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Exhibit 2.2
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of
December 31, 1997 by and among Medical Manager Corporation, a Delaware
corporation ("Medical Manager"); Blue Cross And Blue Shield of South Carolina,
a South Carolina mutual insurance company ("Blue Cross"); Companion
Technologies Corporation, a South Carolina corporation and wholly-owned
subsidiary of Blue Cross ("CTC" and together with Blue Cross, the
"Shareholders") and Companion Technologies Corporation of Texas, a South
Carolina corporation and wholly-owned subsidiary of CTC (the "Company").
Certain other capitalized terms used herein are defined in Article IX and
throughout this Agreement.
RECITALS
The Company is a reseller of The Medical Manager(R) software, and
products and services related thereto (the "Business"). The Shareholders
desire to sell to Medical Manager and Medical Manager desires to purchase from
the Shareholders one hundred percent (100%) of the outstanding capital stock of
the Company.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 PURCHASE AND SALE. Upon the terms and subject to the
conditions of this Agreement, on the Closing Date, CTC shall sell and convey to
Medical Manager (or its designee), and Medical Manager shall purchase from CTC,
all of the shares of capital stock of the Company set forth on Schedule 3.4
hereof (the "Companion Shares), representing one hundred percent (100%) of the
outstanding capital stock, par value ---- per share, of the Company.
1.2 PURCHASE PRICE.
(a) Aggregate Purchase Price. As consideration for the
Companion Shares, Medical Manager agrees on the terms and subject to
the conditions and limitations set forth herein to pay to CTC an
aggregate amount equal to Four Million One Hundred Fifty Thousand
Dollars ($4,150,000), paid in the following manner:
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(I) Stock Issuance. Medical Manager will issue
to Companion one or more stock certificates representing, in
the aggregate, a number of shares (rounded to the nearest
whole share) of common stock, par value $.01 per share, of
Medical Manager Corporation equal to the number of shares
determined by dividing (x) Two Hundred Fifty Thousand Dollars
($250,000) by (y) the average closing sale price of a share of
Medical Manager Common Stock as quoted on the NASDAQ Stock
Market ("NASDAQ") for the five trading days prior to the
Closing Date, as reported (absent manifest error in the
printing thereof) by The Wall Street Journal (Eastern Edition)
(the "MMC Stock"). No fractional shares of Medical Manager
Common Stock will be issued.
(ii) Closing Date Payment. On the Closing Date,
Medical Manager shall pay to CTC an amount (the "Closing Date
Payment") equal to Nine Hundred Seventy-Five Thousand Dollars
($975,000).
(iii) Scheduled Payments. Medical Manager shall
pay to CTC the amounts set forth below on the specified dates,
without interest (the "Scheduled Payments"):
(A) Nine Hundred Seventy-Five Thousand
Dollars ($975,000), one hundred and eighty (180)
calendar days following the Closing Date;
(B) Nine Hundred Seventy-Five Thousand
Dollars ($975,000), on January 15, 1999; and
(C) Nine Hundred Seventy-Five Thousand
Dollars ($975,000), on January 15, 2000.
The Closing Date Payment and the Scheduled Payments shall be
made in immediately available funds by wire transfer to the
account designated from time to time by the Shareholders.
1.3 TIME AND PLACE OF THE CLOSING Subject to and after the
fulfillment or waiver of the conditions set forth in Articles VI and VII of
this Agreement, the closing of the sale of the Companion Shares shall take
place at the offices of Medical Manager Corporation, 0000 X Xxxxx Xxxxx Xxxxx
Xxxx, Xxxxx, Xxxxxxx 00000, on a date selected by Medical Manager within five
(5) days following the fulfillment or waiver of such conditions, or such other
date, time and place as the parties may mutually agree. Throughout this
Agreement, such event is referred to as the "Closing" and such date and time
are referred to as the "Closing Date."
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE MEDICAL MANAGER COMPANIES
As a material inducement to each of the Shareholders to enter into
this Agreement and to consummate the transactions contemplated hereby, Medical
Manager makes the following representations and warranties to the Shareholders:
2.1 CORPORATE STATUS Medical Manager is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Medical Manager has the requisite power and authority to own or
lease its properties and to carry on its business as presently conducted.
2.2 CORPORATE POWER AND AUTHORITY Medical Manager has the
corporate power and authority to execute and deliver this Agreement, to perform
its respective obligations hereunder and to consummate the transactions
contemplated hereby. Medical Manager has taken all action necessary to
authorize its execution and delivery of this Agreement, the performance of its
respective obligations hereunder and the consummation of the transactions
contemplated hereby.
2.3 ENFORCEABILITY This Agreement has been duly executed and
delivered by Medical Manager and constitutes a legal, valid and binding
obligation of Medical Manager, enforceable against Medical Manager in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally, public policy and general
equitable principles regardless of whether such enforceability is considered in
a proceeding at law or in equity.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS
As a material inducement to Medical Manager to enter into this
Agreement and to consummate the transactions contemplated hereby, each of the
Shareholders, jointly and severally, make the following representations and
warranties to Medical Manager:
3.1 CORPORATE STATUS The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of South
Carolina and has the requisite power and authority to own or lease its
properties and to carry on its business as now being conducted. The Company is
legally qualified to do business as a foreign corporation in each of the
jurisdictions where the nature of its properties and the conduct of its
business requires such qualification (all of which jurisdictions are set forth
in Schedule 3.1), and is in good standing in each of the jurisdictions in which
it is so qualified. The Company has fully complied with all of the
requirements of any
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statute governing the use and registration of fictitious names, and has the
legal right to use the names under which it operates its businesses. There is
no pending or threatened proceeding for the dissolution, liquidation,
insolvency or rehabilitation of the Company. All names under which the Company
does business as of the date hereof are specified on Schedule 3.1. Except as
otherwise disclosed in Schedule 3.1, the Company has not changed its name or
used any assumed or fictitious name, or been the surviving entity in a merger,
acquired any business or changed its principal place of business or chief
executive office, within the past three years.
3.2 POWER AND AUTHORITY Each of the Company and the Shareholders
has the corporate power and authority to execute and deliver this Agreement, to
perform its respective obligations hereunder and to consummate the transactions
contemplated hereby. Each of the Company and the Shareholders has taken all
corporate action necessary to authorize the execution and delivery of this
Agreement, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby.
3.3 ENFORCEABILITY This Agreement has been duly executed and
delivered by the Company and each of the Shareholders, and constitutes the
legal, valid and binding obligation of each of the them, enforceable against
each of them in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally, public policy and
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.
3.4 CAPITALIZATION Schedule 3.4 sets forth, with respect to the
Company, (a) the number of authorized shares of each class of its capital
stock, (b) the number of issued and outstanding shares of each class of its
capital stock, and (c) the number of shares of each class of its capital stock
which are held in treasury. All of the issued and outstanding shares of
capital stock of the Company (i) have been duly authorized and validly issued
and are fully paid and non-assessable, (ii) were issued in compliance with all
applicable state and federal securities laws, and (iii) were not issued in
violation of any preemptive rights, rights of first refusal or similar rights.
No preemptive rights, rights of first refusal or similar rights exist with
respect to the shares of capital stock of the Company and no such rights arise
by virtue of or in connection with the transactions contemplated hereby. There
are no outstanding or authorized rights, options, warrants, convertible
securities, subscription rights, conversion rights, exchange rights or other
agreements or commitments of any kind that could require the Company to issue
or sell any shares of its capital stock (or securities convertible into or
exchangeable for shares of its capital stock). There are no outstanding stock
appreciation, phantom stock, profit participation or other similar rights with
respect to the Company. There are no proxies, voting rights or other
agreements or understandings with respect to the voting or transfer of the
capital stock of the Company. The Company is not obligated to redeem or
otherwise acquire any of its outstanding shares of capital stock.
3.5 SHAREHOLDERS OF THE COMPANY Blue Cross owns (of record and
beneficially) one hundred percent (100%) of the outstanding capital stock of
CTC. CTC owns (of record and
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beneficially) one hundred percent (100%) of the outstanding capital stock of
the Company, free and clear of all Liens, restrictions and claims of any kind.
3.6 NO VIOLATION; CONSENTS AND APPROVALS Except for any approvals
or consents required under the Contracts (as defined in Section 3.25) which are
expressly identified in Schedule 3.25 as requiring the consent of third
parties, the execution and delivery of this Agreement by the Company and the
Shareholders, the performance by the Company and the Shareholders of their
obligations hereunder and the consummation by them of the transactions
contemplated by this Agreement will not (a) contravene any provision of the
Articles of Incorporation or Bylaws of the Company, (b) violate or conflict
with any law, statute, ordinance, rule, regulation, decree, writ, injunction,
judgment or order of any Governmental Authority or of any arbitration award
which is either applicable to, binding upon or enforceable against the Company
or any of the Shareholders, (c) conflict with, result in any breach of, or
constitute a default (or an event which would, with the passage of time or the
giving of notice or both, constitute a default) under, or give rise to a right
of payment or right to terminate, amend, modify, abandon or accelerate, any
Contract which is applicable to, binding upon or enforceable against the
Company or the Shareholders, (d) result in or require the creation or
imposition of any Lien upon or with respect to any of the properties or assets
of the Company, (e) give to any individual or entity a right or claim against
the Company or the Shareholders or (f) require the consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, any court or tribunal or any other Person, except any applicable
filings required under the SEC filings required to be made by Medical Manager.
3.7 RECORDS OF THE COMPANY The copies of the Articles of
Incorporation, Bylaws, and other documents and agreements of the Company which
were provided to Medical Manager are true, accurate and complete and reflect
all amendments made through the date of this Agreement. The minute books for
the Company made available to Medical Manager for review were correct and
complete as of the date of such review, no further entries have been made
through the date of this Agreement, such minute books contain the true
signatures of the persons purporting to have signed them, and such minute books
contain an accurate record of all material corporate actions of the
shareholders and directors (and any committees thereof) of the Company taken by
written consent or at a meeting since incorporation. All material corporate
actions taken by the Company have been duly authorized or ratified. All
accounts, books, ledgers and official and other records of the Company are
substantially complete and fairly, fully and accurately reflect all matters
contained therein. The stock ledgers of the Company, as previously made
available to Medical Manager, contain accurate and complete records of all
issuances, transfers and cancellations of shares of the capital stock of the
Company.
