EXHIBIT 99.2
[Impath logo] [genzyme logo]
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ASSET PURCHASE AGREEMENT
BY AND AMONG
IMPATH INC.,
IMPATH PHYSICIAN SERVICES, INC.,
IMPATH PREDICTIVE ONCOLOGY, INC.
AND
GENZYME CORPORATION
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Dated as of February 27, 2004
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.....................................................................................1
1.1 Certain Definitions.............................................................................1
1.2 Other Definitional and Interpretive Matters....................................................11
ARTICLE II PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES.........................................12
2.1 Purchase and Sale of Assets....................................................................12
2.2 Excluded Assets................................................................................13
2.3 Assumption of Liabilities......................................................................15
2.4 Excluded Liabilities...........................................................................15
2.5 Cure Amounts...................................................................................17
2.6 Changes in Lists of Purchased Contracts and Purchased Leases...................................17
2.7 Further Conveyances and Assumptions; Consent of Third Parties..................................18
ARTICLE III CONSIDERATION..................................................................................18
3.1 Consideration..................................................................................18
3.2 Purchase Price Deposit.........................................................................18
3.3 Adjustment of Purchase Price...................................................................19
3.4 Payment of Purchase Price......................................................................22
ARTICLE IV CLOSING AND TERMINATION........................................................................22
4.1 Closing Date...................................................................................22
4.2 Deliveries by Sellers..........................................................................22
4.3 Deliveries by Purchaser........................................................................23
4.4 Termination of Agreement.......................................................................24
4.5 Procedure Upon Termination.....................................................................25
4.6 Effect of Termination..........................................................................25
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLERS......................................................26
5.1 Organization and Good Standing.................................................................26
5.2 Authorization of Agreement.....................................................................26
5.3 Conflicts; Consents of Third Parties...........................................................27
5.4 Taxes..........................................................................................27
5.5 Real Property..................................................................................27
5.6 Tangible Personal Property.....................................................................28
5.7 Intellectual Property..........................................................................28
5.8 Material Contracts.............................................................................29
5.9 Employee Benefits..............................................................................30
5.10 Labor..........................................................................................31
5.11 Litigation.....................................................................................31
5.12 Compliance with Laws and Permits...............................................................31
5.13 Environmental Matters..........................................................................31
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TABLE OF CONTENTS
(CONTINUED)
PAGE
5.14 Financial Advisors.............................................................................32
5.15 Financial Statements...........................................................................32
5.16 Operations in the Ordinary Course of Business..................................................32
5.17 No Other Representations or Warranties; Schedules..............................................33
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER....................................................33
6.1 Organization and Good Standing.................................................................33
6.2 Authorization of Agreement.....................................................................33
6.3 Conflicts; Consents of Third Parties...........................................................34
6.4 Litigation.....................................................................................34
6.5 Financial Advisors.............................................................................34
6.6 Financial Capability...........................................................................35
6.7 Condition of the Business......................................................................34
6.8 Financial Condition of Purchaser...............................................................35
ARTICLE VII BREAK-UP FEE; BANKRUPTCY COURT APPROVAL........................................................35
7.1 Approval of Break-Up Fee.......................................................................35
7.2 Competing Transaction..........................................................................35
7.3 Bankruptcy Court Filings.......................................................................36
ARTICLE VIII COVENANTS......................................................................................36
8.1 Access to Information..........................................................................36
8.2 Conduct of the Business Pending the Closing....................................................36
8.3 Regulatory Approvals...........................................................................38
8.4 Further Assurances.............................................................................39
8.5 Confidentiality................................................................................39
8.6 Preservation of Records........................................................................40
8.7 Publicity......................................................................................40
8.8 Contacts with Suppliers and Customers..........................................................40
8.9 Audited Financial Statements...................................................................41
8.10 Notification of Certain Matters................................................................42
8.11 Insurance Policies.............................................................................43
8.12 [Intentionally Omitted]........................................................................43
8.13 Exculpation....................................................................................43
8.14 OIG Certificate................................................................................43
8.15 Use of Name....................................................................................43
8.16 Transition Services...........................................................................44
ARTICLE IX EMPLOYEES AND EMPLOYEE BENEFITS................................................................44
9.1 Employment.....................................................................................44
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TABLE OF CONTENTS
(CONTINUED)
PAGE
9.2 Standard Procedure.............................................................................45
9.3 Employee Benefits..............................................................................45
ARTICLE X CONDITIONS TO CLOSING..........................................................................47
10.1 Conditions Precedent to Obligations of Purchaser...............................................47
10.2 Conditions Precedent to Obligations of Sellers.................................................48
10.3 Conditions Precedent to Obligations of Purchaser and Sellers...................................49
10.4 Frustration of Closing Conditions..............................................................50
ARTICLE XI TAXES..........................................................................................50
11.1 Transfer Taxes.................................................................................50
11.2 Prorations.....................................................................................50
11.3 Purchase Price Allocation......................................................................51
ARTICLE XII MISCELLANEOUS..................................................................................51
12.1 No Survival of Representations and Warranties..................................................51
12.2 Expenses.......................................................................................51
12.3 Submission to Jurisdiction; Consent to Service of Process......................................52
12.4 Waiver of Right to Trial by Jury...............................................................52
12.5 Entire Agreement; Amendments and Waivers.......................................................52
12.6 Governing Law..................................................................................53
12.7 Notices........................................................................................53
12.8 Severability...................................................................................54
12.9 Binding Effect; Assignment.....................................................................54
12.10 Non-Recourse...................................................................................54
12.11 Counterparts...................................................................................54
12.12 Certain Relief.................................................................................54
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Schedules
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1.1(a) Excluded Contracts
1.1(b)(i) Knowledge of Applicable Seller - IMPATH
1.1(b)(ii) Knowledge of Applicable Seller - IPS and IPO
1.1(c) Personal Property Capital Leases
1.1(d) Personal Property Operating Leases
2.1(e) Purchased Leases
2.1(h) Purchased Contracts
2.1(m) Insurance Policies
2.2(f) Confidential Documents
3.3(a) Working Capital
5.3(a) Conflicts
5.3(b) Consents
5.4(a) Taxes
5.5 Real Property
5.6 Tangible Personal Property
5.7 Intellectual Property
5.8(a) Material Contracts
5.8(b) Defaults
5.9(a) Employee Benefits
5.9(d) ERISA Compliance
5.11 Litigation
5.12(a) Violation of Laws
5.12(b) Default of Permits
5.13 Environmental Matters
5.14 Financial Advisors
5.15 Interim Financial Statements
5.16 Ordinary Course of Business
6.3 No Conflicts
6.8 Purchaser's Financial Condition
8.2 Exceptions to Conduct of Business
Exhibits
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A Bidding Procedures Order
B Escrow Agreement
C Sale Order
D [Intentionally Omitted]
E Xxxx of Sale and Assignment
F Form of Real Property Lease Assignment and Assumption Agreement
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of February 27, 2004, by and among
IMPATH Inc., a Delaware corporation ("IMPATH"), IMPATH Physician Services, Inc.,
a Delaware corporation ("IPS"), IMPATH Predictive Oncology, Inc. ("IPO" and
together with IMPATH and IPS, each a "Seller" and, collectively, the "Sellers"),
and Genzyme Corporation, a Massachusetts corporation ("Purchaser").
Witnesseth:
WHEREAS, Sellers and certain of their Affiliates, each commenced a
case (collectively, the "Bankruptcy Case") under chapter 11 of title 11 of the
United States Code, 11 U.S.C. Sections 101 et seq. (the "Bankruptcy Code"), on
September 28, 2003 (the "Petition Date") by filing a voluntary petition with the
United States Bankruptcy Court for the Southern District of New York;
WHEREAS, Sellers presently conduct the Business;
WHEREAS, Sellers desire to sell, transfer and assign to Purchaser,
and Purchaser desires to acquire and assume from Sellers, pursuant to Sections
363 and 365 of the Bankruptcy Code, all of the Purchased Assets and Assumed
Liabilities, all as more specifically provided herein; and
WHEREAS, certain terms used in this Agreement are defined in Section
1.1.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter contained, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions.
For purposes of this Agreement, the following terms shall have the
meanings specified in this Section 1.1:
"2002 Financial Statements" shall have the meaning set forth in
Section 8.9(d).
"Additional Audit Opinion" shall have the meaning set forth in
Section 8.9(d).
"Additional Auditor Consent" shall have the meaning set forth in
Section 8.9(d).
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, and the term
"control" (including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
"Agreement" means this Asset Purchase Agreement, dated as of February
27, 2004, by and among the Sellers and Purchaser (as the same may be amended,
modified or supplemented from time to time in accordance with the terms and
provisions hereof).
"Allocation Schedule" shall have the meaning set forth in Section
11.3.
"Alternate Transaction" shall mean a transaction or transactions
effected during the Bankruptcy Case pursuant to which (x) any Seller or Sellers,
or any representative of their respective bankruptcy estates (including, without
limitation, a Chapter 11 or Chapter 7 trustee and including the Seller or
Sellers as reorganized pursuant to a Chapter 11 plan or plans), in one or a
series of transactions, sells, transfers, leases or otherwise disposes of,
directly or indirectly, to one or more Persons other than Purchaser,
substantially all of the Purchased Assets, or (y) any Person or affiliated group
of Persons other than Purchaser acquires, directly or indirectly, by purchase,
the conversion of debt-to-equity securities, or by merger or otherwise, 50% or
more of the aggregate vote or aggregate value of the equity or securities
convertible into equity, if any, of any of IMPATH or IPS (or of any successor of
any such Seller) (any transaction described in clause (x) or (y), a "Disposal"),
including any Disposal pursuant to a Competing Bid.
"Analytical Services Business" has the meaning set forth in Section
1.1(a) (in Business definition).
"Antitrust Laws" shall have the meaning set forth in Section 8.3(b).
"AS Contract Election" shall have the meaning set forth in Section
2.6(c).
"AS Contracts" means the Contracts relating to the Analytical
Services Business to be identified or described on a list to be provided to
Purchaser pursuant to Section 2.6(c).
"Assumed Liabilities" shall have the meaning set forth in Section
2.3.
"Auction" shall mean the auction for the Purchased Assets to be
conducted on the Auction Date in the event of the submission of a Competing Bid.
"Auction Date" shall mean the date of the Auction scheduled by the
Bankruptcy Court and set forth in the Bidding Procedures Order.
"Audited Financial Statements" shall have the meaning set forth in
Section 8.9(a).
"Audit Opinion" shall have the meaning set forth in Section 8.9(a).
"Auditor Consents" shall have the meaning set forth in Section
8.9(c).
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"Balance Sheet" shall have the meaning set forth in Section 5.15.
"Balance Sheet Date" shall have the meaning set forth in Section
5.15.
"Bankruptcy Case" shall have the meaning set forth in the Recitals.
"Bankruptcy Code" shall have the meaning set forth in the Recitals.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York or any other court having jurisdiction over the
Bankruptcy Case from time to time.
"Bidding Procedures Order" means an order of the Bankruptcy Court,
substantially in the form attached hereto as Exhibit A, that, among other
things, (i) approves the payment of the Break-Up Fee and Expense Reimbursement
on the terms and conditions set forth in Section 7.1 hereof and (ii) approves
the Bidding Procedures in the form attached as an exhibit to the Bidding
Procedures Order establishing, among other things, the procedures for the
Auction.
"Break-Up Fee" shall have the meaning set forth in Section 7.1.
"Business" means the business as currently conducted by Sellers
involving (i) the performance of laboratory testing services and provision of
patient-specific cancer diagnostic and prognostic information historically
reported by Sellers as IMPATH Physician Services and (ii) the performance of
services historically reported by Sellers as Analytical Services, including
assay development, target validation, patient stratification analysis and
laboratory testing in the preclinical and clinical trials settings (the
"Analytical Services"). "Business" does not mean the businesses previously or
currently conducted by Sellers involving (i) the acquisition and provision of
archived consented patient specimens and derivative biological products
historically reported by Sellers as GeneBank; (ii) the sale and distribution of
blood and plasma products historically reported by Sellers as IMPATH-BCP; (iii)
clinical trial services historically reported by Sellers as IMPATH Clinical
Trial Network; or (iv) the license of pathology information management and tumor
registry software historically reported by Sellers as IMPATH Information
Services.
"Business Day" means any day of the year on which national banking
institutions in New York are open to the public for conducting business and are
not required or authorized to close.
"COBRA" means Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.
"Closing" shall have the meaning set forth in Section 4.1.
"Closing Adjustment" shall have the meaning set forth in Section
3.3(b).
3
"Closing Date" shall have the meaning set forth in Section 4.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Competing Bid" shall have the meaning set forth in Section 7.2.
"Confidentiality Agreement" shall have the meaning set forth in
Section 8.5(a).
"Contract" means any contract, lease, license, agreement, contract
right, purchase order, trust, instrument, and any other agreement, whether or
not in written form, that is binding upon a Person or its property.
"Copyrights" shall have the meaning set forth in Section 1.1 (in
Purchased Intellectual Property definition).
"Coverage Termination Date" shall have the meaning set forth in
Section 9.3(e).
"Cure Amounts" shall have the meaning set forth in Section 2.5.
"Deposit Escrow Funds" shall have the meaning set forth in Section
3.2.
"Designated Employees" shall have the meaning set forth in Section
9.1(a).
"DIP Facility" means the Revolving Credit and Guarantee Agreement
dated as of September 30, 2003, among IMPATH as Borrower, IPO, Medical Registry
Services, Inc., IMPATH Information Services, Inc., Tamtron Corporation and IPS
as Guarantors, Fleet National Bank as administrative agent, and the lenders
thereto.
"Disposal" shall have the meaning set forth in Section 1.1 (in
"Alternate Transaction" definition).
"Disputed Items" shall have the meaning set forth in Section 3.3(e).
"Dispute Notice" shall have the meaning set forth in Section 3.3(f).
"Documents" means all files, documents, instruments, papers, books,
reports, records, tapes, microfilms, photographs, letters, budgets, forecasts,
ledgers, journals, title policies, customer lists, regulatory filings, operating
data and plans, technical documentation (including design specifications,
functional requirements, operating instructions, logic manuals and flow charts),
user documentation (including installation guides, user manuals, training
materials, release notes and working papers), marketing documentation (including
sales brochures, flyers and pamphlets), and other similar materials related to
the Business and the Purchased Assets, in each case, whether or not in
electronic form.
"Employee Benefit Plans" shall have the meaning set forth in Section
5.9(a).
"Employee List" means a complete list of all Employees, including
each Employee's name, title, function, base salary, additional compensation,
full-time/ part-time/per diem status, visa status, tenure with Sellers and
whether such Employee is bound by an employment agreement.
4
"Employees" means all individuals, as of the date hereof, who are
employed by Sellers in the Business (on a full-time, part-time or per diem
basis, but not on a temporary basis), together with individuals who are hired to
work in the Business (on a full-time, part-time or per diem basis, but not on a
temporary basis) by Sellers after the date hereof and prior to the Closing.
"Environmental Law" means any applicable foreign, federal, state or
local statute, regulation, ordinance, or rule of common law currently in effect
relating to the protection of the environment.
"ERISA" means the Employment Retirement Income Security Act of 1974,
as amended.
"Escrow Agent" means Wilmington Trust Company, the escrow agent under
the Escrow Agreement.
"Escrow Agreement" means an escrow agreement in substantially the
form attached hereto as Exhibit B.
"Excluded Assets" shall have the meaning set forth in Section 2.2.
"Excluded Contracts" means the Contracts listed or described on
Schedule 1.1(a) and all other Contracts to which any Seller is a party or by
which Seller is bound that are not listed or described on Schedule 2.1(h) and
all Personal Property Operating Leases and Real Property Leases that are not
listed on Schedule 2.1(e).
"Excluded Liabilities" shall have the meaning set forth in Section
2.4.
"Expense Reimbursement" shall have the meaning set forth in Section
7.1.
"Final Purchase Price Adjustment" shall have the meaning set forth in
Section 3.3(h).
"Financial Statements" shall have the meaning set forth in Section
5.15.
"Financial Statement Delivery Adjustment" shall have the meaning set
forth in Section 3.3(j).
"Furniture and Equipment" means all furniture, fixtures, furnishings,
equipment, vehicles, leasehold improvements, and other tangible personal
property owned or used by any Seller in the conduct of the Business, including
all such artwork, desks, chairs, tables, Hardware, copiers, telephone lines and
numbers, telecopy machines and other telecommunication equipment, cubicles and
miscellaneous office furnishings and supplies.
