ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered into
as of May 31, 2001, by and among INSIGHT LASER CENTERS N.Y. I, INC. (hereinafter
referred to as "Insight" or the "Seller") and INSIGHT AMSURG CENTERS, INC.
(hereinafter referred to as "IAC"), each a New York corporation having its
principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
EMERGING VISION, INC. (f/k/a Stering Vision, Inc.), a New York corporation
having its principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("EVI"), and AMSURG ACQUISITION CORP., a New York corporation with offices
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to
as the "Purchaser"). Hereinafter Sellers, EVI and Purchaser may be collectively
referred to as the "Parties" and, individually, as a "Party".
R E C I T A L S:
WHEREAS, Nassau Center for Ambulatory Surgery, LLC, a New York limited
liability company ("NCA"), is the holder of the New York State license (together
with the Certificate of Need therefor, the "CON") to own and operate a certain
ambulatory surgical center (the "Center") pursuant to Article 28 of the New York
State Public Health Law, which Center is situated in a portion (the "Premises")
of the building (the "Building") located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇; and
WHEREAS, Insight: (i) is the owner of certain of the tangible and
intangible assets used in connection with the ambulatory surgical business
operated at the Center (the "Business"); (ii) is the Tenant of the Premises
pursuant to that certain Lease, dated May 6, 1998, between ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇, as Joint Trustees under Trust Agreement, dated November 25, 1991, as
Landlord (the "Landlord"), and Insight, as Tenant (as amended, the "Lease"); and
(iii) renders consulting and administrative services to NCA in connection with
the operation of the Business, all pursuant to the terms of that certain
Consulting and Administrative Services Agreement, dated May 6, 1998, between
Insight and NCA (as amended, the "Consulting Agreement"); and
WHEREAS, pursuant to the terms of that certain Purchase Agreement, dated
May 6, 1998, between NCA and IAC (as amended, the "Article 28 Agreement" and,
together with the Lease and the Consulting Agreement, sometimes hereinafter
collectively referred to as the "Center Agreements"), NCA has agreed to sell to
IAC, and IAC has agreed to purchase from NCA, all of NCA's right, title and
interest in and to the CON and certain other assets of NCA, all as referred to
therein (the CON, together with such other assets, being hereinafter sometimes
collectively referred to as the "Medical Assets"); and
WHEREAS, EVI has guaranteed the respective obligations of Insight and IAC
under the Center Agreements, all pursuant to that certain Guaranty, dated May 6,
1998 (the "EVI Guaranty"); and
WHEREAS, pursuant to the terms of that certain Security Agreement, dated
May 6, 1998 (the "Security Agreement"), Insight granted to NCA a lien upon, and
security interest in, all of the Accounts (as said term is therein defined) of
Insight pertaining to the Business conducted at the Center; and
WHEREAS, Insight desires to sell, transfer, convey and/or assign to
Purchaser, and Purchaser desires to purchase from Insight, substantially all of
Insight's assets and business; and
WHEREAS, in connection with such purchase and sale of Insight's assets and
business (by the Purchaser), and the consummation of the other transactions set
forth and contemplated herein: (i) Insight desires to sell and assign to
Purchaser, and Purchaser desires to purchase and assume from Insight, all of
Insight's right, title and interest in and to the Consulting Agreement; and (ii)
IAC desires to assign to Purchaser, and Purchaser desires to assume from IAC,
all of IAC's right, title and interest in and to the Article 28 Agreement and
the change of ownership application referred to in Subsection 2.2.1(H)(iv)
hereof, in each case upon, and subject to, the terms and conditions hereinafter
set forth; and
WHEREAS, simultaneously herewith: (A) Insight, IAC, EVI (Insight's parent
entity and an affiliate of IAC) and NCA will enter into an agreement (in the
form attached hereto as Exhibit A; the "NCA Consent Agreement") (without
monetary cost to the Parties hereto) pursuant to which: (i) NCA will consent to
the assignment of each of the Consulting Agreement and the Article 28 Agreement,
by Insight and IAC, respectively, to Purchaser, and, except as otherwise set
forth in said Consent Agreement (such exceptions being hereinafter collectively
referred to as the "Pre-Closing Indemnity Obligations"), the release of Insight
and/or IAC, as the case may be, from their respective obligations and/or
liabilities thereafter arising and/or accruing thereunder; (ii) NCA will release
EVI from all of its obligations and/or liabilities under the Guaranty, other
than with respect to the Pre-Closing Indemnity Obligations; (iii) NCA will
terminate the Security Agreement and will release its lien on the collateral
covered thereby (all of which collateral is being sold and assigned by Insight
to Purchaser hereunder); (iv) except as otherwise specifically set forth in such
Consent Agreement, Insight, IAC and EVI will release NCA (and its officers,
directors and members) from all of its obligations and liabilities arising
and/or accruing under each of the Consulting Agreement and Article 28 Agreement
(after giving effect to the assignment thereof to Purchaser); and (v) Insight,
IAC and EVI will acknowledge the previous termination of that certain Limited
Contingent Guaranty, dated May 6, 1998, executed by ▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"),
and will release ▇▇▇▇▇ from any and all obligations and/or liabilities
thereunder; (B) Insight, EVI and the Landlord will enter into an agreement (in
the form attached hereto as Exhibit B; the "Landlord Consent Agreement", and
together with the NCA Consent Agreement, the "Consent Agreements") pursuant to
which (i) Insight shall surrender the Premises to Landlord, and the Landlord and
Insight will terminate the Lease for the Premises and each of the Landlord and
Insight will, except as otherwise set forth in such Landlord Consent Agreement,
be released and discharged of and from all of their respective liabilities
and/or obligations arising and/or accruing at any time thereunder; and (ii) EVI
will guaranty certain of the Purchaser's obligations under a new lease (the "New
Lease") to be entered into, simultaneously therewith, between Landlord and the
Purchaser, all pursuant to the terms of a limited guaranty, the form of which is
annexed hereto as Exhibit E (the "EVI Lease Guaranty"); and (C) EVI will, by its
execution hereof and of each of the Transaction Documents, guaranty the
respective obligations of Insight and IAC hereunder and under each of the
Transaction Documents.
NOW, THEREFORE, in consideration of the foregoing recitals, as well as the
Parties' respective promises, representations, covenants and warranties made
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto do hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1. Definitions. As used herein, the following words and terms
shall have the following meanings:
"Accounts Payable" shall have the meaning set forth in Section 3.1.1(C)
hereof.
"Agreement" shall mean this Asset Purchase Agreement.
"Article 28 Agreement" shall have the meaning set forth in the recitals to
this Agreement.
"Assets" shall have the meaning set forth in Subsection 2.1.1 hereof.
"Assumed Employee Benefits" shall have the meaning set forth in Subsection
3.1.1(B) hereof.
"Assumed Liabilities" shall have the meaning set forth in Subsection
3.1.1(C) hereof.
"Assumed Payables" shall have the meaning set forth in Subsection 3.1.1(C)
hereof.
"Assumed Post Closing Liabilities" shall have the meaning set forth in
Subsection 3.1.1(A) hereof.
"Benefit Plans" shall have the meaning set forth in Subsection 5.1.18
hereof.
"Building" shall have the meaning set forth in the recitals to this
Agreement.
"Business" shall be defined as the business and operation associated with
the Center.
"Center" shall have the meaning set forth in the recitals to this
Agreement.
"Center Agreements" shall have the meaning set forth in the recitals to
this Agreement.
"Center Assignment Agreement" shall have the meaning set forth in
Subsection 2.3.1(A)(ii) hereto.
"Claims" shall have the meaning set forth in Section 12.21 hereof.
"Closing" shall mean the consummation of the transactions contemplated by
this Agreement and each of the Transaction Documents.
"Closing Date" shall have the meaning set forth in Section 4.1 hereof.
"CON" shall have the meaning set forth in the recitals to this Agreement.
"Consent Agreements" shall have the meaning set forth in the recitals
hereto.
"Consideration" shall have the meaning set forth in Subsection 3.1.1
hereof.
"Consulting Agreement" shall have the meaning set forth in the recitals to
this Agreement.
"Customer Contracts" shall have the meaning set forth in Subsection
2.1.1(C) hereof.
"Contracts Assignment Agreement" shall have the meaning set for in
Subsection 2.2.1(B) hereof.
"Deficit Liabilities Amount" shall have the meaning set forth in Subsection
3.1.3 hereof.
"Encumbrances" shall have the meaning set forth in Subsection 2.1.1 hereof.
"Enforceability Exceptions" shall have the meaning set forth in Subsection
5.1.3 hereof.
"Employment Obligations" shall have the meaning set forth in Section 2.6
hereof.
"Equipment Leases" shall have the meaning set forth in Section 2.7 hereof.
"Equipment Lease Assignment Agreement" see Exhibit C.
"EVI" shall have the meaning set forth in the preamble to this Agreement.
"EVI Lease Guaranty" shall have the meaning set forth in the recitals to
this Agreement.
"Excess Liabilities" shall have the meaning set forth in Subsection 3.1.2
hereof.
"Excluded Assets" shall have the meaning set forth in Subsection 2.1.2
hereof.
"Fees" shall have the meaning set forth in Section 3.3 hereof.
"herein", "hereof" "hereunder" shall have the meaning set forth in Section
12.2 hereof.
"IAC" shall have the meaning set forth in the preamble to this Agreement.
"Indemnified Party" shall have the meaning set forth in Section 8.3 hereof.
"Indemnifying Party" shall have the meaning set forth in Section 8.3
hereof.
"Indemnification Notice" shall have the meaning set forth in Section 8.3
hereof.
"Insight" shall have the meaning set forth in the preamble to this
Agreement.
"Insight Customer Contracts" shall have the meaning set forth in Subsection
2.1.1(C) hereof.
"Insight Equipment Leases" shall have the meaning set forth in Subsection
2.2.1(A) hereof.
"Insight Operating Contracts" shall have the meaning set forth in
Subsection 2.1.1(F) hereof.
"Intellectual Property" shall have the meaning set forth in Subsection
2.1.1(G) hereof.
"Inventory" shall have the meaning set forth in Subsection 2.1.1(B) hereof.
"Landlord" shall have the meaning set forth in the recitals to this
Agreement.
"Landlord Consent Agreement" shall have the meaning set forth in the
recitals hereto.
"Lease" shall have the meaning set forth in the recitals to this Agreement.
"Licensed Software" shall have the meaning set forth in Subsection
5.1.14(B) hereof.
"Losses" shall have the meaning set forth in Section 8.1 hereof.
"MAC Effect" shall have the meaning set forth in Section 5.1.1 hereof.
"Medical Assets" shall have the meaning set forth in the recitals to this
Agreement.
"NCA" shall have the meaning set forth in the recitals to this Agreement.
