Exhibit 3
ESCROW AGREEMENT
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Escrow Agreement (this "Agreement"), dated as of October 1, 1998, by
and among HealthCare Imaging Services, a Delaware corporation (the "Purchaser"),
and Echelon MRI, P.C., a New Jersey professional corporation, Mainland Imaging
Center, P.C., a New Jersey professional corporation, North Jersey Imaging
Management Associates, L.P., a New Jersey limited partnership, Bloomfield
Imaging Associates, P.A., a New Jersey professional corporation, and Xxxxxx X.
Xxxxx, P.A., a New Jersey professional corporation (referred to collectively
herein as the "Sellers" and each individually as a "Seller") and Xxxxxxx Berlin
Shereff Xxxxxxxx, LLP, as escrow agent (the "Escrow Agent"). Except as otherwise
provided herein, all capitalized terms used and not defined herein shall have
the respective meanings ascribed thereto in the Asset Purchase Agreement
(defined below).
WHEREAS, the Purchaser and the Sellers are parties to an Asset Purchase
Agreement (the "Asset Purchase Agreement"), dated as of September 16, 1998,
which provides for, among other things, the purchase by the Purchaser of
substantially all of the Sellers' assets and properties that pertain to the
Facilities;
WHEREAS, the Purchaser and the Sellers have agreed that certificates
evidencing 16.362 shares of Series D Stock, as more fully described on Schedule
A annexed hereto (the "Escrow Shares", and together with any dividends and other
payments and distributions paid or made in respect of the Escrow Shares, the
"Escrow Amount"), each of which shall be duly endorsed in blank or accompanied
by stock powers duly endorsed in blank by the applicable Seller, shall be held
in escrow commencing on the date hereof for the purpose of funding the Accounts
Receivable Adjustment and any unpaid tax liabilities of the Sellers to the State
of New Jersey that have accrued on or prior to the Closing; and
WHEREAS, this Agreement, a copy of which is attached as Exhibit 4 to
the Asset Purchase Agreement, is intended to reflect and serve as the escrow
agreement among the parties hereto with respect to the Escrow Amount.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Appointment. The Purchaser and the Sellers hereby appoint and
designate the Escrow Agent, and the Escrow Agent agrees to serve, as escrow
agent for the purposes set forth herein.
2. Escrow. Simultaneously herewith, (a) the Purchaser shall deliver the
Escrow Shares to the Escrow Agent to be held in escrow in accordance with the
terms and provisions hereof and (b) the Sellers shall duly endorse such
certificates, as applicable, or deliver to the Escrow Agent stock powers duly
endorsed in blank. All dividends and other payments and
distributions paid or made in respect of the Escrow Shares shall be delivered to
the Escrow Agent and held in escrow in accordance with the terms and provisions
hereof. The Escrow Agent shall make distributions of the Escrow Amount to the
Sellers or the Purchaser, as the case may be, only in accordance with the terms
and provisions of Section 4 of this Agreement. Any cash portion of the Escrow
Amount shall be invested in an interest-bearing money market account. Interest
paid with respect to the Escrow Amount shall be paid in accordance with the
terms and provisions of Section 4 of this Agreement. Any taxes that shall become
due on interest earned in such account shall be borne by the party that receives
such interest and shall be timely paid by such party when due.
3. Voting Rights. Prior to any distribution of the Escrow Shares by the
Escrow Agent in accordance with the terms and provisions hereof, each Seller
shall be entitled to exercise any and all voting rights pertaining to the Escrow
Shares which such Seller has deposited with the Escrow Agent in accordance with
the terms hereof and of the Asset Purchase Agreement for any purpose not
inconsistent with the terms hereof and in accordance with the terms of the Asset
Purchase Agreement (including, without limitation, Section 13.08).
4. Release of Escrow Amount. The Escrow Agent shall hold the Escrow
Amount until it delivers the Escrow Amount as provided in this Section 4.
(a) Notification and Action. If, at any time, the Escrow Agent
shall receive written instructions executed by the Purchaser and Xxx.
Xxxxxxx Xxxxx or Xx. Xxx Xxxxx on behalf of the Sellers (which
instructions may be executed in counterparts) directing it to make
distributions out of the Escrow Amount, the Escrow Agent shall deliver
the Escrow Amount, or a portion thereof, as directed in such
instructions, as promptly as practicable after the Escrow Agent's
receipt of such instructions.
