor trouble or other event or condition in respect of the
officers or employees of the Medicomp Companies that is Materially Adverse to
the Medicomp Companies;
(c) Entering into or assumption of any material Contract or
obligation by the Medicomp Companies, other than in the Ordinary Course of
Business or as contemplated hereby;
(d) Change in accounting methods or practices (including, without
limitation, any change in depreciation or amortization policies or rates) by
the Medicomp Companies;
(e) Revaluation by the Medicomp Companies of any of their assets
for book or tax purposes, other than for adjustments made as part of or
arising out of the preparation of the Financial Statements;
(f) Except as disclosed on Schedule 3.20(a)(i), material increase
in the salary or other compensation payable or to become payable by the
Medicomp Companies to any of their officers, directors, employees,
consultants, or contractors, or the declaration, payment or commitment or
obligation of any kind for the payment of a bonus or other additional salary
or compensation to any such individual, except as dictated by applicable law;
(g) Sale, lease or other disposition or transfer of any Property of
the Medicomp Companies other than in the Ordinary Course of Business;
(h) Amendment or termination of any Contract or license to which
either the Medicomp Companies are a party or by which the Medicomp Companies
or any of the Property of the Medicomp Companies are or may be bound, the
effect of which is Materially Adverse to the Medicomp Companies;
7
8
(i) Guarantee by the Medicomp Companies of any obligation of any
Person;
(j) Material increase in the level of the Medicomp Companies
Indebtedness or any new borrowings or loans by the Medicomp Companies;
(k) Waiver or release of any right or claim of the Medicomp
Companies, the effect of which is Materially Adverse to the Medicomp
Companies;
(l) Any dividends, distributions or other payments by the Medicomp
Companies to any Medicomp Stockholder in any form, or any loans, advances or
capital contributions to, or investments in, any other Person;
(m) Imposition of any Lien (other than a Permitted Lien) on any
Property of the Medicomp Companies;
(n) Any failure to pay the trade payables and other obligations of
the Medicomp Companies in excess of $5,000 individually within 60 days of the
date of receipt of invoices therefor or pursuant to their agreed payment
terms, which are currently unpaid, or any material change in the practices or
procedures of the Medicomp Companies with respect to the payment of trade
payables or other obligations of the Medicomp Companies or the collection of
accounts receivable and revenues (whether by way of acceleration of
collections or otherwise);
(o) Payment, discharge or satisfaction of any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), in accounts which in the aggregate exceed the sum of $25,000,
other than the payment, discharge or satisfaction in the Ordinary Course of
Business consistent with past practice or in accordance with their terms, of
liabilities reflected or reserved against in, or contemplated by, the
Financial Statements (or the notes thereto);
(p) Exclusive license or other license or arrangement granted to
any Person with respect to the Medicomp Proprietary Rights; or
(q) Loss or threatened loss of employees, consultants, vendors,
suppliers, or customers that is or would be Materially Adverse to the Medicomp
Companies.
3.9 Liabilities.
Except for the Medicomp Liabilities, UTSC Sub is not acquiring any
liabilities, debts or obligations (and the Medicomp Assets are subject to no
claims), known or unknown, fixed or contingent, liquidated or unliquidated,
secured or unsecured, direct or indirect, or of any other kind or nature
whatsoever.
3.10 Tax Returns and Payments.
(a) All Tax declarations, returns and other filings required to be
filed or made by the Medicomp Companies have been timely filed and are true,
correct and complete, and all Taxes,
8
9
assessments, fees, interest, penalties and other governmental charges shown to
be due and payable on such declarations, returns or filings have been paid or
will be paid on a timely basis. The Medicomp Companies have delivered to UTSC
Sub complete copies of all such Tax declarations, returns and other filings
made within the past three years prior to the execution of this Agreement. The
Medicomp Companies have not received any written notice of a proposed
deficiency or additional assessment for any Taxes, assessments, fees,
interest, penalties or governmental charges against the Medicomp Companies,
and no claim for assessment or collection of Taxes has been made for which
adequate provision has not been made or which has not been resolved as of the
date hereof. Except as set forth at Schedule 3.10(a), there is no completed,
pending, or to the Knowledge of the Medicomp Companies, threatened Tax audit
or investigation with respect to the Medicomp Companies, and the Medicomp
Companies neither are the subject of any inspection or inquiry, nor received
any request or notice from any Governmental Authority with respect to, the Tax
declarations, returns or filings of the Medicomp Companies or Taxes that may
be due by the Medicomp Companies. All Taxes resulting from or relating to the
operations of the Medicomp Companies which were or will be required to have
been paid, withheld or collected and remitted to the proper taxing authority
by the Medicomp Companies at any time prior to the Closing Date, have been, or
will prior to the Closing Date be, paid, withheld or collected and remitted in
full.
(b) Other than net operating loss carry-forwards, the Medicomp
Companies have not benefited from any fiscal advantage or favorable tax regime
by reason of their status or activities. The Medicomp Companies have not
benefited from any fiscal advantage or favorable tax regime in exchange for
existing undertakings or obligations by which they are still bound. The
Medicomp Companies are not bound by any obligation nor shall they incur any
additional tax burden as a result of their enjoyment of any fiscal advantages
or postponement of taxation, or of any favorable tax regime.
(c) Except for Permitted Liens, there are no Liens or grounds for
assertion or assessment of any Liens for Taxes upon the Medicomp Assets.
Except as set forth on Schedule 3.10(c), the Medicomp Companies are not nor
have they been a party to any Tax or loss sharing or Tax allocation agreement.
No item of income or gain reported by the Medicomp Companies for financial
accounting purposes in any pre-Closing Date period since December 31, 1999 is
required to be included in Taxable income in any post-Closing period. The
Medicomp Companies are not required to include in income any adjustment in
their current or in any future Taxable period, by reason of a change in
accounting method; nor to the Knowledge of the Medicomp Companies has a Tax
authority proposed, or is a Tax authority considering, any such change in
accounting method except as may be otherwise disclosed on Schedule 3.10(a).
There are no outstanding rulings or any requests for rulings from any Tax
authority with respect to the Medicomp Companies.
(d) None of the assets of the Medicomp Companies is property that
is required to be treated by Tax authorities as owned by any other Person and
none of the Medicomp Assets is Tax exempt use property.
3.11 Real Property Leases.
Schedule 3.11 contains a list of the Real Property Leases which list
identifies the date of
9
10
each such Real Property Lease and the address of the real property which is
the subject thereof. True and complete copies of each of the leases identified
on Schedule 3.l1 and any and all amendments thereto have been made available
to UTSC Sub. As of the Closing Date, except as disclosed on Schedule 3.11, the
Medicomp Companies will have secured the written agreements of all lessors to
assign the Real Property Leases to UTSC Sub. Upon the Closing, UTSC Sub will
have all right, title and interest of the lessee under the terms of the Real
Property Leases, free and clear of all Liens. There has been no default or
basis for termination of, nor has any event occurred which could constitute a
default or basis for termination of, any Real Property Lease. The Medicomp
Companies do not own any real property.
3.12 Condition of Property.
All buildings, improvements and Equipment owned or otherwise used by
the Medicomp Companies and material to the operation of the Business are in
good operating condition and repair, with no material defects except as
disclosed on Schedule 3.12. To the Knowledge of the Medicomp Companies, all
buildings, improvements and Equipment leased by the Medicomp Companies and
material to the operation of the Business are in good operating condition and
repair, with no material defects. The buildings, improvements and Equipment
owned, leased or otherwise used by the Medicomp Companies are suitable for the
operation of the Business as currently conducted. None of the real property
used by the Medicomp Companies is the subject, and to the Knowledge of the
Medicomp Companies is not likely to become the subject, of any actions for
hidden defects, failure to conform with laws, regulations, rules, codes or
other applicable legal requirements, or actions invoking the builders'
liability, subject to periodic building code, fire and life safety inspections
in the normal course of business which could result in building, tenant space,
tenant equipment or other modifications or compliance adjustments from time to
time. The activities carried out on the real property covered by Real Property
Leases are duly authorized thereby and are not in material violation of any
applicable law, regulation, ordinance, zoning code, or similar enactments.
3.13 Equipment/Title to Properties/Transfer of Medicomp Assets.
(a) Schedule 3.13(a) sets forth a complete and accurate list of
each item of Equipment owned by the Medicomp Companies as of the date hereof
and the address at which each item of Equipment is located. Schedule 3.13(a)
sets forth a complete and accurate list of each lease pursuant to which the
Medicomp Companies lease any item of Equipment and under which the monthly
rental payment exceeds $500 individually. True and complete copies of each of
the leases identified on Schedule 3.13(a) and any and all amendments thereto
have been made available to UTSC Sub. The Medicomp Companies are not in
default under any of the leases set forth on Schedule 3.13(a). As of the
Closing Date, the Medicomp Companies will have secured the written agreements
of all lessors of Equipment under which the monthly rental payment exceeds
$500 individually to assign such leases to UTSC Sub except as disclosed on
Schedule 3.13(a).
(b) The Medicomp Companies have good and marketable title or valid
leasehold to all their Properties, in each case free and clear of any Lien
except: (i) those listed in Schedule 3.13(b); (ii) Permitted Liens; (iii)
Liens imposed by law or incurred in the Ordinary Course of Business for
10
11
obligations not yet due to materialmen, warehousemen and the like; and (iv)
Liens on the lessor's interest in any real property or Equipment leased by the
Medicomp Companies.
(c) The Medicomp Assets and Medicomp Liabilities constitute all of
the Medicomp Companies' property and property rights now used, useful or
necessary for the conduct of the Business. Except as set forth on Schedule
3.13(c), no consent is necessary to, and there exists no restriction on, the
transfer of any of the Medicomp Assets or the assignment of the Medicomp
Liabilities to UTSC Sub. There exists no restriction or condition affecting
the title to or utility of the Medicomp Assets or Medicomp Liabilities which
would prevent UTSC Sub from occupying or utilizing the Medicomp Assets or
enforcing the rights under the Medicomp Liabilities to the same extent as the
Medicomp Companies might continue to do if the Acquisition were not to take
place. Upon the Closing, good and marketable title to the Medicomp Assets and
the rights under the Medicomp Liabilities shall be vested in UTSC Sub free and
clear of all Liens.
3.14 Compliance with Law.
(a) No Violations. The Medicomp Companies are not in material
violation of nor have the Medicomp Companies materially violated any
applicable United States or other country's central, provincial, regional,
federal, state, local, municipal or other governmental or quasi-governmental
statute, law, order, judgment, decree, requirement or regulation ("LAW")
applicable to the Business, operations or Property of the Medicomp Companies.
The Medicomp Companies have not received (i) any notice, claim or assertion,
formal or informal, oral or written, of any such violation by the Medicomp
Companies from any Person, or (ii) any request from any Governmental Agency
that the Medicomp Companies modify or terminate any of their operations or
modify or dispose of any of their Property in each case in any manner.
(b) Permits. Set forth on Schedule 3.14(b) hereto is a description
of each permit, license or approval required for the conduct of the Business.