5
"GAAP" means generally accepted accounting principles in the United
States as of the date hereof.
"Governmental Body" means any government or governmental or
regulatory body thereof, or political subdivision thereof, whether foreign,
federal, state, or local, or any agency, instrumentality or authority thereof,
or any court or arbitrator (public or private).
"Hardware" means any and all computer and computer-related hardware,
including, but not limited to, computers, file servers, facsimile servers,
scanners, color printers, laser printers and networks.
"Holdback Amount" shall have the meaning set forth in Section 3.3(i).
"Holdback Escrow Agent" means the escrow agent under the Holdback
Escrow Agreement.
"Holdback Escrow Agreement" means an escrow agreement in form and
substance to be mutually agreed upon by Sellers and Purchaser.
"Holdback Escrow Funds" shall have the meaning set forth in Section
3.3(i).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Independent Auditor" shall have the meaning set forth in Section
8.9(c).
"IMPATH" shall have the meaning set forth in the Preamble.
"IPO" shall have the meaning set forth in the Preamble.
"IPS" shall have the meaning set forth in the Preamble.
"Knowledge of IMPATH" means, with respect to IMPATH, the actual
knowledge of those Persons identified on Schedule 1.1(b)(i).
"Knowledge of the Applicable Seller" means, with respect to IMPATH,
the Knowledge of IMPATH, and with respect to IPS and IPO, the actual knowledge
of those Persons identified on Schedule 1.1(b)(ii) hereto.
"Law" means any federal, state, local or foreign law, statute, code,
ordinance, Order, rule or regulation.
"Legal Proceeding" means any judicial, administrative or arbitral
actions, suits or proceedings (public or private) by or before a Governmental
Body.
6
"Liability" means any debt, liability or obligation (whether direct
or indirect, known or unknown, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated, or due or to become due), and including all costs
and expenses relating thereto.
"Lien" means any lien, encumbrance, pledge, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude or transfer restriction under any shareholder or similar
agreement.
"Marks" shall have the meaning set forth in Section 1.1 (in Purchased
Intellectual Property definition).
"Material Adverse Effect" means (a) a material adverse effect on the
Business, the Purchased Assets or the Assumed Liabilities, or (b) a material
adverse effect on the ability of Sellers to consummate the transactions
contemplated by this Agreement, other than, in the case of clause (a) or (b), an
effect resulting from (i) any change in the United States or foreign economies
or securities or financial markets in general without an impact on the Business,
the Purchased Assets or the Assumed Liabilities that is disproportionate to the
Business as compared to other Persons with a business similar in size and
product mix to the Business; (ii) any change that generally affects any industry
in which any Seller operates without an impact on the Business, the Purchased
Assets or the Assumed Liabilities that is disproportionate to the Business as
compared to other Persons with a business similar in size and product mix to the
Business; (iii) any action taken by Purchaser or its Affiliates with respect to
the transactions contemplated hereby or with respect to Sellers, including their
employees; (iv) any changes in applicable Law or accounting rules; (v) the
public announcement of this Agreement, compliance with terms of this Agreement
or the consummation of the transactions contemplated by this Agreement; or (vi)
the loss of customers of the Business who become customers of a business of
Purchaser that competes, directly or indirectly, with the Business.
"Material Contract" shall have the meaning set forth in Section 5.8.
"Motion" means the motion or motions of Sellers seeking approval and
entry of the Bidding Procedures Order and the Sale Order.
"OIG" shall have the meaning set forth in Section 4.2(e).
"Order" means any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award of a Governmental Body.
"Ordinary Course of Business" means the ordinary and usual course of
normal day-to-day operations of the Business through the date hereof consistent
with past practice.
"Patents" shall have the meaning set forth in Section 1.1 (in
Purchased Intellectual Property definition).
7
"Permits" means any approvals, authorizations, consents, licenses,
permits or certificates of a Governmental Body.
"Permitted Exceptions" means (i) all defects, exceptions,
restrictions, easements, rights of way and encumbrances disclosed in policies of
title insurance; and (ii) zoning, entitlement and other land use and
environmental regulations by any Governmental Body.
"Person" means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
"Personal Property Capital Leases" means all leases for personal
property that are reflected as capital leases on the Balance Sheet or should be
reflected as capital leases under GAAP and the other leases set forth on
Schedule 1.1(c).
"Personal Property Leases" shall have the meaning set forth in
Section 5.6.
"Personal Property Operating Leases" shall mean the Personal Property
Leases that are listed on Schedule 1.1(d).
"Petition Date" shall have the meaning set forth in the Recitals.
"Purchased Assets" shall have the meaning set forth in Section 2.1.
"Purchased Contracts" shall have the meaning set forth in Section
2.1(h).
"Purchased Intellectual Property" means all intangible proprietary
rights and interests of each Seller used in or related to the Business, however
denominated, throughout the world, whether express or implied, whether or not
registered or recorded, including all intellectual property rights of each
Seller used in or related to the Business and arising from or in respect of the
following: (i) all patents and applications therefor, including continuations,
divisions, continuations-in-part, or reissue patent applications and patents
issuing thereon (collectively, "Patents"), (ii) all trademarks, service marks,
trade names, service names, brand names, all trade dress rights, logos, Internet
domain names and corporate names and general intangibles of a like nature,
together with the goodwill associated with any of the foregoing, and all
applications, registrations and renewals thereof (collectively, "Marks"), (iii)
copyrights and registrations and applications therefor and works of authorship,
and mask work rights (collectively, "Copyrights"), (iv) all Software and
Technology, (v) all choses in action and other rights arising from or relating
to the above, including maintenance rights or rights to upgrades, rights to xxx
and collect remedies against past, present and future infringements or
misappropriations thereof, and rights of priority and protection of interests
therein under the laws of any jurisdiction worldwide, including rights to obtain
renewals, continuations, divisions or other extensions of legal protections
pertaining thereto, and (vi) all tangible embodiments of the above, including
all filings and correspondence with Governmental Authorities, all original
governmental certificates for such Patents, Xxxx and Copyright registrations,
and all files and filings pertaining to any litigation opposition proceeding,
cancellation proceeding and arbitration, mediation, or negotiation arising from
or relating to the above.
8
"Purchased Leases" shall have the meaning set forth in Section
2.1(e).
"Purchased Personal Property Operating Leases" shall have the meaning
set forth in Section 2.1(e).
"Purchased Real Property Leases" shall have the meaning set forth in
Section 2.1(e).
"Purchase Price" shall have the meaning set forth in Section 3.1.
"Purchase Price Adjustment" shall have the meaning set forth in
Section 3.3(c).
"Purchaser" shall have the meaning set forth in the Preamble.
"Purchaser Documents" shall have the meaning set forth in Section
6.2.
"Purchaser's Adjustment Certificate" shall have the meaning set forth
in Section 3.3(e).
"Real Property Lease" shall have the meaning set forth in Section
5.5.
"Reporting Purchaser" shall have the meaning set forth in Section
8.9(c).
"Required Financial Statements" shall have the meaning set forth in
Section 8.9(b).
"Sale Order" shall mean an order or orders of the Bankruptcy Court
pursuant to sections 363 and 365 of the Bankruptcy Code, substantially in the
form attached hereto as Exhibit C, approving this Agreement and all of the terms
and conditions hereof, and approving and authorizing Sellers to consummate the
transactions contemplated hereby. Without limiting the generality of the
foregoing, such order or orders shall find and provide, among other things, that
(i) the Purchased Assets sold to Purchaser pursuant to this Agreement shall be
transferred to Purchaser free and clear of all Liens other than Permitted
Exceptions; provided, however, that any such Liens, to the extent such Liens
exist and except for Liens created by Purchaser and Permitted Exceptions, shall
attach to the Purchase Price; (ii) Purchaser has acted in "good faith" within
the meaning of Section 363(m) of the Bankruptcy Code; (iii) this Agreement was
negotiated, proposed and entered into by the parties without collusion, in good
faith and from arm's length bargaining positions; (iv) the Bankruptcy Court
shall retain jurisdiction to resolve any controversy or claim arising out of or
relating to this Agreement, or the breach hereof as provided in Section 12.3
hereof; and (v) this Agreement and the transactions contemplated hereby are
binding upon, and are not subject to rejection or avoidance by, Sellers or any
chapter 7 or chapter 11 trustee of any Seller.
9
"SEC" shall have the meaning set forth in Section 8.9(a).
"Secured Credit Facility" means the Credit Agreement dated as of June
4, 2001, among IMPATH as Borrower, IPO, Medical Registry Services, Inc., IMPATH
Information Services, Inc., Tamtron Corporation and IPS as Guarantors, Fleet
National Bank as administrative agent, and the lenders thereto.
"Sellers" shall have the meaning set forth in the Preamble.
"Sellers' Adjustment Certificate" shall have the meaning set forth in
Section 3.3(b).
"Seller Documents" shall have the meaning set forth in Section 5.2.
"Software" means any and all (i) computer programs, including any and
all software implementations of algorithms, models and methodologies, whether in
source code or object code, (ii) databases and compilations, including any and
all data and collections of data, whether machine readable or otherwise, (iii)
descriptions, flow-charts and other work product used to design, plan, organize
and develop any of the foregoing, and (iv) all documentation including user
manuals and other training documentation related to any of the foregoing.
"Stand-Alone Plan" means a plan or plans of reorganization of Sellers
which does not constitute an Alternate Transaction.
"Target Working Capital" shall mean an amount equal to $19,981,923.
"Tax Authority" means any U.S. federal, state or local, foreign or
other government, agency, instrumentality or employee thereof, charged with the
administration of any Law relating to Taxes.
"Tax Return" means all returns, declarations, reports, estimates,
information returns and statements, including any statements or attachments
thereto and any amendments thereof, filed or required to be filed in respect of
any Taxes.
"Taxes" means (i) all federal, state, local or foreign taxes,
charges, or other assessments, including all net income, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, property and
estimated taxes and (ii) all interest, penalties, fines, additions to tax or
additional amounts imposed by any Tax Authority in connection with any item
described in clause (i).
"Technology" means, collectively, all designs, formulae, algorithms,
procedures, methods, techniques, ideas, know-how, research and development,
technical data, programs, subroutines, tools, materials, specifications,
processes, inventions (whether patentable or unpatentable and whether or not
reduced to practice), apparatus, creations, improvements, works of authorship
and other similar materials, and all recordings, graphs, drawings, reports,
analyses, and other writings, and other tangible embodiments of the foregoing,
in any form whether or not specifically listed herein.
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"Termination Date" shall have the meaning set forth in Section
4.4(a).
"Transferring Employees" shall have the meaning set forth in Section
9.1(d).
"Transfer Taxes" shall have the meaning set forth in Section 11.1.
"Two Year F/S Deliverables" means the 2002 Financial Statements, the
Unaudited Financial Statements and the Additional Audit Opinion.
"Unaudited Financial Statements" shall have the meaning set forth in
Section 8.9(b).
"Working Capital" means, with respect to the Business, the working
capital calculated as set forth on Schedule 3.3(a).
"Working Capital Accounting Principles" means GAAP using the same
accounting principles and policies used in preparing the Balance Sheet.
"Working Capital Adjustment" shall have the meaning set forth in
Section 3.3(c)(i).
"Working Capital Referee" shall have the meaning set forth in Section
3.3(g).
1.2 Other Definitional and Interpretive Matters.
(a) Unless otherwise expressly provided, for purposes of this
Agreement, the following rules of interpretation shall apply:
Calculation of Time Period. When calculating the period of time
before which, within which or following which any act is to be done or step
taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded. If the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day.
Dollars. Any reference in this Agreement to $ shall mean U.S.
dollars.
Exhibits/Schedules. The Exhibits and Schedules annexed hereto or
referred to herein are hereby incorporated in and made an integral part of this
Agreement as if set forth in full herein. Any capitalized terms used in any
Schedule or Exhibit but not otherwise defined therein shall be defined as set
forth in this Agreement.
Gender and Number. Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include
the plural and vice versa.
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Headings. The provision of the Table of Contents, the division of
this Agreement into Articles, Sections and other subdivisions and the insertion
of headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references in this
Agreement to any "Section" are to the corresponding Section of this Agreement
unless otherwise specified.
Herein. The words such as "herein," "hereinafter," "hereof," and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.
Including. The word "including" or any variation thereof means
"including, without limitation" and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it.
(b) The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and, in the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as jointly drafted by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement.
ARTICLE II
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 Purchase and Sale of Assets. On the terms and subject to the conditions set
forth in this Agreement, at the Closing Purchaser shall purchase, acquire and
accept from Sellers, and Sellers shall sell, transfer, assign, convey and
deliver to Purchaser all of Sellers' right, title and interest in, to and under
the Purchased Assets free and clear of all Liens other than Permitted Exceptions
and Assumed Liabilities. "Purchased Assets" shall mean all of the assets,
tangible and intangible, real and personal, now existing or hereafter acquired,
owned by Sellers or used or held by Sellers for use in the Business, whether or
not reflected on the financial statements of the Sellers, as the same shall
exist at the Closing, including the following (in each case, only to the extent
related to the Business), but excluding all Excluded Assets:
(a) all cash, cash equivalents, bank deposits or similar cash
items of Sellers;
(b) all accounts receivable of Sellers;
(c) all inventory of Sellers;
(d) all security deposits (including customer deposits and
security deposits for rent, electricity, telephone or otherwise) and prepaid
charges and expenses of Sellers relating to the Purchased Assets or the Assumed
Liabilities;
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(e) all rights of Sellers under each Personal Property Lease
listed or described on Schedule 2.1(e) ("Purchased Personal Property Operating
Leases") and each Real Property Lease listed or described on Schedule 2.1(e)
("Purchased Real Property Leases" and together with the Purchased Personal
Property Operating Leases, the "Purchased Leases"), together with all
improvements, fixtures and other appurtenances to real property subject to such
Real Property Leases and rights in respect thereof;
(f) the Furniture and Equipment, and all assets held by Sellers,
in the Sellers' possession or used by Sellers in the Business pursuant to
Personal Property Capital Leases;
(g) all Purchased Intellectual Property;
(h) the contracts listed or described on Schedule 2.1(h) (the
"Purchased Contracts");
(i) all Documents that are used in, held for use in or intended
to be used in the Business, including Documents relating to services, marketing,
advertising, promotional materials, Purchased Intellectual Property, personnel
files for Transferring Employees and all files, customer files and documents
(including credit information), supplier lists, records, literature and
correspondence, whether or not physically located on any of the Sellers'
premises;
(j) all Permits used by any Seller and all pending applications
therefor, to the extent assignable;
(k) all supplies owned by any Seller;
(l) all rights of any Seller under non-disclosure or
confidentiality, non-compete, or non-solicitation agreements with Transferring
Employees;
(m) all insurance policies listed on Schedule 2.1(m) and rights
to proceeds under all property and casualty insurance policies of Sellers to the
extent such policies or rights to proceeds thereof relate to the Purchased
Assets or the Assumed Liabilities;
(n) all rights of any Seller under or pursuant to all
warranties, representations and guarantees made by suppliers, manufacturers and
contractors, in each case except to the extent related to any Excluded Assets;
and
(o) all goodwill and other tangible and intangible assets
associated with the Business, including customer and supplier lists and the
goodwill associated with the Purchased Intellectual Property owned by any
Seller.