"NCA Affiliates" shall have the meaning set forth in Section 12.21 hereof.
"NCA Consent Agreement" shall have the meaning set forth in the recitals
hereto.
"NCA Customer Contracts" shall have the meaning set forth in Section 2.7
hereof.
"NCA Equipment Leases" shall have the meaning set forth in Section 2.7
hereof.
"NCA Operating Contracts" shall have the meaning set forth in Section 2.7
hereof.
"New Lease" shall have the meaning set forth in the recitals to this
Agreement.
"Operating Contracts" shall have the meaning set forth in Subsection
2.1.1(F) hereof.
"Owned Software" shall have the meaning set forth in Subsection 5.1.14(A)
hereof.
"Party/Parties" shall have the meaning set forth in the preamble to this
Agreement.
"Permitted Encumbrances" shall have the meaning set forth in Section 2.1.1
hereof.
"Person" means any individual, corporation, partnership, firm, group, joint
venture, association, trust, limited liability company, unincorporated
organization, estate, trust or other entity.
"Personal Property" shall have the meaning set forth in Subsection 2.1.1(A)
hereof.
"Pre-Closing Indemnity Obligations" shall have the meaning set forth in the
recitals to this Agreement.
"Premises" shall have the meaning set forth in the recitals to this
Agreement.
"Purchase Agreement" shall have the meaning set forth in the recitals to
this Agreement
"Purchaser" shall have the meaning set forth in the preamble to this
Agreement.
"Purchaser Party" shall have the meaning set forth in Section 8.1 hereof.
"Receivables" shall have the meanings set forth in Subsection 2.1.1(E)
hereof.
"Security Agreement" shall have the meaning set forth in the recitals to
this Agreement.
"Sellers" shall have the meaning set forth in the preamble to this
Agreement.
"Seller Parties" shall have the meaning set forth in Section 5.1 hereof.
"Subject Agreements" shall have the meaning set forth in Subsection
5.1.21(A) hereof.
"Transaction Documents" shall have the meaning set forth in Subsection
2.1.2(D) of this Agreement.
ARTICLE II
PURCHASE AND SALE OF ASSETS;
ASSIGNMENT AND ASSUMPTION LEASES AND AGREEMENTS
Section 2.1. Purchase and Sale of Assets.
2.1.1 Assets. Subject to, and upon the terms and conditions contained
herein, on the Closing Date, Insight or IAC, as the case may be, shall sell,
transfer, assign, convey and/or deliver, as the case may be, to Purchaser, free
and clear of any and all claims, liens, mortgages, pledges, security interests,
charges and other encumbrances, of any kind or nature (collectively,
"Encumbrances") other than, and specifically excluding: (i) all statutory liens
in favor of the Landlord of the Premises; and (ii) the rights of third parties
under the Insight Equipment Leases, Insight Customer Contracts and Insight
Operating Contracts, if any, to be assigned to, and assumed by, the Purchaser
hereunder; and (iii) Encumbrances, if any, included in the Assumed Liabilities
(collectively, the "Permitted Encumbrances"), and Purchaser shall purchase
and/or acquire from Insight or IAC, as the case may be, all of their respective
right, title and interest, subject to the foregoing (but, except as specifically
included in the: (i) Assumed Liabilities as set forth in Subsections 3.1.1(A),
3.1.1(B) and 3.1.1(C) hereof; and/or (ii) Basket referred to in Section 8.4
hereof, none of any additional liabilities associated therewith, if any, all of
which additional liabilities shall be discharged, in full, by Insight and/or
IAC, as the case may be, within a maximum period of ten (10) days from and after
the Closing, except if and to the extent Insight and/or IAC is then contesting
any such additional liabilities, in good faith, provided the same does not
materially interfere with the operation of the Business by NCA or Purchaser) in
and to all of the tangible and intangible assets, rights and the businesses of
Insight and IAC, except if and to the extent included within the Excluded Assets
(collectively, the "Assets"), including, but not limited to:
(A) Personal Property. All of the furniture, fixtures, furnishings,
machinery, equipment, computer hardware, peripherals and accessories, vehicles
(including motor vehicle titles and current registrations), if any, office
supplies and all other tangible personal property of whatever type or
description owned or leased by Insight (whether or not in connection with the
operation of the Business) and all attachments thereto and personal property
(including tools and spare parts) associated therewith (collectively, "Personal
Property"); in each case, in their present "AS IS/WHERE IS" condition, without
representation and/or warranty by Insight, except as otherwise expressly
provided for herein;
(B) Inventory. All of Insight's right, title and interest in and to the
inventory, materials, parts, work in progress, returned goods and other items
used in or arising out of the conduct of the Business (collectively,
"Inventory") in each case, in their present "AS IS/WHERE IS" condition, without
representation and/or warranty by Insight, except as otherwise expressly
provided for herein;
(C) Customer Contracts. All of Insight's right, title and interest in and
to all of those written and oral contracts and other agreements entered into by
Insight with third-party payors, including, without limitation, HMO's, insurance
companies, self-insured employers, unions and government entities, if any,
including, but not limited to, those more particularly described on Schedule
2.1.1(C)(i) attached hereto (the "Insight Customer Contracts" and, together with
the NCA Customer Contracts, collectively, the "Customer Contracts"); provided,
however, that, unless if and to the extent the same are included within the
Assumed Liabilities, Purchaser is not assuming nor is obligated to fulfill any
obligation, guarantee or responsibility to any Person under the Customer
Contracts which results from the performance or provision of any services or
actions taken by Insight, or failure by Insight to provide any services or to
take any actions, on or prior to the Closing Date;
(D) Prepaid Expenses. All right, title and interest in and to all prepaid
expenses pertaining to the Business, and the ▇▇▇▇▇ cash located at the Center on
the Closing Date;
(E) Accounts and Receivables. All right, title and interest in and to all
monies, sums and amounts held by or owed to Insight in or in connection with all
accounts, accounts receivable, notes, notes receivable, loans receivable,
instruments, drafts, documents, chattel paper and other similar receivables and
rights to the payment of money or receipt of other benefits, in each case, as
the same relate to the Business conducted at the Center, which remain
uncollected and/or unreceived on the Closing Date, whether or not evidenced by a
writing or reflected on Insight's financial statements (collectively,
"Receivables") including, without limitation, any and all loans receivable from
NCA under the terms of the Consulting Agreement (but specifically excluding any
and all intercompany loans receivable by and/or between Insight, IAC and/or
EVI), without representation and/or warranty, by Insight, as to the
collectibility thereof;
(F) Operating Contracts. All rights of Insight pursuant to all service
contracts and/or agreements, merchandise purchase agreements, utility service
agreements and all other material contracts entered into by Seller and
pertaining to the operation of the Business, the Center and/or the Premises, all
of which (other than those which are cancelable on not more than 30 days' notice
without penalty) are more particularly described on Schedule 2.1.1(F)(i)
attached hereto (the "Insight Operating Contracts" and, together with the NCA
Operating Contracts, collectively, the "Operating Contracts"); provided,
however, that unless if and to the extent the same are included within the
Assumed Liabilities, Purchaser is not assuming nor is obligated to fulfill any
obligation, guarantee or responsibility to any Person under the Operating
Contracts which results from the performance or provision of any services or
actions taken by Insight, or failure by Insight to provide any services or to
take any actions;
(G) Intellectual Property. Except if and to the extent included within the
Excluded Assets, all right, title and interest of Insight and/or IAC (if and to
the extent the same exist as of the Closing) in and to any and all intellectual
property, all of which (other than those set forth in clause (ii) below) are set
forth on Schedule 2.1.1(G) attached hereto (collectively, "Intellectual
Property"), including, without limitation:
(i) patents, patent applications, patent disclosures, and improvements
thereto, whether registered or unregistered;
(ii) trademarks, service marks, logos, internet domain names, trade names
and corporate names, whether registered or unregistered, and registrations and
applications for registration thereof, including, without limitation, the names
and marks "Garden City Surgery Center" and "Garden City SurgiCenter;" without
representation and/or warranty by the Seller or IAC, except as otherwise
expressly set forth herein;
(iii) copyrights, whether registered or unregistered, and registration and
applications for registration thereof;
(iv) computer software (including any source or object codes thereof or
documentation relating thereto), data and documentation, and software licenses
without representation and/or warranty by Insight or IAC, except as otherwise
expressly set forth herein; and
(v) trade secrets and confidential business information, know-how,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, proposals, technical
data, copyrightable work, financial, marketing and business data, pricing and
cost information, business, customer and supplier lists, without representation
and/or warranty by Insight or IAC, except as otherwise expressly set forth
herein.
(H) Other Intangible Property. Except if and to the extent included within
the Excluded Assets and/or as otherwise provided for in this Agreement, all of
Insight's and/or IAC's right, title and interest in and to all:
(i) of the Insight Equipment Leases;
(ii) claims, prepayments, refunds, causes of action, choses in action,
rights of recovery, rights of set off and rights of recoupment of Insight;
(iii) franchises, approvals, permits, licenses, orders, registrations,
certificates, variances and similar rights obtained by Insight or IAC from
governments and governmental agencies for use in connection with the Business;
and
(iv) subject to Purchaser (as opposed to IAC) obtaining any required
consents as a condition thereto, if any, IAC's change of ownership application
(and all information contained therein and all materials prepared and/or filed
with the Public Health Counsel in connection therewith) with respect to the
change of ownership of the CON to IAC, without representation and/or warranty by
IAC and/or Insight; provided, however, that Seller Parties represent and warrant
that, to the best of their knowledge, after due inquiry, said application does
not contain any misstatements of a material fact or omit to state any material
fact necessary to the statements contained therein not misleading.
(I) Other Assets. Except if and to the extent included within the Excluded
Assets, all other assets and rights of Insight not specifically enumerated or
excluded herein, including, but not limited to, copies of all of Insight's
records relating to products and customers of the Business, copies of Insight's
records and data maintained on computer systems, all other transferable rights
of Insight in and to intangible assets used or held for use in the Business,
including all goodwill, all rights of Insight to proceeds (excluding insurance
policies and proceeds of insurance) and products related to the Assets and the
Business, all right, title and interest in and to all of Insight's books,
ledgers, files, documents, correspondence, telephone numbers of the Center,
telephone directory advertising relating to the Center, all state unemployment
and worker's compensation reserve amounts and experience rates to the extent
permitted or required under the laws of the State of New York, reports and other
printed materials (in each case, without representation and/or warranty by
Insight except as specifically set forth herein); provided, however, that
Insight may retain possession of such books and records that it is legally
required to maintain, but shall keep such records at its principal place of
business and shall provide Purchaser reasonable access thereto after the Closing
Date.