(b) Conflicting Notification. In the event of conflicting
instructions from the Purchaser and Xxx. Xxxxxxx Xxxxx or Xx. Xxx Xxxxx
on behalf of the Sellers, the Escrow Agent shall, in its sole and
absolute discretion: (i) continue to hold the Escrow Amount, or the
portion thereof, which is the subject of such conflicting instructions
until (x) it shall receive a copy of a final and non-appealable court
order from a court of competent jurisdiction (in form and substance
satisfactory to the Escrow Agent) or (y) written instructions executed
by the Purchaser and Xxx. Xxxxxxx Xxxxx or Xx. Xxx Xxxxx on behalf of
the Sellers (which instructions may be executed in counterparts)
directing it to deliver the Escrow Amount, or the disputed portion
thereof, in accordance with the terms of such court order or written
instructions, as the case may be, in which event the Escrow Agent shall
deliver such Escrow Amount, or the disputed portion thereof, in
accordance therewith, or (ii) at any time after the five (5) day period
following the Escrow Agent's receipt of such conflicting instructions,
deliver the Escrow Amount into the control of a court of competent
jurisdiction, in which event the Escrow Agent shall have no further
obligations or responsibilities with respect thereto. Notwithstanding
the foregoing, the Escrow Agent shall deliver the Escrow Amount, or a
portion thereof, in accordance with
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the terms of any written instructions executed by the Purchaser and
Xxx. Xxxxxxx Xxxxx or Xx. Xxx Xxxxx on behalf of the Sellers (which
instructions may be executed in counterparts) to the extent that such
instructions are received by the Escrow Agent prior to its delivery of
the Escrow Amount to a court of competent jurisdiction in accordance
with clause (ii) above. Any written instructions delivered to the
Escrow Agent by either the Purchaser or Xxx. Xxxxxxx Xxxxx or Xx. Xxx
Xxxxx on behalf of the Sellers, as the case may be, shall be delivered
contemporaneously by such delivering party to the other parties hereto.
(c) Exchange of Certificates. In the event that any of the
certificates representing the Escrow Shares need to be exchanged for a
number of certificates evidencing in the aggregate the same number of
shares as a result of (i) written instructions to the Escrow Agent
executed by the Purchaser and Xxx. Xxxxxxx Xxxxx or Xx. Xxx Xxxxx on
behalf of the Sellers (which instructions may be executed in
counterparts) as to the disposition of the Escrow Shares or (ii) a
dispute as to a portion of the Escrow Shares, the Purchaser and the
Sellers shall take all action necessary to effect such exchange and
deliver any such replacement certificates duly endorsed in blank or
accompanied by stock powers duly endorsed in blank.
5. Fees and Expenses. The Escrow Agent shall not be entitled to any fee
for acting as such, but shall be reimbursed for any out-of-pocket expenses
incurred in connection herewith, including, without limitation, legal fees and
expenses, which shall be borne by the Purchaser.
6. Responsibilities of Escrow Agent. The Escrow Agent's acceptance of
its duties under this Agreement is subject to the following terms and
conditions, which shall govern and control with respect to its rights, duties,
liabilities and immunities:
(a) The Escrow Agent makes no representations or warranties
and has no responsibilities as to the correctness of any statement
contained herein, and the Escrow Agent shall not be required to inquire
as to the performance of any obligation under any agreement or document
other than this Agreement nor shall the Escrow Agent be under any
obligation to take any legal action in connection with this Agreement
or towards its enforcement or performance or to appear in, prosecute or
defend any action or legal proceeding in connection herewith.
(b) The Escrow Agent shall be protected in acting upon any
written notice, request, waiver, consent, receipt or other paper or
document from any duly authorized agent of any Seller, including,
without limitation, Xxx. Xxxxxxx Xxxxx or Xx. Xxx Xxxxx as contemplated
by this Agreement and/or any duly authorized agent of the Purchaser,
not only as to its due execution and the validity and effectiveness of
its provisions, but also as to the truth of any information therein
contained and what it purports to be. The Escrow Agent shall be
entitled to rely upon any certification, instruction, notice or other
writing delivered to it in compliance with the provisions of this
Agreement without being
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required to determine the authenticity or the correctness of any fact
stated therein or the propriety or validity thereof. The Escrow Agent
may act or fail to act in reliance upon any instrument comporting with
the provisions of this Agreement or signature believed by it, without
independent investigation, to be genuine and may assume that any person
purporting to give notice or advice or make any statement or execute
any document in connection with the provisions hereof has been duly
authorized to do so.