2.2 Excluded Assets. Nothing herein shall be deemed to sell,
transfer, assign or convey the Excluded Assets to Purchaser, and each Seller
shall retain all of such Seller's respective right, title and interest in and to
the Excluded Assets. "Excluded Assets" shall mean all of the following:
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(a) all of any Seller's deposits or prepaid charges and expenses
paid in connection with or to the extent related to any Excluded Assets;
(b) all intercompany accounts receivable, all Medicare, Medicaid
and Tricare receivables, and all accounts receivable arising out of or in
connection with any Excluded Contract;
(c) all Medicare, Medicaid or Tricare provider numbers, and any
Contract, express or implied, with the Center for Medicare Services or Contracts
with fiscal intermediaries that relate solely to Medicare, Medicaid or Tricare;
(d) the Excluded Contracts;
(e) all intercompany obligations, liabilities and indebtedness,
including any note indebtedness, owed to or by a Seller to or by any Affiliate
of any Seller;
(f) any Documents that are (i) confidential personnel and
medical records pertaining to any Employee that the Sellers are prohibited by
Law from disclosing to Purchaser; (ii) other books and records that any Seller
is required by Law to retain, including Tax Returns, financial statements, and
corporate or other entity filings; provided, however, that Seller shall provide
Purchaser with copies of such retained books and records; (iii) minute books,
articles or certificates of incorporation, by-laws, all amendments thereto,
stock ledgers and stock certificates of Sellers; (iv) documents relating to
proposals to acquire the Business by Persons other than Purchaser; (v) personnel
files for Employees who are not Transferring Employees; (vi) such files as
Seller may be prohibited from disclosing to Purchaser under applicable Law
regarding privacy; (vii) Documents listed or described on Schedule 2.2(f) which
any Seller is not permitted to transfer pursuant to any contractual
confidentiality obligation owed to any third party (other than such a provision
contained in or which relates to a Purchased Contract); and (viii) any Document
primarily related to or that is reasonably required to realize the benefits of
any Excluded Asset, with respect to which, Seller shall provide Purchaser with
copies of any such Document related to a Purchased Asset;
(g) any claim, right or interest of Sellers in or to any refund,
rebate, abatement or other recovery for Taxes, together with any interest due
thereon or penalty rebate arising therefrom, for any Tax period (or portion
thereof) ending on or before the Closing Date;
(h) all insurance policies not set forth on Schedule 2.1(m) and
the rights to proceeds under (i) any director and officer liability or similar
policy, (ii) any employed lawyers liability or similar policy and (iii) all
other insurance policies of Sellers to the extent such policies or rights to
proceeds thereof do not relate to the Purchased Assets or the Assumed
Liabilities;
(i) all rights of Sellers under each Personal Property Lease not
listed on Schedule 2.1(e) and each Real Property Lease not listed on Schedule
2.1(e), together with all improvements, fixtures and other appurtenances to the
real property subject to such Real Property Leases and rights in respect
thereof;
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(j) all rights of any Seller under the Confidentiality Agreement
and non-disclosure or confidentiality, non-compete, or non-solicitation
agreements with Employees who are not Transferring Employees;
(k) all rights of any Seller under or pursuant to all
warranties, representations and guarantees made by suppliers, manufacturers and
contractors, in each case to the extent related to any Excluded Assets;
(l) any rights, claims or causes of action of Sellers against
third parties relating exclusively to Excluded Assets;
(m) all rights, claims or causes of action of Sellers against
third parties relating to the accounting irregularities and discrepancies
described in that certain press release of IMPATH dated July 30, 2003;
(n) any Employee Benefit Plan and any trust, insurance policy or
other contract or arrangement relating to any Employee Benefit Plan; and
(o) the capital stock of Sellers or any subsidiary of Sellers.
2.3 Assumption of Liabilities. On the terms and subject to the
conditions set forth in this Agreement, at the Closing Purchaser shall assume,
effective as of the Closing, and shall timely perform and discharge in
accordance with their respective terms, only the following Liabilities of
Sellers (collectively, the "Assumed Liabilities"):
(a) all Liabilities under the Purchased Contracts and Purchased
Leases which did not arise prior to or at the Closing and which arise after the
Closing; and
(b) all Liabilities included within the Working Capital of the
Business at the Closing (calculated in accordance with the Working Capital
Accounting Principles) that is used to determine the Final Purchase Price
Adjustment.
2.4 Excluded Liabilities. Notwithstanding Section 2.3, Purchaser will
not assume or be liable for any Excluded Liabilities. "Excluded Liabilities"
shall mean all Liabilities of each Seller, whether relating to or arising out of
the Business, Purchased Assets or otherwise, fixed or contingent, disclosed or
undisclosed, other than Assumed Liabilities, including the following
Liabilities:
(a) all Liabilities arising out of or related to Excluded
Assets;
(b) except as set forth in Section 11.1, all Liabilities for
Taxes;
(c) all Liabilities arising out of or relating to (i) the
employment or performance of services (including sales commissions), or
termination of employment or services by Sellers or any of their Affiliates, of
15
any individual, on or before the Closing Date and with respect to Employees that
are not Transferring Employees, after the Closing Date, including accrued
vacation, and any severance or other obligations under any Employee Benefit Plan
or otherwise, (ii) workers' compensation claims against a Seller that relate to
the period ending on the Closing Date, irrespective of whether such claims are
made prior to or after the Closing, and (iii) any Employee Benefit Plan;
(d) except as provided by Section 2.3(b), all Liabilities which
arose or accrued prior to the Closing, whether or not subject to compromise
under the Bankruptcy Case;
(e) all intercompany obligations, liabilities and indebtedness,
including any note indebtedness, owed to or by a Seller to or by any Affiliates
of Sellers;
(f) all Liabilities arising out of or related to any violation
of any Law, including any Environmental Law, any Law governing employee
relations, including anti-discrimination Laws, wage and hour Laws, labor
relations Laws, occupational safety and health Laws and the Worker Adjustment
and Retraining Notification Act of 1988, as amended;
(g) all Liabilities arising out of or related to the Secured
Credit Facility, the DIP Facility, Personal Property Capital Leases or any
notes, bonds or other agreements to repay funded debt;
(h) any product liability or other tort or claim for injury to
Person or property which arises out of or is based upon or imposed or asserted
to be imposed in connection with any product sold or service performed by any
Seller;
(i) all Liabilities arising out of or related to any violation
or alleged violation of the Medicare program, the Medicaid program or any
similar programs of any Governmental Body, including any claims for recoupment,
disgorgement or offset;
(j) all Liabilities related to litigation and related claims and
Liabilities or any other claims against Sellers of any kind or nature
whatsoever, involving or relating to facts, events or circumstances arising or
occurring on or prior to the Closing, no matter when raised (including Liability
for breach, misfeasance or under any other theory relating to Sellers' conduct,
performance or non-performance);
(k) all Liabilities under the Excluded Contracts;
(l) all Liabilities with respect to Sellers' financial or other
advisors; and
(m) all Liabilities relating to amounts required to be paid by
Sellers hereunder, including the Cure Amounts.
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2.5 Cure Amounts. At Closing and pursuant to Section 365 of the
Bankruptcy Code, Sellers shall assume and assign to Purchaser and Purchaser
shall assume from Sellers, the Purchased Contracts and Purchased Leases. As a
condition to the assignment and assumption of the Purchased Contracts and
Purchased Leases, the cure amounts, if any as determined by the Bankruptcy Court
(the "Cure Amounts"), necessary to cure all defaults, if any, and to pay all
actual or pecuniary losses that have resulted from such defaults under the
Purchased Contracts and Purchased Leases, shall be paid by Sellers on or before
the Closing or, in Sellers' discretion, if Sellers do not pay all such Cure
Amounts at Closing, Sellers agree promptly following the Closing to pay all Cure
Amounts, and Purchaser will have no Liability therefor.
2.6 Changes in Lists of Purchased Contracts and Purchased Leases.
(a) From time to time after the date of this Agreement through
the calendar day prior to the Closing, (i) Purchaser and Sellers may, by mutual
agreement, remove Contracts from Schedule 2.1(h) and Purchased Leases from
Schedule 2.1(e); provided, however, that in the event Sellers receive and
provide Purchaser with notice that Sellers have received a Competing Bid,
Purchaser and Sellers shall within the later of twenty-four (24) hours of
Purchaser's actual receipt of such notice or the calendar day prior to the
Auction Date complete Purchaser's exercise of such removal rights under this
subsection (a).
(b) (i) Sellers may in their sole discretion (notwithstanding
clause (iii) below), upon notice to Purchaser, add Contracts (other than
Contracts listed on Schedule 1.1(a)) to Schedule 2.1(h), to the extent such
Contracts would not constitute Material Contracts, whether such Contracts exist
on the date hereof or are disclosed to Purchaser pursuant to Section 8.2(c);
(ii) Sellers and Purchaser may, by mutual agreement, add Contracts to Schedule
2.1(h), add Real Property Leases to Schedule 2.1(e), and add Personal Property
Operating Leases to Schedule 2.1(e); and (iii) Purchaser may in its sole
discretion (notwithstanding clause (i) above) add to Schedule 2.1(h) or Schedule
2.1(e) any Contract, Real Property Lease, or Personal Property Operating Lease
that is disclosed to Purchaser pursuant to Section 8.2(c). If any Contract, Real
Property Lease or Personal Property Operating Lease is added to Schedule 2.1(h)
or Schedule 2.1(e), as the case may be, pursuant to either (i), (ii) or (iii) of
this subsection (b), Sellers shall take such steps as are reasonably necessary
to cause such Contract, Real Property Lease or Personal Property Operating Lease
to be assumed by, and assigned to, Purchaser at Closing which shall include
Sellers' payment of all Cure Amounts in accordance with Section 2.5 hereof
relating to such Contract, Real Property Lease or Personal Property Operating
Lease.
(c) Sellers shall provide or make available to Purchaser no
later than March 3, 2003: (i) a list of all AS Contracts (the "AS Contracts
List"), (ii) an updated Schedule 5.8 that includes all AS Contracts that are
Material Contracts and (iii) copies of each Contract on the AS Contracts List.
Purchaser shall determine, in its sole discretion, by providing Sellers with
written notice (the "AS Contract Election") no later than March 10, 2003, which
of the AS Contracts on the AS Contract List or otherwise made available to
Purchaser by Sellers that Purchaser will purchase, acquire and assume from
17
Sellers at the Closing Date. Schedule 2.1(h) shall be deemed updated by all AS
Contracts included or described on the AS Contract Election and Schedule 5.8
shall be deemed updated by all AS Contracts identified by Sellers that are
Material Contracts. Sellers and Purchaser acknowledge and agree that Schedule
5.8 as of the date of this Agreement does not include any AS Contract.
2.7 Further Conveyances and Assumptions; Consent of Third Parties.
(a) From the Closing Date until the one hundred and eightieth
(180th) day following the Closing Date, Sellers shall, or shall cause their
respective Affiliates to, make available to Purchaser such data in personnel
records of Transferring Employees as is reasonably necessary for Purchaser to
transition such employees into Purchaser's records, subject to restrictions of
applicable Law pertaining to the privacy rights of the Transferring Employees.
(b) From time to time following the Closing, Sellers and
Purchaser shall, and shall cause their respective Affiliates to, execute,
acknowledge and deliver all such further conveyances, notices, assumptions,
releases and acquaintances and such other instruments, and shall take such
further actions, as may be reasonably necessary or appropriate to assure fully
to Purchaser and its respective successors or assigns, all of the properties,
rights, titles, interests, estates, remedies, powers and privileges intended to
be conveyed to Purchaser under this Agreement and to assure fully to Sellers and
their respective Affiliates and their successors and assigns, the assumption of
the Liabilities intended to be assumed by Purchaser under this Agreement and to
otherwise make effective the transactions contemplated hereby and thereby.
ARTICLE III
CONSIDERATION
3.1 Consideration. The aggregate consideration for the Purchased
Assets shall be (a) an amount in cash equal to $215,000,000 (the "Purchase
Price") and (b) the assumption of the Assumed Liabilities. The Purchase Price is
subject to adjustment pursuant to Section 3.3 and shall be paid pursuant to
Sections 3.2, 3.3 and 3.4.
3.2 Purchase Price Deposit. (i) Purchaser shall, within two (2)
Business Days of the execution of this Agreement, deposit with the Escrow Agent
the sum of $10,750,000 by wire transfer of immediately available funds and (ii)
Purchaser shall, within two (2) Business Days of the entry of the Bidding
Procedures Order by the Bankruptcy Court, deposit with the Escrow Agent the sum
of $10,750,000 by wire transfer of immediately available funds (the funds due
and payable pursuant to clause (i) and (ii), collectively, the "Deposit Escrow
Funds"). The Deposit Escrow Funds (together with all accrued investment income
thereon) shall be distributed by the Escrow Agent as follows:
(a) if the Closing shall occur, the Deposit Escrow Funds
together with all accrued investment income thereon shall be applied towards the
Purchase Price payable by Purchaser to Sellers at the Closing;
18
(b) if this Agreement is validly terminated by Sellers pursuant
to Section 4.4(d), the Deposit Escrow Funds, together with all accrued
investment income thereon, shall be released to Sellers; or
(c) if this Agreement is validly terminated (i) by Sellers or
Purchaser pursuant to Section 4.4(a), Sections 4.4(e), Section 4.4(f)(i) or
Section 4.4(j), (ii) by Sellers and Purchaser pursuant to Section 4.4(b), or
(iii) by Purchaser pursuant to Section 4.4(c), Section 4.4(f)(ii), Section
4.4(g), Section 4.4(h) or Section 4.4(i), the Deposit Escrow Funds, together
with all accrued investment income thereon, shall in each case be returned to
Purchaser.
3.3 Adjustment of Purchase Price.
(a) Schedule 3.3(a) sets forth a reasonably detailed calculation
of the Working Capital of the Business as of the Balance Sheet Date, prepared
from the books and records of the Sellers and in accordance with the Working
Capital Accounting Principles.
(b) The "Closing Adjustment" shall be Sellers' good faith
pre-Closing estimate of the Purchase Price Adjustment set forth in a certificate
(the "Sellers' Adjustment Certificate") delivered to Purchaser by Sellers on or
before the second Business Day preceding the Closing Date. The Sellers'
Adjustment Certificate shall set forth in reasonable detail each of the items
forming the basis of the Closing Adjustment. Purchaser and Sellers may make any
mutually agreed adjustments to the Sellers' Adjustment Certificate to update the
calculations of the Closing Adjustment prior to the Closing.
(c) The "Purchase Price Adjustment" shall mean the difference
between the following:
(i) (A) the Working Capital of the Business at the Closing
calculated in accordance with the Working Capital Accounting
Principles minus (B) the Target Working Capital ((A) minus (B),
the "Working Capital Adjustment"); minus
(ii) the amount of any deductible under any insurance policy
or self-insurance retention upon the occurrence of a casualty
between the Balance Sheet Date and the Closing, and the amount of
any cash proceeds received from, or other current asset
attributable to, the sale or other disposition or loss of any
non-current asset after the Balance Sheet Date, including
insurance proceeds received that are attributable to the
occurrence of a casualty of a non-current asset owned by Sellers
or used or held by Sellers for use in the Business between the
Balance Sheet Date and the Closing and in any event, which
constitute Purchased Assets.
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(d) Each Seller shall (i) cooperate in good faith with Purchaser
in connection with Purchaser's review of the Sellers' Adjustment Certificate and
(ii) grant Purchaser and its representatives (including its advisors and
accountants) access at reasonable times and places to all books, records and
employees of each Seller reasonably requested by Purchaser in connection with
Purchaser's review of the Sellers' Adjustment Certificate.
(e) Within forty-five (45) days after the Closing Date,
Purchaser shall prepare and deliver to Sellers a certificate (the "Purchaser's
Adjustment Certificate"), which shall include a worksheet setting forth a
reasonably detailed calculation of each item included in the Purchase Price
Adjustment. Purchaser shall (i) cooperate in good faith with Sellers in
connection with Sellers' review of the Purchaser's Adjustment Certificate and
(ii) xxxxx Xxxxxxx' and its representatives (including its advisors and
accountants) access at reasonable times and places to all books, records and
employees of Purchaser reasonably requested by Sellers in connection with
Sellers' review of the Purchaser's Adjustment Certificate. After Purchaser
delivers the Purchaser's Adjustment Certificate to Sellers, Sellers and
Purchaser shall cooperate in good faith to resolve any disputes raised by
Sellers with respect to items set forth in the Purchaser's Adjustment
Certificate ("Disputed Items") and consider whether any modifications to the
Purchase Price Adjustment set forth in Purchaser's Adjustment Certificate are
appropriate.
(f) After attempting to resolve any Disputed Items in accordance
with subparagraph (e) above (whether or not a resolution is reached), the
Purchase Price Adjustment set forth in the Purchaser's Adjustment Certificate
will be final, conclusive and binding on the parties unless Sellers provide a
written notice (a "Dispute Notice") to Purchaser no later than the twentieth
(20th) day after delivery of the Purchaser's Adjustment Certificate setting
forth in reasonable detail (i) any item in the Working Capital Adjustment on the
Purchaser's Adjustment Certificate which Sellers believe is incorrect or has not
been prepared in accordance with the Working Capital Accounting Principles and
(ii) the Sellers' belief as to the correct amount of such item in accordance
with the Working Capital Accounting Principles. Any item or amount on the
Purchaser's Adjustment Certificate to which no dispute is raised in the Dispute
Notice will be final, conclusive and binding on the parties.