2.1.2 Excluded Assets. Notwithstanding anything contained herein to the
contrary, the following assets are excluded from the term Assets (collectively,
the "Excluded Assets"):
(A) All cash assets of Insight and/or IAC on deposit in Insight's and/or
IAC's respective checking and savings accounts on the date of Closing; together
with all checks actually received (but not yet deposited) by Insight, on or
prior to the close of business on the Closing Date, in payment of a portion of
the Receivables;
(B) Insight's and/or IAC's corporate names, seals, minute books, stock
books and financial records;
(C) Insight's and IAC's insurance policies and all proceeds due and/or to
become due to either of them thereunder;
(D) All of Insight's, IAC's and EVI's respective right, title and interest
in, to and under this Agreement and any and all instruments, documents and
agreements being executed and delivered by each of them in connection herewith
(collectively, the "Transaction Documents");
(E) The name and ▇▇▇▇ "Insight Laser Centers";
(F) Any and all Insight Equipment Leases, Insight Customer Contracts,
Insight Operating Contracts and/or Assets which cannot, by their respective
terms, be assigned to and assumed by, the Purchaser without the consent of a
third party, if any, to the extent any such required consent has not been
received by Insight prior to the Closing; provided, however, that
notwithstanding Insight's inability and/or failure to obtain any such required
consent prior to Closing, the same shall not be deemed to relieve the Purchaser
of any and all Assumed Liabilities pertaining thereto; and
(G) Any and all claims for indemnification of any one or more of the Seller
Parties under and/or pursuant to the Consent Agreements.
Section 2.2. Assignment and Assumption of Insight Equipment Leases,
Customer Contracts and Operating Contracts.
2.2.1 On the Closing Date:
(A) Insight shall sell, transfer and assign to Purchaser, and Purchaser
shall purchase and assume, pursuant to the terms of an Assignment and Assumption
of Equipment Lease Agreement (in the form annexed hereto as Exhibit C(i); the
"Equipment Lease Assignment Agreement") to be executed and delivered by Insight
and Purchaser on the Closing Date, all of Insight's right, title and interest in
and to each of those certain equipment leases and procedural financing
agreements more particularly described on Schedule 2.2.1(A)(i) annexed hereto
(the "Insight Equipment Leases" and, together with the NCA Equipment Leases,
collectively, the "Equipment Leases");
(B) Insight shall sell, transfer and assign to Purchaser, and Purchaser
shall purchase and assume, pursuant to the terms of an Assignment and Assumption
of Certain Contracts (in the form annexed hereto as Exhibit(C)(ii); the
"Contracts Assignment Agreement") to be executed and delivered by the Seller and
Purchaser on the Closing Date, all of the Insight's right, title and interest in
and to the Insight Customer Contracts and Insight Operating Contracts;
(C) Purchaser shall assume and agree to pay, perform and discharge all of
Insight's and/or NCA's liabilities and obligations under the Equipment Leases,
Operating Contracts and/or Customer Contracts solely to the extent any such
liabilities and obligations are included within the Assumed Liabilities, it
being specifically understood that if and to the extent any such obligations
and/or liabilities are not included within the Assumed Liabilities and/or arise
out of, or in connection with, the performance or provision of any services or
actions taken by Insight, or failure by Insight to provide any services or to
take any actions, on or prior to the Closing Date, the same are and shall remain
the sole liability and obligation of Insight.
Section 2.3. Assignment and Assumption of Center Agreements.
2.3.1 On the Closing Date:
(A) (i) Insight shall transfer and assign to Purchaser, and Purchaser shall
purchase and assume, pursuant to the terms of an Assignment and Assumption
Agreement (in the form annexed hereto as Exhibit D(i); the "Consulting
Assignment Agreement"), all of Insight's right, title and interest in and the
Consulting Agreement;
(ii) IAC shall transfer and assign to Purchaser, and Purchaser shall
purchase and assume, pursuant to the terms of an Assignment and Assumption
Agreement (in substantially the form annexed hereto as Exhibit D(ii), the "IAC
Assignment Agreement" and, together with the Consulting Assignment Agreement,
the "Center Assignment Agreements"), all of IAC's right, title and interest in
and to the Article 28 Agreement;
(iii) Insight and the Landlord shall agree to the termination of the Lease
and surrender of the Premises to the Landlord, all pursuant to the terms of the
Landlord Consent Agreement, and, simultaneously therewith, (a) the Landlord
shall enter into the New Lease with Purchaser, and (b) EVI shall execute and
deliver to Landlord the EVI Lease Guaranty; and
(B) Purchaser shall assume and agree to pay, perform and discharge
(pursuant to the terms of the Center Assignment Agreements) all of Insight's or
IAC's, as the case may be, respective liabilities and obligations under the
Consulting Agreement and the Article 28 Agreement, as applicable, as and when
the same shall become due and payable, solely to the extent any such liabilities
and obligations are included in the Assumed Liabilities and/or arise and accrue
from and after the Closing Date, it being specifically understood that if and to
the extent any such obligations and/or liabilities are not included within the
Assumed Liabilities and/or arise out of, or in connection with, the performance
or provision of any services or actions taken by Insight (under the Consulting
Agreement) or IAC (under the Article 28 Agreement), or failure by Insight (under
the Consulting Agreement) or IAC (under the Article 28 Agreement) to provide any
services or to take any actions thereunder, on or prior to the Closing Date, the
same are and shall remain the sole liability and obligation of Insight or IAC,
as the case may be.
Section 2.4. Consents. Notwithstanding anything to the contrary contained
herein, in the event any Asset and/or any Insight Equipment Lease, Insight
Customer Contract and/or Insight Operating Contract cannot, by its terms, be
transferred by Insight without the consent of a third party, such Asset and/or
Insight Equipment Lease, Insight Customer Contract and/or Insight Operating
Contract shall not be deemed sold, assigned or delivered hereby unless and until
such third party consent is so obtained; it being understood and agreed that
Insight and EVI, from and after the Closing, shall use its reasonable, good
faith efforts, in cooperation with the Purchaser, to obtain any such required
consents. If any such consent shall not be obtained prior to the Closing, or if
any attempted assignment would be ineffective or would impair Purchaser's rights
in, to and/or under the Assets, Insight Equipment Lease, Insight Customer
Contract and/or Insight Operating Contract in question so that Purchaser would
not, in effect, acquire the benefit of all such rights, Insight and EVI shall,
in cooperation with Purchaser, shall use their reasonable, good faith efforts,
after the date hereof, as Purchaser's agent in order to attempt to obtain for it
the benefits thereunder and shall reasonably cooperate (as reasonably required,
from time to time, by Purchaser), with Purchaser in any other reasonable
arrangement designed to provide such benefits to Purchaser. Notwithstanding the
foregoing, it is specifically understood that Purchaser shall have the sole
obligation and/or responsibility to obtain any governmental consents required as
a condition to IAC's assignment, to the Purchaser, of the change in ownership
application referred to in Subsection 2.1.1(H)(iv) hereof; provided, however,
that IAC shall reasonably cooperate with Purchaser in obtaining the same.
Section 2.5. No Additional Liabilities Assumed.
2.5.1 Insight's and IAC's Breach Under Contracts and Agreements. Purchaser
shall not assume, and Insight or IAC, as the case may be, shall remain liable
for, all claims and liabilities, whether arising prior to, on or subsequent to
Closing, resulting from, in connection with or incident to Insight's or IAC's,
as the case may be, breach of any covenant, condition or other obligation
required of Insight or IAC, as the case may be, under any contract or agreement
entered into by Insight or IAC, as the case may be, with respect to the Center,
the Business and/or the Premises including, without limitation, any Insight
Customer Contract, Insight Operating Contract, Insight Equipment Lease and/or
Center Agreement, except if and to the extent the same are included within the
Assumed Liabilities, and/or if and to the extent any such claim or
responsibility arose and/or accrued prior to May 6, 1998 and was not
specifically assumed by Insight pursuant to any written agreement entered into
between EVI and/or Insight and NCA and/or the Landlord.
2.5.2 EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 2.2, 2.3 AND 3.1 HEREOF, IT
IS EXPRESSLY UNDERSTOOD AND AGREED THAT PURCHASER SHALL NOT ASSUME AND IS NOT
ASSUMING, NOR SHALL PURCHASER BECOME LIABLE, OBLIGATED OR RESPONSIBLE FOR THE
PAYMENT OF, ANY DEBTS, LIABILITIES OR OBLIGATIONS OR THE PERFORMANCE OF ANY
DUTIES OF INSIGHT OR IAC, OF ANY KIND OR NATURE WHATSOEVER, WHETHER NOW OR
HEREAFTER ARISING AND WHETHER CONTINGENT OR LIQUIDATED IN AMOUNT, INCLUDING,
WITHOUT LIMITATION, ANY DEBTS, LIABILITIES, OBLIGATIONS OR DUTIES ARISING OUT OF
INSIGHT'S AND/OR IAC'S ACCOUNTS PAYABLE, TAX LIABILITIES, EMPLOYEE BENEFIT
PROGRAMS, CONTRACTS, AGREEMENTS OR OTHER TYPES OF LIABILITIES OF INSIGHT OR IAC,
AS THE CASE MAY BE, RELATED TO THE OPERATION OF THE BUSINESS.
Section 2.6 Employee Matters. It is expressly agreed that, other than as
may be specifically included in the Assumed Liabilities, Insight shall remain
solely liable for all obligations and/or liabilities to former and current
employees of the Business (whether employed by NCA, Insight or IAC) arising out
of, or in connection with, the employment relationship during the period
commencing May 6, 1998 through and including the Closing Date, only, and/or the
severance of the employment relationship or any obligation that Insight may have
to any representative of those employees during the period commencing May 6,
1998 through and including the Closing Date, only; and Purchaser, except if and
to the extent included within the Assumed Liabilities, shall have no obligation
to any former or current employees of Insight or IAC including, but not limited
to, any obligation to employ any such employee. Without limiting the generality
of the foregoing, it is understood that, other than as specifically included in
the Assumed Liabilities, responsibility for the payment of all compensation,
severance, termination pay, employment benefits and the like (collectively,
"Employment Obligations") arising and/or accruing on or before the Closing Date
shall be the sole liability and obligation of Insight and IAC. On the Closing
Date, Insight shall pay and discharge all accrued and unpaid Employment
Obligations (other than those specifically included in the Assumed Liabilities)
arising and/or accruing on or prior to the Closing Date.
Section 2.7 No Sale or Assignment of NCA Assets. Purchaser acknowledges
that: (i) the Assets shall not include, and shall be deemed to exclude, any of
the business and/or operations of and/or any of the tangible or intangible
assets of, NCA; and (ii) other than with respect to the Insight Customer
Contracts, Insight Operating Contracts and/or Insight Equipment Leases, Insight
is not assigning to Purchaser any operating contracts including, but not limited
to, those more particularly described in Schedules 2.1.1(F)(ii) hereof (the "NCA
Operating Contracts"), customer contracts including, but not limited to, those
more particularly described on Schedule 2.1.1(C)(ii) hereof (the "NCA Customer
Contracts") and/or any equipment leases including, but not limited to those more
particularly described on Schedule 2.2.1(A)(ii) hereof (the "NCA Equipment
Leases") entered into by NCA.