3.8 SUBSIDIARIES The Company does not own, directly or
indirectly, any outstanding voting securities of or other interests in, or have
any control over, any other corporation, partnership, joint venture or other
business entity. The Company is the surviving entity pursuant to an Agreement
and Plan of Merger dated October 9, 1997 among the Company, Management
Solutions Unlimited, Inc., a Texas corporation ("MSU"), and Easy Claims, Inc.,
a Texas corporation (together with MSU, the "Targets"), and all of the assets,
property and rights of every kind and description of
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each Target has been transferred to, vested in and devolved upon the Company by
virtue of the merger of the Company and the Targets.
3.9 FINANCIAL STATEMENTS The Shareholders have delivered to Medical
Manager the internally prepared financial statements of the Company for the
fiscal year ended December 31, 1996, including the notes thereto, and the
internally prepared financial statements of the Company for the eleven (11)
months ended November 30, 1997, including the notes thereto (collectively, the
"Financial Statements"), copies of which are attached as Schedule 3.9 hereto.
The balance sheet of the Company dated as of November 30, 1997, included in the
Financial Statements, is referred to herein as the "Current Balance Sheet."
The Financial Statements fairly present the financial position of the Company
at each of the balance sheet dates and the results of operations for the
periods covered thereby, and have been prepared in accordance with GAAP
consistently applied throughout the periods indicated. The books and records
of the Company fully and fairly reflect all of its transactions, properties,
assets and liabilities. There are no special or non-recurring items of income
or expense during the periods covered by the Financial Statements and the
balance sheets included in the Financial Statements do not reflect any writeup
or revaluation increasing the book value of any assets, except as specifically
disclosed in the notes thereto. The Financial Statements reflect all
adjustments necessary for a fair presentation of the financial information
contained therein.
3.10 CHANGES SINCE THE CURRENT BALANCE SHEET DATE Since the date
of its Current Balance Sheet, the Company has not (a) issued, sold, pledged,
disposed of, encumbered, or authorized the issuance, sale, pledge, disposition,
grant or encumbrance of any shares of its capital stock, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest of the Company;
(b) declared, set aside, made or paid any dividend or other distribution
payable in cash, stock, property or otherwise of or with respect to its capital
stock, or other securities, or reclassified, combined, split, subdivided or
redeemed, purchased or otherwise acquired, directly or indirectly, any of its
capital stock, or other securities, except for dividends or distributions paid
in the ordinary course of business consistent with past practice; (c) paid any
bonus to or increased the rate of compensation of any of its officers,
partners, or salaried employees, or amended any other terms of employment or
engagement of such persons; (d) sold, leased or transferred any of its
properties or assets or acquired any properties or assets other than in the
ordinary course of business consistent with past practice; (e) made or
obligated itself to make capital expenditures out of the ordinary course of
business consistent with past practice; (f) made any payment in respect of its
liabilities other than in the ordinary course of business consistent with past
practice; (g) except in the ordinary course of business consistent with past
practice, incurred any obligations or liabilities (including, without
limitation, any indebtedness for borrowed money, issuance of any debt
securities, or the assumption, guarantee, or endorsement of the obligations of
any Person) or entered into any transaction or series of transactions
contemplated hereby; (h) suffered any theft, damage, destruction or casualty
loss not covered by insurance in excess of $10,000 in the aggregate, and in
excess of $50,000 in the aggregate if covered by insurance; (i) suffered any
extraordinary losses (whether or not covered by insurance); (j) waived,
canceled, compromised or released any rights having a value in excess of
$10,000 in the aggregate; (k) made or adopted any change in its accounting
practice or policies; (l) made any adjustment to
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its books and records other than in respect of the conduct of its business
activities in the ordinary course consistent with past practice; (m) entered
into any transaction with, or made any payment or distributed any assets to,
the Shareholders or any Affiliate of the Company or the Shareholders, other
than in the ordinary course of business consistent with past practice; (n)
entered into any employment agreement that is not terminable at Closing without
any liability or obligation; (o) terminated, amended or modified any agreement
involving an amount in excess of $10,000 in the aggregate; (p) imposed any
security interest or other Lien on any of its assets other than in the ordinary
course of business consistent with past practice; (q) delayed paying any
account payable beyond 45 days following the date on which it is due and
payable except to the extent being contested in good faith; (r) made or pledged
any charitable contributions in excess of $10,000 in the aggregate; (s)
acquired (including, without limitation, for cash or shares of stock, by
merger, consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership or other business organization or division thereof or
any assets, or made any investment either by purchase of stock or securities,
contributions of property, or transfer of capital; (t) increased or decreased
prices charged to customers, except in the ordinary course of business
consistent with past practice; or taken any actions which might reasonably
result in any material loss of customers; (u) entered into any other
transaction or been subject to any event which has or may reasonably be
expected to have a Material Adverse Effect on the Company; or (v) agreed to do
or authorized any of the foregoing.
3.11 LIABILITIES OF THE COMPANY The Company does not have any
liabilities or obligations, whether accrued, absolute, contingent or otherwise,
except (a) to the extent reflected or taken into account in the Current Balance
Sheet and not heretofore paid or discharged, (b) liabilities incurred in the
ordinary course of business consistent with past practice since the date of the
Current Balance Sheet (none of which relates to breach of contract, breach of
warranty, tort, infringement or violation of law, or which arose out of any
action, suit, claim, governmental investigation or arbitration proceeding), (c)
liabilities incurred in the ordinary course of business consistent with past
practice prior to the date of the Current Balance Sheet which, in accordance
with GAAP consistently applied, were not required to be recorded thereon, and
(d) all obligations and liabilities under the Contracts set forth on Schedule
3.12, which obligations accrue after the Closing in the ordinary course of
business. Schedule 3.11 lists all indebtedness owed by the Company to a bank
or any other Person, including, without limitation, indebtedness for borrowed
money (including principal and accrued but unpaid interest) and remaining
payments on capitalized equipment leases.
3.12 LITIGATION Except as set forth on Schedule 3.12, there is no
action, suit, or other legal or administrative proceeding or governmental
investigation pending or, to the Company's or the Shareholders' knowledge,
threatened, anticipated or contemplated against, by or affecting the Company or
the Shareholders, or any of the Company's properties or assets, or which
question the validity or enforceability of this Agreement or the transactions
contemplated hereby, and there is no basis for any of the foregoing. There are
no outstanding orders, decrees or stipulations issued by any Governmental
Authority in any proceeding to which the Company is or was a party which have
not been complied with in full or which continue to impose any material
obligations on the Company.
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3.13 ENVIRONMENTAL MATTERS
(a) The Company and the Shareholders are and have at all
times been in compliance with all environmental laws governing the Company and
its business, operations, properties and assets.
(b) There are no non-compliance orders, warning letters,
notices of violation (collectively "Notices"), claims, suits, actions,
judgments, penalties, fines, or administrative or judicial investigations of
any nature or proceedings (collectively "Proceedings") pending or, to the
Company's and the Shareholders' knowledge, threatened against or involving the
Company, its business, operations, properties, or assets, issued by any
Governmental Authority or third party with respect to any environmental laws or
licenses issued to the Company or the Shareholders (but with respect to the
Shareholders only as it relates to the Company or the Shareholders' interest or
relationship with the Company).
3.14 REAL ESTATE
(a) The Company owns no real property or any right or
interest therein, including, without limitation, any option or other obligation
to purchase any real property or any interest therein other than its interest
in the Leased Premises.
(b) Schedule 3.14(b) sets forth a list of all leases,
licenses or similar agreements ("Leases") to which the Company is a party,
which are for the use or occupancy of real estate owned by a third party
(copies of which have previously been furnished to Medical Manager), in each
case, setting forth (A) the lessor and lessee thereof and the commencement
date, term and renewal rights of each of the Leases, and (B) the street address
or legal description of each property covered thereby (the "Leased Premises").
The Leases are in full force and effect and have not been amended, and no
party thereto is in default or breach under any such Lease. No event has
occurred which, with the passage of time or the giving of notice or both, would
cause a breach of or default under any of such Leases. There is no breach or
anticipated breach by any other party to such Leases. With respect to each
such Leased Premises: (i) presuming adequate landlord's title in the Leased
Premises, the Company has valid leasehold interests in the Leased Premises,
free and clear of any Liens, covenants and easements or title defects of any
nature whatsoever; (ii) the portions of the buildings located on the Leased
Premises that are used in the business of the Company are each in good repair
and condition, normal wear and tear excepted, and are in the aggregate
sufficient to satisfy the Company's current and reasonably anticipated normal
business activities as conducted thereat; and (iii) the Company has not
received notice of (a) any condemnation proceeding with respect to any portion
of the Leased Premises or any access thereto, and no such proceeding is
contemplated by any Governmental Authority; or (b) any special assessment which
may affect any of the Leased Premises, and no such special assessment is
contemplated by any Governmental Authority.
3.15 GOOD TITLE TO AND CONDITION OF ASSETS; INVENTORY The Company
has good and
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marketable title to all of its assets free and clear of any Liens. All assets
(other than personal property belonging to employees) located at the business
premises of the Company are assets of the Company. The Tangible Assets
currently in use or necessary for the business and operations of the Company
are in good operating condition, normal wear and tear excepted, and have been
maintained in accordance with all applicable manufacturer's specifications and
warranties. For purposes of this Agreement, the term "Tangible Assets" means
all vehicles, machinery, equipment, tools, supplies, leasehold improvements,
furniture and fixtures and other tangible personal property used by or located
on the premises of the Company or set forth on the Current Balance Sheet or
acquired by the Company since the date of the Current Balance Sheet. The
inventories of the Company are carried on the books of the Company and have
been accounted for in accordance with generally accepted accounting principles
consistently applied. Except to the extent of any reserve for obsolete or
unsaleable inventory shown on the Current Balance Sheet, all such inventories
are in good and marketable condition and suitable for sale to the Company's
customers in the regular course of business at currently prevailing market
prices.