Such permits, licenses and approvals are in full force and effect. Except as
noted on Schedule 3.14(b), such permits, licenses and approvals are freely
transferable by the Medicomp Companies and, upon Closing, UTSC Sub will have
all right, title and interest of the holder thereof.
3.15 Environmental Matters.
(a) Hazardous Materials. Except as disclosed on Schedule 3.15(a),
neither the Medicomp Companies nor, to the Knowledge of the Medicomp
Companies, any previous owner, tenant, occupant or user of the real property
subject to the Real Property Leases, have used, handled, generated, produced,
manufactured, installed, treated, stored, transported or been involved in the
Release of any Hazardous Materials in material violation of any applicable
Environmental Requirements or in any manner which could result in liability
Materially Adverse to the Medicomp Companies or the imposition of obligations,
fines or penalties Materially Adverse to the Medicomp Companies.
(b) Compliance. Except as disclosed on Schedule 3.15(b), neither
the Medicomp Companies nor, to the Knowledge of the Medicomp Companies, any
previous owner, tenant,
11
12
occupant or user of the real property or any current operator of or tenant on
the real property subject to the Real Property Leases, have received any oral
or written notice or other communication concerning (i) any alleged violation
of or under any applicable Environmental Requirement or the suspected presence
of any Hazardous Material in violation of any applicable Environmental
Requirement on, under, or in the vicinity of such real property, or (ii)
alleged liability for any environmental related damages or claims in
connection with such real property or otherwise, including without limitation
any potential liability as a potentially responsible or liable party with
respect to any environmental investigation or remediation, or the incurrence
of response costs regarding such real property or otherwise. In addition, the
Medicomp Companies have not received any oral or written notice or other
communication concerning any violation, alleged violation, liability or
alleged liability including without limitation as a potential responsible or
liable party, of or under any Environmental Requirement, or in regard to the
presence or suspected presence of Hazardous Materials on or in the vicinity of
property owned or controlled by any third Person which Hazardous Material was
generated, transported, treated, stored, released or disposed by or on behalf
of the Medicomp Companies. There are no Liens on any of the Property of the
Medicomp Companies arising under any Environmental Requirements. The Medicomp
Companies are not in violation of nor have the Medicomp Companies violated at
any time any applicable United States or other country's central, provincial,
regional, federal, state, local, municipal or other governmental or
quasi-governmental statute, law, order, judgment, decree, requirement or
regulation relating to the environment, Hazardous Materials, or Environmental
Requirements.
3.16 Accounts Receivable.
Except as set forth on Schedule 3.16, the accounts receivable and
notes receivable arising since the date thereof are valid and binding
obligations of the debtors arising from a bona fide transaction in the
Ordinary Course of Business and are not subject to any defenses, counterclaims
or rights of setoff.
3.17 Proprietary Rights.
(a) Schedule 3.17(a) contains a true, complete and correct list of
each Proprietary Right which is (i) owned by the Medicomp Companies (the
"OWNED PROPRIETARY RIGHTS") or (ii) licensed to the Medicomp Companies
(excluding any prepackaged software that may be acquired commercially for less
than $15,000) (the "LICENSED PROPRIETARY RIGHTS" and together with the Owned
Proprietary Rights, the "MEDICOMP PROPRIETARY RIGHTS"). Schedule 3.17(a)
identifies which of the Proprietary Rights are Owned Proprietary Rights and
which are Licensed Proprietary Rights.
(b) In each case where any Owned Proprietary Right that consists of
a patent or other registration or application is held by assignment, the
assignment has been duly recorded with the Governmental Agency from which the
patent or other registration issued or before which the application for
registration is pending. The rights of the Medicomp Companies in or to any
Owned Proprietary Rights, and the Exploitation of any Owned Proprietary Rights
for the continued operation of the Business do not and will not conflict with,
misappropriate, or infringe upon any proprietary right of any third party,
subject, as to future Exploitation, to the possibility of
12
13
termination or expiration of the rights of the Medicomp Companies to the Owned
Proprietary Rights.
(c) Except as set forth on Schedule 3.17(a), each Owned Proprietary
Right is exclusively owned by the Medicomp Companies. Each Owned Proprietary
Right and all of the rights of the Medicomp Companies in or to each of the
Licensed Proprietary Rights are held free and clear of any Liens, other than
Permitted Liens. Except as set forth on Schedule 3.17(c), the Medicomp
Companies have not granted any license, sublicense or other right to any
Person with respect to the Owned Proprietary Rights or the Licensed
Proprietary Rights.
(d) Except as set forth on Schedule 3.17(d), no claims have been
made, asserted or threatened, and no claims are presently pending or
threatened, against the Medicomp Companies either (i) based upon or
challenging or seeking to deny or restrict the Exploitation by the Medicomp
Companies of any of the Proprietary Rights in the Business, or (ii) alleging
that (A) the Exploitation of the Proprietary Rights, or (B) any services
provided by, processes used by, or products manufactured or sold by the
Medicomp Companies, does or may conflict with, misappropriate or infringe upon
the proprietary rights of any third party.
(e) Except as set forth on Schedule 3.17(e), to the Knowledge of
the Medicomp Companies, no Person is engaging in any activity or using any
proprietary right that infringes upon the Medicomp Proprietary Rights or upon
the rights of the Medicomp Companies therein. The consummation of the
transactions contemplated by this Agreement and the other Transaction
Agreements will not result in the termination or impairment of any of the
Owned Proprietary Rights.
(f) Schedule 3.17(f) sets forth a complete and accurate list of the
titles and dates of all licenses and sublicenses for the Licensed Proprietary
Rights (including all amendments of such licenses and sublicenses). The
Medicomp Companies have made available to UTSC Sub true, complete and correct
copies of such licenses and sublicenses. With respect to each such license and
sublicense (together with all amendments, consents and evidence of
commencement dates and expiration dates pertaining thereto):
(i) such license or sublicense is legal, valid, binding and
enforceable and in full force and effect, subject to the effect of bankruptcy
or similar insolvency laws affecting the rights of creditors generally and the
potential unavailability of specific enforcement, injunctive relief and other
equitable remedies;
(ii) the consummation of the transactions contemplated by
this Agreement and the other Transaction Agreements will not cause such
license or sublicense to cease to be in full force and effect or to be legal,
valid, binding and enforceable against the other party thereto, subject to the
effect of bankruptcy or similar insolvency laws affecting the rights of
creditors generally and the potential unavailability of specific enforcement,
injunctive relief and other equitable remedies, on terms substantially
identical to those currently in effect, nor will the consummation of the
transactions contemplated by this Agreement or the other Transaction
Agreements constitute a breach or default under such license or sublicense or
otherwise give the licensor or sublicensor a
13
14
right to terminate or materially modify such license or sublicense;
(iii) with respect to each such license or sublicense: (A) the
Medicomp Companies have not received any written notice of termination or
cancellation under such license or sublicense and no licensor or sublicensor
will have any right of termination or cancellation under such license or
sublicense as a result of the consummation of the transactions contemplated by
this Agreement and the other Transaction Agreements, and (B) the Medicomp
Companies have not received any notice of a breach or default under such
license or sublicense, which breach or default has not been cured; and
(iv) the Medicomp Companies are not in breach or default in
any material respect under such license or sublicense.
(g) The rights of the Medicomp Companies to the Owned Proprietary
Rights and, to the Knowledge of the Medicomp Companies, the rights of the
source(s) of each of the Licensed Proprietary Rights in or to the Proprietary
Rights underlying such Licensed Proprietary Rights, have not been adjudged
invalid or unenforceable as a whole or in part and all Medicomp Proprietary
Rights are valid and enforceable to the extent set forth in this Section 3.17.
(h) To the Knowledge of the Medicomp Companies, unless otherwise
disclosed in Schedule 3.17(h), no study has been performed or research or
experiments conducted that would suggest that development and
commercialization of services and products based on the Medicomp Proprietary
Rights would not be feasible, safe or effective.
(i) To the Knowledge of the officers of the Medicomp Companies, all
prepackaged software presently or in the past used by the Medicomp Companies
was and is being used pursuant to valid license or other use arrangements
unless such use would not have a Materially Adverse effect on the Business.
3.18 Customers and Distributors.
Schedule 3.18 sets forth the customers and distributors of the
Medicomp Companies for the period from January 1, 2000 through November 30,
2000. As of the Closing Date, the Medicomp Companies will have secured the
written agreement of all customers and distributors, with whom the Medicomp
Companies have written agreements, providing for the Medicomp Companies'
assignment of all customer agreements to UTSC Sub.
3.19 Suppliers.
Schedule 3.19 sets forth the top ten suppliers of materials to the
Medicomp Companies for the years 1999 and 2000. To the Knowledge of the
Medicomp Companies, none of the suppliers who have provided materials to the
Medicomp Companies since January 1, 1999 intends to cease providing materials,
or materially reduce the amount of materials it provides, to the Medicomp
Companies, which loss of or reduction in the provision of such materials
individually or in the aggregate would be Materially Adverse to the Medicomp
Companies. As of the Closing Date, the
14
15
Medicomp Companies will have secured the written agreement of all suppliers
providing for the Medicomp Companies' assignment of all supply agreements to
UTSC Sub.
3.20 Employment and Labor Matters.
(a) Employment.
(i) Schedule 3.20(a)(i) sets forth a complete and accurate
list of all written employment and independent contractor Contracts to which
the Medicomp Companies are a party or by which the Medicomp Companies are
bound which are not terminable by the Medicomp Companies at will. The Medicomp
Companies are not a party to, nor are they bound by, any oral employment
contracts. All other employees of the Medicomp Companies are employees
terminable at will under Florida law. Schedule 3.20(a)(i) sets forth a list of
the current annualized salaries for all employees of the Medicomp Companies
and the amount and payment terms for payments to consultants of the Medicomp
Companies.
(ii) Schedule 3.20(a)(ii) sets forth severance and other
obligations of the Medicomp Companies to former employees or corporate
officers of the Medicomp Companies and which are still currently outstanding.
The Medicomp Companies have not undertaken to grant any benefits to any
employees or corporate officers of the Medicomp Companies as a result of the
completion of the transactions provided for herein, other than as provided for
herein, nor have the Medicomp Companies changed their hiring or termination
policies or practices in any material respect.
(iii) Except as set forth on Schedule 3.20(a)(iii), no
officers or employees of the Medicomp Companies have resigned, or made known
his or her intention to resign, within the three months preceding the Closing
Date.
(iv) Except as set forth on Schedule 3.20(a)(iv), as of the
date hereof, the Medicomp Companies have paid when due to all of the Medicomp
Companies' employees, officers and directors, any wages, salaries,
commissions, bonuses, benefits, paid holidays, reimbursements or any other
material compensation. Except as set forth on Schedule 3.20(a)(iv), the
Medicomp Companies are in material compliance with all applicable laws, rules,
regulations, ordinances, and other requirements of governmental and
quasi-governmental entities, and all employment and other Contracts that
govern labor, employment and employment practices, terms and conditions of
employment, wages, hours and benefits, including, without limitation, all
laws, rules, regulations, ordinances, and other requirements relating to
employee health and safety, wage and hour, civil or human rights, and
employment discrimination, the non-compliance with which would be Materially
Adverse to the Medicomp Companies or the Business.