ARTICLE III
CONSIDERATION
Section 3.1. Consideration for Assets and Assignments.
3.1.1 As consideration (the "Consideration") for the sale of all of the
Assets and for the assignments contemplated hereby, on the Closing Date, the
Purchaser shall assume, and shall agree to timely pay, perform and discharge, as
and when the same shall be due, payable and dischargeable (the Purchaser hereby
representing and warranting to the Seller Parties that it has (or has available
to it) the financial resources to timely pay, satisfy and discharge the same),
the following liabilities of Insight, IAC and/or NCA:
(A) All losses, fees, costs, other expenses and/or amounts arising and/or
accruing from and after the Closing in connection with the ownership and/or
operation of the Business, the Center and/or the Premises including, but not
limited to, amounts payable under the Equipment Leases, Customer Contracts,
Operating Contracts, Center Agreements and/or the New Lease (collectively, the
"Assumed Post Closing Liabilities");
(B) Subject to the limitations set forth in Subsection 3.1.1(D) hereof, the
accrued and unpaid and/or unused compensation, vacation pay, holiday pay, sick
days, longevity days, termination pay, employment benefits and the like, to
which the personnel employed by Insight and/or NCA in connection with the
operation of the Business shall be entitled as at the Closing Date (the
aggregate thereof being the "Employee Benefits") that are set forth (subject to
the mutual agreement of the Parties) on Schedule 3.1.1(B) hereto (the Employee
Benefits set forth on Schedule 3.1.1.(B) hereto being referred to collectively
as the "Assumed Employee Benefits");
(C) Subject to the limitations set forth in Subsection 3.1.1(D) hereof, the
accounts payable arising in connection with the operation of the Business
arising and/or accruing on or prior to the Closing Date (the aggregate thereof
being the "Accounts Payable"), that are set forth (subject to the mutual
agreement of the Parties) on Schedule 3.1.1(C) hereto (the Accounts Payable set
forth on Schedule 3.1.1(C) hereto being referred to collectively as the "Assumed
Payables" and, together with the Assumed Post Closing Liabilities, and the
Assumed Employee Benefits, hereinafter collectively referred to as the "Assumed
Liabilities"); and
(D) It is specifically understood and agreed that the aggregate dollar
amount of the Assumed Payables to be assumed, paid and discharged by Purchaser
pursuant to Subsection 3.1.1(C), together with the dollar amount of the Assumed
Employee Benefits to be assumed, paid and discharged by Purchaser pursuant to
Subsection 3.1.1 (B) hereof, shall not exceed, in the aggregate, Four Hundred
Sixty Thousand ($460,000) Dollars (the "Assumed Liabilities Amount").
3.1.2 In the event that, as at the Closing, the aggregate dollar amount of
the Employee Benefits and/or the Accounts Payable shall exceed the Assumed
Liabilities Amount (such excess amount being the "Excess Liabilities"), then
Insight shall, within ten (10) business days after the Closing, pay, perform and
discharge all such Excess Liabilities, except if and to the extent Insight is
then contesting the same, in good faith, provided such contest does not
materially interfere with the Purchaser's or NCA's operation of the Business.
3.1.3 In the event that, as at the Closing, the aggregate dollar amount of
the Employee Benefits and/or the Accounts Payable shall be less than the Assumed
Liabilities Amount (such lesser amount being the "Deficit Liabilities Amount"),
then the Deficit Liabilities Amount shall be deemed to be a Basket, and shall be
governed by the provisions of Section 8.4 hereof.
3.1.4 Notwithstanding anything contained herein to the contrary, the
Purchaser shall not assume, and shall have no obligation and/or liability with
respect to any liabilities of Insight, IAC and/or NCA that would otherwise be
subject to assumption by Purchaser pursuant to the provisions of Subsections
3.1.1(B) or 3.1.1(C) hereof, if and to the extent the aggregate dollar amount of
such liabilities and/or obligations shall be in excess of Four Hundred Sixty
Thousand ($460,000) Dollars, and the aggregate of such liabilities shall be
excluded from the defined term "Assumed Liabilities," and shall be deemed
included in the defined term "Excess Liabilities."
Section 3.2. Allocation of Consideration. The Consideration shall be
allocated among the Assets, Equipment Leases and Center Agreements acquired
hereunder in accordance with the allocations set forth on Schedule 3.3 hereto.
It is agreed that the allocations set forth on Schedule 3.3 were arrived at by
arm's length negotiation, and in the reasonable opinion of each of the Purchaser
and Insight, properly reflect the respective fair market values of the Assets.
Insight and Purchaser each hereby covenant and agree that they will not take a
position on any tax returns, before any governmental agency charged with the
collection of any taxes, or in any judicial proceeding that is in any way
inconsistent with the representations contained in this Section 3.3, or the
allocations set forth on Schedule 3.3.
Section 3.3. Sales Taxes, Transfer Taxes and Filing Fees. Insight shall be
responsible for, and shall promptly pay any and all costs and expenses for
taxes, fees, stamps, charges, and all documentary, recording or filing fees
payable in connection with the transfer of the Assets (collectively, the
"Fees"); provided, however, that all such Fees payable to governmental agencies
as a condition to IAC's assignment, to the Purchaser, of the CON change in
ownership application, shall be the sole responsibility of the Purchaser, except
if and to the extent such Fees arose and/or accrued on or prior to the Closing
Date (at the specific instance and/or request of IAC, as opposed to the
Purchaser) which, unless the same are included in the Assumed Liabilities, shall
be paid by IAC pursuant to the provisions hereof. Insight warrants that it has
(or has available to it) the financial resources to pay the Fees and will not
fail to pay the Fees from and after the Closing, when due.
ARTICLE IV
CLOSING; DELIVERIES
Section 4.1. Closing; Closing Date. The Closing is being held on the
date hereof, simultaneously with the execution and delivery
of this Agreement (such date being the "Closing Date").
Section 4.2. Deliveries by Seller Parties. At the Closing, the Seller Parties
shall deliver (or cause to be delivered) to Purchaser the following duly
executed documents, which shall be in form and substance reasonably acceptable
to Purchaser:
4.2.1 duly executed assignments, bills of sale and other instruments of
conveyance sufficient to transfer and vest in Purchaser good and marketable
title to the Assets, with general warranties of title, free and clear of any and
all Encumbrances, except those specifically included in the Permitted
Encumbrances, together with any consents, permits and approvals that may be
required of any third parties, if and to the extent obtained by Insight prior to
the Closing, it being specifically understood and agreed that the foregoing
shall not be deemed to require IAC to obtain any governmental required consents
as a condition to its assignment, to Purchaser, of IAC's change in ownership
application (referred to in Subsection 2.1.1(H)(iv) hereof).
4.2.2 a certificate executed by the duly authorized Secretary of each of
the Seller Parties, to the effect that all warranties and representations of
each of the Seller Parties contained in this Agreement, to the best of such
Party's knowledge and belief, after due inquiry, are true and correct at and as
of the Closing;
4.2.3 a certificate of incumbency certified by the secretaries of each of
the Seller Parties, together with a certified copies, dated as of the Closing,
of the resolutions of the board of directors of each of the Seller Parties,
unanimously approving and authorizing this Agreement and each of the Transaction
Documents, and the transactions contemplated hereby and thereby;
4.2.4 certificates, dated not more than ten (10) days prior to the Closing
Date, from the Seller Parties state of incorporation evidencing the good
standing of each of the Seller Parties in such state;
4.2.5 the Equipment Lease Assignment Agreement;
4.2.6 the Center Assignment Agreements;
4.2.7 the Contracts Assignment Agreement;
4.2.8 the Consent Agreements (signed by the Seller Parties) and any and all
deliveries required of the Seller Parties pursuant to the Consent Agreements;
4.2.9 such other certificates or documents reasonably required by
Purchaser;
4.2.10 original counterparts (if and to the extent the same exist and are
in Insight's or IAC's possession and/or control) of all of the agreements,
contracts, commitments, leases, plans, bids, quotations, proposals, instruments,
computer programs and software, data bases whether in the form of diskettes,
computer takes or otherwise, related object and source codes, manuals and
guidebooks, price books and price lists, customer and subscriber lists, supplier
lists, sales records, files, correspondence, and other documents, books,
records, papers, files, office supplies and data belonging to Insight or IAC, as
the case may be, which are part of the Assets; and
4.2.11 the EVI Lease Guaranty.
Section 4.3. Purchaser's Deliveries at Closing. At Closing, Purchaser shall
deliver (or cause to be delivered) to the Sellers the following duly executed
documents, which shall be in form and substance reasonably satisfactory to
Sellers:
4.3.1 the Equipment Lease Assignment Agreement;
4.3.2 the Center Assignment Agreements;
4.3.3 the Consent Agreements (signed by NCA and/or the Landlord, as
applicable) and any and all deliveries required of Purchaser, NCA and/or the
Landlord pursuant to the Consent Agreements;
4.3.4 a certificate executed by a duly authorized executive officer of the
Purchaser, to the effect that all warranties and representations of Purchaser
contained in this Agreement are, to the best of such Party's knowledge and
belief, after due inquiry, true and correct at and as of the Closing;
4.3.5 a certificate of incumbency certified by the secretary of Purchaser,
together with certified copies, dated as of the Closing, of the resolutions of
the board of directors of Purchaser unanimously approving and authorizing this
Agreement and each of the Transaction Documents, and the transactions
contemplated hereby and thereby;
4.3.6 certificates, dated not more than ten (10) days prior to the Closing
Date, from the State of New York evidencing the good standing of Purchaser;
4.3.7 the Contracts Assignment Agreement; and
4.3.8 such other certificates or documents reasonably required by the
Seller Parties.
Section 4.4 Possession. Possession of the Assets and the Premises
shall be delivered to Purchaser on the closing Date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties of the Seller Parties. Insight, IAC
and EVI (sometimes hereinafter collectively referred to as the "Seller Parties",
and individually as a "Seller Party"), hereby jointly and severally represent
and warrant to Purchaser that the following representations and warranties are
true, accurate and complete, in all material respects, on the Closing Date, each
of which shall be unaffected by any investigation heretofore or hereafter made
by Purchaser, or any actual or constructive knowledge of Purchaser that any of
the same shall not be true, accurate and complete:
5.1.1 Organization and Good Standing. Each of the Seller Parties is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York, and has the full power and authority (corporate and
otherwise) to own and lease its properties, and to operate its businesses in all
places where it does business, except where such failure to own and/or lease any
such property and/or to operate its business would not reasonably be anticipated
to result in a material adverse effect on the business, properties, operations
and/or financial condition (a "MAC Effect") of each such Seller Parties and/or
any of their respective subsidiaries, including, without limitation, Insight's
rendering of administrative and consulting services with respect to the
operation of the Business.