(g) Purchaser and Sellers shall attempt to resolve the matters
raised in a Dispute Notice in good faith. On or after the fifth (5th) Business
Day after delivery of the Dispute Notice, either Purchaser or Sellers may
provide written notice to the other that it elects to submit the Disputed Items
to Deloitte & Touche or another nationally recognized independent accounting
firm chosen jointly by the Purchaser and Sellers (the "Working Capital
Referee"). The Working Capital Referee shall promptly, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, review
only those items and amounts specifically set forth and objected to in the
Dispute Notice and resolve the dispute with respect to each such specific item
and amount in accordance with the Working Capital Accounting Principles. The
fees and expenses of the Working Capital Referee will be shared equally by
Purchaser and Sellers. The decision of the Working Capital Referee with respect
20
to the items contained in the Dispute Notice will be final, conclusive and
binding on the parties, and the Purchase Price Adjustment set forth in the
Purchaser's Adjustment Certificate, as adjusted by the determinations of the
Working Capital Referee with respect to any items included in a Dispute Notice,
will be final, conclusive and binding on the parties. Each of the parties to
this Agreement agrees to cooperate with the Working Capital Referee and use its
commercially reasonable efforts to cause the Working Capital Referee to resolve
any dispute no later than thirty Business Days after selection of the Working
Capital Referee.
(h) If the Purchase Price Adjustment set forth on the
Purchaser's Adjustment Certificate that becomes final, conclusive and binding on
the parties (the "Final Purchase Price Adjustment") exceeds the Purchase Price
Adjustment set forth in the Sellers' Adjustment Certificate, Purchaser shall
promptly, and in any event within five (5) Business Days of the determination of
the Final Purchase Price Adjustment, pay the difference to Sellers (pro-rata
based on the respective payments to Sellers made at the Closing) by wire
transfer of immediately available funds. If the Purchase Price Adjustment set
forth in the Sellers' Adjustment Certificate exceeds the Final Purchase Price
Adjustment, Sellers shall promptly, and in any event within five (5) Business
Days of the determination of the Final Purchase Price Adjustment, pay the
difference to Purchaser by wire transfer of immediately available funds. Any
payment pursuant to this Section 3.3(h) shall be an adjustment to the Purchase
Price.
(i) The Purchase Price payable at the Closing by Purchaser shall
be reduced by an amount equal to $2,700,000 (the "Holdback Amount"). At the
Closing, Purchaser shall immediately deposit with the Holdback Escrow Agent the
Holdback Amount by wire transfer of immediately available funds (the "Holdback
Escrow Funds"). The Holdback Escrow Funds (together with all accrued investment
income thereon) shall be distributed by the Holdback Escrow Agent to Sellers
(pro-rata based on the respective payments to Sellers made at the Closing) on
the same date that the payment described in Section 3.3(h) becomes due and
payable, provided, that the distribution of the Holdback Escrow Funds shall be
reduced by the amount due, if any, to Purchaser from Sellers pursuant to Section
3.3(h), and the amount of any such reduction shall instead be returned to
Purchaser. Each of Purchaser and Sellers shall bear 50% of the fees, costs and
expenses of the Holdback Escrow Agent.
(j) In addition to the Purchase Price Adjustment, the Purchase
Price payable at the Closing by Purchaser shall be further adjusted as follows:
(i) The Purchase Price shall be reduced by $500,000 upon the
delivery to Purchaser of the election described in Section
4.4(h).
(ii) If the Audited Financial Statements and the Audit
Opinion are delivered by Sellers to Purchaser on or before April
1, 2004, the Purchase Price shall be increased by $1,000,000.
(iii) If the Audited Financial Statements and the Audit
Opinion are delivered by Sellers to Purchaser on or after April
2, 2004, but on or before April 15, 2004, the Purchase Price
shall be increased by $500,000.
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(iv) If Sellers are required pursuant to Section 8.9(d) to
deliver to Purchaser the 2002 Financial Statements, and Sellers
deliver to Purchaser the Two Year F/S Deliverables after May 30,
2004 but on or before June 15, 2004, the Purchase Price shall be
reduced by $500,000.
The aggregate positive or negative adjustment to the Purchase Price, if any,
determined in accordance with this Section 3.3(j) is hereinafter referred to as
the "Financial Statement Delivery Adjustment".
3.4 Payment of Purchase Price. On the Closing Date, Purchaser shall
pay the Purchase Price (a) less the Deposit Escrow Funds (including any interest
earned thereon), which shall be released to the Sellers pursuant to Section
3.2(a) and the Holdback Amount, and (b) plus or minus, as applicable, the
Closing Adjustment and the Financial Statement Delivery Adjustment, if any, to
Sellers in an amount for each Seller as designated by each Seller, which shall
be paid by wire transfer of immediately available funds into accounts for each
Seller as designated by each Seller, respectively.
ARTICLE IV
CLOSING AND TERMINATION
4.1 Closing Date. Subject to the satisfaction of the conditions set
forth in Sections 10.1, 10.2 and 10.3 hereof (or the waiver thereof by the party
entitled to waive that condition), the closing of the purchase and sale of the
Purchased Assets and the assumption of the Assumed Liabilities provided for in
Article II hereof (the "Closing") shall take place at the offices of Weil,
Gotshal & Xxxxxx LLP located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (or at such
other place as the parties may designate in writing) at 10:00 a.m. (New York
City time) on the date that is two (2) Business Days following the satisfaction
or waiver of the conditions set forth in Article X (other than conditions that
by their nature are to be satisfied at or prior to the Closing, but subject to
the satisfaction or waiver of such conditions), unless another time or date, or
both, are agreed to in writing by the parties hereto. The date on which the
Closing shall be held is referred to in this Agreement as the "Closing Date".
4.2 Deliveries by Sellers. At the Closing, each Seller shall deliver
to Purchaser:
(a) a duly executed xxxx of sale and assignment in the form
attached as Exhibit E hereto;
(b) duly executed assignments of each item of registered
Intellectual Property included in the Purchased Intellectual Property, in a form
suitable for recording in the U.S. patent and trademark office or copyright
office, as applicable, and general assignments of all other Purchased
Intellectual Property, and duly executed Real Property Lease Assignment and
Assumption Agreements in recordable form, substantially in the form of Exhibit F
hereto, separately for each Purchased Real Property Lease;
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(c) the officer's certificates required to be delivered pursuant
to Sections 10.1(a), and 10.1(b);
(d) an incumbency and specimen signature certificate, dated as
of the Closing Date, from each Seller with respect to the officer or officers of
each Seller executing this Agreement and any other documents delivered hereunder
by or on behalf of Sellers;
(e) a duly executed officer's certificate of IMPATH certifying
that, (i) to the Knowledge of IMPATH, there have been no changes in the position
of the Office of the Inspector General (the "OIG") expressed in an email dated
February 5, 2004 and previously provided to Purchaser, and (ii) IMPATH has
delivered to the OIG the certificate required by Section 8.14, a copy of which
shall be attached as an exhibit thereto;
(f) a duly executed Holdback Escrow Agreement;
(g) a certificate meeting the requirements of Treasury
Regulation Section 1.1445-2(b)(2);
(h) a certified copy of the Sale Order; and
(i) all other instruments of conveyance and transfer, in form
and substance reasonably acceptable to Purchaser, as may be necessary to convey
the Purchased Assets to Purchaser.
4.3 Deliveries by Purchaser. At the Closing, Purchaser shall deliver
to Sellers:
(a) a duly executed Real Property Lease Assignment and
Assumption Agreements in recordable form, substantially in the form of Exhibit F
hereto, separately for each Purchased Real Property Lease;
(b) a duly executed Holdback Escrow Agreement;
(c) the Purchase Price (less the Deposit Escrow Funds and the
Holdback Amount and increased or decreased, as applicable, by the (i) Closing
Adjustment and (ii) the Financial Statement Delivery Adjustment, if any), in
immediately available funds, as set forth in Section 3.4 hereof;
(d) the officer's certificates required to be delivered pursuant
to Sections 10.2(a) and 10.2(b); and
(e) an incumbency and specimen signature certificate, dated as
of the Closing Date, from Purchaser with respect to the officer or officers of
Purchaser executing this Agreement and any other documents delivered hereunder
by or on behalf of Purchaser.
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4.4 Termination of Agreement. This Agreement may be terminated prior
to the Closing as follows:
(a) by Purchaser or Sellers, if for any reason the Closing shall
not have occurred by the close of business on July 1, 2004 (the "Termination
Date");
(b) by mutual written consent of Sellers and Purchaser;
(c) by Purchaser, if there shall be a breach by any Seller of
any representation or warranty, or any covenant or agreement contained in this
Agreement which would result in a failure of a condition set forth in Section
10.1 or 10.3 and which breach, following the receipt by Sellers of a notice to
cure such breach from Purchaser, has not been cured by the earlier of (i) the
forty-fifth (45th) day following receipt of such written notice and (ii) two (2)
Business Days prior to the Termination Date;
(d) by Sellers, if there shall be a breach by Purchaser of any
representation or warranty, or any covenant or agreement contained in this
Agreement which would result in a failure of a condition set forth in Section
10.2 or 10.3 and which breach following the receipt by Purchaser of a notice to
cure such breach from Sellers, has not been cured by the earlier of (i) the
forty-fifth (45th) day following receipt of such written notice and (ii) two (2)
Business Days prior to the Termination Date;
(e) by Sellers or Purchaser if there shall be in effect a final
nonappealable Order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby; it being agreed that the
parties hereto shall promptly appeal any adverse determination which is not
nonappealable (and pursue such appeal with reasonable diligence);
(f) (i) by Sellers or Purchaser, if the Bankruptcy Court enters
an order which approves an Alternate Transaction or, (ii) by Purchaser, if any
Seller files a proposed plan of reorganization or liquidation that does not
contemplate the closing of the transactions contemplated by this Agreement,
including a Stand-Alone Plan filed by any Seller; or
(g) by Purchaser, if (i) the Bankruptcy Court has not entered
the Bidding Procedures Order by March 23, 2004 or after its entry, the Bidding
Procedures Order fails to be in full force and effect or is stayed, reversed,
modified or amended in any respect without the prior written consent of the
Purchaser or (ii) the Bankruptcy Court has not entered the Sale Order by April
30, 2004;
(h) by Purchaser, if Sellers do not deliver to Purchaser the
Audited Financial Statements and the Audit Opinion on or before April 30, 2004,
provided, however, that the Sellers may, in their sole discretion, elect to
extend such date to May 15, 2004 by providing written notice of such election to
Purchaser prior to April 30, 2004, and if such notice is delivered, Purchaser
may not terminate this Agreement pursuant to this Section 4.4(h) until May 16,
2004;
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(i) by Purchaser, if (A) Sellers are required pursuant to Section 8.9(d) to
deliver to Purchaser the 2002 Financial Statements and Sellers do not deliver
the Two Year F/S Deliverables to Purchaser on or before June 15, 2004 or, (B)
after receipt of the Audited Financial Statements, it is determined in
accordance with Section 8.9(d) that Purchaser would be required to file with the
SEC pursuant to SEC Regulation S-X audited consolidated financial statements of
the Business as of December 31, 2002 and 2001 and for the fiscal years then
ended; or
(j) by Sellers or Purchaser if the Bankruptcy Court enters an order which
approves a Stand-Alone Plan not filed by any Seller.
4.5 Procedure Upon Termination. In the event of termination by
Purchaser or Sellers, or both, pursuant to Section 4.4 hereof, written notice
thereof shall forthwith be given to the other party, and this Agreement shall
terminate, and the purchase of the Purchased Assets hereunder shall be
abandoned, without further action by Purchaser or any Seller. If this Agreement
is validly terminated as provided herein each party shall redeliver to the party
furnishing the same or destroy all documents, work papers and other material of
any other party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof.
4.6 Effect of Termination.
(a) In the event that this Agreement is validly terminated in
accordance with Section 4.4, then each of the parties shall be relieved of its
duties and obligations arising under this Agreement after the date of such
termination and such termination shall be without Liability to Purchaser or
Sellers, subject to Section 4.6(b); provided, however, that the obligations of
the parties set forth in Sections 3.2, 4.5, 4.6, 7.1, 8.5 and Article XII hereof
shall survive any such termination and shall be enforceable hereunder.
(b) The parties hereby agree that it is impossible to determine
accurately the amount of damages that Sellers would suffer if the transactions
contemplated herein were not consummated as a result of a material breach of
this Agreement by Purchaser, or that Purchaser would suffer if the transactions
contemplated herein were not consummated as a result of a material breach by
Sellers. As a result, notwithstanding anything in this Agreement to the
contrary, the parties hereby agree that the payments of both installments of the
Deposit Escrow Funds pursuant to Section 3.2 and the Break-up Fee and Expense
Reimbursement pursuant to Section 7.1 shall serve as liquidated damages against
Sellers and Purchaser, as the case may be, and shall be the sole and exclusive
remedy of Purchaser against Sellers and Sellers against Purchaser, as the case
may be, if the transactions contemplated by this Agreement are not consummated
due to a material breach of this Agreement.
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(c) The Confidentiality Agreement shall survive any termination
of this Agreement and nothing in this Section 4.6 shall relieve Purchaser or
Sellers of their respective obligations under the Confidentiality Agreement. If
this Agreement is validly terminated in accordance with Section 4.4(d),
Purchaser agrees that the prohibition in the Confidentiality Agreement
restricting Purchaser's ability to solicit employees of any Seller to join the
employ of Purchaser or any if its Affiliates shall be extended to a period of
one (1) year from the date of termination of this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller hereby severally, but not jointly, represents and
warrants to Purchaser that:
5.1 Organization and Good Standing. Except as a result of the
commencement of the Bankruptcy Case, such Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now conducted.
5.2 Authorization of Agreement. Subject to entry of the Sale Order,
such Seller has all requisite corporate power, authority and legal capacity to
execute and deliver this Agreement and each other agreement, document, or
instrument or certificate contemplated by this Agreement to be executed, or
otherwise executed, by such Seller in connection with the consummation of the
transactions contemplated hereby and thereby (such other agreements, documents,
instruments or certificates, collectively, the "Seller Documents"), to perform
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Seller Documents to which such Seller is a party and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate action on the part of such Seller. This Agreement has
been, and each of the Seller Documents to which such Seller is a party will be
at or prior to the Closing, duly and validly executed and delivered by such
Seller and (assuming the due authorization, execution and delivery by the other
parties hereto and thereto, the entry of the Sale Order, and, with respect to
such Seller's obligations under Section 7.1, the entry of the Bidding Procedures
Order) this Agreement constitutes, and each of the Seller Documents when so
executed and delivered will constitute, legal, valid and binding obligations of
such Seller enforceable against such Seller in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
26
5.3 Conflicts; Consents of Third Parties.
(a) Subject to satisfaction of the condition set forth in
Section 10.3(c) and except as set forth on Schedule 5.3(a), none of the
execution and delivery by such Seller of this Agreement or the Seller Documents,
the consummation of the transactions contemplated hereby or thereby, or
compliance by such Seller with any of the provisions hereof or thereof will
conflict with, or result in any violation of or default under, or give rise to a
right of termination, cancellation or acceleration of any obligation under (i)
the certificate of incorporation or bylaws of such Seller; (ii) any Contract or
Permit to which such Seller is a party or by which any of the properties or
assets of such Seller are bound except to the extent any of the foregoing is not
enforceable due to operation of applicable bankruptcy Law or the Sale Order;
(iii) any Order applicable to such Seller or any of the properties or assets of
such Seller; or (iv) any applicable Law, other than, in the case of clauses
(ii), (iii) and (iv), such conflicts, violations, defaults, terminations,
cancellations or accelerations that would not reasonably be expected to have a
Material Adverse Effect.