3.16 COMPLIANCE WITH LAWS Each of the Company, the Shareholders
and any Affiliate of the Company is and has been in compliance with all laws,
regulations and orders applicable to it, its business and operations (as
conducted by it now and in the past), the Company's assets and the Leased
Premises and any other properties and assets (in each case owned or used by it
now or in the past). The Company has not been cited, fined or otherwise
notified of any asserted past or present failure to comply with any laws,
regulations or orders and no proceeding with respect to any such violation is
pending or, to the Company's or the Shareholders' knowledge, threatened.
Neither the Company, the Shareholders, their Affiliates, nor any of their
respective employees or agents, has made any payment of funds in connection
with their business which is prohibited by law, and no funds have been set
aside to be used in connection with their business for any payment prohibited
by law. The Company is not subject to any Contract (other than with Medical
Manager or its Affiliates), decree or injunction which restricts the continued
operation of any business or the expansion thereof to other geographical areas,
customers and suppliers or lines of business.
3.17 LABOR AND EMPLOYMENT MATTERS Schedule 3.17 sets forth the
name, address, social security number and current rate of compensation of each
of the employees of the Company. The Company is not a party to or bound by any
collective bargaining agreement or any other agreement with a labor union, and
there has been no effort by any labor union during the 24 months prior to the
date hereof to organize any employees of the Company into one or more
collective bargaining units. There is no pending or, to the Company's or the
Shareholders' knowledge, threatened labor dispute, strike or work stoppage
which affects or which may affect the business of the Company or which may
interfere with its continued operations. Neither the Company nor any agent,
representative or employee thereof has within the last 24 months committed any
unfair labor practice as defined in the National Labor Relations Act, as
amended, and there is no pending or, to the Company's or the Shareholders'
knowledge, threatened charge or complaint against the Company by or with the
National Labor Relations Board or any representative thereof. There has been
no strike, walkout or work stoppage involving any of the employees of the
Company during the 24 months prior to the date hereof. Schedule 3.17 contains
detailed information about each contract, agreement or plan of
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the following nature, whether formal or informal, and whether or not in
writing, to which the Company is a party or under which it has an obligation:
(i) employment agreements, including, without limitation, severance
compensation agreements, incentive compensation agreements, bonus agreements
and the like), (ii) employee handbooks, policy statements and similar plans,
(iii) noncompetition agreements and (iv) consulting agreements. Except for the
employees subject to the employment agreements referenced on Schedule 3.17, all
of the Company's employees are employees at-will. The Company has complied
with applicable laws, rules and regulations relating to employment, civil
rights and equal employment opportunities, including but not limited to, the
Civil Rights Act of 1964, the Fair Labor Standards Act, and the Americans with
Disabilities Act, as amended.
3.18 EMPLOYEE BENEFIT PLANS
(a) Employee Benefit Plans. Schedule 3.18 contains a
list setting forth each employee benefit plan or arrangement of the Company,
including but not limited to employee pension benefit plans, as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), multiemployer plans, as defined in Section 3(37) of ERISA, employee
welfare benefit plans, as defined in Section 3(1) of ERISA, deferred
compensation plans, stock option plans, bonus plans, stock purchase plans,
hospitalization, disability and other insurance plans, severance or termination
pay plans and policies, whether or not described in Section 3(3) of ERISA, in
which employees, their spouses or dependents, of the Company participate
("Employee Benefit Plans") (true and accurate copies of which, together with
the most recent annual reports on Form 5500 and summary plan descriptions with
respect thereto, were furnished to Medical Manager).
(b) Compliance with Law. With respect to each Employee
Benefit Plan (i) each has been administered in all material respects in
compliance with its terms and with all applicable laws, including, but not
limited to, ERISA and the Internal Revenue Code of 1986, as amended (the
"Code"); (ii) no actions, suits, claims or disputes are pending, or threatened;
(iii) no audits, inquiries, reviews, proceedings, claims, or demands are
pending with any governmental or regulatory agency; (iv) there are no facts
which could give rise to any material liability in the event of any such
investigation, claim, action, suit, audit, review, or other proceeding; (v) all
material reports, returns, and similar documents required to be filed with any
governmental agency or distributed to any plan participant have been duly or
timely filed or distributed; and (vi) no "prohibited transaction" has occurred
within the meaning of the applicable provisions of ERISA or the Code.
(c) Qualified Plans. With respect to each Employee
Benefit Plan intended to qualify under Code Section 401(a) or 403(a) (i) the
Internal Revenue Service has issued a favorable determination letter, true and
correct copies of which have been furnished to Medical Manager, that such plans
are qualified and exempt from federal income taxes; (ii) no such determination
letter has been revoked nor has revocation been threatened, nor has any
amendment or other action or omission occurred with respect to any such plan
since the date of its most recent determination letter or application therefor
in any respect which would adversely affect its qualification or materially
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increase its costs; (iii) no such plan has been amended in a manner that would
require security to be provided in accordance with Section 401(a)(29) of the
Code; (iv) no reportable event (within the meaning of Section 4043 of ERISA)
has occurred, other than one for which the 30-day notice requirement has been
waived; (v) as of the Effective Date, the present value of all liabilities that
would be "benefit liabilities" under Section 4001(a)(16) of ERISA if benefits
described in Code Section 411(d)(6)(B) were included will not exceed the then
current fair market value of the assets of such plan (determined using the
actuarial assumptions used for the most recent actuarial valuation for such
plan); (vi) all contributions to, and payments from and with respect to such
plans, which may have been required to be made in accordance with such plans
and, when applicable, Section 302 of ERISA or Section 412 of the Code, have
been timely made; and (vii) all such contributions to the plans, and all
payments under the plans (except those to be made from a trust qualified under
Section 401(a) of the Code) and all payments with respect to the plans
(including, without limitation, PBGC (as defined below) and insurance premiums)
for any period ending before the Closing Date that are not yet, but will be,
required to be made are properly accrued and reflected on the Current Balance
Sheet.
(d) Multiemployer Plans. With respect to any
multiemployer plan, as described in Section 4001(a)(3) of ERISA ("MPPA Plan")
(i) all contributions required to be made with respect to employees of the
Company have been timely paid; (ii) the Company has not incurred, and is not
expected to incur, directly or indirectly, any withdrawal liability under ERISA
with respect to any such plan (whether by reason of the transactions
contemplated by the Agreement or otherwise); (iii) Schedule 3.18 sets forth (A)
the withdrawal liability under ERISA to each MPPA Plan, (B) the date as of
which such amount was calculated, and (c) the method for determining the
withdrawal liability; and (iv) no such plan is (or is expected to be) insolvent
or in reorganization and no accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived,
exists or is expected to exist with respect to any such plan.
(e) Welfare Plans. (i) The Company is not obligated
under any employee welfare benefit plan as described in Section 3(1) of ERISA
("Welfare Plan") to provide medical or death benefits with respect to any
employee or former employee of the Company or its predecessors after
termination of employment; (ii) the Company has complied with the notice and
continuation coverage requirements of Section 4980B of the Code and the
regulations thereunder with respect to each Welfare Plan that is, or was during
any taxable year for which the statute of limitations on the assessment of
federal income taxes remains, open, by consent or otherwise, a group health
plan within the meaning of Section 5000(b)(1) of the Code; and (iii) there are
no reserves, assets, surplus or prepaid premiums under any Welfare Plan which
is an Employee Benefit Plan. The consummation of the transactions contemplated
by this Agreement will not entitle any individual to severance pay, and, will
not accelerate the time of payment or vesting, or increase the amount of
compensation, due to any individual.
(f) Controlled Group Liability. Neither the Company, nor
any entity that would be aggregated with it under Code Section 414(b), (c), (m)
or (o): (i) has ever terminated or withdrawn from an employee benefit plan
under circumstances resulting (or expected to result) in
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liability to the Pension Benefit Guaranty Corporation ("PBGC"), the fund by
which the employee benefit plan is funded, or any employee or beneficiary for
whose benefit the plan is or was maintained (other than routine claims for
benefits); (ii) has any assets subject to (or expected to be subject to) a lien
for unpaid contributions to any employee benefit plan; (iii) has failed to pay
premiums to the PBGC when due; (iv) is subject to (or expected to be subject
to) an excise tax under Code Section 4971; (v) has engaged in any transaction
which would give rise to liability under Section 4069 or Section 4212(c) of
ERISA; or (vi) has violated Code Section 4980B or Section 601 through 608 of
ERISA.
(g) Other Liabilities. (i) None of the Employee Benefit
Plans obligates the Company to pay separation, severance, termination or
similar benefits solely as a result of any transaction contemplated by this
Agreement or solely as a result of a "change of control" (as such term is
defined in Section 280G of the Code); (ii) all required or discretionary (in
accordance with historical practices) payments, premiums, contributions,
reimbursements, or accruals for all periods ending prior to or as of the
Effective Date shall have been made or properly accrued on the Current Balance
Sheet or will be properly accrued on the books and records of the Company as of
the Effective Date; and (iii) none of the Employee Benefit Plans has any
unfunded liabilities which are not reflected on the Current Balance Sheet or
the books and records of the Company.