5.1.2 Authorization for Agreement. The execution, delivery and performance
of this Agreement and each of the Transaction Documents by the Seller Parties,
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action (corporate and otherwise) of the
Seller Parties and all requisite action (corporate and otherwise) has been taken
by each of the Seller Parties to carry out the terms of this Agreement and each
of the Transaction Documents.
5.1.3 Authority. The Seller Parties have the full legal right, power and
authority to enter into this Agreement and each of the Transaction Documents,
and, subject to obtaining each of the consents referred to herein, to consummate
the transactions contemplated hereby and thereby. Neither the execution nor the
delivery of this Agreement and each of the Transaction Documents, nor the
consummation of the transactions contemplated hereby and thereby, conflict or
will conflict with or result or will result in a breach of the Seller Parties'
respective Certificates of Incorporation or Bylaws, or the terms, conditions or
provisions of any contract, agreement, commitment or undertaking to which any
Seller Party is a party or by which any Seller Party or the Assets are bound.
This Agreement and each of the Transaction Documents constitute the valid and
binding obligation of the Seller Parties, enforceable against each of them in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforceability of creditors' rights generally or by
general principles of equity (collectively, the "Enforceability Exceptions").
5.1.4 Capital Stock; Shareholders. The authorized capital stock of (i)
Insight consists of 200 shares of common stock, no par value, of which 50 shares
are issued and outstanding, and all of which are owned by EVI; and (ii) IAC
consists of 200 shares of common stock, no par value, all of which shares are
issued and outstanding, and all of which are owned by Dr. ▇▇▇▇ ▇▇▇▇▇. No shares
of capital stock are held in Insight's or IAC's treasury.
5.1.5 Intentionally Omitted.
5.1.6 Personal Property. To the best of Insight's knowledge and belief,
after due inquiry, all items of Personal Property (included in the Assets) are
in good working order and condition, ordinary wear and tear excepted, and have
been maintained in accordance with normal industry practice.
5.1.7 Good Title to Assets; No Encumbrances. Insight or IAC, as the case
may be, are the sole and exclusive legal and beneficial owners of, and have
good, valid and marketable title to, all of the Assets, free and clear of all
Encumbrances other than the Permitted Encumbrances and other than with respect
to those Assets which are leased by Insight, the Purchaser hereby acknowledges
that, in addition to the Medical Assets (as said term is defined in the Article
28 Agreement), the NCA Customer Contracts and NCA Operating Contracts, a
substantial portion of the assets used in connection with the operation of the
Business are leased to NCA and are not included in the Assets to be sold to
Purchaser hereunder. The Assets constitute all of the assets used in connection
with the operation and conduct of the Business, except for the Medical Assets,
the NCA Customer Contracts, the NCA Equipment Leases (and the items of equipment
covered thereby), the NCA Operating Contracts, the leasehold estate in the
Premises of the Center, all other tangible and intangible assets of NCA, and
that certain computer hardware and software system owned by The Eye Guys, LLP,
which system is used in connection with the operation of the Business pursuant
to an oral agreement between Insight (or NCA) and such entity.
5.1.8 Leasehold Interest. Immediately prior to the Closing, the Lease
represented the entire agreement between Insight and the Landlord with respect
to the leasing of the Premises and was the legal, valid, binding and enforceable
obligation of Insight, (except for the Enforceability Exceptions), and in full
force and effect. To the best of Insight's knowledge, no party to the Lease is
in breach or default thereunder, and no event has occurred which, with the
giving of notice, the lapse of time or both, would constitute a breach or
default by any party thereto, or permit termination, modification or
acceleration thereunder. To the best of Insight's knowledge, no party to the
Lease has repudiated any provisions thereof and there are no disputes or
forbearance programs in effect with respect thereto. Other than if and to the
extent constituting a Permitted Encumbrance, Insight has not assigned,
transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in
the Premises.
5.1.9 Inventory. To the best of Insight's knowledge, the Inventory is not
obsolete, damaged or defective, in any material respect, and has been stored and
maintained in accordance with normal industry practice. The Inventory has at all
times has been maintained, at appropriate levels, in the ordinary course of
business, consistent with past practice.
5.1.10 Customer Contracts. To the best of Insight's knowledge, after due
inquiry, Schedules 2.1(C)(i) and (ii) hereto contain a complete and accurate
list of all material Customer Contracts. To the best of Insight's knowledge, all
services provided under the Customer Contracts have been performed in material
compliance with the laws, rules and regulations of, and under appropriate
federal, state and local authorities, regulations and laws. In addition, to the
best of Insight's knowledge, neither NCA nor Insight is liable for any claims or
liabilities resulting from NCA's and/or Insight's breach of any covenant,
condition or other obligation required of either NCA or Insight, as the case may
be, under any Customer Contract. To the best of Insight's knowledge, none of the
parties to the Customer Contracts (including, without limitation, that certain
Agreement, between NCA and HIP Health Plans of New York) have canceled the
Customer Contract to which it is a party.
5.1.11 Intentionally Omitted
5.1.12 Accounts and Notes Receivable. To the best of Insight's knowledge,
after due inquiry, Schedule 5.1.12 hereto contains a materially complete and
accurate list of all Receivables of Seller as of the Closing Date, which
Receivables, to the best of Insight's knowledge, after due inquiry, are not
subject to any offset, recoupment, counterclaim, claim or defense with respect
thereto. To the best of Insight's knowledge, after due inquiry, all Receivables
are valid (but not necessarily collectible) and legally binding, represent
bona-fide transactions, and arose in the ordinary course of the Business.
5.1.13 Operating Contracts. To the best of Insight's knowledge, after due
inquiry, Schedules 2.1.1(F)(i) and (ii) hereto contain a complete and accurate
list of those Operating Contracts in effect as of the Closing Date which are not
cancelable, by Insight or NCA (as one of the contracting parties thereto),
without penalty on no more than thirty (30) days written notice. To the best of
Insight's knowledge, Insight and NCA have complied, in all material respects,
with all of their respective obligations thereunder, and are not in default, in
any material respect, in performing their respective obligations under each such
Operating Contract.
5.1.14 Computer Software; Other Intellectual Property.
(A) Schedule 5.1.14 contains a complete and accurate list of the computer
software that is owned by Insight and used in the Business (the "Owned
Software").
(B) Schedule 5.1.14 hereto contains a complete and accurate list of all
software of which Insight has obtained the right to use (collectively, the
"Licensed Software"), including the terms of Insight's (or NCA's) oral
agreement, with the owner thereof, to use the same.
5.1.15 Intentionally Omitted
5.1.16 Insurance. None of the Seller Parties shall cancel, or take, or fail
to take, any action that would result in a cancellation of (i.e., failure to pay
premiums applicable thereto), any of NCA's insurance policies in effect as of
the Closing Date.
5.1.17 Employees. Schedule 5.1.17 contains a complete and accurate list of
all officers, directors and employees employed in connection with the operation
of the Business and the rate of compensation (and the portions thereof
attributable to salary, bonus and other compensation, respectively), job title
and date of employment. To the best of Insight's knowledge, Insight is and has
(and has caused NCA to) have been, at all times, in material compliance with all
federal, state and local laws, rules and regulations with respect to employment,
wages, hours and benefits. To the best of Insight's knowledge, Insight has (and
has caused NCA not to be) not engaged in any unfair labor practices nor are any
unfair labor practices or other complaints against Insight filed with the
National Labor Relations Board, Equal Employment Opportunity Commission,
Department of Labor or any similar agency or instrumentality of any state or
local government; and Insight has experienced no labor interruptions over the
past two years and Insight has a reasonable basis to believe, and does believe
and consider its relationships with its employees to be good.
5.1.18 Benefit Plans. Except for that certain Consulting Agreement between
Insight and ▇▇▇▇▇, Schedule 5.1.18 contains a complete and accurate list of all
employee benefit plans of Insight and/or NCA (the "Benefit Plans"), including,
without limitation, any written Insight and/or NCA employment agreements and/or
any other agreements containing "golden parachute" provisions, or deferred
compensation agreements, or pension, profit sharing, stock options or other
employee benefit plans together with copies of such plans, agreements and any
trusts related thereto, and classifications of employees covered thereby. With
respect to such Benefit Plans, Insight warrants:
(A) Neither Insight nor NCA has a pension, profit sharing, deferred
compensation, stock option, employee stock purchase or other employee benefit
plan or arrangement.
(B) Insight has complied (and/or has caused NCA to comply), in all material
respects, with all Benefit Plans afforded employees of Insight and/or NCA from
May 6, 1998 through and including the Closing Date.
(C) To the best of Insight's knowledge, Insight has not incurred liability
under Section 4062 of ERISA; and
(D) Insight will terminate the employment of each of its employees and each
of its Benefit Plans identified on Schedule 5.1.18 from and after the Closing,
and Purchaser hereby consents to such termination.
5.1.19 Action and Litigation. To the best of Insight's knowledge, after due
inquiry, neither the Business, the Assets, the Center nor Insight are in
default, in any material respect, under any law or regulation or under any order
of any court or federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality having jurisdiction over
the Business, the Assets, the Center or Insight. To the best of Insight's
knowledge, after due inquiry, there are no charges, complaints, actions, suits,
proceedings, hearings, investigations, claims or demands pending or threatened
against or affecting Insight, NCA, the Business, the Center or the Assets, at
law or in equity, by third parties, which are not adequately and fully covered
by the liability insurance policies maintained by NCA and/or one or more of the
physicians performing services at the Center, or before any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over Insight. To the best of Insight's
knowledge, after due inquiry, Insight's rendering of administrative and
consulting services to NCA pursuant to the Consulting Agreement is and was in
compliance, in all material respects, with all requirements, standards, criteria
and conditions set forth in applicable federal, state and local statutes,
ordinances, permits, licenses, orders, approvals, variances, rules and
regulations, and to the best of Insight's knowledge, after due inquiry, the
Business is not in violation of any of the foregoing which might materially,
adversely affect the operations, affairs, prospects, properties, assets, profits
or condition (financial or otherwise) of the Business.