(b) Except as set forth on Schedule 5.3(b), no consent, waiver,
approval, Order, Permit or authorization of, or declaration or filing with, or
notification to, any Person or Governmental Body is required on the part of such
Seller in connection with the execution and delivery of this Agreement or the
Seller Documents to which such Seller is a party or the consummation of the
transactions contemplated hereby or thereby, except for (i) compliance with the
applicable requirements of the HSR Act, if any, (ii) the entry of the Sale
Order, (iii) the entry of the Bidding Procedures Order with respect to such
Seller's obligations under Section 7.1, and (iv) for such other consents,
waivers, approvals, Orders, Permits, authorizations, declarations, filings and
notifications, the failure of which to be obtained or made would not reasonably
be expected to have a Material Adverse Effect.
5.4 Taxes.
(a) Except as set forth on Schedule 5.4(a), and except for
matters that would not reasonably be expected to have a material financial
impact on such Seller, (i) such Seller has timely filed all Tax Returns required
to be filed with the appropriate Tax Authorities in all jurisdictions in which
such Tax Returns are required to be filed (taking into account any extension of
time to file granted or to be obtained on behalf of such Seller); and (ii) all
Taxes shown to be payable on such Tax Returns have been paid.
(b) Such Seller is not a foreign person within the meaning of
Section 1445 of the Code.
5.5 Real Property. Such Seller does not own any real property.
Schedule 5.5 sets forth all real property and interests in real property leased
by a Seller as lessee or lessor and used in the Business (individually, a "Real
Property Lease" and collectively, the "Real Property Leases"). Such Seller has
or has let, as applicable, an enforceable leasehold interest under each of the
Real Property Leases to which it is a party, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
27
rights and remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Except as set forth on Schedule 5.5, such
Seller has not received any written notice of any default or event that with
notice or lapse of time, or both, would constitute a default by such Seller
under any of the Real Property Leases to which it is a party, except defaults
which Sellers are obligated to cure as of the Closing Date pursuant to Section
2.5 hereof, or have been cured by Sellers prior to the date hereof, or are
unenforceable due to the operation of applicable bankruptcy Law or the Sale
Order.
5.6 Tangible Personal Property. Schedule 5.6 sets forth all leases
relating to personal property used by Sellers in the Business (the "Personal
Property Leases"). Such Seller has an enforceable leasehold interest under each
of the Personal Property Leases to which it is a party, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Except as set forth on Schedule 5.6, such
Seller has not received any written notice of any default or event that with
notice or lapse of time or both would constitute a default by such Seller under
any of the Personal Property Leases that constitutes a Purchased Asset to which
it is a party, except for defaults which Sellers are obligated to cure pursuant
to Section 2.5 hereof, or have been cured by Sellers prior to the date hereof,
or are unenforceable due to the operation of applicable bankruptcy Law or the
Sale Order. Except as set forth on Schedule 5.6, Purchaser will be vested with
good title to all personal property owned by such Seller or used by such Seller
in the Business (except to the extent any such property is an Excluded Asset),
free and clear of all Liens, other than Permitted Exceptions, to the fullest
extent permissible under Section 363(f) of the Bankruptcy Code. Sellers own or
have the rights to use all of the assets, properties and rights of every type
and description, whether real or personal and whether tangible or intangible,
used or necessary to the conduct of the Business.
5.7 Intellectual Property. Schedule 5.7 sets forth an accurate and
complete list of all (i) Patents, (ii) registered Marks and applications for
registration of Marks and (iii) registered Copyrights, which in the case of each
of the foregoing clauses (i) through (iii) are owned or licensed by a Seller and
included in the Purchased Intellectual Property. Except as set forth on Schedule
5.7, such Seller owns or possesses licenses or other rights to use all Purchased
Intellectual Property, except as would not reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 5.7, the Purchased
Intellectual Property are not the subject of any pending challenge received by
such Seller in writing, except as would not reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 5.7, no Seller has
received written notice alleging that the operation of the Business infringes,
and to the Knowledge of the Applicable Seller, the operation of the Business by
such Seller does not infringe, the intellectual property of any other Person. To
the Knowledge of the Applicable Seller, no other Person has infringed the
Purchased Intellectual Property owned, licensed or otherwise used by such
Seller.
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5.8 Material Contracts.
(a) Schedule 5.8(a) sets forth all of the following Contracts to
which such Seller is a party or by which it is bound or by which the Purchased
Assets owned by such Seller may be bound or affected (collectively, the
"Material Contracts"):
(i) Contracts (or groups of related Contracts) for the
purchase or sale of supplies, goods, equipment, or other personal
property, or for the furnishing or receipt of services, in each
case, the performance of which will extend over a period of more
than one year or which provides for aggregate payments to or by
any Seller in excess of $100,000;
(ii) Contracts relating to the lease or license of any asset
of the Business, including Technology and Intellectual Property
(and including all customer license and maintenance agreements)
and including all Personal Property Leases and Real Property
Leases;
(iii) Contracts with any Affiliate or current officer or
director of such Seller;
(iv) Contracts relating to confidentiality, non-solicitation
or non-competition (whether the Seller is subject to or the
beneficiary of such obligations);
(v) any agency, dealer, distributor, sales representative,
marketing or other similar agreement;
(vi) Contracts relating to the acquisition by such Seller of
any operating business or the capital stock of any other Person;
(vii) Contracts relating to incurrence of indebtedness,
guarantees or loans, in each case involving amounts in excess of
$100,000;
(viii) Contracts which involve the expenditure of more than
$200,000 in the aggregate or require performance by any party
more than one hundred and eighty (180) days from the date hereof
that, in either case, are not terminable by such Seller without
penalty on less than ninety (90) days' notice;
(ix) third party reimbursement agreements; or
(x) courier and consulting agreements.
(b) Subject to entry of the Sale Order and the assumption and
assignment of such Material Contracts that constitute Purchased Assets, and
except as set forth on Schedule 5.8(b), each of the Material Contracts that is a
Purchased Contract is in full force and effect and is the legal, valid and
binding obligation of the Seller which is a party to such Material Contract,
29
enforceable against such Seller in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity), except where the
failure, individually or in the aggregate with respect to all Material Contracts
that constitute Purchased Assets, to be so in full force and effect, legal,
valid and binding or enforceable would not reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 5.8(b), such Seller has
not received any written notice of any default or event that with notice or
lapse of time or both would constitute a default by such Seller under any
Material Contract that constitutes a Purchased Asset to which such Seller is a
party, other than defaults which Sellers are obligated to cure as of the Closing
Date pursuant to Section 2.5 hereof, or have been cured by Sellers prior to the
date hereof, or are unenforceable due to the operation of applicable bankruptcy
Law or the Sale Order.
5.9 Employee Benefits.
(a) Schedule 5.9(a) sets forth all material "employee benefit
plans", as defined in Section 3(3) of ERISA, all "cafeteria plans" as defined in
Section 125 of the Code, and all bonus or incentive compensation, equity or
equity-based compensation, deferred compensation, retirement, severance pay,
sick leave, vacation pay, salary continuation, disability, medical, life
insurance, educational assistance, programs or agreements, as to which such
Seller has any liability (contingent or otherwise) with respect to any current
or former employees of such Seller (the "Employee Benefit Plans"). None of the
Employee Benefit Plans is a multiemployer plan as defined in Section 3(37) of
ERISA, or is subject to Sections 4063 or 4064 of ERISA.
(b) Such Seller has received a favorable determination letter
that each Employee Benefit Plan of such Seller intended to qualify under Section
401 of the Code, and the trust maintained pursuant thereto do qualify under
Section 401 and 501(a) of the Code respectively. Nothing has occurred with
respect to the operation of the Plans which could reasonably be expected to
cause the loss of such qualification or exemption.
(c) True, correct and complete copies of the following documents
with respect to each Employee Benefit Plan have been provided to Purchaser by
Sellers: (i) any plans and related trust documents, and amendments thereto, (ii)
the most recent Forms 5500, (iii) the last Internal Revenue Service
determination letter, and (iv) the most recent summary plan descriptions.
(d) The Employee Benefit Plans comply and have complied with all
applicable provisions of ERISA and other laws, except to the extent that such
amendments or actions are not required by law to be made or taken until a date
after the Closing Date and are disclosed on Schedule 5.9(d) or would not
reasonably be expected to have a Material Adverse Effect. Except for the
Bankruptcy Case and related proceedings, there are no pending or, to the
Knowledge of the Applicable Seller, threatened actions, claims or lawsuits
relating to or in connection with the Employee Benefit Plans of such Seller or
the assets of any of the Employee Benefit Plans of such Seller.
30
5.10 Labor.
(a) None of the employees of such Seller are represented by any
labor union or organization, labor or collective bargaining agreement.
(b) There are no (i) strikes, work stoppages, slowdowns,
lockouts or arbitrations or (ii) material grievances or other labor disputes
pending or, to the Knowledge of the Applicable Seller, threatened against or
involving such Seller, except as would not reasonably be expected to have a
Material Adverse Effect. There are no unfair labor practice charges, grievances
or complaints pending or, to the Knowledge of the Applicable Seller, threatened
by or on behalf of any employee or group of employees of such Seller, except as
would not reasonably be expected to have a Material Adverse Effect.
5.11 Litigation. Except as set forth on Schedule 5.11, (i) there are
no Legal Proceedings pending or, to the Knowledge of the Applicable Seller,
threatened against such Seller, or to which Seller is otherwise a party, which,
if adversely determined, would reasonably be expected to have a Material Adverse
Effect, and (ii) such Seller is not subject to any Order, except to the extent
the same would not reasonably be expected to have a Material Adverse Effect.
5.12 Compliance with Laws and Permits.
(a) Such Seller is in compliance with all Laws of any
Governmental Body applicable to its operations or assets or the Business, except
as set forth on Schedule 5.12(a), or where the failure to be in compliance would
not reasonably be expected to have a Material Adverse Effect and except with
respect to Environmental Laws (which are covered by Section 5.13). Except as set
forth on Schedule 5.12(a), such Seller has not received any written notice of or
been charged with the violation of any Laws, except where such violation would
not reasonably be expected to have a Material Adverse Effect.
(b) Such Seller currently has all Permits which are required for
the operation of the Business as presently conducted, except where the absence
of which would not reasonably be expected to have a Material Adverse Effect.
Except as set forth on Schedule 5.12(b), such Seller is not in default or
violation (and no event has occurred which, with notice or the lapse of time or
both, would constitute a default or violation) of any term, condition or
provision of any Permit to which it is a party, except where such default or
violation would not reasonably be expected to have a Material Adverse Effect.
5.13 Environmental Matters. Except as set forth on Schedule 5.13
hereto and except in each case or in the aggregate as would not reasonably be
expected to have a Material Adverse Effect:
31
(a) the operations of such Seller are in compliance with all
applicable Environmental Laws, which compliance includes obtaining, maintaining
and complying with all Permits issued pursuant to Environmental Laws, and Seller
has incurred no Liability under any Environmental Laws;
(b) such Seller is not the subject of any outstanding written
Order or Contract with any Governmental Body respecting non-compliance with or
potential liability under any Environmental Laws; and
(c) such Seller has not received any written communication
alleging that Seller may be in violation of any Environmental Law, or any Permit
issued pursuant to Environmental Law, or may have any Liability under any
Environmental Law.
5.14 Financial Advisors. Except as set forth on Schedule 5.14, no
Person has acted, directly or indirectly, as a broker, finder or financial
advisor for such Seller in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment in
respect thereof.
5.15 Financial Statements. Schedule 5.15 sets forth the internal
unaudited balance sheet of the IMPATH Physician Services division and Analytical
Services division of IMPATH as at November 30, 2003 (the "Balance Sheet Date")
and the related internal unaudited statements of income and cash flows for the
eleven-month period then ended (together, the "Financial Statements"). The
Financial Statements have been prepared from the books and records of the
Sellers, as of the date and for the period indicated, and in accordance with
GAAP and, except as set forth on Schedule 5.15, present fairly in all material
respects the financial position, results of operations and cash flows of the
IMPATH Physician Services division and Analytical Services division of IMPATH as
of the date and for the period indicated (subject to normal year-end adjustments
and lack of footnote disclosure). For purposes hereof, the unaudited
consolidated balance sheet of the Business as at November 30, 2003 is referred
to as the "Balance Sheet".
5.16 Operations in the Ordinary Course of Business. Except as set
forth on Schedule 5.16, since the Balance Sheet Date, the Business has been
conducted in the Ordinary Course of Business, and no event, occurrence, fact,
condition, change, development or effect has occurred that individually or in
the aggregate has had or reasonably would be expected to have a Material Adverse
Effect on the Business, Purchased Assets or Assumed Liabilities. Except as set
forth on Schedule 5.16, no Seller has taken any action described in Section
8.2(b) since the Balance Sheet Date.
5.17 No Other Representations or Warranties; Schedules. Except for
the representations and warranties contained in this Article V (as modified by
the Schedules hereto), neither Sellers nor any other Person makes any other
express or implied representation or warranty with respect to Sellers, the
Business, the Purchased Assets, the Assumed Liabilities or the transactions
contemplated by this Agreement, and each Seller disclaims any other
representations or warranties, whether made by Sellers or any of their
32
respective Affiliates, officers, directors, employees, agents or
representatives. Except for the representations and warranties contained in this
Article V (as modified by the Schedules hereto), each Seller (i) expressly
disclaims and negates any representation or warranty, expressed or implied, at
common law, by statute, or otherwise, relating to the condition of the Purchased
Assets (including any implied or expressed warranty of merchantability or
fitness for a particular purpose, or of conformity to models or samples of
materials) and (ii) hereby disclaims all liability and responsibility for any
representation, warranty, projection, forecast, statement, or information made,
communicated, or furnished (orally or in writing) to Purchaser or its Affiliates
or representatives (including any opinion, information, projection, or advice
that may have been or may be provided to Purchaser by any director, officer,
employee, agent, consultant, or representative of such Seller or any of its
Affiliates). Sellers make no representations or warranties to Purchaser
regarding the probable success or profitability of the Business. The disclosure
of any matter or item in any Schedule hereto shall not be deemed to constitute
an acknowledgment that any such matter is required to be disclosed or is
material or that such matter would reasonably be likely to result in a Material
Adverse Effect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers that:
6.1 Organization and Good Standing. Purchaser is a corporation in
good standing under the laws of The Commonwealth of Massachusetts and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now conducted.
6.2 Authorization of Agreement. Purchaser has full corporate power
and authority to execute and deliver this Agreement and each other agreement,
document, instrument or certificate contemplated by this Agreement to be
executed, or otherwise executed, by Purchaser in connection with the
consummation of the transactions contemplated hereby and thereby (such other
agreements, documents, instruments or certificates, the "Purchaser Documents"),
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Purchaser of this Agreement and each
Purchaser Document have been duly authorized by all necessary corporate action
on behalf of Purchaser. This Agreement has been, and each Purchaser Document
will be at or prior to the Closing, duly executed and delivered by Purchaser and
(assuming the due authorization, execution and delivery by the other parties
hereto and thereto) this Agreement constitutes, and each Purchaser Document when
so executed and delivered will constitute, legal, valid and binding obligations
of Purchaser, enforceable against Purchaser in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
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6.3 Conflicts; Consents of Third Parties.
(a) Except as set forth on Schedule 6.3, none of the execution
and delivery by Purchaser of this Agreement and of the Purchaser Documents, the
consummation of the transactions contemplated hereby or thereby, or the
compliance by Purchaser with any of the provisions hereof or thereof will
conflict with or result in any violation or default under, or give rise to a
right of termination, cancellation or acceleration of any obligation under (i)
the certificate of incorporation or by-laws of Purchaser, (ii) any Contract or
Permit to which Purchaser is a party or by which Purchaser or its properties or
assets are bound, (iii) any Order applicable to Purchaser or any of the
properties or assets of Purchaser or (iv) any applicable Law, except, in the
case of clauses (ii), (iii) and (iv), for such violations, breaches, defaults,
terminations, cancellations or accelerations as would not have a material
adverse effect on the ability of Purchaser to perform its obligations under this
Agreement or to consummate the transactions contemplated by this Agreement.
(b) No consent, waiver, approval, Order, Permit or authorization
of, or declaration or filing with, or notification to, any Person or
Governmental Body is required on the part of Purchaser in connection with the
execution and delivery of this Agreement or the Purchaser Documents or the
consummation of the transactions contemplated hereby or thereby except for
compliance with the applicable requirements of the HSR Act, if any.
6.4 Litigation. There are no Legal Proceedings pending or, to the
knowledge of Purchaser, threatened against Purchaser, or to which Purchaser is
otherwise a party, which, if adversely determined, would reasonably be expected
to have a material adverse effect on the ability of Purchaser to perform its
obligations under this Agreement or to consummate the transactions hereby.