(v) The removal of any director, officer or employee of the
Medicomp Companies will not result in the creation or acceleration of any
rights of third parties against the Medicomp Companies, including any right to
acquire Medicomp Proprietary Rights or Medicomp Common Stock.
15
16
(vi) The Medicomp Companies are in full compliance with and
have not violated the terms and provisions of any applicable United States or
other country's central, provincial, regional, federal, state, local,
municipal or other governmental or quasi-governmental statute, law, order,
judgment, decree, requirement or regulation pertaining to immigration and the
hiring of non-citizens (collectively, "IMMIGRATION LAWS"). The Medicomp
Companies have not been the subject of any inspection or investigation
relating to their compliance with or violation of Immigration Laws, nor have
they been warned, fined or otherwise penalized by reason of any failure to
comply with Immigration Laws, nor is any such proceeding pending or, to the
Knowledge of Medicomp, threatened. The Medicomp Companies have provided to
UTSC Sub all records, documents or other papers which are retained pursuant to
applicable Immigration Laws.
(b) Labor Disputes. There is no pending or, to the Knowledge of the
Medicomp Companies, threatened dispute, controversy (including any
representation question), strike, work stoppage or claimed violation of the
terms of a collective bargaining agreement or employment contract affecting or
relating to any employee or group of employees (in each case, whether union or
nonunion) of the Medicomp Companies that is reasonably likely to be Materially
Adverse to the Business. There is no pending or, to the Knowledge of the
Medicomp Companies, threatened, labor-related litigation involving the
Medicomp Companies.
(c) Payments to Agents and Employees. All payments to agents,
consultants and others made by the Medicomp Companies have been in payment of
bona fide fees and commissions and not as bribes or illegal or improper
payments. The Medicomp Companies have properly and accurately reflected on
their books and records all compensation paid to and perquisites provided to
or on behalf of their consultants, agents and employees. Such compensation and
perquisites have been properly and accurately disclosed in the Financial
Statements.
3.21 Insurance.
Schedule 3.21 lists all policies of liability, theft, fire, title,
workers' compensation and other forms of insurance and surety bonds insuring
the Medicomp Companies and their directors, officers, employees, Properties,
assets and Business. The policies listed on Schedule 3.21 evidence insurance
in such amounts and against such risks and losses as are generally maintained
with respect to comparable properties and businesses. All policies listed in
Schedule 3.21 are in full force and effect and all premiums have been paid by
the Medicomp Companies. The Medicomp Companies have not failed to give any
notice or to present any claim under any such policy or binder in a due or
timely fashion. Except as set forth on Schedule 3.21, there have not been any
claims in excess of $10,000 under any of the policies listed in Schedule 3.21
or against any insurers in relation to the operation of the Medicomp
Companies. As of the Closing Date, the Medicomp Companies will have secured
the written agreement of all insurers providing for the Medicomp Companies'
assignment of all insurance policies to UTSC Sub.
3.22 Contracts.
(a) Schedule 3.22 sets forth a complete and accurate list of each
Contract to which the Medicomp Companies are a party other than (i) Contracts
under which no party thereto has any
16
17
remaining liability, absolute or contingent, (ii) Contracts for or related to
employment, and (iii) Contracts which the Medicomp Companies have entered into
with their shareholders.
(b) The Designated Contracts are and shall be as of the Closing
Date in full force and effect and are valid and enforceable in accordance with
their respective terms with respect to the Medicomp Companies and the other
party(ies) thereto, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general equitable principles. The
Medicomp Companies shall have, as of the Closing Date, secured the written
agreement of all parties for the Medicomp Companies' assignment of all
Designated Contracts to UTSC Sub, if applicable.
(c) No event has occurred and no condition exists which
constitutes, or with notice or lapse of time or both would constitute, a
material default by the Medicomp Companies or any other party under any of the
Designated Contracts. Neither the execution of this Agreement or the other
Transaction Agreements nor the Closing will constitute or result in a breach
or violation of or default under any Designated Contract or would create a
Lien on any Medicomp Asset.
(d) The Medicomp Companies have not received any oral or written
notice that any party to any of the Designated Contracts intends to cancel or
terminate any of them or to exercise or not exercise any options under any of
them.
(e) The Medicomp Companies are not a party to, nor is the Property
of the Medicomp Companies bound by, any non-written contract material to the
Business or the Medicomp Companies not disclosed in this Agreement or the
Schedules hereto.
(f) None of the Designated Contracts is contrary to any applicable
legal or regulatory provisions, or to any judicial or administrative decision.
3.23 Legal Proceedings.
Schedule 3.23 sets forth a complete and accurate list of all claims,
suits, actions, arbitrations, legal, administrative or other proceedings or
governmental investigations: (i) to which the Medicomp Companies are a party
or which are, to the Knowledge of the Medicomp Companies, threatened against
the Medicomp Companies, (ii) to which any employee or representative of the
Medicomp Companies is a party and in respect of which the Medicomp Companies
are obligated to provide indemnification or reimbursement, or (iii) to which
the Medicomp Companies or any employee or representative of the Medicomp
Companies was a party (with respect to the latter, only to the extent the
Medicomp Companies were obligated to provide indemnification or reimbursement
in respect thereof). Schedule 3.23 sets forth, for each of the matters
identified therein, a brief summary of such matter and the parties involved
therein, the total maximum amount claimed by the plaintiff against the
Medicomp Companies and, to the extent settled or resolved, the amount paid by
the Medicomp Companies in judgment or settlement and any other remedies
imposed upon the Medicomp Companies as a result thereof. There are no claims,
suits, actions, arbitrations, legal, administrative or other proceedings or
governmental investigations pending or, to the Knowledge of the Medicomp
Companies, threatened against the Medicomp Companies which seek to question,
17
18
delay, or prevent the consummation of the transactions contemplated by this
Agreement or any of the other Transaction Agreements. The Medicomp Companies
are not in default with respect to any judgment, order, writ, injunction,
decree or award of any Governmental Agency or of any arbitrator or arbitration
panel. Other than as set forth in Schedule 3.23, there is presently
outstanding, to the Knowledge of the Medicomp Companies, no reasonable basis
for any other material claim, suit, action, arbitration or other proceeding to
be brought against the Medicomp Companies which, if asserted, would have at
least a reasonable probability of an outcome that would be Materially Adverse
to the Medicomp Companies.
3.24 Certain Relationships and Interests.
Except as set forth in Schedule 3.24 and Schedule 3.20(a)(1), and as
may be disclosed by the Financial Statements, the Medicomp Companies do not
have and have not had, any Contract with, any outstanding loans to or from,
any outstanding liabilities to, or any sharing arrangements (whether for
compensation or otherwise) with any officer, director, employee, stockholder
or Affiliate of the Medicomp Companies, or any relative of any such Person or
any Person in which any such individual is an officer, director or partner or
has a material financial interest, direct or indirect. Except as set forth in
Schedule 3.24, no officer, director, employee, stockholder, member or
Affiliate of the Medicomp Companies, nor any relative of any of such
individual, owns or has any direct or indirect interest in any Property owned
by or leased to the Medicomp Companies or any Proprietary Right licensed to or
by the Medicomp Companies. Except as set forth in Schedule 3.24, neither the
Medicomp Companies nor any officer, director, stockholder or Affiliate of the
Medicomp Companies, nor any relative of any such individual, owns or has any
direct or indirect interest in any business which is a competitor, supplier or
customer of the Medicomp Companies or in any Person with whom the Medicomp
Companies are doing business in any way.
3.25 Business Records.
Except as set forth on Schedule 3.25, all records of the Medicomp
Companies, including without limitation all customer, supplier, accounting,
personnel and computer records, are complete and accurate and are maintained
in accordance with good business practices.
3.26 Powers of Attorney; Guarantees and Other Liabilities.
The Medicomp Companies do not have any powers of attorney
outstanding. Except as set forth in Schedule 3.26, the Medicomp Companies do
not have any obligations or liabilities (absolute or contingent) as guarantor,
surety, cosigner, endorser, co-maker, indemnitor, or otherwise respecting the
obligations or liabilities of any Person.
3.27 Full Disclosure.
The representations and warranties contained in this Article 3 taken
together with the matters described in the Schedules as a whole, do not
contain any untrue statement of a material fact and do not omit any material
fact the omission of which would make the statements made herein or therein
misleading. The Medicomp Companies do not have Knowledge of any fact that the
18
19
Medicomp Companies reasonably believes is or would be Materially Adverse to
the Medicomp Companies or the Business which has not been set forth herein.
3.28 Brokers.
Except as set forth on Schedule 3.28, no broker, agent, finder,
consultant or other Person has been retained by, or has acted on behalf of the
Medicomp Companies(other than legal and accounting advisors) or is entitled to
be paid based upon any agreements or understandings made by the Medicomp
Companies in connection with any of the transactions contemplated by this
Agreement.
3.29 Investment Representations.
(a) This Agreement is made in reliance upon the
representation of Medicomp, Inc. to UTC that the Shares will be acquired by
Medicomp, Inc. for investment, for Medicomp, Inc.'s own account, not as a
nominee or agent, and not with a view to the resale or distribution of any
part thereof, and that Medicomp, Inc. has no present intention of selling,
granting any participation in, or otherwise distributing the same. Medicomp,
Inc. understands that the Shares are "restricted" under the federal securities
laws inasmuch as they are being acquired from UTC in a transaction not
involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the
Securities Act only in certain limited circumstances. By executing this
Agreement, Medicomp, Inc. further represents that it does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to the Shares.
(b) Medicomp, Inc. believes it has received all the
information from UTC that it considers necessary or appropriate for entering
into this Agreement and acquiring the Shares. Medicomp, Inc. further
represents that it has had an opportunity to ask questions and receive answers
from UTC regarding the business, properties, prospects and financial condition
of UTC.
3.30 Survival of Representations and Warranties; Nature of Representations
and Warranties. The representations and warranties of the Medicomp Companies
shall survive the Closing Date.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF UTC AND UTSC SUB
UTSC Sub and UTC represent and warrant to the Medicomp Companies as follows:
4.1 Organization, Good Standing and Qualification.
UTSC Sub and UTC are corporations duly organized and validly existing
under the laws of the State of Delaware and have all necessary corporate power
and authority to own, lease and operate the properties and assets they now
own, lease and operate and to carry on their business as now being conducted.
UTSC Sub is qualified to do business in Florida.
4.2 Issuance of the Shares.
19
20
Upon issuance to Medicomp, Inc. pursuant to the terms and conditions
of this Agreement, the Shares will be validly issued, fully paid and
non-assessable, free and clear of any and all taxes, liens, claims and
encumbrances, except as contemplated by the Transfer Agreements.
4.3 Principle Exchange/Market.
The UTC Common Stock is currently listed on the Nasdaq National
Market, and UTC will use reasonable efforts to maintain its listing on the
Nasdaq National Market until at least December 31, 2004.