3.19 TAX MATTERS All Tax Returns required to be filed prior to the
date hereof with respect to the Company or any of its income, properties,
franchises or operations have been timely filed, each such Tax Return has been
prepared in compliance with all applicable laws and regulations, and all such
Tax Returns are true and accurate in all respects. All Taxes due and payable
for the periods expiring on or prior to December 31, 1997 by or with respect to
the Company have been paid or are accrued on the Current Balance Sheet or will
be accrued on its books and records as of the Closing. Except as set forth in
Schedule 3.19 hereto: (i) with respect to each taxable period of the Company,
either such taxable period has been audited by the relevant taxing authority or
the time for assessing or collecting Taxes with respect to each such taxable
period has closed and such taxable period is not subject to review by any
relevant taxing authority; (ii) no deficiency or proposed adjustment which has
not been settled or otherwise resolved for any amount of Taxes has been
asserted or assessed by any taxing authority against the Company; (iii) the
Company has not consented to extend the time in which any Taxes may be assessed
or collected by any taxing authority; (iv) the Company has not requested or
been granted an extension of the time for filing any Tax Return to a date later
than the Closing Date; (v) there is no action, suit, taxing authority
proceeding, or audit or claim for refund now in progress, pending or threatened
against or with respect to the Company regarding Taxes; (vi) the Company has
not made an election or filed a consent under Section 341(f) of the Code (or
any corresponding provision of state, local or foreign law) on or prior to the
Closing Date; (vii) there are no Liens for Taxes (other than for current Taxes
not yet due and payable) upon the assets of the Company; (viii) the Company
will not be required (A) as a result of a change in method of accounting for a
taxable period ending on or prior to the Closing Date, to include any
adjustment under Section 481(c) of the Code (or any corresponding provision of
state, local or foreign law) in taxable income for any taxable period (or
portion thereof) beginning after the Closing Date or (B) as a result of any
"closing agreement," as described in
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Section 7121 of the Code (or any corresponding provision of state, local or
foreign law), to include any item of income or exclude any item of deduction
from any taxable period (or portion thereof) beginning after the Closing Date;
(ix) the Company has not been a member of an affiliated group (as defined in
Section 1504 of the Code) or filed or been included in a combined, consolidated
or unitary income Tax Return; (x) the Company is not a party to or bound by any
tax allocation or tax sharing agreement and has no current or potential
contractual obligation to indemnify any other Person with respect to Taxes;
(xi) no taxing authority will claim or assess any additional Taxes against the
Company for any period for which Tax Returns have been filed; (xii) the Company
has not made any payments, and is not and will not become obligated (under any
contract entered into on or before the Closing Date) to make any payments, that
will be non-deductible under Section 280G of the Code (or any corresponding
provision of state, local or foreign law); (xiii) the Company has not been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code (or any corresponding provision of state, local or
foreign law) during the applicable period specified in Section 897(c)(1)(a)(ii)
of the Code (or any corresponding provision of state, local or foreign law);
(xiv) no claim has ever been made by a taxing authority in a jurisdiction where
the Company does not file Tax Returns that the Company is or may be subject to
Taxes assessed by such jurisdiction; (xv) the Company has no permanent
establishment in any foreign country, as defined in the relevant tax treaty
between the United States of America and such foreign country; (xvi) true,
correct and complete copies of all income and sales Tax Returns filed by or
with respect to the Company for the past three years have been furnished or
made available to Medical Manager; (xvii) the Company will not be subject to
any Taxes for the period ending at the Closing Date for any period for which a
Tax Return has not been filed imposed pursuant to Section 1374 or Section 1375
of the Code (or any corresponding provision of state, local or foreign law);
(xviii) no sales or use tax will be payable by the Company or Medical Manager
as a result of this transaction, and there will be no non-recurring intangible
tax, documentary stamp tax or other excise tax (or comparable tax imposed by
any governmental entity) payable by the Company or Medical Manager by virtue of
the transactions completed in this Agreement.
3.20 INSURANCE The Company is covered by valid, outstanding and
enforceable policies of insurance issued to it by reputable insurers covering
its properties, assets and businesses against risks of the nature normally
insured against by corporations in the same or similar lines of business and in
coverage amounts typically and reasonably carried by such corporations (the
"Insurance Policies"). Such Insurance Policies are in full force and effect,
and all premiums due thereon have been paid. As of the Closing Date, each of
the Insurance Policies will be in full force and effect. The Company has
complied with the provisions of such Insurance Policies. Schedule 3.20
contains (i) a complete and correct list of all Insurance Policies and all
amendments and riders thereto (copies of which have been provided to Medical
Manager) and (ii) a detailed description of each pending claim under any of the
Insurance Policies that relates to loss or damage to the properties, assets or
businesses of the Company. The Company has not failed to give, in a timely
manner, any notice required under any of the Insurance Policies to preserve its
rights thereunder.
3.21 RECEIVABLES All of the Receivables are valid and legally
binding, represent bona fide transactions and arose in the ordinary course of
business of the Company. All of the Receivables
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are good and collectible receivables, and will be collected in full in
accordance with the terms of such receivables (and in any event within 90 days
following the Closing), without setoff or counterclaims, subject to the
allowance for doubtful accounts, if any, set forth on the Current Balance Sheet
as reasonably adjusted since the date of the Current Balance Sheet in the
ordinary course of business consistent with past practice. For purposes of
this Agreement, the term "Receivables" means all receivables of the Company,
including, without limitation, all manufacturer's warranty receivables, all
accounts receivable arising from the provision of goods and/or services, notes
receivable, and insurance proceeds receivable.
3.22 LICENSES AND PERMITS The Company possesses all licenses,
approvals, permits or authorizations from governmental authorities
(collectively, the "Permits") for its business and operations, including,
without limitation, with respect to the operation of each of the Leased
Premises, and Schedule 3.22 sets forth a true, complete and accurate list of
all such Permits and all applications for Permits. All such Permits are valid
and in full force and effect, the Company is in full compliance with the
respective requirements thereof, and no proceeding is pending or, to the
Company's or the Shareholders' knowledge, threatened to revoke or amend any of
them. None of such Permits is or will be impaired or in any way affected by
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
3.23 RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS; AFFILIATED
TRANSACTIONS No current supplier (other than those which can be replaced in a
commercially reasonable manner and on substantially the same terms as currently
in place) to the Company of items material to the conduct of its business will
or has threatened to terminate its business relationship with the Company for
any reason. Neither the Company nor any of the Shareholders, nor any Affiliate
of the Company or the Shareholders, have any direct or indirect interest in any
customer or supplier of the Company, or in any person from whom or to whom the
Company leases real or personal property. No Shareholder, or Affiliate of the
Company or the Shareholders, is a party to any Contract or transaction with the
Company or has any interest in any property used by the Company.
3.24 INTELLECTUAL PROPERTY The Company has no patents, patent
applications, inventions, know-how, proprietary formulas, designs or processes,
computer software, or similar intellectual property; provided, however, that
the Shareholders and their Affiliates hereby grant to Medical Manager, its
Affiliates, successors and assigns at no additional charge a non-exclusive
perpetual license to use all program modules (including, without limitation,
all source code and object code relating thereto) created by the Shareholders
and their Affiliates using the Data Merge programming language as enhancements
to a Medical Manager software product (the "Modules"), and Medical Manager
shall have the unrestricted right to make enhancements and to otherwise modify
such Data Merge programming language. The conduct of the business of the
Company as presently conducted, and the unrestricted conduct and the
unrestricted use and exploitation of the Modules, does not infringe or
misappropriate any rights held or asserted by any Person, and no Person is
infringing on the Modules. No payments are required for the continued use of
the Modules. None of the Modules has ever been declared invalid or
unenforceable, or is the subject of any pending or threatened action for
opposition, cancellation, declaration, infringement, or invalidity,
unenforceability or
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misappropriation or like claim, action or proceeding.
3.25 CONTRACTS Schedule 3.25 sets forth a list of each Contract
(including any amendments and modifications thereto, whether written or oral),
of whatsoever kind or nature, to which the Company is a party or by which the
Company is bound, true, correct and complete copies of which (or, with respect
to oral Contracts, written summaries of the material terms thereof) have been
provided to Medical Manager. Except as specifically identified on Schedule
3.25, none of the Contracts require the consents or approval of third parties
to the transactions contemplated hereby. The copy of each Contract furnished
to Medical Manager is a true, correct and complete copy of the document it
purports to represent and reflects all amendments thereto made through the date
of this Agreement. The Company has not violated any of the terms or conditions
of any Contract or any term or condition which would permit termination or
modification of any Contract, all of the covenants to be performed by any other
party thereto have been fully performed, and there are no claims for breach or
indemnification or notice of default or termination under any Contract. No
event has occurred which constitutes, or after notice or the passage of time,
or both, would constitute, a default by the Company or any other party under
any Contract. The Company is not subject to any liability or payment
obligation resulting from renegotiation of amounts paid under any Contract.
3.26 BANK ACCOUNTS; BUSINESS LOCATIONS Schedule 3.26 sets forth
all accounts of the Company with any bank, broker or other depository
institution, and the names of all persons authorized to withdraw funds from
each such account. As of the date hereof, the Company has no office or place
of business other than as identified on Schedule 3.14(b) and the Company's
principal places of business and chief executive offices are indicated on
Schedule 3.14(b). All locations where the equipment, inventory, chattel paper
and books and records of the Company are located as of the date hereof are
fully identified on Schedule 3.14(b).
3.27 NO COMMISSIONS The Company has not incurred any obligation
for any finder's or broker's or agent's fees or commissions or similar
compensation in connection with the transactions contemplated hereby.
3.28 ACCURACY OF INFORMATION FURNISHED No representation,
statement or information made or provided by the Company or any of the
Shareholders contained in this Agreement (including, without limitation, the
various Schedules and Exhibits attached hereto) or any agreement executed in
connection herewith or in any certificate delivered pursuant hereto or thereto,
contains or shall contain any untrue statement of a material fact or omits or
shall omit any fact necessary to make the information contained therein not
materially misleading. The Company has provided Medical Manager with true,
accurate and complete copies of all documents listed or described in the
various Schedules attached hereto.