Purchaser is not subject to any Order, except to the extent the same would not
reasonably be expected to have a material adverse effect on the ability of
Purchaser to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby.
6.5 Financial Advisors. No Person other than Banc of America
Securities has acted, directly or indirectly, as a broker, finder or financial
advisor for Purchaser in connection with the transactions contemplated by this
Agreement and no Person other than Banc of America Securities is entitled to any
fee or commission or like payment in respect thereof.
6.6 Financial Capability. Purchaser (i) has, and at the Closing will
have, sufficient internal funds (without giving effect to any unfunded financing
regardless of whether any such financing is committed) available to pay the
Purchase Price and any expenses incurred by Purchaser in connection with the
transactions contemplated by this Agreement and (ii) has, and at the Closing
will have, the resources and capabilities (financial or otherwise) to perform
its obligations hereunder.
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6.7 Condition of the Business. Notwithstanding anything contained in
this Agreement to the contrary, Purchaser acknowledges and agrees that Sellers
are not making any representation or warranty whatsoever, express or implied,
beyond those expressly given by each Seller in Article V hereof (as modified by
the Schedules hereto), and Purchaser acknowledges and agrees that, except for
the representations and warranties contained therein, the Purchased Assets and
the Business are being transferred on a "where is" and, as to condition, "as is"
basis.
6.8 Financial Condition of Purchaser. Schedule 6.8 sets forth
accurate information with respect to the Purchaser that is required to perform
the calculations required by Rule 3-05 of Regulation S-X, which information
shall be used to determine whether Sellers are required to deliver to Purchaser
the 2002 Financial Statements in accordance with Section 8.9(d).
ARTICLE VII
BREAK-UP FEE; BANKRUPTCY COURT APPROVAL
7.1 Approval of Break-Up Fee. In consideration for Purchaser having
expended considerable time and expense in connection with this Agreement and the
negotiation thereof and the identification and quantification of assets of
Sellers, (i) if this Agreement is terminated pursuant to Section 4.4(f)(i),
Sellers shall pay Purchaser expense reimbursement for reasonable and documented
expenses of Purchaser in an amount not to exceed $750,000 (the "Expense
Reimbursement") on the Business Day immediately following the date of such
termination and, upon consummation of an Alternate Transaction, Sellers shall
pay Purchaser a break-up fee in an amount equal to $5,375,000 (the "Break-Up
Fee"), (ii) if this Agreement is terminated pursuant to Section 4.4(c), Sellers
shall pay Purchaser the Expense Reimbursement on the Business Day immediately
following the date of such termination and, if Sellers consummate an Alternate
Transaction during the pendency of the Bankruptcy Case, Sellers shall pay
Purchaser the Break-up Fee on the date of consummation of such Alternate
Transaction and (iii) if this Agreement is terminated pursuant to Section
4.4(f)(ii), Sellers shall pay Purchaser the Expense Reimbursement on the
Business Day immediately following the date of such filing.
7.2 Competing Transaction. This Agreement is subject to approval by
the Bankruptcy Court and the consideration by Sellers of higher or better
competing bids that qualify under the terms of the Bidding Procedures Order
(each a "Competing Bid"). From the date hereof (and any prior time) and until
the transactions contemplated by this Agreement are consummated, each Seller is
permitted to cause its representatives and Affiliates to initiate contact with,
solicit or encourage submission of any inquiries, proposals or offers by, any
Person (in addition to Purchaser and its Affiliates, agents and representatives)
35
in connection with any sale or other disposition of the Purchased Assets or the
Business. In addition, Sellers shall have the responsibility and obligation to
respond to any inquiries or offers to purchase all or any part of the Purchased
Assets or the Business and perform any and all other acts related thereto which
are required under the Bankruptcy Code or other applicable Law, including
supplying information relating to the Business and the assets of Sellers to
prospective purchasers, subject to the terms and provisions of confidentiality
agreements.
7.3 Bankruptcy Court Filings. Promptly, and in any event within five
(5) Business Days after the date hereof, Sellers shall file the Motion with the
Bankruptcy Court and shall use commercially reasonable efforts to have the
hearing on approval of the Bidding Procedures Order held no later than March 23,
2004, and to have the hearing on approval of the Sale Order held no later than
April 30, 2004. Purchaser agrees that, without it being required to assume any
liability but at its own expense, Purchaser will, following a request by
Sellers, assist in obtaining the Sale Order by furnishing affidavits or other
documents or information reasonably requested by Sellers for filing with the
Bankruptcy Court for the purposes, among others, of providing adequate
assurances of performance by Purchaser under this Agreement and for
demonstrating that Purchaser is a "good faith" purchaser under Section 363(m) of
the Bankruptcy Code. In the event Purchaser is the successful bidder and the
entry of the Sale Order or the Bidding Procedures Order is appealed, Sellers and
Purchaser, each at their own expense, shall use their respective commercially
reasonable efforts to defend such appeal.
ARTICLE VIII
COVENANTS
8.1 Access to Information. Sellers agree that, prior to the Closing
Date, Purchaser shall be entitled, through its officers, employees and
representatives (including its legal advisors and accountants), to make such
investigation of the properties, business and operations of the Business and
such examination of the books and records of the Business, the Purchased Assets
and the Assumed Liabilities as it reasonably requests and to make extracts and
copies of such books and records. Any such investigation and examination shall
be conducted during regular business hours upon reasonable advance notice and
under reasonable circumstances and shall be subject to restrictions under
applicable Law. Sellers shall use commercially reasonably efforts to cause the
officers, employees, consultants, agents, accountants, attorneys and other
representatives of Sellers to cooperate with Purchaser and Purchaser's
representatives in connection with such investigation and examination, and
Purchaser and its representatives shall cooperate with Sellers and their
representatives and shall use their reasonable efforts to minimize any
disruption to the Business. Notwithstanding anything herein to the contrary, no
such investigation or examination shall be permitted to the extent that it would
require Sellers to disclose information subject to the attorney-client privilege
or conflict with any confidentiality obligations to which each Seller is bound.
8.2 Conduct of the Business Pending the Closing.
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(a) Prior to the Closing, except (1) as set forth on Schedule
8.2, (2) as required by applicable Law, (3) to cancel, dispose of or compromise
any debt or claim to the extent relating to Excluded Assets or Excluded
Liabilities or (4) with the prior written consent of Purchaser, each Seller
shall:
(i) conduct the Business only in the Ordinary Course of
Business; and
(ii) use its commercially reasonable efforts to (A) preserve
the present assets, business operations, organization and
goodwill of the Business, and (B) preserve the present
relationships with customers and suppliers of the Business.
(b) Except (1) as set forth on Schedule 8.2, (2) as required by
applicable Law, (3) to cancel, dispose of or compromise any debt or claim to the
extent relating to Excluded Assets or Excluded Liabilities, or (4) with the
prior written consent of Purchaser, each Seller shall not:
(i) subject any of the Purchased Assets to any Lien, except
for Permitted Exceptions;
(ii) acquire any material properties or assets that would be
Purchased Assets or sell, assign, license, transfer, convey,
lease or otherwise dispose of any of the Purchased Assets, except
for acquisitions or dispositions of properties or assets in the
Ordinary Course of Business;
(iii) terminate, release, assign any rights under or
discharge any other party thereunder of any of their obligations
under any Material Contract that is a Purchased Contract or
Purchased Lease or amend, modify or supplement the terms of any
Material Contract that is a Purchased Contract or Purchased
Lease;
(iv) transfer or grant any rights under, modify any existing
rights under, or enter into any settlement regarding the breach
or infringement of, or permit to lapse or fail to preserve, or
fail to take any action, provide any notice, make any filing, or
pay any fee necessary to maintain any Purchased Intellectual
Property;
(v) terminate, cancel or amend any property or casualty
insurance coverage maintained with respect to the Business or any
Purchased Asset or Assumed Liability that is not replaced by a
substantially comparable amount of insurance coverage; (vi) enter
into any settlement or release with respect to any material
litigation included within the Purchased Assets;
(vii) enter into or agree to enter into any merger or
consolidation with, any Person, except for an Alternate
Transaction;
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(viii) cancel or compromise any debt or claim, except to the
extent such cancellation or compromise is reflected in the
Purchase Price Adjustment, or waive or release any material right
of any Seller, in each case, that constitutes a Purchased Asset;
or
(ix) agree to do anything prohibited by this Section 8.2.
(c) After the date hereof and prior to the Closing, Sellers
shall notify Purchaser in writing from time to time of any Contracts entered in
the Ordinary Course of Business by Sellers relating to the Business. Purchaser
shall be entitled to add any such Contract to Schedule 2.1(h) pursuant to
Section 2.6(b).
8.3 Regulatory Approvals.
(a) If legally required, Purchaser and Sellers shall (i) make or
cause to be made all filings required of each of them or any of their respective
subsidiaries or Affiliates under the HSR Act or other Antitrust Laws (as defined
below) with respect to the transactions contemplated hereby as promptly as
practicable after the date of this Agreement, (ii) comply at the earliest
practicable date with any request under the HSR Act or other Antitrust Laws for
additional information, documents, or other materials received by each of them
or any of their respective subsidiaries from the FTC, the Antitrust Division or
any other Governmental Body in respect of such filings or such transactions, and
(iii) cooperate with each other in connection with any such filing and in
connection with resolving any investigation or other inquiry of any of the FTC,
the Antitrust Division or other Governmental Body under any Antitrust Laws with
respect to any such filing or any such transaction. Each such party shall use
its commercially reasonable efforts to furnish to each other all information
required for any application or other filing to be made pursuant to any
applicable Law in connection with the transactions contemplated by this
Agreement. Each such party shall promptly inform the other parties hereto of any
oral communication with, and provide copies of written communications with, any
Governmental Body regarding any such filings or any such transaction. No party
hereto shall independently participate in any formal meeting with any
Governmental Body in respect of any such filings, investigation, or other
inquiry without giving the other parties hereto prior notice of the meeting and,
to the extent permitted by such Governmental Body, the opportunity to attend
and/or participate.
(b) If a filing under the HSR Act is legally required, Purchaser
and Sellers shall use commercially reasonable efforts to take such action as may
be required to cause the expiration of the notice periods under the HSR Act or
other Antitrust Laws with respect to such transactions as promptly as possible
after the execution of this Agreement. Purchaser and Sellers shall use
commercially reasonable efforts to resolve such objections, if any, as may be
asserted by any Governmental Body with respect to the transactions contemplated
by this Agreement under the HSR Act, the Xxxxxxx Act, as amended, the Xxxxxxx
Act, as amended, the Federal Trade Commission Act, as amended, and any other
United States federal or state or foreign statutes, rules, regulations, orders,
decrees, administrative or judicial doctrines or other laws that are designed to
prohibit, restrict or regulate actions having the purpose or effect of
38
monopolization or restraint of trade (collectively, the "Antitrust Laws"). In
connection therewith, if any Legal Proceeding is instituted (or threatened to be
instituted) challenging any transaction contemplated by this Agreement as in
violation of any Antitrust Law, Purchaser and Sellers shall cooperate and use
commercially reasonable efforts to contest and resist any such Legal Proceeding,
and to have vacated, lifted, reversed, or overturned any decree, judgment,
injunction or other order whether temporary, preliminary or permanent, that is
in effect and that prohibits, prevents, or restricts consummation of the
transactions contemplated by this Agreement, including by pursuing all available
avenues of administrative and judicial appeal and all available legislative
action, unless, by mutual agreement, Purchaser and Sellers decide that
litigation is not in their respective best interests. Notwithstanding anything
to the contrary herein, Purchaser shall not be required to divest itself of any
business, product lines or assets in connection with seeking or obtaining
approvals under any Law relating to antitrust, competition or trade regulation.
8.4 Further Assurances. Sellers and Purchaser shall use commercially
reasonable efforts to (i) take all actions necessary or appropriate to
consummate the transactions contemplated by this Agreement and (ii) cause the
fulfillment at the earliest practicable date of all of the conditions to their
respective obligations to consummate the transactions contemplated by this
Agreement. After the Closing, Sellers shall use commercially reasonable efforts
to (i) deliver promptly to Purchaser any mail or other communication received by
Sellers after the Closing pertaining to the Purchased Assets, the Business or
the Assumed Liabilities, and any cash, checks or other instruments of payment in
respect thereof which constitute a Purchased Asset and (ii) refer all inquiries
related to the Business, the Purchased Assets and the Assumed Liabilities to
Purchaser. After the Closing, Purchaser shall use commercially reasonable
efforts to (i) deliver promptly to Sellers any mail or other communication
received by Purchaser after the Closing pertaining to the Excluded Assets or the
Excluded Liabilities, and any cash, checks or other instruments of payment in
respect thereof which constitute an Excluded Asset and (ii) refer all inquiries
related to the Excluded Assets and the Excluded Liabilities to Sellers.
8.5 Confidentiality.
(a) Purchaser acknowledges that the information provided to it
in connection with this Agreement and the transactions contemplated hereby is
subject to the terms of the confidentiality agreement between Purchaser and
IMPATH and/or their respective Affiliates and/or representatives dated November
21, 2003, as amended (the "Confidentiality Agreement"), the terms of which are
incorporated herein by reference.
(b) Each Seller acknowledges that the success of the Business
after the Closing depends upon the continued preservation of the confidentiality
of certain information possessed by such Seller, that the preservation of the
confidentiality of such information by Sellers is an essential premise of the
bargain between Sellers and Purchaser, and that Purchaser would be unwilling to
39
enter into this Agreement in the absence of this Section 8.5(b). Accordingly,
each Seller hereby agrees with Purchaser that such Seller and its
representatives will not, and that such Seller will cause its Affiliates not to,
at any time on or after the Closing Date, directly or indirectly, without the
prior written consent of Purchaser, disclose or use, any confidential or
proprietary information involving or relating to the Business, the Purchased
Assets or the Assumed Liabilities; provided, however, that the information
subject to the foregoing provisions of this sentence will not include any
information generally available to, or known by, the public (other than as a
result of disclosure in violation hereof); and provided, further, that the
provisions of this Section 8.5(b) will not prohibit any retention of copies of
records or disclosure (i) required by any applicable Law so long as reasonable
prior notice is given of such disclosure and a reasonable opportunity is
afforded to contest the same or (ii) made in connection with the enforcement of
any right or remedy relating to this Agreement or the transactions contemplated
hereby. Sellers agree that they will be responsible for any breach or violation
of the provisions of this Section 8.5(b) by any of their representatives.
8.6 Preservation of Records. Purchaser and, subject to the following
sentence, Sellers agree that each of them shall preserve and keep the records
held by it or their respective Affiliates relating to the Business for a period
of seven (7) years from the Closing Date and shall make such records and
personnel available to the other as may be reasonably required by such party in
connection with, among other things, any insurance claims by, Legal Proceedings
or Tax audits against or governmental investigations of Sellers or Purchaser or
any of their respective Affiliates or in order to enable Sellers or Purchaser to
comply with their respective obligations under this Agreement and each other
agreement, document or instrument contemplated hereby or thereby. In the event a
Seller wishes to destroy such records during such seven-year period, or a Seller
or Purchaser wishes to destroy such records after that time, such party shall
first give sixty (60) days prior written notice to the other and such other
party shall have the right at its option and expense, upon prior written notice
given to such party within that sixty (60) day period, to take possession of the
records within one hundred and twenty (120) days after the date of such notice.
8.7 Publicity. Neither Sellers nor Purchaser shall issue any press
release or public announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of the other
parties hereto, which approval will not be unreasonably withheld or delayed,
unless, in the sole judgment of Purchaser or Sellers, disclosure is otherwise
required by applicable Law or with respect to filings to be made with the
Bankruptcy Court in connection with this Agreement or by the applicable rules of
any stock exchange or similar public trading system on which Purchaser or a
Seller lists securities, provided that the party intending to make such release
shall use its reasonable efforts consistent with such applicable Law, Bankruptcy
Court requirement or rules to consult with the other party with respect to the
text thereof.
8.8 Contacts with Suppliers and Customers. Notwithstanding anything
to the contrary contained herein, prior to the Closing, without the prior
written consent of IMPATH, which may be withheld for any reason, Purchaser shall
not contact any suppliers to, or customers of, the Business other than suppliers
to or customers of the Business that have been, are or potentially may be a
supplier to or a customer of Purchaser or any Affiliate of Purchaser.