4.4 No Violations.
Neither the execution and delivery of this Agreement or any of the
other Transaction Agreements by UTSC Sub or UTC nor the consummation of the
transactions contemplated hereby or thereby, will (i) violate any law,
statute, ordinance, rule or regulation to which UTSC Sub or UTC is subject, or
any provision of UTSC Sub's or UTC's organizational documents, or (ii)
conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate
modify, or cancel, or require any notice under, or the consent of any other
party to, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement for borrowed money, instrument of indebtedness
lien, or other arrangement to which UTSC Sub or UTC is a party or by which it
is bound or to which any of its assets is subject, excluding from clauses (i)
and (ii) above such violations, conflicts, breaches and defaults that, in the
aggregate, would not have a Materially Adverse effect on the ability of UTSC
Sub or UTC to consummate the transactions provided for by this Agreement and
the other Transaction Agreements.
4.5 Approvals.
No consent, permit or approval of, filing with or notice to any
Governmental Agency or any other Person (whether or not governmental in
character) has been or is required to be obtained, made or given by UTSC Sub
or UTC in connection with the execution and delivery of this Agreement or the
other Transaction Agreements or the performance of and compliance with this
Agreement and such Transaction Agreements, except such consents, permits,
approvals, filings or notices that have been so obtained, made or given or
notices that will be filed pursuant to the Securities Act and pursuant to the
requirements of the Nasdaq Stock Market.
4.6 Authorization, Validity.
UTSC Sub and UTC each has all requisite right, corporate power and
authority and full legal capacity to enter into, perform and comply with this
Agreement and each of the other Transaction Agreements to which it is or will
be a party. All proceedings required to be taken by UTSC Sub and UTC to
authorize the execution, delivery and performance of and compliance with this
Agreement and such Transaction Agreements have been properly taken and no
other proceedings (corporate or otherwise) on the part of UTSC Sub or UTC (or
their shareholders) or any other Person are necessary to authorize this
Agreement and the other Transaction Agreements or to
20
21
consummate the transactions contemplated hereby or thereby. This Agreement and
each of such Transaction Agreements has been, or will at Closing be, duly
executed by UTSC Sub and UTC and constitute, or will constitute at Closing,
the valid and binding obligation of UTSC Sub and UTC, enforceable against UTSC
Sub and UTC in accordance with their terms, except as the same may be limited
by bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law).
4.7 SEC Documents.
The UTC Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and UTC is in full compliance with and has filed all reports,
schedules, forms, statements and other documents required to be filed by it
with the Securities and Exchange Commission ("SEC") pursuant to the reporting
requirements of the Exchange Act, including material filed pursuant to Section
13(a) or 15(d) (all of the foregoing including all filings, exhibits,
financial statements, schedules and documents incorporated by reference
therein being referred to herein as the "SEC DOCUMENTS"). As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder. The financial statements of UTC included in the SEC
Documents have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed
or summary statements) and fairly present in all material respects the
financial position of UTC as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
4.8 Brokers.
No broker, agent, finder, consultant or other Person has been retained
by, or has acted on behalf of UTSC Sub or UTC (other than legal and accounting
advisors ) or is entitled to be paid based upon any agreements or
understandings made by UTSC Sub or UTC in connection with any of the
transactions contemplated by this Agreement, other than any payment to Xxxxxx
Xxxxxxxx for which UTC will be responsible.
ARTICLE 5. [Reserved]
ARTICLE 6. CONDITIONS TO THE CLOSING
6.1 Conditions to Each Party's Obligations. The respective obligations of
each party to effect the transactions to be effected by it at the Closing
shall be subject to the satisfaction, or waiver by such party (except with
respect to the Medicomp Stockholder approval, which may not be waived by
either party hereto), at or prior to the Closing Date of the following
conditions:
21
22
(a) Consents, Approvals. The Medicomp Stockholders shall have
approved the Acquisition, this Agreement and the other Transaction Agreements
as required by law, and the Medicomp Companies shall have received all
consents, approvals, authorizations, or other actions by, or filings with or
notification to, any Person or Governmental Agency set forth in Article 3 and
made all such filings and declarations, as may be required to consummate the
transactions contemplated by this Agreement, and the execution and delivery of
the other Transaction Agreements.
(b) No Injunctions. There shall not be in effect any statute,
regulation, order, decree or judgment of any governmental authority which
makes it illegal or enjoins or prevents the consummation of the transactions
contemplated by this Agreement or the Transaction Agreements.
(c) Deadline. The Closing shall take place not later than December
31, 2000.
6.2 Conditions to Obligations of UTSC Sub and UTC. The obligations of each
of UTSC Sub and UTC to effect the transactions to be effected by it at the
Closing shall be subject to the satisfaction of, or waiver by UTSC Sub and
UTC, at or prior to the Closing Date, of the following conditions:
(a) Medicomp Companies' Obligations Performed. The Medicomp
Companies shall have performed, satisfied and complied in all material
respects with all covenants, agreements, conditions and obligations under this
Agreement required to be performed by them on or prior to the Closing Date.
The deliveries described in Section 6.5 hereof shall have been made.
(b) Accuracy of Representations and Warranties. The representations
and warranties of the Medicomp Companies contained in this Agreement or any
written schedule or certificate that shall be delivered by the Medicomp
Companies pursuant to this Agreement shall be true and correct in all material
respects in each case as of the Closing Date (except for representations and
warranties expressly stated herein to be applicable solely as to a specified
date which were true and correct as of such date).
(c) Due Diligence. The completion of UTSC Sub's and UTC's due
diligence review of the Business and operations of the Medicomp Companies to
the reasonable satisfaction of UTSC Sub and UTC.
(d) Transaction Agreements. The Medicomp Companies shall have
executed and delivered each of the Transaction Agreements.
(e) No Materially Adverse Effect. Since the date of this Agreement,
no event or series of events shall have occurred which has had or would
reasonably be expected to have a Materially Adverse effect on the Medicomp
Companies.
(f) Certification by Medicomp. UTSC Sub shall have received a
certificate, dated the date of the Closing, signed by an officer of the
Medicomp Companies representing and warranting, in such detail as UTSC Sub may
reasonably request, that the conditions specified in Section 6.1(a)
22
23
and Sections 6.2(a), (b), (d) and (e) have been fulfilled.
(g) Consents: Approvals.
All consents, approvals and actions of, filings with and
notices to any Governmental Agency necessary to permit UTSC Sub and UTC to
perform their obligations under this Agreement and the other Transaction
Agreements and all other consents (or in lieu thereof waivers) to the
performance by the Medicomp Companies of their obligations under this
Agreement and the other Transaction Agreements or to the consummation of the
transactions contemplated hereby and thereby as are required under any
Contract to which the Medicomp Companies are a party or by which any of their
Property is bound shall have been obtained, shall be in form and substance
reasonably satisfactory to UTSC Sub , shall not be subject to the satisfaction
of any condition that has not been satisfied or waived, shall not be
conditioned upon the giving of any additional consideration by UTSC Sub, and
shall be in full force and effect.
(h) Litigation. There shall be no investigation, notice,
litigation, arbitration or proceeding pending or threatened by any
Governmental Agency or Person for the purpose of enjoining or preventing the
consummation of this Agreement or the other Transaction Agreements or
otherwise claiming that the consummation of this Agreement or such Transaction
Agreements is illegal or improper or which, if decided adversely, would
Materially Adversely affect (i) the Business, (ii) UTSC Sub's rights in
respect thereof, (iii) the Medicomp Assets, or (iv) the Medicomp Companies'
ability to perform their obligations under this Agreement and the Transaction
Agreements, if and when the transactions contemplated hereby are consummated,
or that would cause any of the transactions contemplated by this Agreement or
the Transaction Agreements to be rescinded following consummation (and no such
judgment, order, decree, stipulation, injunction or change shall be in
effect).
(i) Opinion of the Medicomp Companies' Counsel. UTSC Sub and UTC
shall have received from Holland & Knight LLP, counsel for the Medicomp
Companies, an opinion dated the date of the Closing in the form of Exhibit B.
(j) Management Agreements.
(i) UTSC Sub shall have entered into a five-year employment
agreement with Xxxxxxx Xxxxx as Co-Chief Executive Officer in the form as
attached in Exhibit C, including his acceptance of and agreement to be bound
by (i) UTC's Employee Manual, and (ii) UTC's Securities Trades by UTC
Personnel Policy, both of which shall be attachments to his employment
agreement. Xxxxxxx Xxxxx shall report directly to Xxxxxxx Xxxxxxxxx, CEO of
UTC; and
(ii) UTSC Sub shall have entered into employment agreements
with Xxx Xxxxx, Xxxxxxx Xxxxx, Xxxx Button, Xxx Xxxxxxx, Xxx Xxxxx, and Xxxx
Xxxx in the form as attached in Exhibit C hereto, including acceptance by each
of the foregoing of and agreement to be bound by (i) UTC's Employee Manual,
and (ii) UTC's Securities Trades by UTC Personnel Policy, both of which shall
be attachments to each of their employment agreements.
23
24
(k) Approval and Delivery of Documentation. The Medicomp Companies
shall have delivered such other certificates, instruments, opinions and other
documents as UTSC Sub may reasonably request, and the form and substance of
all certificates, instruments, opinions and other documents delivered to UTSC
Sub under this Agreement shall be satisfactory in all reasonable respects to
UTSC Sub and its counsel. No legal impediment to the consummation of
transactions contemplated by this Agreement and the Transaction Agreements
shall have arisen in the reasonable judgment of UTSC Sub and UTC. The
deliveries described in Section 6.5 hereof shall have been made.
6.3 Conditions to Obligations of the Medicomp Companies. The obligations
of the Medicomp Companies to effect the transactions to be effected by them at
the Closing shall be subject to the satisfaction, or waiver by the Medicomp
Companies, at or prior to the Closing Date of the following conditions:
(a) UTSC Sub's and UTC's Obligations Performed. UTSC Sub and UTC
shall have performed, satisfied and complied in all material respects with all
covenants, agreements, conditions and obligations under this Agreement
required to be performed by them on or prior to the Closing Date.
(b) Accuracy of Representations and Warranties. Each of the
representations and warranties of UTSC Sub and UTC contained in this Agreement
or any written schedule or certificate that shall be delivered by UTSC Sub or
UTC pursuant to this Agreement shall be true and correct in all material
respects in each case as of the Closing Date (except for representations and
warranties expressly stated herein to be applicable solely as to a specified
date which were true and correct as of such date).
(c) Opinion of UTSC Sub and UTC's Counsel. The Medicomp Companies
shall have received from Mahon, Patusky, Xxxxxxxxx & Xxxxxx, Chartered,
counsel for UTSC Sub and UTC, an opinion dated the date of the Closing in the
form of Exhibit E.
(d) Deliveries upon Closing. UTSC Sub and UTC shall have delivered
such other certificates, instruments, opinions and other documents as the
Medicomp Companies may reasonably request, and the form and substance of all
certificates, instruments, opinions and other documents delivered to the
Medicomp Companies under this Agreement shall be satisfactory in all
reasonable respects to the Medicomp Companies and their counsel. No legal
impediment to the consummation of transaction contemplated by this Agreement
and the other Transaction Agreements shall have arisen in the reasonable
judgment of the Medicomp Companies. The deliveries described in Section 6.4
hereof shall have been made.