3.29 MEDICAL MANAGER LICENSES Every copy of The Medical Manager(R)
software sold by the Company has been fully paid for and each copy of the
software sold is subject to an existing license between the Company's customer
and Medical Manager or its Affiliates. All software
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(including, without limitation, the operating systems and application
software), other than The Medical Manager(R) brand software, sold by the
Company to end users has been duly licensed by the owner of such software.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE CLOSING
4.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE CLOSING The
Company and the Shareholders jointly and severally covenant and agree that,
between the date of this Agreement and the Closing Date, the business of the
Company shall be conducted only in, and the Company shall not take any action
except in, the ordinary course of business, consistent with past practice. The
Company and the Shareholders shall use their best efforts to preserve intact
its business organizations, to keep available the services of its current
officers, employees and consultants, and to preserve its present relationships
with customers, suppliers and other Persons with which they have significant
business relations. By way of amplification and not limitation, the Company
shall not, between the date of this Agreement and the Closing Date, directly or
indirectly, do or propose or agree to do any of the following without the prior
written consent of Medical Manager:
(a) amend or otherwise change its Articles of
Incorporation or Bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, encumber, or,
authorize the issuance, sale, pledge, disposition, grant or encumbrance
of (i) any shares of its capital stock of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire
any shares of such capital stock, or any other ownership interest, of
it or (ii) any of its assets, tangible or intangible, except in the
ordinary course of business consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its
capital stock;
(e) acquire (including, without limitation, for cash or
shares of stock, by merger, consolidation or acquisition of stock or
assets) any interest in any corporation, partnership or other business
organization or division thereof, or make any investment either by
purchase of stock or securities, contributions of capital or property
transfer, or, except in the ordinary course of business, consistent
with past practice, purchase any property or assets of any other
Person;
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(f) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse or otherwise as an
accommodation become responsible for, the obligations of any Person, or
make any loans or advances;
(g) modify (except as contemplated pursuant to Section
5.13), terminate or enter into any Contract other than in the ordinary
course of business, consistent with past practice;
(h) increase the compensation payable or to become payable
to its officers or employees, or, except as presently bound to do,
grant any severance or termination pay to, or enter into any employment
or severance agreement with, any of its directors, officers or other
employees, or establish, adopt, enter into or amend or take any action
to accelerate any rights or benefits under any collective bargaining,
bonus, profit sharing, trust, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any directors, officers or employees;
(i) take any action with respect to accounting policies or
procedures other than in the ordinary course of business and in a
manner consistent with past practice;
(j) pay, discharge or satisfy any existing claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or
satisfaction in the ordinary course of business and consistent with
past practice of due and payable liabilities reflected or reserved
against in its financial statements, as appropriate, or liabilities
incurred after the date hereof in the ordinary course of business and
consistent with past practice;
(k) increase or decrease prices charged to its customers,
or take any action which might reasonably result in any increase in the
loss of customers;
(l) enter into any transaction with any Shareholder or
Affiliate thereof; or
(m) agree, in writing or otherwise, to take or authorize
any of the foregoing actions or any action which would make any
representation or warranty in Article III untrue or incorrect.
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ARTICLE V
ADDITIONAL AGREEMENTS
5.1 FURTHER ASSURANCES Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby. The
Shareholders covenant and agree that, with respect to any real estate lease
listed on Schedule 3.14 for which the tenant is not the Company, within 30 days
following the Closing, they will execute and deliver such additional
instruments and other documents and shall take such further actions as may be
necessary to assign such leases to the Company and to cause the landlords
thereof to consent to such assignments and to the transactions contemplated
under this Agreement.
5.2 COMPLIANCE WITH COVENANTS The Shareholders shall cause the
Company, and Blue Cross shall cause CTC, to comply with all of their respective
covenants under this Agreement.
5.3 OTHER ACTIONS Each of the parties hereto, at its own expense,
shall use its reasonable efforts to take, or cause to be taken, all appropriate
actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated herein, including, without limitation,
using its reasonable efforts to obtain all licenses, permits, consents,
approvals, authorizations, qualifications and orders of any Governmental
Authority and parties to the Contracts to which the Company is a party or by
which it is bound as are necessary for the consummation of the transactions
contemplated hereby. Each of parties, at its own expense, shall make on a
prompt and timely basis all governmental or regulatory notifications and
filings required to be made by it for the consummation of the transactions
contemplated hereby. The parties also agree to use reasonable efforts to
defend all lawsuits or other legal proceedings challenging this Agreement or
the consummation of the transactions contemplated hereby and to lift or rescind
any injunction or restraining order or other order adversely affecting the
ability of the parties to consummate the transactions contemplated hereby.
5.4 ACCESS TO INFORMATION From the date hereof to the Closing
Date, the Company and the Shareholders shall (and each shall cause its
directors, officers, employees, auditors, counsel and agents to) afford Medical
Manager and Medical Manager's officers, employees, auditors, counsel and agents
reasonable access at all reasonable times to its properties, offices, and other
facilities, to its officers and employees, and to all books and records, and
shall furnish such persons with all financial, operating and other data and
information as may be reasonably requested. No information provided to or
obtained by Medical Manager shall affect any representation or warranty in this
Agreement.
5.5 NOTIFICATION OF CERTAIN MATTERS The Company and the
Shareholders shall give prompt notice to Medical Manager of the occurrence or
non-occurrence of any pre-Closing event
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which would likely cause any representation or warranty contained herein to be
untrue or inaccurate, or any covenant, condition, or agreement contained herein
not to be complied with or satisfied (provided that any such disclosure shall
not, in any way, be deemed to amend, modify, or in any way affect the
representations, warranties and covenants made by any party in or pursuant to
this Agreement).
5.6 CONFIDENTIALITY; PUBLICITY Except as may be required by law
or as otherwise permitted or expressly contemplated herein, no party hereto or
their respective Affiliates, employees, agents and representatives shall
disclose to any third party this Agreement, the subject matter or terms hereof
or any confidential information or other proprietary knowledge concerning the
business or affairs of the other party which it may have acquired from such
party in the course of pursuing the transactions contemplated by this Agreement
without the prior consent of the other party hereto; provided, that any
information that is otherwise publicly available, or has been obtained from a
third party, without breach of this provision, shall not be deemed confidential
information. No press release or other public announcement related to this
Agreement or the transactions contemplated hereby shall be issued by the
Company, the Shareholders or their Affiliates without the prior written
approval of Medical Manager. Notwithstanding the foregoing, Medical Manager
may make such public disclosure required by law or by the terms of any listing
agreement with or requirements of NASDAQ or which it otherwise deems necessary
or desirable.
5.7 NO OTHER DISCUSSIONS The Company, the Shareholders, and their
Affiliates, employees, agents and representatives will not (i) initiate,
encourage the initiation by others of discussions or negotiations with third
parties or respond to solicitations by third persons relating to any merger,
sale or other disposition of any substantial part of the assets, capital stock
(or derivatives thereof), business or properties of the Company (whether by
merger, consolidation, sale of stock, sale of assets or otherwise) or (ii)
enter into any agreement or commitment (whether or not binding) with respect to
any of the foregoing transactions. The Company and the Shareholders will
immediately notify Medical Manager if any third party attempts to initiate any
solicitation, discussion or negotiation with respect to any of the foregoing
transactions, and shall provide Medical Manager with the name of such third
parties, the substance of any communications and the terms of any offers.
5.8 RESTRICTIVE COVENANTS In order to assure that Medical Manager
will realize the benefits of this transaction, each of the Shareholders agree
with Medical Manager that they and their Affiliates will not:
(a) for a period of three (3) years from the Closing
Date, directly or indirectly, alone or as a partner, joint venturer, officer,
director, member, employee, consultant, agent, independent contractor or
shareholder of, or lender to, any company or business, engage in any
Competitive Activity. As used herein "Competitive Activity shall consist of
the sale, solicitation for sale, marketing (but excluding solicitations for
sale and marketing consisting of trade shows, trade publications, mass industry
mailings and other solicitations and marketing efforts which are not solely or
principally targeted to the Persons or licensees described in subparagraphs (A)
and (B) below), licensing, servicing, distributing of, or other business
activity of whatsoever kind or nature relating to, any software, or products
and services related thereto, and all improvements, enhancements and versions
thereof, which competes, directly or indirectly, with the business,
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software, products or services of Medical Manager and its Affiliates, to (A)
any Person who is both a licensee of The Medical Manager(R) and engaged in
business, in whole or in part, in the States of Florida or Texas, or (B) any
licensee of The Medical Manager(R) software, wherever located, whose accounts
are being acquired by Medical Manager pursuant to this Agreement; provided,
however, that the foregoing restrictions shall not restrict the Company and the
Shareholders from providing claims processing services with respect to CHAMPUS
and Palmetto Government Benefit Administrators.
(b) for a period of three (3) years from the Closing
Date, directly or indirectly request or advise any Person which is a supplier
of the Company, Medical Manager or any Affiliate of the Company or Medical
Manager, to withdraw, curtail or cancel any such supplier's business with the
Company, Medical Manager or any Affiliate of the Company or Medical Manager, or
its or their successors and assigns;
(c) for a period of three (3) years from the Closing
Date, directly or indirectly employ, or permit any Affiliate to employ within
the States of Florida, Texas, Colorado, Iowa or Nebraska (or anywhere if such
employment would cause a breach of any covenant not to compete or similar
obligation on the part of the employee) any person who was employed by the
Company, Medical Manager or any Affiliate of the Company or Medical Manager at
or within the then prior six months, or in any manner solicit for employment
any employee of the Company, Medical Manager or any Affiliate of the Company or
Medical Manager wherever employed, or in any manner seek to induce any such
person to leave his or her employment with the Company, Medical Manager or any
Affiliate of the Company or Medical Manager wherever employed;
(d) at any time following the Closing Date, directly or
indirectly, in any way utilize, disclose, copy, reproduce or retain in its
possession any of the Company's proprietary rights or records, including, but
not limited to, any of its customer lists.