40
8.9 Financial Statements.
(a) Sellers shall deliver to Purchaser as soon as reasonably
practicable audited consolidated financial statements of the Business as of
December 31, 2003 and for the fiscal year then-ended (the "Audited Financial
Statements"). The Audited Financial Statements must be prepared from the books
and records of Sellers and be in accordance with GAAP and Securities and
Exchange Commission ("SEC") Regulation S-X, and must be accompanied by an
opinion (the "Audit Opinion") of the Independent Auditor (as defined below) that
the Audited Financial Statements present fairly in all material respects the
financial position of the Business as of the date listed above and the results
of operations and cash flows of the Business for the fiscal year listed above,
in accordance with GAAP. The Audit Opinion of the Independent Auditor must be
unqualified and unlimited as to scope or otherwise.
(b) Sellers shall use their commercially reasonable efforts to
deliver to Purchaser as soon as reasonably practicable (but in no event later
than forty-five (45) days after the end of the applicable fiscal quarter)
unaudited consolidated financial statements of the Business as of the end of the
most recent fiscal quarter completed on or prior to the Closing Date and as of
the end of the corresponding fiscal quarter of the preceding fiscal year and for
the three-, six-, or nine-month periods, as applicable, then-ended (the
"Unaudited Financial Statements" and together with the Audited Financial
Statements, the "Required Financial Statements"). The Unaudited Financial
Statements must be prepared from the books and records of Sellers and be in
accordance with SEC Regulation S-X and GAAP (except for footnotes not required
by SEC Regulation S-X). The Unaudited Financial Statements must present fairly
in all material respects the financial position of the Business and the results
of operations and cash flows of the Business for each of the interim periods
listed above, in accordance with GAAP.
(c) As soon as reasonably practicable following the date hereof,
Sellers shall (i) compile and prepare the Required Financial Statements and (ii)
engage Xxxxx Xxxxxxxx LLP (the "Independent Auditor") to audit the Audited
Financial Statements. Sellers shall provide the Independent Auditor with access
to all necessary documents, records and appropriate personnel and take all other
reasonable actions to facilitate the preparation and audit of the Audited
Financial Statements, including the execution and delivery of management
representation letters by appropriate personnel of each Seller. Sellers shall
use their commercially reasonable efforts to cause the Independent Auditor to
provide to Purchaser and any Affiliate of Purchaser that is required or desires
to file a periodic report or registration statement with the SEC (a "Reporting
Purchaser") the consents requested by Purchaser no later than five (5) Business
Days prior to Closing (the "Auditor Consents") to permit the inclusion of the
Audit Opinion with respect to the Audited Financial Statements in the Reporting
Purchaser's reports and registration statements filed with the SEC for periods
required under applicable Law.
41
(d) If Purchaser determines in good faith after consultation
with Purchaser's independent auditor that based on the information set forth in
the Audited Financial Statements and on Schedule 6.8, Purchaser would be
required to file with the SEC pursuant to SEC Rule 3-05 of Regulation S-X
audited consolidated financial statements of the Business as of December 31,
2002 and for the fiscal year then-ended (the "2002 Financial Statements"),
Sellers shall deliver to Purchaser as soon as reasonably practicable the 2002
Financial Statements. The 2002 Financial Statements shall be prepared from the
books and records of Sellers and be in accordance with GAAP and SEC Regulation
S-X, and shall be accompanied by an opinion (the "Additional Audit Opinion") of
the Independent Auditor that the 2002 Financial Statements present fairly in all
material respects the financial position of the Business as of the respective
dates listed above and the results of operations and cash flows of the Business
for the respective fiscal years listed above, in accordance with GAAP. The
Additional Audit Opinion of the Independent Auditor must be unqualified and
unlimited as to scope or otherwise. Sellers shall use their commercially
reasonable efforts to cause the Independent Auditor to provide to Purchaser and
any Reporting Purchaser the consents requested by Purchaser no later than five
(5) Business Days prior to Closing (the "Additional Auditor Consents") to permit
the inclusion of the Additional Audit Opinion with respect to the 2002 Financial
Statements in the Reporting Purchaser's reports and registration statements
filed with the SEC for periods required under applicable Law. Schedule 6.8 shall
not be amended or modified in any manner for any reason, whether as a result of
previous occurrences, future occurrences, changes in law or otherwise. Schedule
6.8 includes the methodology under SEC Regulation S-X that shall be used to make
the determination under this Section 8.9(d). The calculation set forth on
Schedule 6.8 and the examples set forth therein shall be the exclusive methods
used to determine whether the 2002 Financial Statements are required to be
delivered under Section 8.9(d).
(e) Following the Closing, Sellers shall cooperate with
Purchaser in the preparation of any unaudited financial statements for the most
recent fiscal quarter completed on or ending after the date hereof and prior to
Closing and which Sellers have not provided at or prior to the Closing.
8.10 Notification of Certain Matters. Sellers shall give prompt
notice to Purchaser if any Person provides written notice to Sellers that (a)
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement or (b) such Person is not likely to
provide a required consent prior to Closing. Sellers shall also give prompt
notice to Purchaser if Seller receives any written objection or proceeding that
challenges the transactions contemplated hereby or the entry of the Sale Order.
Sellers shall give prompt notice to Purchaser of (i) to the Knowledge of the
Applicable Seller, any alleged violation of Law applicable to any Seller; (ii)
any written notice of the commencement of any investigation, inquiry or review
by any Governmental Entity with respect to the Business or that any such
investigation, inquiry or review, to the Knowledge of the Applicable Seller, is
contemplated; (iii) to the Knowledge of the Applicable Seller, the infringement
or unauthorized use by any Person of any Purchased Intellectual Property of such
42
Seller; and (iv) the execution of any Material Contract or any contract with a
third-party reimbursement organization or Governmental Body (and Sellers shall
deliver or make available a copy thereof to Purchaser). Purchaser shall give
prompt notice to Sellers, and Sellers shall give prompt notice to Purchaser, in
the event that either party becomes aware of any event which would reasonably be
expected to (i) have a Material Adverse Effect or (ii) provide either party with
the ability to terminate the Agreement.
8.11 Insurance Policies. From and after the Closing, Purchaser shall
not modify, amend or supplement any insurance policy set forth on Schedule
2.1(m) where such modification, amendment or supplement could or is reasonably
likely to adversely affect any rights or benefits of Sellers under such
insurance policies with respect to periods prior to the Closing.
8.12 [Intentionally Omitted]
8.13 Exculpation. None of Sellers (except as set forth in Section
4.6(b)) nor any of their respective Affiliates or any other Person will have or
be subject to any Liability to Purchaser or any other Person resulting from the
distribution to Purchaser or its representatives or Purchaser's use of, any
information regarding Sellers, the Business or the transactions contemplated by
this Agreement, including any confidential memoranda distributed on behalf of
Sellers relating to the Business or other publication or data room information
provided to Purchaser or its representatives, or any other document or
information in any form provided to Purchaser or its representatives in
connection with the sale of the Business and the transactions contemplated
hereby.
8.14 OIG Certificate. One day prior to the Closing Date, IMPATH shall
file its third and final certification with the OIG in compliance with the
obligations set forth in the Stipulation and Order of Settlement and Dismissal,
entered into in November 2001, in the matter of U.S. v. IMPATH.
8.15 Use of Name.
(a) Each Seller agrees, in connection with the consummation of
its plan of reorganization, to (i) amend their respective certificates of
incorporation or other appropriate documents which are required to change their
respective corporate name to a new name that is, in Purchaser's judgment,
sufficiently dissimilar to their respective present name so as to avoid
confusion and make their respective present name available to Purchaser and (ii)
acknowledge consents in form satisfactory to Purchaser and in such quantity as
Purchaser may request consenting to Purchaser and any Affiliate of Purchaser
changing their respective corporate names to IMPATH, IMPATH Physician Services,
IMPATH Predictive Oncology or any name similar thereto. Except as expressly
authorized in paragraph (b) below, neither of Sellers nor any of their
Affiliates may use the names "IMPATH", "IMPATH Physician Services", "IMPATH
Predictive Oncology" or any name confusingly similar thereto for any purpose.
43
(b) Effective as of the Closing, Purchaser hereby grants to each
Seller a non-exclusive, irrevocable (subject to the provisions set forth
herein), worldwide, royalty-free license to use the Sellers' current corporate
names (i.e., "IMPATH Inc.," "IMPATH Physician Services, Inc." and "IMPATH
Predictive Oncology, Inc.") (or the name "IMPATH" to the extent utilized in the
corporate name of any subsidiary of any Sellers) as necessary in connection with
the administration of their respective estates and the winding down of their
respective businesses. This license will automatically terminate on March 31,
2005. Sellers covenant that any product or services offered or sold by Sellers
while they use the trade names "IMPATH Inc.," "IMPATH Physician Services, Inc."
and "IMPATH Predictive Oncology, Inc." will be at least as high in quality as
the products or services offered or sold by Sellers prior to the Closing. All
use of the corporate names "IMPATH Inc.," "IMPATH Predictive Oncology, Inc." and
"IMPATH Physician Services, Inc." and all goodwill arising from such use will
inure solely to the benefit of Purchaser. If either of the Sellers breach any
provision of this Section 8.15 and fails to cure such breach within thirty (30)
days of receiving written notice of the breach from Purchaser, Purchaser may
terminate the license granted to Sellers in this paragraph (b) by providing
written notice to Sellers, in which case Sellers shall immediately cease all
uses of the names "IMPATH Inc.," "IMPATH Predictive Oncology, Inc." and "IMPATH
Physician Services, Inc." or any name confusingly similar to those names.
8.16 Transition Services. At the Closing, Sellers and Purchaser shall
enter into a transition services agreement, in form and substance reasonably
acceptable to both Purchaser and Sellers, which shall describe the services to
be provided among the parties, including computer services, the sharing of
employees and the leasing of real or personal property.
ARTICLE IX
EMPLOYEES AND EMPLOYEE BENEFITS
9.1 Employment.
(a) Immediately after the date of this Agreement, Sellers shall
provide Purchaser with the Employee List and an opportunity to review the
employment files and other related documents of all Employees so that Purchaser
may determine, in its sole discretion, to whom Purchaser will extend offers of
employment. Prior to the Closing, Sellers agree to periodically update the
Employee List and deliver such updated Employee List to Purchaser. Purchaser
shall extend an offer of employment to all of the Employees at the Closing Date
less no more than fifty (50) Employees. Sellers agree that if the number of
Employees on the Closing Date exceeds eight hundred and thirty (830), Purchaser
shall not be obligated to offer employment to more than seven hundred and eighty
(780) Employees. Within twenty (20) Business Days after the provision by Sellers
to Purchaser of the Employee List, Purchaser shall provide Sellers with a list
of those Employees to whom Purchaser has extended or will extend offers of
employment (the "Designated Employees"). Sellers agree to cooperate with
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Purchaser and use their reasonable best efforts to cause the Designated
Employees to make available their employment services to Purchaser. Sellers
hereby consent to the hiring of the Designated Employees by Purchaser and
waives, with respect to the employment by Purchaser of Designated Employees, any
claims or rights Sellers may have against Purchaser or any Designated Employee
(except to the extent such claims or rights are assigned to Purchaser hereunder)
under any non-competition, confidentiality or employment agreement.
(b) Prior to the Closing, Purchaser shall deliver in writing, an
offer of employment to each of the Designated Employees to commence employment
immediately following the Closing. Purchaser may employ any of the Designated
Employees upon those terms that it may establish in its discretion, and it is
understood that such terms may differ from the Sellers' employment terms in
various material respects, except that Purchaser shall offer employment to each
Designated Employee at the same salary or hourly wage rate the Designated
Employee earned at the date of this Agreement.
(c) After the Closing Date, Sellers shall remain responsible for
(i) any and all wages, salaries, benefit and other compensation or payments
(including, without limitation, accrued vacation leave and sick leave, bonuses,
commissions and other incentive-based compensation) payable to the Employees for
periods prior to the Closing, and (ii) any severance, retention bonus or change
in control payment payable to any of the Employees that become due or owed as a
result of the consummation of the transactions contemplated by this Agreement.
(d) After the Closing Date, Purchaser shall become responsible
for any and all wages, salaries, benefits and other compensation or payments
payable to each Designated Employee who is hired by Purchaser on the Closing
Date (a "Transferring Employee") for periods following the Closing Date on such
terms and conditions as Purchaser and each Transferring Employee may agree.
Except as specifically set forth in Section 9.1(a) and this Section 9.1(d), (i)
Purchaser shall have no obligation to offer employment to, or to employ, any
Employee and (ii) Purchaser shall have the right to terminate any Transferring
Employee for any reason after the Closing Date. Purchaser and Sellers agree that
the Employees are not third-party beneficiaries of this Agreement.
9.2 Standard Procedure. Pursuant to the "Standard Procedure" provided
in Section 5 of Revenue Procedure 96-60, 1996-2 C.B. 399, (i) Purchaser and
Sellers shall report on a predecessor/successor basis as set forth therein, (ii)
Sellers will not be relieved from filing a Form W-2 with respect to any
Transferring Employees, and (iii) Purchaser will undertake to file (or cause to
be filed) a Form W-2 for each such Transferring Employee with respect to the
portion of the year during which such Employees are employed by Purchaser that
includes the Closing Date, excluding the portion of such year that such Employee
was employed by such Seller.
9.3 Employee Benefits.
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(a) Following the Closing, Purchaser shall provide all
Transferring Employees with coverage under Purchaser's then-current benefit
plans, programs, policies and arrangements applicable to similarly situated
employees of Purchaser. Years of service with Sellers prior to the Closing shall
be treated as service with the Purchaser for eligibility and vesting purposes
and for purposes of benefit accruals, including but not limited to annual
vacation allowances, except to the extent such treatment will result in a
duplication of benefits.
(b) Following the Closing, Purchaser shall take commercially
reasonable steps to cause to be waived all limitations as to pre-existing
conditions, exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Transferring Employees under any medical
or dental benefit plans that such Transferring Employees are eligible to
participate in after the Closing under comparable plans maintained by Purchaser,
other than limitations, exclusions or waiting periods that are already in effect
with respect to such Transferring Employees and that have not been satisfied as
of the Closing under any medical or dental plan maintained for such Transferring
Employees immediately prior to the Closing by Sellers. With respect to any
waiting period that is not waived, service with Sellers will be credited in
accordance with Section 9.3(a). Provided that, prior to the Closing Date,
Sellers have provided Purchaser with the necessary information, Purchaser shall
take commercially reasonable steps to allow for credit under any medical or
dental plan amounts previously paid by Transferring Employees (or their
dependents) during the plan year or calendar year (as applicable) that includes
the Closing Date toward any applicable deductible, co-payment, out-of-pocket
maximum or similar provision of such Purchaser medical or dental plan.
(c) Nothing contained in this Section 9.3 or elsewhere in this
Agreement shall be construed to prevent the termination of employment of any
Transferring Employee.
(d) Accrued Vacation. Except as required by applicable Law or to
the extent included within the definition of Assumed Liabilities, Seller shall
be responsible for all Liabilities with respect to Transferring Employees
attributable to their accrued and unused vacation, sick days and personal days
through the Closing Date.
(e) Continuation and Portability of Employee Benefits. From and
after the date of this Agreement, the Sellers shall provide continuation
coverage to employees of Sellers as required by COBRA until the later of the
Closing Date or the date that Sellers' group health plan is terminated (the
"Coverage Termination Date"). Upon the Coverage Termination Date, to the extent
required by Law, Purchaser shall provide COBRA coverage to all individuals who
are "M&A Qualified Beneficiaries" (as defined in the regulations issued pursuant
to COBRA) with respect to the Purchased Assets. Such coverage provided by
Purchaser shall be provided solely under Purchaser's employee benefit plans, and
only to those to whom Purchaser is required to provide COBRA coverage under Law.