(c) The sole duty of the Escrow Agent, other than as herein
specified, shall be to receive the Escrow Amount and hold it subject to
release, in accordance with the written instructions of the Purchaser
and Xxx. Xxxxxxx Xxxxx or Xx. Xxx Xxxxx on behalf of the Sellers or as
otherwise provided for herein, and the Escrow Agent shall be under no
duty to determine whether the Purchaser and the Sellers are complying
with the requirements of the Asset Purchase Agreement or any other
agreement or document. No implied covenants or obligations shall be
inferred from this Agreement against the Escrow Agent, nor shall the
Escrow Agent be bound by the provisions of any agreement beyond the
specific terms hereof. The Escrow Agent shall have no duties or
responsibilities except those expressly set forth herein and shall
neither be obligated to recognize nor have any liability or
responsibility arising under any other agreement to which the Escrow
Agent is not a party, even though reference thereto may be made herein.
The Escrow Agent shall not be required to inquire as to the performance
of any obligation under any agreement or document, including, without
limitation, the Asset Purchase Agreement or any agreements or documents
referred to herein or therein nor shall the Escrow Agent be under any
obligation to take any legal action in connection with this Agreement
or towards its enforcement or performance or to appear in, prosecute or
defend any action or legal proceeding in connection herewith.
(d) The Escrow Agent does not have any interest in the Escrow
Amount, but is serving as escrow holder only and has only possession
thereof.
(e) The Escrow Agent shall not be liable for any error of
judgment, or for any mistake of fact or law, or for anything which it
may do or refrain from doing in connection herewith, except as may
result from its own gross negligence or willful misconduct.
(f) The Purchaser agrees to indemnify the Escrow Agent against
and save it harmless from any and all claims, liabilities, costs,
payments and expenses, including reasonable fees and expenses of
counsel either paid to retained attorneys (who may be selected by the
Escrow Agent) or amounts representing the fair value of legal services
rendered to itself, incurred as a result of or in connection with the
performance of this Agreement, except as a result of the Escrow Agent's
own gross negligence or willful misconduct.
(g) The duties of the Escrow Agent hereunder are solely
ministerial in nature,
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and the Escrow Agent shall not have any liability under, or duty to
inquire into, the terms and provisions of any other agreement or
document. The Purchaser and the Sellers acknowledge that the Escrow
Agent, from time to time, has served as counsel to the Purchaser
including, without limitation, in connection with the negotiation,
execution and delivery of the Asset Purchase Agreement and the other
agreements and documents contemplated thereby. The participation of
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP as Escrow Agent is being
undertaken as an accommodation to the parties hereto and shall in no
way hinder or limit the present or future ability of Xxxxxxx Berlin
Shereff Xxxxxxxx, LLP to act as counsel to the Purchaser with respect
to any matter including, but not limited to, disputes between and/or
among the Purchaser, the Sellers and any stockholder of the Sellers
arising from the Asset Purchase Agreement or with regard to this
Agreement; provided, however, that such representation shall not affect
the Escrow Agent's obligations hereunder and shall be at the cost and
expense of the Purchaser.
(h) In case any property held by the Escrow Agent hereunder
shall be attached, garnished or levied upon under any order of court,
or the delivery thereof shall be stayed or enjoined by any order of
court, or any other writ, order, judgment or decree shall be entered or
issued by any court affecting such property, or any part thereof, or
any act of the Escrow Agent, the Escrow Agent is hereby expressly
authorized to use its sole discretion to obey and comply with all
writs, orders, judgments or decrees so entered or issued, whether with
or without jurisdiction, and in case the Escrow Agent obeys and
complies with any such writ, order, judgment or decree, it shall not be
liable to any person, firm or corporation by reason of such compliance
notwithstanding the fact that such writ, order, judgment or decree may
be subsequently reversed, modified, annulled, set aside or vacated.
(i) The Escrow Agent may, at any time, resign by providing
written notice to each of the other parties hereto and depositing the
Escrow Amount with a successor escrow agent designated jointly by the
Purchaser and Xxx. Xxxxxxx Xxxxx or Xx. Xxx Xxxxx on behalf of the
Sellers. Upon receipt of the Escrow Agent's resignation, the Purchaser
and Xxx. Xxxxxxx Xxxxx or Xx. Xxx Xxxxx on behalf of the Sellers shall
promptly appoint a successor escrow agent. If no successor shall have
been appointed within ten (10) days after the mailing of notice of
resignation by the Escrow Agent, the Escrow Agent shall be entitled to
deposit any or all of the Escrow Amount with a court of competent
jurisdiction.