The Shareholders agree and acknowledge that the restrictions contained in this
Section 5.8 are reasonable in scope and duration and are necessary to protect
Medical Manager after the Closing Date. If any provision of this Section 5.8
as applied to any party or to any circumstance is adjudged by a court to be
invalid or unenforceable, the same will in no way affect any other circumstance
or the validity or enforceability of this Agreement. If any such provision, or
any part thereof, is held to be unenforceable because of the duration of such
provision, scope of activities restricted, or the area covered thereby, the
parties agree that the court making such determination shall have the power to
reduce the duration, scope of activities restricted and/or area of such
provision, and/or to delete specific words or phrases, and in its reduced form,
such provision shall then be enforceable and shall be enforced. The parties
agree and acknowledge that the breach of this Section 5.8 may cause irreparable
damage to Medical Manager and upon breach of any provision of this Section 5.8,
Medical Manager shall be entitled to injunctive relief, specific performance or
other equitable relief; provided, however, that, this shall in no way limit any
other remedies which Medical Manager may have (including, without limitation,
the right to seek monetary damages).
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5.9 MEDICAL MANAGER NON-SOLICITATION For a period of three (3)
years from the Closing Date, Medical Manager and its Affiliates will not,
directly or indirectly employ, or permit any Affiliate to employ, within the
Marketing Territory (as defined in the Authorized Reseller Agreement) (or
anywhere if such employment would cause a breach of any covenant not to compete
or similar obligation on the part of the employee) any person who was employed
by the Shareholders or any Affiliate of the Shareholders (other than employees
of the Company) at or within the then prior six months, or in any manner
solicit for employment any employee of the Shareholders or any Affiliate of the
Shareholders (other than employees of the Company) wherever employed, or in any
manner seek to induce any such person to leave his or her employment with the
Shareholders or any Affiliate of the Shareholders (other than employees of the
Company) wherever employed.
5.10 DUE DILIGENCE REVIEW Medical Manager shall be entitled to
conduct prior to Closing a due diligence review of the assets, properties,
financial information, books and records of the Company. If the due diligence
review is not satisfactory to Medical Manager in its sole discretion, then
Medical Manager may elect not to close the transactions contemplated by this
Agreement in which case this Agreement shall be terminated and the parties
shall be released from any and all obligations hereunder; provided, however,
that no party shall be relieved from any liability for the wilful breach of any
of its representations, warranties, covenants and agreements set forth in this
Agreement.
5.11 TRADING IN MEDICAL MANAGER COMMON STOCK Except as otherwise
expressly consented to, in writing, by Medical Manager, from the date of this
Agreement until the Closing Date, neither the Company, the Shareholders nor any
of their Affiliates will directly or indirectly purchase or sell (including
short sales) any shares of the capital stock of Medical Manager or its
Affiliates in any transactions effected on The Nasdaq Stock Market or
otherwise.
5.12 PAYOFF AND ESTOPPEL LETTERS Prior to Closing, the Company and
the Shareholders shall obtain and deliver to Medical Manager payoff and
estoppel letters with respect to any indebtedness of the Company, which letters
shall contain payoff amounts, per diems, wire transfer instructions and an
agreement to deliver, upon full payment, UCC-3 termination statements,
satisfactions of mortgage or other appropriate releases and any original
promissory notes or other evidences of indebtedness marked canceled. Further,
within 30 calender days following the Closing, the Shareholders shall have
satisfied all obligations and liabilities of the Company (including, without
limitation, penalties and interest) to (i) IBM Credit Corporation, its
Affiliates, successors and assigns, secured by Liens evidenced by financing
statements filed with the Colorado Secretary of State showing Precision
Business Systems as debtor, (ii) Mercantile Bank of Xxxxxxxx, its Affiliates,
successors and assigns, secured by Liens evidenced by financing statements
filed with the Kansas Secretary of State showing Management Solutions, Inc. as
debtor, (iii) Orix Credit Alliance, Inc., its Affiliates, successors and
assigns, secured by Liens evidenced by financing statements filed with the
Texas Secretary of State showing Medical Solutions as debtor, and (iv) the
State of Colorado for taxes as evidenced by a Colorado state tax lien field
with the Colorado Recorder of Deeds on or about November 1, 1991 reflecting
Precision Business Systems as the delinquent taxpayer/debtor, and will have
filed appropriate releases of such Liens within such 30 calender day
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period.
5.13 SHAREHOLDER AND DIRECTOR VOTE Each of the Shareholders, in
executing this Agreement, consents to the transactions contemplated hereunder,
and waives notice of any meeting in connection therewith.
5.14 AMENDMENT OF EMPLOYMENT AGREEMENT. Prior to Closing, the
Company and the Shareholders shall have amended the terms and conditions of the
Employment Agreement and any related compensation arrangements with Xxxx
Xxxxxx, on terms acceptable to Medical Manager.
5.15 RECEIVABLES DEBT. Medical Manager agrees to pay to the
Shareholders the amount, if any, by which (i) the amount "Due to Companion"
exceeds (ii) the amount "Due from Companion" as of December 31, 1997
(determined in a manner consistent with the calculation of such amounts as set
forth on the Current Balance Sheet (the "Net Payable Payment"). The
Shareholders agree to pay to Medical Manager the amount, if any, by which (iii)
the amount "Due from Companion" exceeds (iv) the amount "Due to Companion" as
of December 31, 1997 (determined in a manner consistent with the calculation of
such amounts as set forth on the Current Balance Sheet (the "Net Receivable
Amount"). Based upon the calculation on the Net Payable Amount or the Net
Receivable Amount as determined in the audited financial statements of the
Company prepared by Coopers & Xxxxxxx LLP for the year ending December 31,
1997, the Net Payable Amount or the Net Receivable Amount, as applicable, shall
be paid by the appropriate party as set forth above, without interest, within
five (5) business days following receipt of such audited financial statements.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS
OF MEDICAL MANAGER
The obligations of Medical Manager to effect transactions contemplated
hereby, shall be subject to the fulfillment at or prior to the Closing Date of
the following conditions, any or all of which may be waived in writing in whole
or in part by Medical Manager:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS The representations and warranties of the Company and the
Shareholders contained in this Agreement shall be true and correct at and as of
the Closing Date with the same force and effect as though made at and as of
that time except (i) for changes specifically permitted by or disclosed
pursuant to this Agreement, and (ii) that those representations and warranties
which address matters only as of a particular date shall remain true and
correct as of such date. The Shareholders shall have performed and complied
with all of their respective obligations required by this Agreement to be
performed or complied with at or prior to the Closing Date. The Shareholders
shall have delivered to Medical Manager a certificate, dated as of the Closing
Date, duly signed by an executive officer
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and Chief Financial Officer in their corporate capacity and not personally,
certifying that such representations and warranties are true and correct and
that all such obligations have been performed and complied with.
6.2 NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY Between
the date hereof and the Closing Date, (i) there shall have been no Material
Adverse Change to the Company, (ii) there shall have been no adverse federal,
state or local legislative or regulatory change affecting in any material
respect the services, products or business of the Company, and (iii) none of
the properties and assets of the Company shall have been damaged by fire,
flood, casualty, act of God or the public enemy or other cause (regardless of
insurance coverage for such damage) which damages may have a Material Adverse
Effect thereon, and there shall have been delivered to Medical Manager a
certificate to that effect, dated the Closing Date and signed by or on behalf
of the Company and the Shareholders.
6.3 CORPORATE CERTIFICATE The Shareholders shall have delivered
to Medical Manager (i) copies of the Articles of Incorporation and Bylaws of
the Company as in effect immediately prior to the Closing Date, and (ii) copies
of resolutions adopted by the Board of Directors and shareholders of the
Company authorizing the transactions contemplated by this Agreement certified
in each case as of the Closing Date by the Secretary of the Company as being
true, correct and complete. The Company shall have delivered to Medical
Manager a certificate of good standing (or equivalent) of the Company issued by
the Secretary of State of Texas and each other state in which it is qualified
to do business as of a date not more than thirty days prior to the Closing
Date.
6.4 OPINION OF COUNSEL Medical Manager shall have received an
opinion, dated as of the Closing Date, from counsel for the Company and the
Shareholders acceptable to Medical Manager, in form and substance as set forth
as Exhibit 6.4.
6.5 CONSENTS The Company and Medical Manager shall have received
consents to the transactions contemplated hereby and waivers of rights to
terminate or modify any rights or obligations of the Company from any Person
from whom such consent or waiver is required under any Material Contract.
6.6 TERMINATION AND RELEASE At the Closing, the Company and each
of the Shareholders, and such of their Affiliates as may be designated by
Medical Manager, shall have delivered to Medical Manager a termination of all
existing agreements among Medical Manager and its Affiliates, on the one hand,
and the Company, the Shareholders and their Affiliates, on the other hand,
including a mutual release (the "Termination and Release") in the form set
forth as Exhibit 6.6.
6.7 COMPANY COMMON STOCK At the Closing, the Shareholders shall
have delivered to Medical Manager all certificates evidencing the shares of
capital stock of the Company held by them, duly endorsed for transfer to
Medical Manager or its designee.
6.8 NO ADVERSE LITIGATION There shall not be pending or
threatened any action or
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proceeding by or before any court or other governmental body which shall seek
to restrain, prohibit, invalidate or collect damages arising out of the
transactions contemplated hereby, and which, in the judgment of Medical
Manager, makes it inadvisable to proceed with this Agreement and other
transactions contemplated hereby.
6.9 MEDICAL MANAGER BOARD APPROVAL The Board of Directors of
Medical Manager shall have authorized and approved this Agreement and the
transactions contemplated hereby.
6.10 DUE DILIGENCE REVIEW Medical Manager shall be satisfied with
the results of its due diligence review pursuant to Section 5.9.
6.11 AUTHORIZED RESELLER AGREEMENT CTC shall have executed and
delivered the Authorized Reseller Agreement, in the form set forth as Exhibit
6.11 (the "Authorized Reseller Agreement").