(e) Litigation. There shall be no investigation, notice,
litigation, arbitration or proceeding pending or threatened by any
Governmental Agency or Person for the purpose of enjoining or preventing the
consummation of this Agreement or the other Transaction Agreements or
otherwise claiming that the consummation of this Agreement or such Transaction
Agreements is illegal or improper or that would cause any of the transactions
contemplated by this Agreement or such Transaction Agreements to be rescinded
following consummation (and no such judgment,
24
25
order, decree, stipulation, injunction or change shall be in effect).
6.4 UTSC Sub's Deliveries at Closing.
(a) At Closing, UTSC Sub and/or UTC shall deliver to the Medicomp
Companies, as appropriate, the following:
(i) the Cash Consideration;
(ii) a duly executed certificate, dated as of the Closing
Date, from UTSC Sub and UTC to the effect that the conditions set forth in
Sections 6.3(a) and (b) which have not otherwise been waived by the Medicomp
Companies have been satisfied;
(iii) duly executed Employment Agreements with Xxxxxxx Xxxxx,
Xxx Xxxxx, Xxxxxxx Xxxxx, Xxxx Button, Xxx Xxxxxxx, Xxx Xxxxx, and Xxxx Xxxx
in the form as attached in Exhibit C hereto;
(iv) a duly executed Registration Rights Agreement in the form
of Exhibit D hereto;
(v) a duly executed Incentive Bonus Pool Agreement in the
form of Exhibit F hereto (the "Incentive Bonus Pool Agreement");
(vi) opinion of Xxxxx Patusky Xxxxxxxxx & Xxxxxx, Chartered,
counsel for UTSC Sub and UTC, addressing the matters relating to UTSC Sub and
UTC in the form of Exhibit E hereto;
(vii) a duly executed certificate for 128,571 shares of UTC
Common Stock (representing 50% of the Shares) to
Medicomp, Inc.;
(viii) a duly executed Escrow Agreement, signed by the parties and an
Escrow Agent ; and
(ix) a resale certificate in the form of Exhibit G hereto.
(b) At Closing, UTC shall deliver a duly executed certificate for
128,571 shares of UTC Common Stock (representing 50% of the Shares) to the
Escrow Agent.
6.5 The Medicomp Companies' Deliveries at Closing.
At Closing, the Medicomp Companies shall deliver to UTSC Sub and UTC
the following:
(a) a duly executed certificate, dated as of the Closing Date, from
the Medicomp Companies to the effect that the conditions set forth in Sections
6.1(a), 6.2(a), (b), (d), (e) which have not otherwise been waived by UTSC Sub
and UTC have been satisfied;
(b) opinion of Holland & Knight LLP, counsel for the Medicomp
Companies,
25
26
addressing the matters relating to the Medicomp Companies in the form of
Exhibit B hereto;
(c) duly executed Employment Agreements with Xxxxxxx Xxxxx, Xxx
Xxxxx, Xxxxxxx Xxxxx, Xxxx Button, Xxx Xxxxxxx, Xxx Xxxxx, and Xxxx Xxxx in
the form as attached in Exhibit C hereto;
(e) a duly executed Registration Rights Agreement in the form of
Exhibit D hereto;
(f) certificates of the secretaries of the Medicomp Companies
certifying the authenticity and completeness and accompanying the charter,
By-laws, minutes and record books of the Medicomp Companies including a
certified copy of the Medicomp Stockholders' resolutions approving this
Agreement, the other Transaction Agreements and the transactions contemplated
hereby and thereby; and
(g) such other instruments or documents necessary to complete the
transaction contemplated herein, all reasonably satisfactory in form and
substance to UTSC Sub.
ARTICLE 7. POST-CLOSING OBLIGATIONS AND AGREEMENTS
7.1 Certain Taxes.
All transfer, documentary, sales, use, value added, stamp, duty,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement or the Acquisition shall
be paid by the Medicomp Companies when due, and the Medicomp Companies will,
at their own expense, file all necessary Tax returns and other documentation
with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees. The Medicomp Companies shall indemnify,
defend and hold UTSC Sub and UTC, together with their respective Affiliates,
officers, directors, shareholders, employees and agents, harmless from and
against any such Taxes.
7.2 Post-Closing Operations.
(a) UTSC Sub will operate the Business as it existed as of
Closing and will develop the Business' products, including accelerated
development of a self-activated wireless heart monitor. UTSC Sub intends to
fund and operate the Business as it will be conducted in accordance with an
operating budget and milestones that will be developed after Closing, subject
to UTSC Sub's determination that revenues, spending and milestones are in
accordance with such budget and milestones, and UTC hereby guarantees UTSC
Sub's funding obligation under this Section 7.2(a). In the event that the
Business fails to achieve the revenues detailed in the budget, the business
exceeds the expenditures detailed in the budget, or the business fails to
timely achieve the milestones in accordance with the budget after the Closing,
then, upon the occurrence of any of the foregoing, UTSC Sub in its sole
discretion shall no longer be obligated to fund the business in accordance
with the budget and may fund, develop and otherwise operate and manage the
Business in any manner and by any means it chooses in its sole discretion. All
26
27
expenditures in excess of $50,000 shall be approved by UTC's designee and any
out-of-budget expenditure must be approved in advance of obligation by UTC's
designee.
(b) UTC's existing and planned telemedicine operations will
be operated through UTSC, and UTSC Sub shall be a subsidiary of UTSC.
(i) Xxxxxxx Xxxxx shall serve as co-CEO of UTSC Sub
with Xxxxxxx Xxxxxxxxx who will serve as UTSC Sub's other co-CEO. In the event
that Xxxxxxx Xxxxxxxxx ceases to serve as Chairman or CEO of UTC, then Xxxxxxx
Xxxxx shall serve as sole CEO of UTSC Sub.
(ii) Xxxxxxx Xxxxx shall also serve as co-CEO of UTSC
with Xxxxxxx Xxxxxxxxx who will serve as UTSC's other co-CEO. In the event
that Xxxxxxx Xxxxxxxxx ceases to serve as Chairman or CEO of UTC, then Xxxxxxx
Xxxxx shall serve as sole CEO of UTSC.
(iii) UTC shall cause the number of members of the
Board of Directors to be increased by one and shall cause Xxxxxxx Xxxxx to be
appointed to fill such newly created directorship.
7.3 Transfer Restrictions.
(a) Medicomp, Inc. hereby agrees that it will not, directly or
indirectly, without the prior written consent of UTC, sell, offer, contract to
sell, pledge, grant any option to purchase or otherwise dispose of
(collectively, a "DISPOSITION") any of the Shares delivered to Medicomp, Inc.
in accordance with Section 1.3(a) for a period commencing on the date hereof
and ending (i) with respect to 64,286 of the Shares delivered to Medicomp,
Inc. on Closing, on the 90th day following the Closing Date or on such earlier
date as reasonably may be necessary for Medicomp, Inc. to pay required income
tax obligations resulting from the Acquisition, and (ii) with respect to the
remaining 64,285 of the Shares delivered to Medicomp, Inc. at Closing, on the
180th day following the Closing Date (each, a "LOCK-UP PERIOD"). The foregoing
restriction is expressly agreed to preclude Medicomp, Inc. from engaging in
any hedging or other transaction which is designed to or reasonably expected
to lead to or result in a Disposition of Shares during the Lock-Up Period.
Such prohibited hedging or other transactions would include, without
limitation, any short sale (whether or not against the box) or any purchase,
sale or grant of any right (including, without limitation, any put or call
option). Medicomp, Inc. also agrees and consents to the entry of stop transfer
instructions consistent with the restrictions set forth in this Section 7.3
with the Transfer Agent against the transfer of any Shares.
(b) The Shares and any other shares of UTC Common Stock issued to
Medicomp, Inc. pursuant to this Agreement may only be disposed of pursuant to
an effective registration statement under the Securities Act, or pursuant to
an available exemption from or in a transaction not subject to the
registration requirements of the Securities Act, and in compliance with any
applicable federal and state securities laws.
27
28
(c) UTC will register the Shares for resale by Medicomp, Inc. in
accordance with the terms of the Registration Rights Agreement attached as
Exhibit D hereto.
7.4 Certain Medicomp Activities. Medicomp, Inc. hereby agrees and
covenants to UTC and UTSC Sub as follows:
(a) Medicomp, Inc. will take no action, by board resolution or
otherwise, in furtherance of the dissolution of Medicomp or the pro rata or
similar distribution of the Shares to the shareholders of Medicomp prior to
the first anniversary of the Closing Date.
(b) Medicomp, Inc. agrees to cooperate fully with UTC in connection
with the preparation and filing with the SEC of any required reports on Form
8-K relating to the Acquisition and the other transactions contemplated by
this Agreement at its own expense.
(c) Within twenty days following the Closing Date, the Medicomp
Companies will take all necessary actions to change their corporate names to a
new name that does not contain the trademark "Medicomp or Telemedical
Procedures", which trademarks are included among the Medicomp Assets purchased
by UTSC Sub hereunder.
7.5 Additional Agreements.
In case at any time after the date of this Agreement any further
action is necessary or desirable to carry out the purposes of this Agreement
or the other Transaction Agreements, the parties to this Agreement shall take
all such actions.
ARTICLE 8. INDEMNIFICATION
8.1 Indemnification as to Representations, Warranties, Covenants and Other
Matters.
(a) The Medicomp Companies, jointly and severally, agree to
indemnify, defend and hold UTSC Sub, UTC and their respective Affiliates,
officers, directors, shareholders, employees and agents harmless from and
against any and all losses, liabilities, damages, claims, demands, costs,
obligations, deficiencies and expenses (including without limitation interest,
penalties and reasonable attorneys' fees and expenses and, in the case of
environmental matters, reasonably necessary facility and equipment repairs,
modifications and additions) (collectively and including without limitation
Tax Losses, "LOSSES") which arise, or result, directly or indirectly, from:
(i) Representations, Warranties and Covenants -- any
material breach of or failure to perform, any representation, warranty,
covenant or obligation of the Medicomp Companies in this Agreement or in any
Schedule or certificate delivered pursuant hereto, including the Medicomp
Companies' representations, warranties, covenants or obligations in any manner
relating to Medicomp, Inc. or Telemedical Procedures LLC individually or
together;
(ii) Identified Claims and Litigation Matters (Designated
Claims) -- defense costs
28
29
and all other Losses arising out of or in connection with the claims and
litigation matters against the Medicomp Companies which are identified on
Schedule 8.1(a)(ii) (such claims and matters, the "DESIGNATED CLAIM"; Losses
from the Designated Claims, the "DESIGNATED CLAIM LOSSES");
(iii) Liabilities -- any and all liabilities, debts, or
obligations, known or unknown, fixed or contingent, liquidated or
unliquidated, secured or unsecured, direct or indirect, or of any other kind,
of the Medicomp Companies, which arose or accrued prior to Closing, other than
liabilities specifically disclosed and identified as to amount in the
Schedules attached hereto. The foregoing liabilities shall include, without
limitation, any and all losses that UTSC Sub might incur by reason of any
claim, suit, demand or action alleging that the operation of the Business of
the Medicomp Companies prior to Closing conflicted with, infringed upon or
misappropriated the proprietary rights of any third party, only to the extent
covered by the Medicomp Companies' warranties and representations under this
Agreement; and
(iv) Taxes -- in addition to Losses resulting from any breach
of the representations and warranties in Section 3.10, but notwithstanding
disclosure in Schedule 3.10(a), any and all Losses arising from or related or
attributable to Taxes of UTSC Sub relating to UTSC Sub's acquisition of the
Medicomp Assets and arising or accruing on or before Closing, or obligations
of UTSC Sub to report, pay, or withhold in respect of such Taxes, to the
extent related to UTSC Sub's acquisition of the Medicomp Assets and arising or
accruing on or before Closing (including all Losses arising from or related or
attributable to Medicomp, Inc. or Telemedical Procedures LLC), all such Losses
in this clause (iv) with respect to Tax matters are referred to herein as "TAX
LOSSES").