7. Amendment and Termination. This Agreement may be amended or
terminated only by a writing signed by the Escrow Agent, the Purchaser and Xxx.
Xxxxxxx Xxxxx or Xx. Xxx Xxxxx on behalf of the Sellers. Once the Escrow Amount
has been distributed, this Agreement shall terminate and the Escrow Agent shall
have no further duties or responsibilities hereunder; provided, however, that
the exculpatory and indemnification provisions of Section 6 shall survive
termination.
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8. Interpleading. Notwithstanding anything to the contrary herein, at
any time the Escrow Agent shall have the right, in its sole discretion, to
deposit the Escrow Amount with a court having competent jurisdiction, in which
event the Escrow Agent shall give written notice of such deposit to each of the
other parties hereto. Upon such deposit, the Escrow Agent shall be relieved and
discharged of all further duties and responsibilities with respect to the Escrow
Amount.
9. Notices and Addresses. Any notice, demand, request, waiver or other
communication under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service, if personally served or sent by
telecopy; on the business day after notice is delivered to a courier or mailed
by express mail, if sent by courier delivery service or express mail for next
day delivery; and on the third day after mailing, if mailed to the party to whom
notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and addressed as follows:
If to the Sellers, to:
Xxxxxxx Xxxxx
with a copy to:
Xxxxxx Xxxxx, Esq.
Blank Rome Xxxxxxx & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Fax: (000) 000-0000
If to the Purchaser, to:
Xxxxxxx X. Xxxxxx, Esq.
HealthCare Imaging Services, Inc.
000 Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
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with a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
If to the Escrow Agent, to:
Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
10. Miscellaneous. This Agreement shall be binding upon the successors
and assigns of the parties hereto and shall inure to the benefit of and be
enforceable by each of them and their respective permitted successors and
assigns. The headings in this Agreement are for purposes of reference only and
shall not limit or define the meaning hereof. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
shall constitute one instrument. In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Agreement which shall
remain binding on all parties hereto.
11. Governing Law: Forum; Process. This Agreement shall be construed in
accordance with, and governed by, the Laws of the State of New York as applied
to contracts made and to be performed entirely in the State of New York without
regard to principles of conflicts of Law. Each of the parties hereto hereby
irrevocably and unconditionally submits to the exclusive jurisdiction of any
court of the State of New York or any federal court sitting in the State of New
York for purposes of any suit, action or other proceeding arising out of this
Agreement (and agrees not to commence any action, suit or proceedings relating
hereto except in such courts). Each of the parties hereto agrees that service of
any process, summons, notice or document by U.S. registered mail at its address
set forth herein shall be effective service of process for any action, suit or
proceeding brought against it in any such court. Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement, which is
brought by or against it, in the courts of the State of New York or any federal
court sitting in the State of New York and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
HEALTHCARE IMAGING SERVICES, INC.
/s/ Xxxxxxx X. Xxxxxx
By: ___________________________
Name: Xxxxxxx X. Xxxxxx
Title: CHM/CEO
ECHELON MRI, P.C.
/s/ Xxxxxx X. Xxxxx
By: ___________________________
Name: Xxxxxx X. Xxxxx
Title: President
MAINLAND IMAGING CENTER, P.C.
/s/ Xxxxxx X. Xxxxx
By: ___________________________
Name: Xxxxxx X. Xxxxx
Title: President
NORTH JERSEY IMAGING MANAGEMENT
ASSOCIATES, L.P.
/s/ Xxxxxx X. Xxxxx
By: ___________________________
Name: Xxxxxx X. Xxxxx
Title: President
BLOOMFIELD IMAGING ASSOCIATES, P.A.
/s/ Xxxxxx X. Xxxxx
By: ___________________________
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXX X. XXXXX, M.D., P.A.
/s/ Xxxxxx X. Xxxxx
By: ___________________________
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXXX BERLIN SHEREFF XXXXXXXX, LLP
as Escrow Agent
/s/Xxxxx X. Xxxxxxxxx
By:____________________________
Xxxxx X. Xxxxxxxxx, a Partner
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SCHEDULE A--Escrow Shares
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Certificate No. Name Number of Shares
--------------- ---- ----------------
X-00 Xxxxxxx XXX, X.X. 0.000
X-00 Xxxxxxxx Imaging Center, P.C. 1.8
D-13 North Jersey Imaging Management Associates, L.P. 4.418
D-14 Bloomfield Imaging Associates, P.A. 1.145
D-15 Xxxxxx X. Xxxxx, P.A. 0.491
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