5.1.20 Tax Returns and Audits. To the best of Insight's knowledge, after
due inquiry, each of the Seller Parties have timely filed all requisite federal,
state and other tax returns for all fiscal periods ending on or before the
Closing Date. To the best of Insight's knowledge, each of the Seller Parties
have paid, when due, all taxes levied and imposed in connection with the
operation of their respective businesses, including, without limitation,
applicable sales and use taxes, social security taxes, business license taxes,
federal and state income taxes, employment taxes, federal and state withholding
taxes, unemployment taxes, workmen's compensation taxes, franchise taxes,
property taxes, ad valorem taxes and all similar taxes, except where the failure
to pay the same is not reasonably anticipated to result in a MAC Effect on the
Seller Parties, the Business, the Assets and/or the Center. To the best of
Insight's knowledge, after due inquiry, there are no open years, examinations in
progress or pending claims against them for federal, state or other taxes
(including penalties and interest) for any period or periods prior to and
including the Closing Date, and no notice of any claim, whether pending or
threatened, for taxes has been received.
5.1.21 Contracts, Leases and Commitments.
(A) The Operating Contracts, Customer Contracts, Equipment Leases and
Center Agreements are sometimes hereinafter collectively referred to as the
"Subject Agreements".
(B) On the Closing Date, Insight shall have delivered to Purchaser a true
and correct copy of each of the Subject Agreements within its possession and/or
control, together with any and all amendments thereto.
(C) To the best of Insight's knowledge, each of the Subject Agreements is
the valid, binding obligation of all parties thereto, enforceable (subject to
the Enforceability Exceptions) in accordance with their respective terms and in
full force and effect, except where the failure of any such subject agreement to
so be in full force and effect is not reasonably anticipated to have a MAC
Effect on the Business, the Center or NCA.
(D) To the best of Insight's knowledge, after due inquiry, there is no
existing material breach of any of the terms of any of the Subject Agreements by
Insight or any other party thereto, and no event has occurred which, with the
lapse of time or the giving of notice to both, could constitute a material
breach of any Subject Agreement by Insight or any other party thereto, Seller
Parties or any other party thereto of any right, or accelerate any of their
respective obligations, thereunder. Without limiting the generality of the
foregoing, all rents and all other payments, of any kind or nature, payable
pursuant to the terms of the Subject Agreements, have, as of the date hereof,
been paid, in full.
(E) To the best of Insight's knowledge, after due inquiry, Insight has
performed (or has caused NCA to perform) all of its (or NCA's, as the case may
be) material obligations required to be performed by it under each of the
Subject Agreements.
5.1.22 Environmental Matters. To the best of Insight's knowledge, after due
inquiry, Insight (on its own behalf or on behalf of NCA) and/or NCA, has
obtained all permits, licenses and other authorizations which are required in
connection with the conduct of the Business under regulations relating to
pollution or protection of the environment, including regulations relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including without limitation ambient air, surface water,
groundwater, or land), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes. To the best of Insight's knowledge, after due inquiry,
Insight and/or NCA and the Business are in matieral compliance with all the
terms and conditions of all required permits, licenses and authorizations, and
are also in material compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in those laws or contained in any regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder. To the best of Insight's knowledge, after
due inquiry, during the period of Insight's lease of the Premises there have
been no emissions, migrations, releases, discharges, spillage or disposals in,
on, at, under, adjacent to or affecting (or potentially affecting) such Premises
or any neighboring properties. To the best of Insight's knowledge, after due
inquiry, there are no past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere with or
prevent compliance or continued compliance with those laws or any regulations,
code, plan, order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, or which may give rise to any
common law or legal liability, or otherwise form the basis of any claim, action,
demand, suit, proceeding, hearing, study or investigation, based on or related
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste from May 6, 1998 through the
Closing Date. To the best of Insight's knowledge, after due inquiry, there is no
civil, criminal or administrative action, suit, demand, claim, hearing, notice
or demand letter, notice of violation, investigation, or proceeding pending or
threatened against Insight or NCA in connection with the conduct of the Business
from May 6, 1998 through the Closing Date relating in any way to the laws
referred to in this Section 5.1.22 or any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered, promulgated or
approved under such laws.
5.1.23 Outstanding Liabilities. Except for the Assumed Liabilities, Insight
has paid or will make arrangements for the payment of all monies and similar
indebtedness owed to any of its creditors in such a manner so as to prevent
Purchaser from incurring any liability for the payment thereof and/or any such
creditors from asserting a claim against the transactions contemplated hereunder
upon any alleged violation of the Bulk Sales Law provisions of the State of New
York. Seller acknowledges that Purchaser and Insight have agreed to waive
compliance with such Bulk Sales Law; provided, however, that Purchaser may
publish a notice of the sale of the Assets in accordance therewith.
Notwithstanding anything contained herein to the contrary, Insight has paid, or
will make all proper arrangements, to, and shall, pay and discharge, on or prior
to the Closing, all such indebtedness, except if and to the extent being
contested, by Insight, in good faith, and such contest would not reasonably be
anticipated to have a MAC Effect on the Business, the Center or Purchaser.
5.1.24 No Interest In Other Entities. Neither Insight nor IAC own shares of
any corporation or any ownership or other investment interest, either of record,
beneficially or equitably, in any association, partnership, joint venture or
other legal entity. Insight's and NCA's respective interests in the Assets is
held directly by each of Insight and NCA, as the case may be, and not through
any association, partnership, joint venture or other legal entity.
5.1.25 Brokers' Fees. The Seller Parties have not engaged any broker or
finder, and shall indemnify Purchaser against any and all claims for payment of
brokerage commissions or finder's fee, in connection with the transactions
contemplated herein.
5.1.26 Intentionally Omitted
5.1.27 No Misrepresentations. To the best of the Seller Parties' knowledge,
after due inquiry, no representation, warranty or statement of the Seller
Parties contained in this Agreement or any of the Transaction Documents or in
any of the exhibits and schedules attached hereto or thereto contains any untrue
statement of material fact, nor omits to state any material fact necessary to
make the representations, warranties and statements contained herein or therein,
not misleading.
5.1.28 Intentionally Omitted
5.1.29 Change in Business
(A) To the best of Insight's knowledge, since May 6, 1998, there have not
been any of the following:
(i) any material adverse change in the prospects of the Business, except
for the failure, since such date, of certain doctors to use the Center and the
resultant effect thereof on the Business;
(ii) any damage, destruction or loss (whether or not covered by insurance)
materially or adversely affecting the Assets;
(iii) any sale, lease, abandonment or other disposition, by Insight, of any
of the Assets, except for sales of inventory or obsolete assets in the ordinary
course of business;
(iv) any incurrence of an obligation or liability (absolute or contingent),
except for those disclosed herein and except for those incurred in the ordinary
course of operating the Business, consistent with past practice;
(v) an event or condition of any character that has or would reasonably be
expected to have a MAC Effect on the Business or upon the Assets, excluding
events or conditions, if any, of a general economic, market or similar nature
and except as otherwise set forth in clause (i) above.
(B) To the best of Insight's knowledge, since May 6, 1998, Insight has
maintained (and/or has caused NCA to maintain, pursuant to the terms of the
Consulting Agreement) the Center, the Business and the CON in material
compliance with all applicable federal, state and local laws, ordinances and
regulations, and the Business, the Center and the CON are in good standing and
not in material violation of any such laws, ordinances or regulations, no notice
or complaint alleging any such violation has been received by the Seller
Parties, and there are no facts or circumstances known to the Seller Parties
that could give rise to any such violations, or which could have a MAC Effect on
the Business, the Center and/or the CON.
(C) IAC's transfer of ownership application with respect to the CON has not
been withdrawn from the Public Health Counsel, although IAC may have been deemed
to have abandoned the same.
Section 5.2. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to the Seller Parties that the following representations
and warranties are true, accurate and complete, in all material respects, on the
Closing Date, each of which shall be unaffected by any investigation heretofore
or hereafter made by the Seller Parties, or any actual or constructive knowledge
of the Seller Parties than any of the same shall not be true, accurate and
complete.
5.2.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York, and has the full power and authority to own and lease its properties
and to operate its business in all places where it does business, except where
such failure to own and/or lease any such property and/or to operate its
business would not result in a MAC Effect on the business, properties,
operations and/or financial condition of Purchaser.
5.2.2 Authorization for Agreement. The execution and delivery of this
Agreement and each of the Transaction Documents by the Purchaser, and the
consummation of the transactions contemplated hereby and thereby, have been duly
authorized by all necessary action (corporate or otherwise) by the Purchaser,
and all requisite actions (corporate or otherwise) have been taken by Purchaser
to carry out the terms of this Agreement, and each of the Transaction Documents
to which it is a party.
5.2.3 Authority. Purchaser has the full legal right, power and authority to
enter into this Agreement and each of the Transaction Documents to which it is a
party, and subject to the Seller Parties' obtaining each of the consents
referred to herein (other than as set forth in Section 2.4 hereof), to
consummate the transactions contemplated hereby and thereby to the extent
required. Neither the execution nor delivery of this Agreement and the
Transaction Documents to which it is a party, nor the consummation of the
transactions contemplated hereby and thereby conflicts or will conflict with or
results or will result in a breach of Purchaser's Certificate of Incorporation
or Bylaws, or the terms, conditions or provisions of any undertaking to which
Purchaser is a party or by which Purchaser or its business or assets are bound.
This Agreement and each of the Transaction Documents to which it is a party
constitute the valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with their respective terms, except as such enforcement
may be limited by the Enforceability Exceptions.
5.2.4 Intentionally Omitted
5.2.5 No Misrepresentations. To the best of Purchaser's knowledge, after
due inquiry, no representation, warranty or statement of Purchaser contained in
this Agreement or any of the Transaction Documents or in any of the exhibits and
schedules attached hereto or thereto contains any untrue statement of material
fact, nor omits to state any material fact necessary to make the
representations, warranties and statements contained herein or therein, not
misleading.
5.2.6 Brokers' Fees. The Purchaser has not engaged any broker or finder,
and shall indemnify the Seller Parties against any and all claims for payment of
brokerage commissions or finder's fee of any broker or finder retained by
Purchaser (in breach of the representation of Purchaser set forth herein) in
connection with the transactions contemplated herein.
5.2.7 Assumed Liabilities. Purchaser will make arrangements for the payment
of all monies and similar indebtedness included in the Assumed Liabilities in
such a manner so as to reasonably prevent the Seller Parties from incurring any
liability for the payment thereof.