(b) UTSC Sub and UTC agree, jointly and severally, to indemnify,
defend and hold the Medicomp Companies and their respective Affiliates,
officers, directors, shareholders, members, employees and agents harmless from
and against any and all Losses which arise or result, directly or indirectly,
from any breach of or failure to perform, any representation, warranty,
covenant or obligation of UTSC Sub or UTC in this Agreement and any and all
Losses related to UTSC Sub's ownership of the Medicomp Assets subsequent to
Closing.
8.2 Notice of Claims.
(a) If an indemnified party reasonably believes that it may incur
any Losses hereunder, or receives notice of a third-party claim for which it
intends to seek indemnification hereunder, it shall give the indemnifying
party prompt written notice of such claim (the "Claim Notice") (which in the
case of a third party claim, shall be within 10 days of receipt of such
claim), specifying the facts and circumstances of the indemnification claim in
reasonable detail and the estimated amount of the Losses prior to the
applicable Expiration Date. If the matter to which a claim relates shall not
have been resolved as of the date of the Claim Notice, the indemnified party
shall estimate the amount of the claim in the Claim Notice, and shall also
specify therein that the claim has not yet been liquidated (an "Unliquidated
Claim"). If an indemnified party gives a Claim Notice for an Unliquidated
Claim, the indemnified party shall also give a second Claim Notice (the
"Liquidated Claim Notice") within 60 days after the matter giving rise to the
claim becomes finally resolved, and the Liquidated Claim Notice shall specify
the amount of the claim. Each indemnifying party to
29
30
which a Claim Notice is given shall respond to any indemnified party that has
given a Claim Notice (a "Claim Response") within 30 days (the "Response
Period") after the later of (i) the date that the Claim Notice is given or
(ii) if a Claim Notice is first given with respect to an Unliquidated Claim,
the date on which the Liquidated Claim Notice is given. Any Claim Response
shall specify whether or not the indemnifying party giving the Claim Response
disputes the claim described in the Claim Notice. If any indemnifying party
fails to give a Claim Response within the Response Period, such indemnifying
party shall be deemed not to dispute the claim described in the related Claim
Notice. If any indemnifying party elects not to dispute a claim described in a
Claim Notice, whether by failing to give a timely Claim Response in accordance
with the terms hereof or otherwise, then the amount of such claim shall be
conclusively deemed to be an obligation of such indemnifying party.
(b) If any indemnifying party shall be obligated to indemnify an
indemnified party pursuant to this Section 8, such indemnifying party shall
pay to such indemnified party the amount to which such indemnified party shall
be entitled within 15 business days after the day on which such indemnifying
party became so obligated to the indemnified party. If the indemnified party
shall be UTSC Sub or UTC and payment has not been made within the 15 business
day period referenced in the previous sentence, it shall first seek payment to
which it is entitled under this Section 8 from the Escrow Securities.
(c) If, during the Response Period, an indemnified party receives a
Claim Response from the indemnifying party, then for a period of 15 days (the
"Resolution Period") after the indemnified party's receipt of such Claim
Response, the indemnified party and the indemnifying party shall endeavor to
resolve any dispute arising therefrom. If such dispute is resolved by the
parties during the Resolution Period, the amount that the parties have
specified as the amount to be paid by the indemnifying party, if any, as
settlement for such dispute shall be conclusively deemed to be an obligation
of such indemnifying party. If the parties are unable to agree upon a
resolution to such dispute prior to the expiration of the Resolution Period
(or any extension thereto to which the indemnifying party and indemnified
party agree in writing), the issue shall be presented to a CPA firm selected
by UTSC Sub, and a CPA firm selected by the Medicomp Companies, to arrive at a
proposed resolution. In the event that the two selected firms arrive at a
mutual recommendation, it shall be adopted by the parties. In the event that
two selected firms are unable to arrive at a mutual recommendation, then the
two selected firms shall agree upon a third CPA firm to act as an arbitrator
(the "Accounting Arbitrator") for a final determination of the reasonable
assessment of the amount to be paid by the indemnifying party. If the
Accounting Arbitrator determines that the amount withheld by UTSC Sub is in
excess of the amount of Losses that are likely to be incurred by UTSC Sub,
then UTSC Sub shall release the excess amount to Medicomp, Inc. The fees and
expenses of the Accounting Arbitrator shall be borne equally by UTSC Sub, on
the one hand, and by the Medicomp Companies, on the other. Each of the parties
shall bear its own attorneys' and accountants' fees and expenses incurred in
connection with resolution of the matter by the Accounting Arbitrator.
(d) Notwithstanding anything to the contrary in this Article 8, the
Medicomp Companies shall not have any obligation to indemnify UTSC Sub and UTC
from and against any Claim until UTSC Sub and UTC have suffered damages by
reason of all such breaches in excess
30
31
of $10,000 in the aggregate (after which point the Medicomp Companies will be
obligated only to indemnify UTSC Sub and UT from and against all such claims
and any further claims).
(e) Any claim for indemnification under this Article 8 shall be
made by giving a Claim Notice under Section 8.2(a) on or before the applicable
statute of limitation has expired with respect to the initiation of a suit in
a court of competent jurisdiction for the claim underlying the claim for
indemnification (in each case, an "Expiration Date"). So long as an
Indemnified Party gives a Claim Notice for an Unliquidated Claim on or before
the applicable Expiration Date, such Indemnified Party shall be entitled to
pursue its rights to indemnification regardless of the date on which such
Indemnified Party gives the related Liquidated Claim Notice.
(f) The indemnifying party under this Section 8.2 shall have the
right to conduct and control, through counsel of its own choosing but
reasonably acceptable to the indemnified party, any third-party claim, action
or suit or compromise or settlement thereof but only so long as prior to
assuming the conduct or control of such claims, action or suit, the
indemnifying party confirms in writing to the indemnified party that such
claim, action or suit is one in respect of which the indemnifying party is
obligated to provide indemnification under this Agreement. The indemnified
party may, at its election, participate in the defense of any such claim,
action or suit through counsel of its own choosing, but the fees and expenses
of such counsel shall be at the expense of the indemnified party, unless the
indemnified party shall have been advised by such counsel that there are one
or more legal defenses available to it that are inconsistent and conflicting
with those available to the indemnifying party (in which case, if the
indemnified party notifies the indemnifying party in writing that it elects
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action on behalf
of the indemnified party with respect to such defenses). If the indemnifying
party shall fail to defend promptly and diligently any such third-party claim,
action or suit, then, upon the written notice to the indemnifying party
stating the reasons therefore, the indemnified party may defend, through
counsel of its own choosing, such claim, action or suit and may settle such
claim, action or suit and recover from the indemnifying party the amount of
such settlement or of any judgment and the costs and expenses of such defense.
The obligations of the indemnifying party hereunder shall not be reduced as a
result of any action by the party furnishing the notice of third-party claim
responding to such claim if such action is reasonably required to minimize
damages or to avoid a forfeiture or penalty or to comply with a requirement
imposed by law. The indemnifying party shall not compromise or settle any
third-party claim, action or suit that includes any term which shall require
any act or forbearance by the indemnified party and which does not
unconditionally release the indemnified party from all liability in respect of
such claim, action or suit without the prior written consent of the
indemnified party. UTSC Sub and the Medicomp Companies shall cooperate in all
reasonable respects with each other in connection with the defense,
negotiation or settlement of any legal proceeding, claim or demand referred to
in this Section 8.2.
8.3 Offset.
(a) UTSC Sub shall have the right to offset from the "hold-back"
described in Section 4 of the Escrow Agreement and from the employee incentive
bonus pool created by UTSC Sub in accordance with the Incentive Bonus Pool
Agreement, any amounts representing Losses to XXXX
00
00
Sub or UTC arising under Sections 8.1(a)(i),(ii),(iii) and (iv) of this
Agreement, all as are more fully described in and subject to the terms of the
Escrow Agreement.
(b) Exercise of the offset rights under Section 8.3(a) by UTSC Sub
shall not limit the rights of UTSC Sub to recover any amounts owed to it that
exceed the amount obtained by exercise of those rights and such exercise shall
not be in substitution of or in any way limit the exercise by UTSC Sub of its
other rights and remedies.
ARTICLE 9. MISCELLANEOUS
9.1 Transactional Expenses.
The Medicomp Companies and UTSC Sub shall each pay its own legal and
accounting fees and expenses incident to the negotiation, preparation,
execution, delivery and performance hereof, including, without limitation, the
fees and expenses of its counsel, accountants and other experts.
9.2 [Reserved]
9.3 Other Agreements Superseded; Waiver and Modification.
This Agreement and the other Transaction Agreements supersede all
prior agreements, representations or understandings, written or oral, of UTC,
UTSC Sub and the Medicomp Companies relating to any form of acquisition of the
Medicomp Companies, and incorporates the entire understanding of the parties
with respect thereto. This Agreement may be amended or supplemented only by a
written instrument signed by the party against whom the amendment or
supplement is sought to be enforced. Except as otherwise provided in Article
6, the party benefited by any condition or obligation may waive the same, but
such waiver shall not be enforceable by another party unless made by written
instrument signed by the waiving party.
9.4 Survival.
Except as otherwise specified in this Agreement, the indemnifications,
covenants, representations and warranties made in this Agreement or made in
writing pursuant hereto shall survive the Closing, any investigation of the
matters covered thereby by or on behalf of any party to whom they are made or
any discovery or knowledge prior to Closing or execution of this Agreement of
misstatement or misrepresentation by the party to whom they are made. Each of
the parties acknowledges that the others are entering into this Agreement and
will consummate the transactions contemplated hereby, in reliance upon the
express representations and warranties of the other parties made in this
Agreement or made in a writing delivered pursuant hereto.
9.5 Recovery of Litigation Costs.
If any legal action is brought for the enforcement of this Agreement
or because of an alleged dispute, breach, default or misrepresentation in
connection with any provision of this Agreement,
32
33
the prevailing party shall be entitled to recover reasonable attorneys' fees
and other costs incurred in that action or proceeding, in addition to any
other relief to which it may be entitled.