6.12 CONSUMMATION OF ASSET PURCHASE Companion Technologies of
Florida, Inc. ("CTF"), and the Shareholders shall have consummated concurrently
with the Closing of the transactions contemplated pursuant to the Asset
Purchase Agreement among Medical Manager, CTF and the Shareholders of even date
herewith (the "Asset Purchase Agreement").
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF
THE COMPANY AND THE SHAREHOLDERS
The obligations of the Company and the Shareholders to effect the
transactions contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing Date of the following conditions, any or all of
which may be waived in whole or in part in writing by the Company and the
Shareholders:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS The representations and warranties of Medical Manager contained in
this Agreement shall be true and correct at and as of the Closing Date with the
same force and effect as though made at and as of that time except (i) for
changes specifically permitted by or disclosed pursuant to this Agreement, and
(ii) that those representations and warranties which address matters only as of
a particular date shall remain true and correct as of such date. Medical
Manager shall have performed and complied with all of its obligations required
by this Agreement to be performed or complied with at or prior to the Closing
Date. Medical Manager shall have delivered to the Company a certificate, dated
as of the Closing Date, and signed by an executive officer in his personal
capacity and not personally, certifying that such representations and
warranties are true and correct and that all such obligations have been
performed and complied with.
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7.2 NO ADVERSE LITIGATION There shall not be pending or
threatened any action or proceeding by or before any court or other
governmental body which shall seek to restrain, prohibit, invalidate or collect
damages arising out of the transactions contemplated hereby, and which, in the
judgment of the Company, makes it inadvisable to proceed with this Agreement
and other transactions contemplated hereby.
7.3 TERMINATION AND RELEASE At the Closing, Medical Manager and
such of its Affiliates as may be designated by CTC shall have delivered to CTC
the Termination and Release.
7.4 CTC AND SHAREHOLDERS BOARD APPROVAL The respective Boards of
Directors of CTC and the Shareholders shall have authorized and approved this
Agreement and the transactions contemplated hereby.
7.5 AUTHORIZED RESELLER AGREEMENT Medical Manager's Affiliate
shall have executed and delivered the Authorized Reseller Agreement.
7.6 CONSUMMATION OF ASSET PURCHASE Medical Manager shall have
consummated concurrently with the Closing the transactions contemplated
pursuant to the Asset Purchase Agreement among Medical Manager, Companion
Technologies of Florida, Inc., and the Shareholders of even date herewith.
ARTICLE VIII
INDEMNIFICATION
8.1 AGREEMENT BY THE SHAREHOLDERS TO INDEMNIFY The Shareholders
agree, jointly and severally, to indemnify and hold Medical Manager, its
Affiliates and their respective stockholders, directors, officers, employees,
attorneys, agents, successors and assigns (the "Indemnified Parties") harmless
from and against the aggregate of all expenses, losses, costs, deficiencies,
liabilities and damages (including, without limitation, related counsel and
paralegal fees and expenses) incurred or suffered by the Indemnified Parties,
arising out of or resulting from (i) any breach of a representation or warranty
made by the Company or any Shareholder in or pursuant to this Agreement, (ii)
any breach of the covenants or agreements made by the Company or any
Shareholder in or pursuant to this Agreement, (iii) any inaccuracy in any
certificate, instrument or other document delivered by the Company or any
Shareholder pursuant to this Agreement or (iv) any Excluded Liabilities of the
Company and its Affiliates which the Indemnified Parties are required to pay,
(v) any matter identified on Schedule 3.12, (vi) the failure to obtain the
consent of any landlord to the transactions contemplated under this Agreement,
if such consent is required pursuant to the terms of any of the real estate
leases set forth on Schedule 3.14, and (vii) any breach by CTF or the
Shareholders of any representation, warranty, covenant or agreement under or
made pursuant to the Asset Purchase Agreement (collectively, "Indemnifiable
Damages"). Without limiting the generality of the foregoing, with respect to
the measurement of Indemnifiable Damages, the Indemnified
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Parties shall have the right to be put in the same pre-tax consolidated
financial position as it would have been in had each of the representations and
warranties of the Company and the Shareholders hereunder been true and correct
and had the covenants and agreements of the Company and the Shareholders
hereunder been performed in full. Notwithstanding the foregoing provisions, no
claim for Indemnifiable Damages (except for claims under clauses (ii), (iv),
(v) and (vi) of this Section 8.1, and except for claims for breach of Section
5.8 or of the last sentence of Section 5.11), shall be asserted by the
Indemnified Parties until the aggregate of all Indemnifiable Damages (i.e. the
Indemnifiable Damages, in the aggregate under both this Agreement and under the
Asset Purchase Agreement) exceeds the sum of Fifty Thousand Dollars ($50,000)
(the "Indemnification Threshold"), in which case the Indemnified Parties shall
be entitled to the full amount of Indemnifiable Damages in excess of $50,000.
Notwithstanding the foregoing or any other provision of this Agreement, the
parties agree that the aggregate Indemnifiable Damages that may be paid by the
Shareholders and the Company, other than for claims under Section 5.8, shall
not exceed the sum of the Purchase Price. If any indemnity payment is made
hereunder by the Company or by either Shareholder, then the Shareholders and
the Company shall each be subrogated to any rights which Medical Manager would
have had against third parties in the absence of such indemnity.
8.2 SOFTWARE INDEMNITY In addition to, and not in derogation of,
any and all other rights and remedies available to the Company and the
Shareholders at law or in equity, Medical Manager agrees to indemnify and hold
the Shareholders, their Affiliates and their respective stockholders,
directors, officers, employees, attorneys, agents, successors and assigns
harmless from and against the aggregate of all expenses, losses, costs,
deficiencies, liabilities and damages (including, without limitation, related
counsel and paralegal fees and expenses) incurred or suffered by such parties
arising out of or related to any claim by any of the licensees of The Medical
Manager(R) identified on Schedule 3.25 arising from or relating to the
inability of any pre-version 9.0 release of The Medical Manager(R) software to
recognize a four digit date field (i.e. the "Year 2000") excluding from such
indemnification obligation any expenses, losses, costs, deficiencies,
liabilities and damages (including, without limitation, related counsel and
paralegal fees and expenses) which are caused by the fraudulent or negligent
representation by CTF, the Company, the Shareholders, their Affiliates, or
their respective employees or agents, with regard to the Year 2000 compliance
of such pre-version 9.0 release of The Medical Manager(R) software, unless such
negligent representation was made in reasonable reliance upon information
obtained from Medical Manager.
8.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES Each of the
representations and warranties (including, without limitation, the matters set
forth on any Exhibit hereto) made by the parties in this Agreement or pursuant
hereto shall survive the Closing Date. Notwithstanding any knowledge of facts
determined or determinable by any party by investigation, each party shall have
the right to fully rely on the representations, warranties, covenants and
agreements of the other parties contained in this Agreement or in any other
documents or papers delivered in connection herewith. Each representation,
warranty, covenant and agreement of the parties contained in this Agreement is
independent of each other representation, warranty, covenant and agreement.
Each of the Shareholders hereby agrees to waive any and all rights of
contribution or other claim which it may have against the Company.
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8.4 NO BAR The Indemnified Parties may take any action or
exercise any remedy available to it by appropriate legal proceedings to collect
the Indemnifiable Damages, all of which remedies shall be cumulative.
8.5 REMEDIES CUMULATIVE The remedies provided herein shall be
cumulative and shall not preclude any party from asserting any other right, or
seeking any other remedies, against the other parties hereto.
ARTICLE IX
DEFINITIONS
9.1 DEFINED TERMS As used herein, the following terms shall have
the following meanings:
"Assumed Liabilities" shall mean (i) all of the obligations, duties
and liabilities of the Company set forth on the Current Balance Sheet, except
as provided in subparagraph (vii) of the definition of Excluded Liabilities,
(ii) all of the obligations, duties and liabilities of the Company incurred
after the date of the Current Balance Sheet and on or prior to the Closing Date
in the ordinary course of business consistent with past practice, (iii) all of
the obligations, duties and liabilities of the Company incurred in the ordinary
course of business prior to the date of the Current Balance Sheet which, in
accordance with GAAP consistently applied, were not required to be recorded on
the Current Balance Sheet (and which in the aggregate are not material) and, in
each such case under (i), (ii) and (iii), other than obligations and
liabilities of the Company due to or on behalf of any Shareholder or Affiliate
of the Company or any Shareholder and (iv) all obligations and liabilities
under the Contracts with customers of the Company set forth on Schedule 3.25,
and all obligations and liabilities under the real estate leases set forth on
Schedule 3.14 to the extent that the applicable landlord's consent is obtained,
but only for obligations and liabilities under such Contracts and leases which
accrue on and after the Closing in the ordinary course of business. If
Schedule 3.25 fails to identify a Contract (an "Omitted Contract"), and Medical
Manager elects in writing to accept any benefits as assignee of the Company
under such Omitted Contract (an "Accepted Contract"), then Medical Manager
shall be deemed to have agreed to assume, pay, discharge and perform the
Company's obligations and liabilities under each such Accepted Contract
accruing after Medical Manager's acceptance of such Accepted Contract.
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contract" means any contract or other agreement between two or more
Persons which creates an obligation to do or not do something, whether written
or oral, express or implied,
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including without limitation, any agreement, lease, note, mortgage, indenture,
loan agreement, franchise agreement, covenant, employment agreement, license,
instrument, purchase and sales order, commitment, undertaking or other
obligation.