ARTICLE VI
[INTENTIONALLY OMITTED]
ARTICLE VII
[INTENTIONALLY OMITTED]
ARTICLE VIII
INDEMNIFICATION; SURVIVAL
Section 8.1 Indemnification by Seller Parties. The Seller Parties hereby
agree to jointly and severally indemnify, defend and hold harmless Purchaser and
its officers, directors, equity holders, employees, agents, representatives,
successors and assigns (each a "Purchaser Party") of, from, against, and in
respect of or relating (directly or indirectly) to any and all loss, liability,
claim, damages, cost, fees and expense (including, without limitation,
reasonable attorneys' fees and disbursements), of any kind and description,
inchoate or otherwise (collectively, "Losses"), resulting (directly or
indirectly) from, relating to or incident to:
8.1.1 The existence of any and all Encumbrances against any of the Assets,
other than the Permitted Encumbrances and other than those created by the
Landlord of the Premises, and all other liabilities and obligations of the
Seller Parties with respect to the Assets, the Business and/or the Center,
whether known or unknown, mature or contingent, to the extent such liabilities
and obligations are not included in the Assumed Liabilities to be expressly
assumed by Purchaser hereunder;
8.1.2 Any misrepresentation, breach of representation or warranty, or
breach or nonfulfillment of any covenant or obligation on the part of the Seller
Parties made or given in or with respect to this Agreement or any of the
Transaction Documents, or from any misrepresentation in or omission from any
schedule hereto or other instrument furnished or to be furnished by any of the
Seller Parties to Purchaser in connection with the transactions provided for in
this Agreement; and
8.1.3 Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses (including reasonable attorney,
engineer, and expert witness fees) incident to any of the foregoing provisions
and/or that arise from facts and circumstances arising on or after May 6, 1998
though and including the Closing Date. The Seller Parties hereby waive any and
all contractual, statutory and other causes of action, at law or in equity,
which the Seller Parties have or may have now or in the future against Purchaser
or any Purchaser Party arising out of or in any manner connected with the
foregoing, only. Without limiting the generality of the foregoing, the Seller
Parties agree that they will continue to defend, at their own expense, any
pending or future actions against the Seller Parties which are based on dealings
prior to the Closing Date with customers, suppliers and other parties associated
with the Business and/or the Center, except if and to the extent the same relate
to and/or are otherwise included within the Assumed Liabilities.
Section 8.2 Indemnification by Purchaser. Purchaser hereby agrees to
indemnify, defend and hold harmless the Seller Parties and their respective
officers, directors, employees, agents, representatives, successors and assigns
of, from, against, and in respect of or relating (directly or indirectly) to any
and all Losses resulting (directly or indirectly) from, relating to or incident
to:
8.2.1 Any and all Assumed Liabilities; and
8.2.2 Any misrepresentation, breach of representation or warranty, or
breach or nonfulfillment of any covenant or obligation on the part of Purchaser
made or given in or with respect to this Agreement or any Transaction Documents;
and
8.2.3 Any actions, suits, proceedings, claims, demands, assessments,
judgments, cost and expenses (including attorney, engineer and expert witness
fees) incident to any of the foregoing provisions or that relate to facts or
circumstances arising following the Closing.
Without limiting the generality of the foregoing, the Purchaser agrees that
it will defend, at its own expense, any future actions against any of the Seller
Parties which are based on Purchaser's dealings following the Closing Date with
customers, suppliers and other parties associated with the Business and/or the
Center and/or which relate to the Assumed Liabilities.
Section 8.3 Notice and Payment. A Party entitled to indemnification
pursuant to Section 8.1 or 8.2 hereof (an "Indemnified Party") shall give
written notice to the Party responsible for indemnification pursuant to Sections
8.1 or 8.2 hereof (an "Indemnifying Party") of any claim, suit, liability or
demand which gives rise to indemnification by an Indemnifying Party pursuant to
this Agreement (hereinafter referred to as an "Indemnification Notice"); it
being specifically understood that if and to the extent any such claim is based
upon a beach of any such Party's representations and/or warranties made herein,
such notice shall be given to the other Party(ies) within a maximum period of
twelve (12) months following the Closing Date, which notice shall have the
effect of tolling the twelve (12) month survival period of such representations
and warranties until the final, binding disposition of any claims with respect
thereto. Such Indemnification Notice shall describe the claim in reasonable
detail and shall indicate the amount (estimated if necessary) of the Loss that
has been or may be sustained by the Indemnified Party.
8.3.1 With respect to third party claims, the Indemnifying Party may elect
to compromise or defend, at its own expense and by its own counsel, any matter
involving the asserted liability of the Indemnifying Party so long as the
Indemnifying Party pursues the same diligently and in good faith. If the
Indemnifying Party undertakes to compromise or defend such asserted liability,
the Indemnifying Party shall, within 15 days (or sooner, if the nature of the
asserted liability so requires) notify the Indemnified Party of its intent to do
so, and the Indemnified Party shall cooperate, at the expense of the
Indemnifying Party, in the compromise of, or defense against, any such asserted
liability. Notwithstanding the foregoing, the Indemnified Party shall have the
right to participate in any matter through counsel of its own choosing at its
own expense; provided that the Indemnifying Party's counsel shall be lead
counsel. After the Indemnifying Party shall have notified the Indemnified Party
of its intention to undertake to defend or settle any such asserted liability,
and for so long as the Indemnifying Party diligently pursues such defense, the
Indemnifying Party shall not be liable for any additional legal expenses
incurred by the Indemnified Party in connection with any defense or settlement
of such asserted liability, except to the extent such participation is requested
by the Indemnifying Party, in which event the Indemnified Party shall be
reimbursed by the Indemnifying Party for reasonable additional legal expenses,
out-of-pocket expenses and allocable share of employee compensation incurred in
connection with such participation for any employee whose participation is so
requested. If the Indemnifying Party desires to accept a final and complete
reasonable settlement of asserted liability and the Indemnified Party refuses to
consent to such reasonable settlement, then the Indemnified Party's liability
under this Article 8 with respect to such asserted liability shall be limited to
the amount so offered (and accepted) in settlement and the Indemnified Party
shall reimburse the Indemnifying Party for any additional costs of defense which
it subsequently incurs with respect to such claim.
8.3.2 If the Indemnifying Party does not undertake to defend such matter to
which the Indemnified Party is entitled to indemnification hereunder, or fail to
diligently pursue such defense, the Indemnified Party may undertake such defense
through counsel of its own choice, at the cost and expense of the Indemnifying
Party, and the Indemnified Party may settle such matter, and the Indemnifying
Party shall reimburse the Indemnified Party for the amount paid in such
settlement and any other liabilities or expenses incurred by the Indemnified
Party in connection therewith; provided, however, that the Indemnified Party
shall not settle any such claim without the written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or delayed.
8.3.3 All sums paid by the Indemnified Party for which the Indemnifying
Party is obligated to reimburse the Indemnified Party under this Article 8
(together with interest thereon from the date of the Indemnified Party's payment
of any amounts until paid in full, computed at the rate of 8% per annum) shall
be paid within ten days of demand with interest calculated at the maximum rate
allowed under New York State law.
Section 8.4. Basket. Notwithstanding anything in this Agreement to the
contrary, as to matters which are subject to claims from indemnification
pursuant to Section 8.1 hereof, the Seller Parties shall not be liable to
Purchaser for any Losses (and the Purchaser shall be responsible for and shall
timely pay to the party entitled thereto) unless and until the aggregate of
Purchaser's Losses, which are the subject of claim(s) for indemnification under
Section 8.1 of this Agreement, shall exceed the aggregate sum of the Deficit
Liabilities Amount (if and to the extent there shall be a Deficit Liabilities
Amount; such amount, if any, being sometimes referred to herein as the
"Basket").
Section 8.5 Survival. The representations of the Parties contained in
Sections 5.1 and 5.2 of this Agreement shall survive the Closing for a period of
one (1) year, only, after which time they shall each be null and void and of no
further force or effect; provided, however, that the representations and
warranties of the Parties that give rise to any claims of the Parties (for
indemnification or otherwise), shall survive until the final, binding
disposition of any such claims, provided the affected Party shall have given
written notice of such claims, on or before the expiration of such one (1) year
period, which notice shall have the effect of tolling the twelve (12) month
survival period of such representations and warranties until the final, binding
disposition of any claim with respect thereto.
ARTICLE IX
NON-COMPETION AND NON-DISCLOSUSRE
Section 9.1 Non-competition and Non-disclosure. The Seller Parties agree
that, for a period of two (2) years following the Closing Date, they shall not,
directly or indirectly, for themselves or their subsidiaries and/or affiliates:
9.1.1 Non-solicitation of Customers. Solicit or attempt to solicit any
present, future or prospective customers of the Business, Purchaser or NCA,
directly or indirectly, to induce or encourage them to acquire or obtain from
anyone other than the Purchaser and/or NCA service competitive with or
substitute for any service provided by the Business other than, and expressly
excluding, laser surgery and/or eye examinations and referrals to
ophthalmologists and/or physicians in connection therewith.
9.1.2 Non-solicitation of Employees. Induce, solicit for employment, or
assist others in employing, inducing or soliciting for employment any individual
who, as of the Closing, was an employee of Insight, the Purchaser and/or NCA for
the purpose of providing services that are the same or similar to the types of
services offered or engaged in by NCA, the Business or the Purchaser as of the
date of this Agreement; it being specifically understood that the foregoing
shall not restrict the Seller Parties from continuing to retain and/or employ
▇▇▇▇▇▇▇ ▇▇▇▇, on a part-time basis, in connection with the administration of
Insight Laser Center, Inc.'s refractive laser surgery business.
9.1.3 Non-competition. Engage, directly or indirectly, in any business
located within a 17.5 mile radius of the Center which is similar to the
Business, whether such engagement be as an employer, officer, director, owner,
investor, employee, partner or consultant. Notwithstanding the above, the
foregoing covenant shall not be deemed to prohibit the Seller Parties from
acquiring as an investment not more than twenty (20%) percent of the capital
stock of a competing business.
9.1.4 Proprietary Information. Not disclose, at any time, now or in the
future, Purchaser's and/or NCA's proprietary information, trade secrets,
customers, or other confidential information, including, but not limited to,
nonpublic financial statements, price lists and pricing information, information
concerning costs, charges, operating procedures and results, marketing and
business plans, mailing lists, marketing research, whether in existence or
proposed, to any person, firm, partnership, corporation or business for any
reason or purpose whatsoever, except if and to the extent any such information:
(i) is in the public domain at the time of disclosure by the Disclosing Party,
provided such disclosure was not made in violation of the provisions hereof; or
(ii) was already known to the Disclosing Party prior to disclosure, to it; or
(iii) is required to be disclosed by the Disclosing Party pursuant to Court
order and/or judicial subpoena and/or applicable law.
If the final judgment of a court of competent jurisdiction declares that
any term or provision of this Section 9.1 is invalid or unenforceable, the
Parties agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or area of
the term or provision, to delete specific words or phrases, or to replace any
invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed.
Section 9.2 Specific Performance. Each of the Parties acknowledges and
agrees that the Purchaser would be damaged irreparably in the event any of the
provisions of this Article 9 are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Seller Parties agree
that the Purchaser shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Article 9 and to enforce specifically this
Article 9 and the terms and provisions hereof in addition to any other remedy to
which Purchaser may be entitled, at law or equity.