9.6 Notices.
Any notice under or relating to this Agreement shall be given in
writing and shall be deemed sufficiently given and served for all purposes
when personally delivered or given by telex or machine-confirmed facsimile or
seven (7) Business Days after a writing is deposited in the mails, airmail
postage and other charges prepaid and registered, return receipt requested, in
each case sent or addressed as follows:
(a) If to UTSC:
UTSC Sub Acquisition, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, CEO
with a copy to:
Xxxxx Patusky Xxxxxxxxx & Xxxxxx, Chartered
0000 Xxxxxxxxxxx Xxxxxx. X.X.
Xxxxxxxxxx, X.X. 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
(b) If to UTC:
United Therapeutics Corporation
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, CEO
with a copy to:
Xxxxx Patusky Xxxxxxxxx & Xxxxxx, Chartered
0000 Xxxxxxxxxxx Xxxxxx. X.X.
00
00
Xxxxxxxxxx, X.X. 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
(c) If to the Medicomp Companies:
Xx. Xxxxxxx X. Xxxxx (Marked Personal & Confidential)
0000 Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Holland & Knight LLP
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. X. Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
9.7 Law Governing: Dispute Resolution.
(a) This Agreement shall be construed in accordance with the laws
of the State of Delaware, without regard to its internal conflicts of law
principles.
(b) Neither party shall institute a proceeding in any court or
administrative agency to resolve a dispute between the parties before that
party has sought to resolve the dispute through direct negotiation with the
other party. If the dispute is not resolved after two (2) weeks of direct
negotiation, the parties shall attempt to resolve the dispute through
mediation. If the parties do not promptly agree upon a mediator, either party
may designate a representative who together shall select a competent mediator.
If the mediator is unable to facilitate a settlement of the dispute within a
reasonable period time, as determined by the mediator, the mediator shall
issue a written statement to the parties to that effect and the aggrieved
party may then seek relief through the courts or administratively. The parties
agree that the exclusive proper place of venue for any mediation hearing shall
be Silver Spring, Maryland for a claim brought by the Medicomp Companies and
Melbourne, Florida for a claim brought by UTC or UTSC Sub. Medicomp Companies
consent to the jurisdiction of the federal and state courts sitting in or
otherwise with jurisdiction covering claims arising in Silver Spring, MD, USA
(and of the appropriate appellate courts) and UTC and UTSC Sub consent to the
jurisdiction of the federal and states courts sitting in or otherwise with
jurisdiction covering claims arising in Melbourne, FL, USA (and of the
34
35
appropriate appellate courts), in any such action or proceeding and waive any
objection to venue laid therein.
(c) The prevailing party in any mediation, litigation,
administrative proceeding or appeals arising out of this agreement shall
recover its expenses and costs including reasonable attorney's fees from the
other party.
9.8 Assignability; Successors.
The Medicomp Companies may not assign any of their rights or
obligations hereunder without the consent of UTSC Sub or UTC. UTSC Sub may
assign its rights and obligations hereunder without consent of the Medicomp
Companies to any Affiliate of UTSC Sub or UTC or to any successor or assign of
UTSC Sub or UTC, provided that notice thereof is given to the Medicomp
Companies and provided that such assignment shall not release UTSC Sub or UTC
from its obligations hereunder. Any assignment made or purported to be made
contrary to the provisions of this Section 9.8 shall be void and of no force
or effect. Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of each of the parties and their respective successors
and assigns.
9.9 Time of Essence.
Time is of the essence of this Agreement and all of the terms,
conditions and provisions hereof.
9.10 Counterparts.
This Agreement may be executed in any number of counterparts and each
such executed counterpart shall be deemed to be an original instrument, but
all such executed counterparts together shall constitute one and the same
instrument. One party may execute one or more counterparts other than that or
those executed by another party, without thereby affecting the effectiveness
of any such signatures.
9.11 Parties in Interest.
Nothing in this Agreement, express or implied, is intended to confer
any rights or remedies under or by reason of this Agreement on any Person
other than the parties to it and their respective permitted successors and
assigns, nor is anything in this Agreement intended to relieve or discharge
any obligation of any third Person to any party hereto or give any third
Person any right of subrogation or action over against any party hereto.
9.12 Severability.
If any provision of this Agreement is held to be unenforceable for any
reason, it shall be modified rather than voided, if possible, in order to
achieve the intent of the parties to this Agreement to the extent possible. In
any event, all other provisions of this Agreement shall be
35
36
deemed valid and enforceable to the full extent.
9.13 Confidentiality.
(a) The terms and conditions of this Agreement shall be treated as
confidential and shall not be disclosed by any party hereto other than to (i)
its or his officers, directors, employees, accountants, lawyers, and other
advisors, on a need to know basis, (ii) successors and assigns of such party
and Persons considering investing in or acquiring such party or any Affiliate
thereof or providing financing for the same, and (iii) as may be reasonably
necessary to permit consummation of the transactions contemplated by this
Agreement or for subsequent operation of UTSC Sub or the Business. The
foregoing shall not prevent disclosure as required by applicable law,
including federal securities laws, or by UTC as it may deem necessary or
appropriate as a public company. In connection with any disclosure permitted
by this Section 9.13, the disclosee shall be instructed to comply with the
obligations of this paragraph.
(b) In the event that the Closing does not occur, each of UTSC Sub,
on the one hand, and Medicomp, on the other hand, shall treat as confidential
and shall not disclose other than to its or his officers, directors,
employees, accountants, lawyers, and other advisors, on a need to know basis,
any confidential information (as defined in Section 9.13(d) below) of any of
the other parties hereto. In connection with any disclosure permitted by this
Section 9.13, the disclosee shall be instructed to comply with the obligations
of this Section 9.13.
(c) At all times after Closing, the Medicomp Companies will hold in
strictest confidence, and will not use or disclose to any third party other
than their officers, directors, employees, accountants, lawyers, and other
advisors, on a need to know basis, any confidential information (as defined in
Section 9.13(d) below) of the Medicomp Companies or other Affiliates or of
UTSC Sub or any of their Affiliates obtained by the Medicomp Companies at any
time prior to Closing. In connection with any disclosure permitted by this
Section 9.13, the disclosee shall be instructed to comply with the obligations
of this Section 9.13.
(d) The term "confidential information" as used in this Section
9.13 shall mean all non-public information relating to a party and its
Affiliates. "Confidential information" of a party includes, without
limitation, information relating to services and products of such party and
its Affiliates, marketing or promotion of such services and products, business
policies or practices, customers, suppliers, or such other information
received from others that the party or its Affiliates is obligated to treat as
confidential. "Confidential information" shall not include, however,
information that: (i) is or becomes generally known or available to the public
through no fault of any of the parties to whom disclosure is made, (ii) was
given to third parties by the disclosing party without restriction on use or
disclosure, (iii) was known by the parties to whom disclosure is made prior to
receiving such information from the disclosing party, or (iv) is required to
be disclosed pursuant to any court order, law or regulation, after providing
notice to the disclosing party; provided, however, that in the event of a
dispute disclosure, the party to whom disclosure was made shall bear the
burden of proof of demonstrating that the confidential information falls
within one of the above exceptions.
36
37
9.14 Disclosure Schedules.
Disclosure of any fact or item in any Disclosure Schedule shall,
should the existence of the fact or item or its contents be relevant to any
other Disclosure Schedule and such relevance shall be clear on its face, be
deemed to be disclosed with respect to that other Disclosure Schedule whether
or not any explicit cross-reference appears therein. Disclosure of any matter
in the Disclosure Schedules shall not be deemed to imply that such matter is
or is not material. Disclosure of any matter in the Disclosure Schedules shall
not constitute an admission or raise any inference that such matter
constitutes a violation of law or an admission of liability or facts
supporting liability.
ARTICLE 10. INTERPRETATION OF THIS AGREEMENT
10.1 Terms Defined.
As used in this Agreement, the following terms have the respective
meanings set forth below or in the location indicated:
Accounting Arbitrator - see Section 8.2(c).
Acquisition - see Recitals.
Affiliate - a Person (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, another Person, or (ii) which beneficially owns or holds 20% or more of
any class of the voting stock of another Person, or (iii) 20% or more of the
voting stock (or in the case of a Person which is not a corporation, 20% or
more of the equity interest) of which is beneficially owned or held by another
Person. The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by Contract or
otherwise.
Agreement - this Asset Purchase Agreement, including the Exhibits and
Schedules hereto.
Anniversary Date - see Section 1.5.
Average Anniversary Closing Price - see Section 1.5.
Business - a medical device manufacturer in the case of Medicomp, Inc.
and a telemedicine services company in the case of Telemedical Procedures LLC.
Business Day - any day which is not a Saturday, Sunday or a bank
holiday in either Florida or Maryland, USA.
Cash Consideration - see Section 1.3.
37
38
Claim Notice - see Section 8.2(a).
Closing - see Section 1.2.
Closing Date - see Section 1.2.
Consideration - any cash or non-cash consideration of any kind
whatsoever, whether tangible or intangible, direct or indirect.
Contract - except as specifically provided in this Agreement, any
written agreement, contract, lease, license, promissory note, conditional
sales contract, indenture, mortgage, deed of trust, commitment, undertaking,
instrument or arrangement of any kind. Without limiting the generality of the
foregoing, any agreement, commitment, undertaking or arrangement of any kind
with a Governmental Agency shall constitute a "Contract" whether it was
entered into voluntarily or pursuant to applicable law or in settlement of a
claim or possible claim by such Governmental Agency, or otherwise.
Designated Claim - see Section 8.l(a)(ii).
Designated Claim Loss - see Section 8.1(a)(ii).
Designated Contracts - see the Contracts included or listed on
Schedule 3.22.
Disposition - see Section 7.3(a).
Dollar or $ - means United States dollars.
Environmental Requirements - any currently existing United States or
other country's central, provincial, regional, federal, state or local laws,
statutes and common law, ordinances, regulations, permits, orders, licenses,
approvals, authorizations or similar requirements of any Government Authority
and all judicial and administrative agency decrees, judgments and orders, in
each case relating to safety, health or the environment, including without
limitation, those pertaining to soils, subsurface, air, surface water and
ground water, land use, Hazardous Materials, waste, disposal, noise, odor and
other human health or environmental matters.
Equipment - any machinery, tools, appliances, vehicles, furniture,
fixtures, equipment, computers (and related software systems), parts or
similar tangible personal Property.
Escrow - the escrow established by the parties hereto pursuant to the
Escrow Agreement.
Escrow Agent - Xxxxx, Patusky Xxxxxxxxx & Xxxxxx, Chartered as initial
escrow agent, and Chicago Title or its successor as successor escrow agent,
which shall serve as escrow agent of the Escrow pursuant to the Escrow
Agreement.
Escrow Agreement - the Escrow Agreement entered into by and among the
parties hereto in
38
39
the form attached hereto as Exhibit A.
Escrow Securities - see Section 1.3(b).
Exchange Act - the Securities Exchange Act of 1934, as amended.
Expiration Date - see Section 8.2(e).
Exploitation - the use, display, reproduction, manufacturing,
distribution, licensing, sublicensing, sale, representation or any other
exercise of any Proprietary Rights, or any rights relating thereto, in any
product, work, technology, process or other form or manner, including without
limitation to any online use or transmission via Internet or other electronic
medium, whether now known or hereafter devised. "Exploit" means to so use,
display, reproduce, manufacture, distribute, license, sublicense, sell,
represent or otherwise exercise any Proprietary Rights, or any rights relating
thereto.