"ERISA" means Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Liabilities" shall mean (i) any obligation or liability of
the Company or any other Person absolute or contingent, known or unknown, which
are not Assumed Liabilities, (ii) any liability or obligation of the Company
arising under this Agreement, (iii) any liability or obligation of the Company
with respect to, or arising out of, any employee benefit plan, executive
deferred compensation plan, or any other plans or arrangements for the benefit
of any employees or officers of the Company, (iv) any liability or obligation
of the Company under any incentive compensation agreement, bonus agreement or
employment related settlement agreement, (v) any obligations or liabilities to
the sellers thereof (and their respective principals) arising from or relating
to the acquisition (by stock purchase, asset purchase, merger or otherwise) by
the Company or the Shareholders of any Person and all obligations and
liabilities relating thereto, (vi) any liability or obligation of the Company
relating to any default under the Assumed Liabilities to the extent such
default existed prior to the Closing, (vii) notwithstanding the definition of
Assumed Liabilities to the contrary, and except as provided under Section 5.15,
any liability or obligation of the Company to any of the Shareholders, or to
any Affiliate of the Company or the Shareholders, or to any party claiming to
have a right to acquire any shares of capital stock or other securities
convertible into or exchangeable for any shares of capital stock of the
Company, (viii) any obligations or liabilities arising from or relating to any
of the matters set forth on Schedule 3.12, (ix) any liabilities or obligations
of Precision Business Systems to IBM Credit Corporation, its Affiliates,
successors and assigns, (x) any liabilities or obligations of Management
Solutions, Inc. to Mercantile Bank of Xxxxxxxx, its Affiliates, successors and
assigns, (xi) any liabilities or obligations of Medical Solutions to Orix
Credit Alliance, Inc., its Affiliates, successors and assigns, and (xii) any
tax liability (including, without limitation, penalties and interest thereon)
evidenced by a Colorado State tax lien filed with the Colorado Recorder of
Deeds on or about November 1, 1997 reflecting Precision Business Systems as the
delinquent taxpayer/debtor.
"GAAP" means generally accepted accounting principles in effect in the
United States of America from time to time.
"Governmental Authority" means any nation or government, any state,
regional, local or other political subdivision thereof, and any entity or
official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, but not limited to, any conditional sale
or other title retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code or comparable law or any jurisdiction in connection with such
mortgage, pledge, security interest, encumbrance, lien or charge).
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"Material Adverse Change (or Effect)" means a change (or effect), in
the condition (financial or otherwise), properties, assets, liabilities,
rights, obligations, operations, business or prospects which change (or effect)
individually or in the aggregate, is materially adverse to such condition,
properties, assets, liabilities, rights, obligations, operations, business or
prospects.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, estate, trust,
unincorporated association, joint venture, Governmental Authority or other
entity, of whatever nature.
"SEC" means the Securities and Exchange Commission.
"Tax Return" means any tax return, filing or information statement
required to be filed in connection with or with respect to any Tax.
"Taxes" means all taxes, fees or other assessments, including, but not
limited to, income, excise, property, sales, franchise, intangible, payroll,
withholding, social security and unemployment taxes imposed by any federal,
state, local or foreign governmental agency, and any interest or penalties
related thereto.
9.2 OTHER DEFINITIONAL PROVISIONS
(a) All terms defined in this Agreement shall have the
defined meanings when used in any certificates, reports or other documents made
or delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) All matters of an accounting nature in connection
with this Agreement and the transactions contemplated hereby shall, except as
otherwise provided, be determined in accordance with GAAP applied on a basis
consistent with prior periods, where applicable.
(d) As used herein, the neuter gender shall also denote
the masculine and feminine, and the masculine gender shall also denote the
neuter and feminine, where the context so permits.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 TERMINATION This Agreement may be terminated upon written
notice at any time prior to the Closing Date:
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(a) by mutual consent of all of the parties hereto at any
time prior to the Closing; or
(b) by Medical Manager in the event of a material breach
by the Company or any of the Shareholders of any provision of this
Agreement; or
(c) by the Company in the event of a material breach by
Medical Manager of any provision of this Agreement; or
(d) by either Medical Manager or the Company, if the
Closing shall not have occurred by December 31, 1997.
ARTICLE XI
SECURITIES LAW MATTERS
The parties agree as follows with respect to the sale or other
disposition after Closing Date of the MMC Stock:
11.1 DISPOSITION OF SHARES The Shareholders represent and warrant
that the MMC Stock being acquired by them hereunder are being acquired and will
be acquired for their own respective accounts and will not be sold or otherwise
disposed of, except pursuant to (i) an exemption from the registration
requirements under the Securities Act, which does not require the filing by
Medical Manager with the SEC of any registration statement, offering circular
or other document, in which case, the Shareholders shall first supply to
Medical Manager an opinion of counsel (which counsel and opinions shall be
reasonably satisfactory to Medical Manager) that such exemption is available,
or (ii) an effective registration statement filed by Medical Manager with the
SEC under the Securities Act.
11.2 LEGEND The certificates representing the MMC Stock shall bear
the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND IN
COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE WITH
RESPECT THERETO, OR IN ACCORDANCE WITH AN OPINION
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OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Medical Manager may, unless a registration statement is in effect covering such
shares, place stop transfer orders with its transfer agents with respect to
such certificates in accordance with federal securities laws.
ARTICLE XII
GENERAL PROVISIONS
12.1 NOTICES All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage pre-paid), guaranteed
overnight delivery, or facsimile transmission if such transmission is confirmed
by delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and facsimile numbers
(or to such other addresses or facsimile numbers which such party shall
designate in writing to the other party):
(a) IF TO MEDICAL MANAGER TO:
Medical Manager Corporation
0000 X Xxxxx Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx, Associate General Counsel
Facsimile Number (000) 000-0000
WITH A COPY TO:
Akerman, Senterfitt & Xxxxxx, PA
Xxx Xxxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Facsimile Number (000) 000-0000
(b) IF TO THE COMPANY TO:
Companion Technologies of Texas, Inc.
I-20 at Xxxxxx Xxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxx XxXxxxxx, Esq.
Facsimile Number: (000) 000-0000
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WITH A COPY TO:
Xxxxxx Xxxxx Xxxxxx & Xxxxxxx, LLP
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Facsimile Number: (000) 000-0000
12.2 ENTIRE AGREEMENT This Agreement (including the Exhibits and
Schedules attached hereto) and other documents delivered at the Closing
pursuant hereto, contains the entire understanding of the parties in respect of
its subject matter and supersedes all prior agreements and understandings (oral
or written) between or among the parties with respect to such subject matter.
The Exhibits and Schedules constitute a part hereof as though set forth in full
above.
12.3 EXPENSES Except as otherwise provided herein, the parties
shall pay their own fees and expenses, including their own counsel fees,
incurred in connection with this Agreement or any transaction contemplated
hereby.
12.4 AMENDMENT; WAIVER This Agreement may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by all parties. No failure to exercise, and no delay in exercising,
any right, power or privilege under this Agreement shall operate as a waiver,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude the exercise of any other right, power or privilege. No
waiver of any breach of any provision shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other provision, nor shall
any waiver be implied from any course of dealing between the parties. No
extension of time for performance of any obligations or other acts hereunder or
under any other agreement shall be deemed to be an extension of the time for
performance of any other obligations or any other acts. The rights and
remedies of the parties under this Agreement are in addition to all other
rights and remedies, at law or in equity, that they may have against each
other.
12.5 BINDING EFFECT; ASSIGNMENT The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein shall
be construed to give any other person any legal or equitable rights hereunder.
Except as expressly provided herein, the rights and obligations of this
Agreement may not be assigned or delegated by the Company or any of the
Shareholders without the prior written consent of Medical Manager. Medical
Manager may assign all or any portion of its rights, and delegate all or any of
its obligations, hereunder to one or more of its Affiliates, provided that
Medical Manager shall thereafter remain fully obligated hereunder.
12.6 COUNTERPARTS This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument.
12.7 INTERPRETATION When a reference is made in this Agreement to
an article, section,
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paragraph, clause, schedule or exhibit, such reference shall be deemed to be to
this Agreement unless otherwise indicated. The headings contained herein and
on the schedules are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement or the schedules. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." Time shall
be of the essence in this Agreement.
12.8 GOVERNING LAW; INTERPRETATION This Agreement shall be
construed in accordance with and governed for all purposes by the laws of the
State of Florida applicable to contracts executed and to be wholly performed
within such State.
12.9 JURISDICTION
(a) Any suit, action or proceeding against the Company or
the Shareholders arising out of, or with respect to, this Agreement or any
judgment entered by any court in respect thereof may be brought in the U.S.
District Court for the Middle District of Florida and each of the Company and
the Shareholders hereby irrevocably accepts and consents to the nonexclusive
personal jurisdiction of those courts for the purpose of any suit, action or
proceeding.
(b) In addition, each of the Company and the Shareholders
hereby irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or any
judgment entered by any court in respect thereof brought in the U.S. District
Court for the Middle District of Florida, and hereby further irrevocably waives
any claim that any suit, action or proceedings brought in such District Court
has been brought in an inconvenient forum.
12.10 ARM'S LENGTH NEGOTIATIONS Each party herein expressly
represents and warrants to all other parties hereto that (a) before executing
this Agreement, said party has fully informed itself of the terms, contents,
conditions and effects of this Agreement; (b) said party has relied solely and
completely upon its own judgment in executing this Agreement; (c) said party
has had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement; (d) said party has acted voluntarily and of its own
free will in executing this Agreement; (e) said party is not acting under
duress, whether economic or physical, in executing this Agreement; and (f) this
Agreement is the result of arm's length negotiations conducted by and among the
parties and their respective counsel.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
MEDICAL MANAGER CORPORATION,
a Delaware corporation
By: /s/ Xxxx Xxxx
------------------------------
Name: Xxxx Xxxx
Title: President
BLUE CROSS AND BLUE SHIELD OF SOUTH
CAROLINA a South Carolina mutual
insurance company
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: CFO, Senior Vice President,
Treasurer
COMPANION TECHNOLOGIES
CORPORATION
a South Carolina corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Treasurer
COMPANION TECHNOLOGIES CORPORATION OF
TEXAS a South Carolina corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Treasurer
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