Section 9.3 Reasonable Restraint. It is agreed between the parties that the
foregoing covenants in this Article 9 impose a reasonable restraint on the
Seller Parties in light of the activities and business of the Seller Parties as
of the date of this Agreement.
Section 9.4. Severability. The covenants in this Article 9 are severable
and separate, and the unenforceability of any specific covenant shall not affect
the provisions of any other covenant. Moreover, in the event any court of
competent jurisdiction shall determine that the scope, time, or territorial
restrictions set forth herein are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the court
deems reasonable, and the Agreement shall thereby be reformed.
Section 9.5. Independent Covenants. All of the covenants in this Article 9
shall be construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of the Seller
Parties against Purchaser, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Purchaser of such
covenants. It is specifically agreed that the period of two years stated above,
shall be computed by excluding from such computation any time during which the
Seller Parties are in violation of any provision of this Article 9 and any time
during which there is pending in any court of competent jurisdiction any action
(including any appeal from any judgment) brought by any person, whether or not a
party to this Agreement, in which action Purchaser seeks to enforce the
agreements and covenants of the Seller Parties or in which any person contests
the validity of such agreements and covenants or their enforceability or seeks
to avoid their performance or enforcement.
Section 9.6. Materiality. The Seller Parties hereby agree that this Article
9 is a material and substantial part of the transactions contemplated hereby.
ARTICLE X
[INTENTIONALLY OMITTED]
ARTICLE XI
POST-CLOSING COVENANTS
Section 11.1 Further Assurances. The Parties shall execute and deliver or
cause to be executed and delivered such further instruments and take such other
action as the Parties may require to more effectively carry out the transfer of
the Assets and the consummation of the matters contemplated by this Agreement.
Section11.2 UCC Matters. From and after the Closing Date, Sellers will
promptly refer all inquiries with respect to ownership of the Assets or the
Business to Purchaser. In addition, Insight will execute such documents and
financing statements as Purchaser may reasonably request from time to time to
evidence the transfer of the Assets to Purchaser, including any necessary
assignments of financing statements.
Section 11.3 Collection of Receivables. After Closing, Purchaser shall have
the sole right to collect and to endorse with the name of Insight any checks
thereafter received on account of any Receivables. If Insight receives payment
in respect of any Receivables following the Closing Date, Insight shall be
deemed to hold such payment in trust for the benefit of Purchaser, and Insight
shall remit such payments to Purchaser within five (5) days of receipt thereof.
Section 11.4 Retention of Retained Business Records. Insight agree that
prior to the destruction of any business records which deal with matters prior
to the Closing Date and which are not transferred to Purchaser pursuant to this
Agreement, Insight will advise Purchaser, in writing, of such intended
destruction. If, within thirty (30) days after such notice, Purchaser notifies
Insight that Purchaser wishes to have such records preserved, Insight shall
deliver such records to Purchaser, at Purchaser's expense.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of New York notwithstanding
principles of conflicts of laws thereof.
Section 12.2 Terms and Conditions. The term "Agreement" as used herein, as
well as the terms "herein," "hereof," "hereunder" and the like shall mean this
Agreement in its entirety and all Schedules and Exhibits attached hereto, all of
which hereby made a part hereof. The captions and section headings hereof are
for reference and convenience only and do not enter into or become part of the
context. All pronouns, singular and plural, masculine, feminine or neuter, shall
mean and include the person, entity, firm, or corporation to which they relate
as the context may require.
Section 12.3 Severability. In the event that any term, covenant, condition,
agreement, section or provision hereof shall be deemed invalid or unenforceable
by a court of competent and final jurisdiction, this Agreement shall not
terminate or be deemed void or voidable, but shall continue in full force and
effect and there shall be substituted for such stricken provision a like but
legal and enforceable provision which most nearly accomplishes the intention of
the parties hereto.
Section 12.4 Notices. All notices, requests, demands, and other
communications shall be deemed to have been duly given if in writing and
delivered by hand or sent by reliable overnight delivery service (e.g., Federal
Express), telecopier (receipt confirmed) or certified or registered mail,
postage prepaid, to the appropriate address indicated below or to such other
address as may be given in a notice sent to the other Parties hereto:
If to Purchaser:
Amsurg Acquisition Corp.
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Seller Parties:
c/o Emerging Vision, Inc.
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
Emerging Vision, Inc.
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Section 12.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
Section 12.7 Schedules and Exhibits. Each Schedule and Exhibit referred to
in this Agreement is hereby incorporated by reference and made an integral part
hereof, and may be referred to in this Agreement and any other related
instrument or document without being attached hereto or thereto.
Section 12.8 Intentionally Omitted.
Section 12.9 Confidentiality. Whether or not the transactions contemplated
herein are consummated, the Parties hereto agree to keep confidential any and
all information and data with respect to another party which it received as a
result of any investigation or disclosure made in connection with this Agreement
and which is not otherwise available to third parties; provided, however, that
each Party shall be permitted to disclose any such information or data (A) to
the extent such party believes that such disclosure is reasonably required by
applicable law or regulation, and (B) as is necessary to obtain consents to the
transactions contemplated hereby. Notwithstanding anything contained herein to
the contrary, Purchaser may, at its option, disclose any such materials, as well
as the terms and provisions of this Agreement and the Transaction Documents, to
any potential investor or future client of the Business or the Purchaser without
notice to, or the consent of, the Seller Parties.
Section 12.10 Press Release and Announcements. No Party shall issue any
press release or announcement or make any other public disclosure relating to
the subject matter of this Agreement prior to the Closing Date without the prior
written approval of the other Party, which consent shall not be unreasonably
withheld; provided, however, that any Party may make any public disclosure it
believes in good faith is required by law or regulation, in which case, the
disclosing party will advise the other party prior to making the disclosure.
Section 12.11 Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit or detriment of the parties hereto and their
respective heirs, personal representatives, permitted successors and assigns.
Section 12.12 Assignment. No Party may assign any of its rights, duties or
obligations under this Agreement without the prior written consent of the other
Parties, and any attempt to do so shall be null and void and of no force and
effect upon the non-consenting Party. Notwithstanding the foregoing, Purchaser
shall have the right, exercisible in its sole and absolute discretion, to assign
this Agreement and any one or more of the Transaction Documents to any Person,
without the consent of any Party; provided, however, that written notice thereof
is promptly given to the Seller Parties, and further that no such assignment
shall relieve and/or otherwise discharge the obligations of Purchaser hereunder.
Section 12.13 Entire Agreement; Modification of Agreement. This Agreement
embodies the entire agreement of the Parties relating to the subject matter and
supersedes all prior oral or written agreements between the Parties with respect
to said subject matter. No amendment or modification of this Agreement shall be
valid or binding upon the Parties unless made in writing and signed by each of
the Parties.
Section 12.14 Remedy at Law Inadequate. The Seller Parties hereby
acknowledge and agree that, upon any actual or threatened breach of any of the
provisions of this Agreement, Purchaser will suffer irreparable damages and its
remedy at law will be inadequate, and Purchaser and its successors and assigns
shall be entitled to injunctive or other equitable relief in addition to any
other remedy it may have for a breach of such provisions.
Section 12.15 Remedies Cumulative. All remedies, rights, powers and
privileges conferred hereunder upon the parties, unless otherwise provided,
shall be cumulative and not restricted to those provided by law.
Section 12.16 Expenses. Each party shall pay its own expenses in connection
with the preparation of this Agreement and, except as otherwise specifically set
forth herein, the consummation of the transactions contemplated hereby.
Section 12.17 No Third Party Beneficiaries. Except as provided in Section
12.21 hereof, nothing in this Agreement is intended to create a benefit in favor
of, or an obligation to, any person or entity not a party to this Agreement.
Section 12.18 Waiver of Breach or Violation Not Deemed Continuing. The
waiver by any Party of a breach or violation of any provision of this Agreement
shall not operate as, or be construed to be, a waiver of any subsequent breach
or violation of any provision hereof. No breach or violation of any provision
hereof may be waived, except by an agreement, in writing, signed by the waiving
Party.
Section 12.19. Construction. The Parties acknowledge and agree that this
Agreement and each of the Transaction Documents are the result of arms-length
negotiations among the Parties, and has been reviewed by each Party and their
respective counsel. Accordingly, this Agreement shall be deemed the product of
each Party hereto, and no ambiguity shall be constructed in favor of or against
any Party.
Section 12.20. Legal Fees. In the event of any litigation arising out of or
relating to this Agreement or any instrument or document delivered pursuant
hereto, the substantially prevailing Party shall be entitled to reasonable
attorneys' fees, costs and expenses, including all related litigation costs.
Attorneys' fees shall include all fees incurred in establishing the entitlement
to, and the quantum of, such fees. Attorneys' fees shall also include all fees
and related litigation costs incurred in connection with all appeals and
applications to the initial tribunal and all courts to which appeals are taken.
Section 12.21. Acknowledgment; Waiver. The Seller Parties hereby
acknowledge and agree that neither this Agreement, the Transaction Documents
(other than with respect to the Consent Agreements), nor any of the transactions
contemplated hereby or thereby shall confer on any one or more of the Seller
Parties any rights, claims, causes of action, defenses and/or remedies, of any
kind or nature (collectively, "Claims") against NCA, the Landlord and/or any of
their respective officers, directors, shareholders, members, trustees,
beneficiaries, successors, assigns, assets or properties (collectively, the "NCA
Affiliates"). Accordingly, each of the Seller Parties hereby covenants and
agrees that it shall not make any Claims against the NCA Affiliates, nor shall
any of the NCA Affiliates have any liability, of any kind or nature, whether at
law or in equity, in respect of this Agreement, the Transaction Documents (other
than with respect to the Consent Agreements, pursuant to the terms thereof)
and/or any of the transactions contemplated hereby and thereby, and any and all
such Claims are hereby expressly waived and released by each of the Seller
Parties.
The Seller Parties further acknowledge and agree that, as a material
inducement to Purchaser to enter into this Agreement and to agree to condition
the Seller Parties' execution hereof on, among other things, the execution of
the Consent Agreements, the Purchaser has required that the Seller Parties make
the foregoing acknowledgments, agreements and waivers, and Purchaser is entering
into this Agreement and the Transaction Documents in reliance thereon.
The Parties hereby acknowledge and agree that the NCA Affiliates are
intended third-party beneficiaries of the provisions of this Subsection 12.21.
IN WITNESS WHEREOF, the Parties have caused their duly authorized officers
to execute this Agreement, under seal, all as of the day and year first above
written.
INSIGHT LASER CENTERS N.Y. I, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President & CEO
INSIGHT AMSURG CENTERS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇, President
EMERGING VISION, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
AMSURG ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇, Secretary