Sellers shall notify Purchaser of its expected Coverage Termination Date at
least 30 days in advance of such date, or if such date is not known to Sellers
30 days in advance then such notice shall be given as soon as Seller is aware of
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its Coverage Termination Date (but not later than the actual Coverage
Termination Date). For the avoidance of doubt, an Employee whose employment is
terminated after the date of this Agreement shall be deemed to be an "M&A
Qualified Beneficiary" if (i) the Employee, for a period beginning not less than
six months prior to the Closing Date and ending as of the Closing Date, was (a)
continuously and directly connected to the Business, or (b) was continuously
performing a general management or administrative function that was primarily
dedicated to the Business; (ii) no Seller, nor any Affiliate of Seller, is
maintaining a group health plan; and (iii) the termination of the Employee's
employment occurs on or before December 31, 2004. Notwithstanding the foregoing,
no Employee shall be deemed an M&A Qualified Beneficiary if such Employee's
activities on behalf of a Seller were primarily dedicated to a business that is
not part of the Business.
(f) 401(k) Plan. Sellers shall be solely responsible for
maintaining and/or terminating their 401(k) plan and any and all other Employee
Benefit Plans they maintain that are qualified (or were designed to be
qualified) under Section 401(a) of the Code. So that Purchaser may prepare to
accept rollovers from those Transferring Employees who desire to roll their
distributions from Sellers' plan into Purchaser's 401(k) plan, prior to the
Closing, Sellers shall provide Purchaser with the most recent IRS determination
letter with respect to each qualified plan that Sellers maintain. If Purchaser
considers such letter for a plan to be outdated or the letter is not favorable,
or if the plan has no individual determination letter, Sellers will explain to
Purchaser (and provide promptly any requested documentation therefor) the
reasons for the absence of a sufficiently recent favorable determination letter
from the U.S. Internal Revenue Service with respect to each such Employee
Benefit Plan that is designed to be a qualified plan. If Purchaser accepts such
explanation and documentation as evidence that Sellers' plans are properly
qualified, Sellers shall cooperate reasonably with Purchaser to allow those
Transferring Employees who wish to do so to rollover their benefits to
Purchaser's 401(k) plan, and to otherwise achieve a smooth transition regarding
any rollovers elected by the Transferring Employees. Sellers shall be
responsible for providing any required blackout notices, within the meaning of
the Xxxxxxxx-Xxxxx Act of 2002, with respect to each such Employee Benefit Plan,
shall maintain the assets of such Employee Benefit Plans in the manner required
by ERISA until they are distributed to participants and beneficiaries, and shall
otherwise comply with all Laws affecting such Employee Benefit Plans.
ARTICLE X
CONDITIONS TO CLOSING
10.1 Conditions Precedent to Obligations of Purchaser. The obligation
of Purchaser to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by Purchaser in whole or
in part to the extent permitted by applicable Law):
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(a) The representations and warranties set forth in Article V of
this Agreement qualified as to materiality or Material Adverse Effect shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, at and as of the Closing, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality or Material
Adverse Effect shall be true and correct, and those not so qualified shall be
true and correct in all material respects, in each case, on and as of such
earlier date); provided, however, that in the event of a breach of a
representation or warranty other than a representation or warranty qualified by
Material Adverse Effect, the condition set forth in this Section 10.1(a) shall
be deemed satisfied unless the effect of all such breaches of representations
and warranties taken together result in a Material Adverse Effect, and Purchaser
shall have received a certificate signed by an authorized officer of each
Seller, dated the Closing Date, to the foregoing effect;
(b) Each Seller shall have performed and complied in all
material respects with all obligations and agreements required in this Agreement
to be performed or complied with by it prior to the Closing Date, and Purchaser
shall have received certificates signed by an authorized officer of each Seller,
dated the Closing Date, to the foregoing effect;
(c) All of the Real Property Leases included within the
Purchased Assets shall be in full force and effect and assignable to and
assumable by Purchaser without the consent of the other party thereto pursuant
to Section 365 of the Bankruptcy Code or consent thereto shall have been
obtained;
(d) All of the Contracts, Purchased Intellectual Property and
Personal Property Operating Leases included within the Purchased Assets shall be
in full force and effect and assignable to and assumable by Purchaser without
the consent of the other party thereto pursuant to Section 365 of the Bankruptcy
Code or consent thereto shall have been obtained, other than such Contracts,
Purchased Intellectual Property or Personal Property Operating Leases the
failure of which to be in full force and effect and assignable to and assumable
by Purchaser or the failure to obtain such consent of the other party thereto
would not reasonably be expected to cause a Material Adverse Effect;
(e) Sellers shall have delivered the Sellers' Adjustment
Certificate to the Purchaser;
(f) Sellers shall have delivered, or caused to be delivered, to
Purchaser all items set forth in Section 4.2; and
(g) Sellers shall have delivered to Purchaser (i) the Required
Financial Statements and the Audit Opinion, and (ii) if Purchaser determines
pursuant to Section 8.9(d) that the 2002 Financial Statements are required, the
Two Year F/S Deliverables.
10.2 Conditions Precedent to Obligations of Sellers. The obligations
of Sellers to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any or all of which may be waived by Sellers in whole or
in part to the extent permitted by applicable Law):\
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(a) The representations and warranties of Purchaser set forth in
this Agreement qualified as to materiality shall be true and correct, and those
not so qualified shall be true and correct in all material respects, at and as
of the Closing, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties qualified as to materiality shall be true and correct, and those not
so qualified shall be true and correct in all material respects, in each case,
on and as of such earlier date); provided, however, that in the event of a
breach of a representation or warranty other than a representation or warranty
qualified by material adverse effect on the ability of Purchaser to consummate
the transactions contemplated by this Agreement, the condition set forth in this
Section 10.2(a) shall be deemed satisfied unless the effect of all such breaches
of representations and warranties taken together result in a material adverse
effect on the ability of Purchaser to consummate the transactions contemplated
by this Agreement, and Seller shall have received a certificate signed by an
authorized officer of Purchaser, dated the Closing Date, to the foregoing
effect;
(b) Purchaser shall have performed and complied in all material
respects with all obligations and agreements required by this Agreement to be
performed or complied with by Purchaser on or prior to the Closing Date, and
Sellers shall have received a certificate signed by an authorized officer of
Purchaser, dated the Closing Date, to the foregoing effect; and
(c) Purchaser shall have delivered, or caused to be delivered,
to Seller the items set forth in Section 4.3.
10.3 Conditions Precedent to Obligations of Purchaser and Sellers.
The respective obligations of Purchaser and each Seller to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, on
or prior to the Closing Date, of each of the following conditions (any or all of
which may be waived by Purchaser and Seller in whole or in part to the extent
permitted by applicable Law):
(a) there shall not be in effect any Order enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
(b) the Bankruptcy Court shall have entered the Bidding
Procedures Order;
(c) the Bankruptcy Court shall have entered the Sale Order and
any stay period applicable to the Sale Order shall have expired or shall have
been waived by the Bankruptcy Court, the Sale Order shall not have been modified
or vacated without the consent of the Purchaser and shall remain in full force
and effect;
(d) if any filing under the HSR Act or other Antitrust Laws is
required, the waiting period applicable to the transactions contemplated by this
Agreement under the HSR Act or other Antitrust Laws shall have expired or early
termination shall have been granted; and
49
(e) all material approvals from Governmental Bodies shall have
been obtained.
10.4 Frustration of Closing Conditions. Neither Seller nor Purchaser
may rely on the failure of any condition set forth in Section 10.1, 10.2 or
10.3, as the case may be, if such failure was caused (through action or
omission) solely by such party's failure to comply with any provision of this
Agreement.
ARTICLE XI
TAXES
11.1 Transfer Taxes. Purchaser, on the one hand, and Sellers, on the
other hand, shall each be responsible for 50% of any sales, use, stamp,
documentary stamp, filing, recording, transfer or similar fees or taxes or
governmental charges (including any interest and penalty thereon) payable in
connection with the transactions contemplated by this Agreement ("Transfer
Taxes"). Sellers shall discharge all Transfer Taxes, and Purchaser shall
promptly thereafter pay Sellers an amount equal to 50% of such Transfer Taxes
paid by Sellers. Sellers shall seek to include in the Sales Order a provision
that provides that the transfer of the Purchased Assets shall be free and clear
of any stamp or similar taxes under Bankruptcy Code Section 1146(c).
11.2 Prorations.
(a) All real and personal property Taxes or similar ad valorem
obligations levied with respect to the Purchased Assets for any taxable period
that includes the Closing Date and ends after the Closing Date, whether imposed
or assessed before or after the Closing Date, shall be prorated between Sellers
and Purchaser as of 12:01 a.m. (Eastern time) on the Closing Date. If any Taxes
subject to proration are paid by Purchaser, on the one hand, and Sellers, on the
other hand, the proportionate amount of such Taxes paid (or in the event of a
refund of any portion of such Taxes previously paid is received, such refund)
shall be paid promptly by (or to) the other after the payment of such Taxes (or
promptly following the receipt of any such refund).
(b) To the extent practicable, the parties hereto shall notify
the gas, water, sewage treatment, telephone and electric utility companies that
Purchaser shall be responsible for the payment of all obligations of the
Business or the Purchased Assets incurred therefor on or after the Closing.
Purchaser shall be responsible for the payment of all charges for such services
incurred after the Closing. Sellers shall be responsible, as
debtors-in-possession, for the payment of all charges for such services incurred
from and after September 28, 2003 to (but excluding) the Closing Date. Sellers
shall use commercially reasonable efforts to cause the telephone companies to
render a xxxx for telephone service incurred from and after September 28, 2003
to (but excluding) the Closing Date, and Sellers shall be responsible for the
payment of such xxxx.
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(c) Except as otherwise expressly provided herein, all
installments of special assessments or other charges on or with respect to the
Purchased Assets payable by Sellers for any period in which the Closing Date
shall occur, including base rent, common area maintenance, royalties, all
municipal, utility or authority charges for water, sewer, electric or gas
charges, garbage or waste removal, and cost of fuel, shall be apportioned as of
12:01 am (Eastern Time) on the Closing Date, and each party shall pay its
proportionate share promptly upon the receipt of any xxxx, statement or other
charge with respect thereto. If such charges or rates are assessed either based
upon time or for a specified period, such charges or rates shall be prorated as
of 12:01 am (Eastern Time) on the Closing Date. If such charges or rates are
assessed based upon usage of utility or similar services, such charges shall be
prorated based upon meter readings taken on the Closing Date.
11.3 Purchase Price Allocation. Purchaser shall, within one hundred
and twenty (120) days after the Closing Date, prepare and deliver to Sellers a
schedule (the "Allocation Schedule") allocating the Purchase Price and the
Assumed Liabilities among the Purchased Assets in accordance with Treas. Reg.
1.1060-1 (or any comparable provisions of state or local tax law) or any
successor provision. Sellers will have the right to raise reasonable objections
to the Allocation Schedule within ten (10) days after their receipt thereof, in
which event Purchaser and Sellers will negotiate in good faith to resolve such
objections. If Purchaser and Sellers cannot mutually resolve Sellers' reasonable
objections to the Allocation Schedule within twenty (20) days after Purchaser's
receipt of such objections, such dispute shall be presented to an accounting
firm to be mutually selected by Purchaser and Sellers on the next day for a
decision that shall be rendered by such accounting firm within thirty (30)
calendar days thereafter and shall be final and binding upon each of the
parties. The fees, costs and expenses incurred in connection therewith shall be
shared in equal amounts by Purchaser, on the one hand, and Sellers, on the other
hand. Purchaser and Sellers each shall report and file all Tax returns
(including amended Tax returns and claims for refund) consistent with the
Allocation Schedule, and shall take no position with respect to Taxes contrary
thereto or inconsistent therewith (including in any audits or examinations by
any taxing authority or any other proceedings) with respect to the transactions
contemplated by this Agreement. Purchaser and Sellers shall cooperate in the
filing of any forms (including Form 8594) with respect to such allocation,
including any amendments to such forms required with respect to any adjustment
to the Purchase Price, pursuant to this Agreement. Notwithstanding any other
provisions of this Agreement, the foregoing agreement shall survive the Closing
without limitation.
ARTICLE XII
MISCELLANEOUS
12.1 No Survival of Representations and Warranties. The
representations and warranties of the parties contained in this Agreement shall
be extinguished by and shall not survive Closing, and no claims may be asserted
with respect thereto and no party shall have any Liability for any breach
thereof after the Closing.
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12.2 Expenses. Except as otherwise provided in this Agreement, each
of Sellers, on the one hand, and Purchaser, on the other hand, shall bear their
own expenses incurred in connection with the negotiation and execution of this
Agreement and each other agreement, document and instrument contemplated by this
Agreement and the consummation of the transactions contemplated hereby and
thereby. Purchaser shall bear the filing fees associated with the HSR Act
filings, if any.
12.3 Submission to Jurisdiction; Consent to Service of Process.
(a) Without limiting any party's right to appeal any order of
the Bankruptcy Court, (i) the Bankruptcy Court shall retain exclusive
jurisdiction to enforce the terms of this Agreement and to decide any claims or
disputes which may arise or result from, or be connected with, this Agreement,
any breach or default hereunder, or the transactions contemplated hereby, and
(ii) any and all proceedings related to the foregoing shall be filed and
maintained only in the Bankruptcy Court, and the parties hereby consent to and
submit to the jurisdiction and venue of the Bankruptcy Court and shall receive
notices at such locations as indicated in Section 12.7 hereof; provided,
however, that if the Bankruptcy Case has closed, the parties agree to
unconditionally and irrevocably submit to the exclusive jurisdiction of the
United States District Court for the Southern District of New York sitting in
New York County or the Commercial Division, Civil Branch of the Supreme Court of
the State of New York sitting in New York County and any appellate court from
any thereof, for the resolution of any such claim or dispute. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the parties hereto agrees that a judgment
in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
(b) Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or proceeding by
delivery of a copy thereof in accordance with the provisions of Section 12.7.
12.4 Waiver of Right to Trial by Jury. Each party to this Agreement
waives any right to trial by jury in any action, matter or proceeding regarding
this Agreement or any provision hereof.
12.5 Entire Agreement; Amendments and Waivers. This Agreement
(including the Schedules and Exhibits hereto) and the Confidentiality Agreement
represent the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof. This Agreement can be amended,
supplemented or changed, and any provision hereof can be waived, only by written
52
instrument making specific reference to this Agreement signed by the party
against whom enforcement of any such amendment, supplement, modification or
waiver is sought. No action taken pursuant to this Agreement shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein. The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such breach or as a
waiver of any other or subsequent breach. No failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
12.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and performed in such State, irrespective of and without regard for its
conflicts of law principles, as to all matters, including matters of validity,
construction, effect, enforceability, performance and remedies.
12.7 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given (i) when delivered
personally by hand (with written confirmation of receipt), (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one Business Day
following the day sent by overnight courier (with written confirmation of
receipt), in each case at the following addresses and facsimile numbers (or to
such other address or facsimile number as a party may have specified by notice
given to the other party pursuant to this provision):
If to a Seller:
IMPATH Inc.
000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx, Esq.
53
If to Purchaser, to:
Genzyme Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. XxxXxxxxx, Esq.
With a copy to:
Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx, Esq.
12.8 Severability. If any term or other provision of this Agreement
is invalid, illegal, or incapable of being enforced by any law or public policy,
all other terms or provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal, or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
12.9 Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to create
any third party beneficiary rights in any Person not a party to this Agreement.
No assignment of this Agreement or of any rights or obligations hereunder may be
made by any Seller or Purchaser (by operation of Law or otherwise) without the
prior written consent of the other parties hereto and any attempted assignment
without the required consents shall be void. No assignment of any obligations
hereunder shall relieve the parties hereto of any such obligations. Upon any
such permitted assignment, the references in this Agreement to Purchaser shall
also apply to any such assignee unless the context otherwise requires.
12.10 Non-Recourse. No past, present or future director, officer,
employee, incorporator or stockholder of any Seller or Purchaser shall have any
liability for any obligations or liabilities of Sellers or Purchaser under this
Agreement or the Seller Documents or the Purchaser Documents of or for any claim
based on, in respect of, or by reason of, the transactions contemplated hereby
and thereby.
12.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
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12.12 Certain Relief. The parties hereto specifically acknowledge and
agree that the remedy at law for any breach of Sections 8.5 or 8.15 will be
inadequate and that Sellers or Purchaser, as applicable, in addition to any
other relief available to them, shall be entitled to temporary and permanent
injunctive relief without the necessity of proving actual damage or posting any
bond whatsoever.
[Signatures Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first written above.
GENZYME CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President, Genzyme Genetics
IMPATH INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Executive
Officer
IMPATH PHYSICIAN SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Executive
Officer
IMPATH PREDICTIVE ONCOLOGY, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Executive
Officer
56