Financial Statements - see Section 3.7.
Governmental Agency - any United States or other country's central,
provincial, regional, federal, state or local government or any political
subdivision thereof or any department, commission, board, bureau, agency,
court, panel or other instrumentality of any kind of any of the foregoing or
any quasi-governmental entity of any kind or type.
Hazardous Materials - any substance:
(i) which is (upon the Closing) defined as a hazardous substance,
hazardous material, hazardous waste, extremely hazardous substance, extremely
hazardous material, extremely hazardous waste, pollutant, contaminant, toxic
substance, toxic material, toxic waste or any similar term in any
Environmental Requirement;
(ii) which is hazardous, toxic, corrosive, flammable, explosive,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous,
(iii) which is regulated under any Environmental Requirement;
(iv) the presence of which on the Real Property causes or threatens
to cause a nuisance upon the Real Property or to adjacent properties or poses
or threatens to pose a hazard to the Real Property or to the health or safety
of Persons on or about the Real Property;
(v) which is petroleum or a petroleum substance or a petroleum
product, including without limitation gasoline, diesel fuel or other petroleum
hydrocarbons;
(vi) which is asbestos or an asbestos compound or which contains
asbestos; or
(vii) which is a PCB (polychlorinated biphenyl) or a PCB compound or
contains PCBs.
39
40
Immigration Laws - see Section 3.20(a)(vi).
Incentive Bonus Pool Agreement - see Section 6.4(a)(v).
Knowledge - means the actual knowledge of the Person to whom the
reference is made.
Licensed Proprietary Rights - see Section 3.17(a).
Law - see Section 3.14(a).
Lien - any mortgage, deed of trust, security interest, retention of
title or lease for security purposes, pledge, charge, encumbrance, equity,
claim, easement, right of way, covenant, limitation, condition or restriction,
leasehold interest or any right of any kind of any other Person in or with
respect to any Property.
Liquidated Claim Notice - see Section 8.2(a).
Lock-Up Period - see Section 7.3(a).
Losses - see Section 8.1(a).
Materially Adverse - with respect to a Party, shall mean materially
adverse to such Party or its business, financial condition, results of
operations, liabilities, assets, properties, sales, operations, or prospects,
taken as a whole.
Medicomp Assets - all assets listed on Schedule 1.1(a) hereto.
Medicomp Cash Consideration - see Section 1.3.
Medicomp Common Stock - common stock, $.01 par value per share, of
Medicomp, Inc.
Medicomp Companies - see introductory paragraphs.
Medicomp, Inc. - see introductory paragraphs.
Medicomp Indebtedness - all current liabilities and long-term debt of
the Medicomp Companies, including without limitation, (i) all accounts
payable, long-term debt due within one-year, short-term borrowings, accrued
expenses including officer's compensation, salaries and payroll taxes, and
other liabilities, (ii) all debt for borrowed money or for the deferred
purchase price of property or services, and other interest-bearing
obligations, of the Medicomp Companies, (iii) all obligations under leases
that are or should be, under generally accepted accounting principles related
to the preparation of consolidated financial statements, as consistently
applied by Medicomp in past years, treated as capital leases of the Medicomp
Companies, (iv) all debt for borrowed money or for the deferred purchase price
of property or services, or capital leases, in
40
41
respect of which the Medicomp Companies have provided their Guarantee (other
than the Guarantee of the Real Property Lease by the Medicomp Companies), (iv)
all principal, interest and other amounts outstanding (and any penalties or
other amounts attributable to the repayment thereof at the Closing) by the
Medicomp Companies to any lender, bank or financial institution, whether by
loan, line of credit, or bank overdraft, (v) all overdue or deferred social
security contributions or pension fund payments or other payments in respect
of Taxes (including interest and penalties thereon accrued Closing), (vi) any
deferred payment in respect of any court orders or judgments or settlements
arising prior to the Closing Date, and (vii) any deferred severance payments
in connection with dismissal of any employees prior to the Closing Date to the
extent treated as indebtedness under generally accepted accounting principles
of the United States.
Medicomp Liabilities - all liabilities listed on Schedule 1.1(b)
hereto.
Medicomp Preferred Stock - the preferred stock of Medicomp as
authorized by the Medicomp Articles of Incorporation and described in detail
on Schedule 3.3.
Medicomp Proprietary Rights - see Section 3.17(a).
Medicomp Stockholders - holders of outstanding securities of Medicomp,
Inc. and members of Telemedical Procedures LLC entitled to vote with respect
to the Acquisition.
Net Sales - with respect to any Product, the invoiced sales price of
such Product billed by UTSC Sub and its Affiliates to Third Parties less the
following: (a) credits, allowances, discounts and rebates to, and chargebacks
from the account of, such Third Parties for damaged, obsolete, outdated,
rejected or returned Product and for retroactive price reductions in lieu of
returned Product; (b) actual shipping and handling, freight and insurance
costs incurred in transporting such Product in final form to such Third
Parties; (c) cash, quantity, and trade discounts; (d) sales, use, excise,
tariffs, value-added and other taxes or governmental charges incurred in
connection with the sale, exportation or importation, transportation, or
delivery of such Product in final form; and (e) bad debts or uncollectible
accounts. Net Sales shall not include (i) Products distributed to Third
Parties solely for marketing and advertising purposes, or as samples for
testing, evaluation or promotion purposes, and (ii) sales among UTSC Sub and
its Affiliates, although Net Sales shall include subsequent sales by UTSC Sub
and its Affiliates to a Third Party.
Ordinary Course of Business - the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
Owned Proprietary Rights - see Section 3.17(a).
Patent Rights - (i) all domestic and international issued patents and
patent applications set forth in Schedule 3.17(a) attached hereto which are
owned by or licensed to the Medicomp Companies which claim (a) a Product, (b)
the process of manufacture or use of a Product, or (c) a congener described
within the patents or patent applications set forth Schedule 3.17(a), and (ii)
any and all reissues, extensions, substitutions, confirmations, registrations,
revalidations, renewals,
41
42
supplementary protection certificates, additions, continuations,
continuations-in-part, divisions, or foreign equivalents to any such patents
and patent applications set forth in Schedule 3.17(a).
Permitted Lien - (a) Liens for taxes or other governmental charges not
yet due and payable or the amount or validity of which is being contested in
good faith by appropriate proceedings, (b) Liens existing on the Closing Date
and judgments and other similar Liens fully reflected on the Schedules hereto,
and (c) easements, rights-of-way, restrictions, and other similar encumbrances
which, in the aggregate, do not materially interfere with the occupation, use,
and enjoyment of the property or assets encumbered thereby in the normal
course of business or materially impair the value of the property subject
thereto.
Person - an individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or a Governmental Agency.
Product - shall mean any product that is designed or manufactured by
Medicomp, Inc. and any service provided by Telemedical Procedures LLC.
Promissory Note - see Section 1.3(c).
Property - any interest of the Medicomp Companies in any kind of
property or asset, whether real, personal or mixed, tangible or intangible,
and wherever located, including without limitation money and the other
Medicomp Assets, and including, without limitation, the Business and the
goodwill and value of the Medicomp Companies as a going concern.
Proprietary Rights - all trademarks, service marks, trade dress,
copyrights and trade names, and all applications for or registrations of any
of the foregoing, marketing or promotional designs, rights against other
Persons in respect of the any of the foregoing and any other promotional
Properties used or useful or developed or acquired for use in the Business.
All privacy, publicity, property, moral or other such similar rights ("droit
moral"). All patents, patent rights, patent applications, letters patent,
trade secrets, inventions, models, processes, designs, licenses, business
rights, rights to exclude others, information as to the identities or
requirements of customers or potential customers, market information, market
analyses, marketing plans, operating or management policies, procedures and
forms, and all other proprietary rights used or useful or developed or
acquired for use in the Business.
Real Property Leases - the leases of real property under which the
Medicomp Companies are lessees, all as set forth on Schedule 3.11.
Release - any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching or disposing into the environment
of any Hazardous Material.
Response Period - see Section 8.2(a).
SEC - Securities and Exchange Commission.
42
43
SEC Documents - see Section 4.7.
Securities Act - the Securities Exchange Act of 1933, as amended.
Shares - see Section 1.3.
Tax or Taxes - any United States or other country's central,
provincial, regional, federal, state, local or other jurisdictional tax,
import or export fees, duties or tariffs, assessments, fees (including without
limitation, documentation, license, filing and registration fees), customs'
fees, social security payments or contributions, social contribution payments,
or other charges of any other nature or kind whatsoever, levied by a
Governmental Authority, including without limitation (a) taxes imposed or
based on or with respect to or measured by any net or gross income or
receipts, (b) value added, transfer, excise, sales, use, gross receipts or
other similar taxes, (c) any franchise taxes, taxes on doing business, license
taxes, occupational taxes, gross receipts taxes or capital stock taxes
(including any minimum taxes and taxes measured by any item of tax
preference), (d) taxes based upon or imposed with reference to real or
personal property ownership, (e) compulsory social welfare and social security
funds, (f) employment taxes that are required to be paid or collected, or any
other employment related tax imposed by any other federal, state or other
jurisdiction, (g) any withholding for Taxes, and (h) any taxes similar to or
in the nature of those taxes described in (a), (b), (c), (d), (e), (f) or (g)
above, together with any penalties, fines, interest, or other additions to any
such taxes or other charges however imposed, withheld, levied or assessed.
Tax Losses - see Section 8.l(a)(iv).
Telemedical Cash Consideration - see Section 1.3.
Telemedical Procedures LLC - see introductory paragraphs.
Third Party - any individual or entity other than the Medicomp
Companies, UTSC Sub, UTC and their respective Affiliates.
Transaction Agreements - this Agreement, the Escrow Agreement, the
Registration Rights Agreement, and the Incentive Bonus Pool Agreement.
Transfer Agent - the transfer agent for UTC, which at the date hereof
is The Bank of New York.
Unliquidated Claim - see Section 8.2(a).
UTC - see introductory paragraphs.
UTC Common Stock - the common stock of UTC, par value $.01 per share.
UTC Shares - see Section 1.3(c).
43
44
UTSC - Unither Telemedicine Services Corporation, a Delaware
corporation, a wholly owned subsidiary of UTC.
UTSC Sub - see introductory paragraphs.
10.2 References.
All terms such as "herein," "hereby" or "hereunder" refer to this
Agreement as a whole. The use of the terms "including", "include" and
"includes" followed by one or more examples is intended to be illustrative and
shall not be deemed or construed to limit the scope of the classification or
category to the examples listed.
10.3 Headings, Schedules.
The headings used in this Agreement are provided for convenience only
and this Agreement shall be interpreted as though they did not appear herein.
The Schedules and Attachments to this Agreement form an integral part of this
Agreement.
10.4 Fair Construction.
This Agreement shall be given a fair and reasonable construction in
accordance with the intention of the parties and without regard to the drafter
thereof.
44
45
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
UTSC SUB ACQUISITION, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxxx, CEO
UNITED THERAPEUTICS CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxxx, CEO
MEDICOMP, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx., President
TELEMEDICAL PROCEDURES LLC
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx., President
45
